I suggest an amendment to the Unemployment Insurance Act so as to eliminate the inequities presently in that act. I should say, Mr Chairman, that the proposals to which I have referred, are embodied in the provisions of S. 987, which you were kind enough to introduce in the Senate. And we would respectfully request that S. 226 be amended by substituting the proposed provisions as there set forth.

Senator MORSE. Thank you for your able presentation of your case which will be of help in the considerations of the committee in executive session. It is helpful to bring together the representations of the various sides of the controversy when we consider the subject matter of these hearings. You have been very helpful to us.

Mr. LOOMIS. Thank you.

Senator MORSE. Mr. Clark.
Senator CLARK. No questions.

Senator MORSE. I have two or three questions.

First, a request for information for whatever value it may prove to be worth in the considerations of the committee. I think it is always best to have this kind of information in the record because if we don't someone can say, "Why didn't you take a look at it?" I am confident that you will have no objection to supplying it. I think we ought to ask the carriers to supply us with a memorandum that sets forth the retirement benefits for the executives-this item is always raised-so if you would supply us, with a memorandum that sets forth the retirement benefits for the executives of the railroads, it would be helpful.

Mr. LOOMIS. I am not sure that we can do it, Mr. Chairman. We have no such information at the AAR. My recollection is that either in 1957 or 1958 the Retirement Board supplied some information. Senator MORSE. We can get it from them.

Mr. LOOMIS. We do not have the information at the AAR.

Senator MORSE. Mr. Schreiber, can you supply the committee with a memorandum that will set forth the retirement benefits for the railroad executives?

Mr. SCHREIBER. I believe, Mr. Chairman, that we did file some sort of statement in 1957. I don't know whether we have additional information. If we have it we will bring it up to date. (The information follows:)

Hon. WAYNE MORSE,

RAILROAD RETIREMENT BOARD,
Chicago, Ill., February 25, 1959.

Chairman, Subcommittee on Railroad Retirement, Committee on Labor and Public Welfare, U.S. Senate, Washington, D.C.

DEAR SENATOR MORSE: Attached is the statement you requested of the Board on February 18, 1959, during the hearing on S. 226 and S. 978 concerning supplemental private pension plans for railroad executives.

Sincerely yours,

HOWARD W. HABERMEYER,

Chairman.

SUPPLEMENTARY PENSION PLANS IN THE RAILROAD INDUSTRY COVERING EXECUTIVE EMPLOYEES

In 1957, at the request of the Subcommittee on Railroad Retirement of the Senate Committee on Labor and Public Welfare, the Railroad Retirement Board made a study of supplementary pension plans in the railroad industry. This was a one-time study and related to plans in effect at the beginning of 1957. The following data on supplementary pension plans covering executive employees were based on that study.

Of the supplementary pension plans in effect in the railroad industry at the beginning of 1957, two-thirds were restricted to employees who might be classified as executive or management employees. These plans covered some 55,000 employees, and ranged from those which included all employees on a monthly or annual basis to those which listed the officials qualifying for membership. The majority of the plans for executives were noncontributory; that is, the entire cost of the plan was borne by the company. Also, in the majority of cases, these were the only pension plans of the company.

The attached tabular comparison summarizes information on the benefit formulas and illustrates benefits payable under plans in effect on the 10 largest railroads with such plans. These employers account for two-thirds of all employees covered by such plans.

In most of the plans the pension is calculated by multiplying 1 to 12 percent of the average monthly earnings in the last 5 or 10 years of service by the number of years of service with the company and subtracting the annuity payable under the Railroad Retirement Act. The illustrative pensions shown in the table are in addition to the railroad retirement employee and spouse annuities payable. The table does not reflect the effect of various minmum or maximum provisions or other modifications of the benefit formulas.

NOTE.-Amounts shown are in addition to employee and spouse annuities payable under Railroad Retirement Act. Computations were made as of Jan. 1, 1959, when maximum railroad retirement employee annuity was $186 and maximum spouse annuity was $59.50. Retirement annuities based on 40 years of service will not be possible until 1977 when the maximum annuity possible under present law will be $260. The maximum spouse annuity will be $63.50 beginning February 1960.

Senator MORSE. Very well. Senator Clark raises the question whether the SEC might have that.

Mr. LOOMIS. I would very much doubt it, although I am not certain. I don't know of any place where it would center. Of course, it will eventually center in the Labor Department.

At the present time I don't know of any central place where the information is available. I think the Retirement Board did collect that by request.

Senator MORSE. Mr. Loomis doesn't think they have that. The Retirement Board will obtain for us what they can and the staff will proceed to get information from other sources if available.

Senator CLARK. I am not saying that it is relevant. It may not be relevant, but it is, certainly, not secret information.

Mr. LOOMIS. As I say, under the new law, as I understand it, eventually they will be filed with the Secretary of Labor.

Senator MORSE. This may be governed by Federal regulations. If so, you might supply it by way of memorandum. That will be accept

able to the chairman.

I also know this point is bound to be raised by some member of this committee in executive session. There was some discussion a year ago of it. That is the problem that I think we discussed a week ago. This matter of the working rules was particularly referred to.

Mr. LOOMIS. Yes.

Senator MORSE. And the relationship of operating costs to labor policies is it your intention to file in this hearing any material on that particular subject?

Mr. LOOMIS. We will be very glad to, Mr. Chairman.

Senator MORSE. I wish you would do so, so that at least we have it for reference in the deliberations of the committee. I recognize that, basically, collective bargaining governs it. That has been a source of controversy among the group for some time. But, nevertheless, it is important here when we go into the matter of ability to pay, over and above a wage, for a reasonable retirement system. Any information you would like to give us on that would be helpful. (The supplemental information follows:)

Hon. WAYNE MORSE,

ASSOCIATION OF AMERICAN RAILROADS,
Washington, D.C., February 26, 1959.

Chairman, Subcommittee on Railroad Retirement,
Committee on Labor and Public Welfare,

U.S. Senate, Washington, D.C.

DEAR MR. CHAIRMAN: When I appeared before your honorable committee on February 18, you asked, after a brief discussion of outmoded railroad work rules and the relation such rules have to the ability or inability of railroads to pay for increased retirement benefits for railroad employees, as reported at pages 163-164 of the transcrit, this question:

"Is it your intention to file in this hearing any material on that particular subject"?

I am very glad to supply information pertinent to that subject, and respectfully request that it be incorporated in the record of the hearing.

In general, such rules are of three principal classes:

First, are ones that require railroads to employ more people than they need or can profitably use for the amount of work to be done.

Second, are rules that compel retention and perpetuation of work and pay standards made obsolete by advancing technology.

Third, are rules that preempt for the brotherhoods traditional and proper management functions of determining (1) the kind and amount of work to be

done and who is to do it, and (2) operational policy necessary to obtain the most efficient use of plant, equipment, and manpower.

Counting all three classes, and after allowing for overlapping cost duplications, the total annual cost of outmoded work rules is placed by railroads at over $500 million.

A prime example of a rule that requires railroads to employ more men than they need or can profitably use results from continued employment of firemen on diesel locomotives that have neither fires to stoke nor boilers to tend.

Diesel-powered yard locomotives were operated safely without firemen for 12 years prior to the 1937 diesel firemen's agreement, and the first diesel-powered streamlined passenger trains also were operated safely without firemen. Since 1937, self-propelled motorcars and trains comprised of electric rail cars, including those of rapid transit systems such as the Hudson & Manhattan Railway in New York and the New York City subway, have operated safely over millions of miles without firemen.

In countries outside the United States, operation of other than steam locomotives without firemen is common practice. (France, for example, which holds the world railroad speed record and is widely noted for excellence of its rail service, uses an engineer only on all locomotives except those not equipped with "dead man" control.) In Canada, where removal of firemen from freight and yard diesels is underway, a royal commission appointed to investigate and make recommendations said in its report of December 18, 1957: "Their functions have either totally disappeared, as in the case of the production of power, mechanical assistance, and inspection, or are a mere duplication of what is discharged by another or others, as in the case of the lookout functions performed by the head-end trainman and the engineman." (Yard and freight diesels were the only classes of service involved in the Canadian investigation.) Continued employment of firemen on diesel locomotives in the United States is no more justified than in Canada. Their removal would save in excess of $200 million a year.

Railroads are also required, under operating rules, to employ many trainmen, including assistant conductors, ticket collectors, baggagemen, brakemen, and flagmen, who are not needed and cannot be used to good advantage. This is true in both road and yard service. As in the case of firemen, the many advances in technology that have combined to make railroad operation faster, safer, and more economical have at the same time reduced or eliminated the need for many of the trainmen formerly required.

So-called excess-crew laws on the statute books of 23 States force unneeded employment. In 16 of these States, laws prescribe the precise numbers of brakemen or other members of train crews that must be carried on trains under varying conditions which the laws set forth. In seven other States, authority to compel employment of additional members of train crews is vested in State regulatory bodies.

When handbrakes were the sole means of stopping trains, the need for brakemen to race back and forth across the tops of cars setting and releasing brakes was apparent. But for many years, brakemen actually have been relieved for all practical purposes from performing braking functions of this sort. Instead, under the Federal Safety Appliance Act and regulations of the Interstate Commerce Commission, every car must be equipped with airbrakes.

The brakeman's job today is to watch to see that all mechanical equipment of the train, such as axles, wheels, and rigging, remains in good order and to do necessary flagging when the train is at a halt. Laws requiring railroads to hire more brakemen than needed, which are based upon conditions when the number of brakemen needed was largely determined by the number of cars in a train that had to be braked by hand, have no place in modern railroad operation. Today, they are featherbed laws pure and simple, and beyond any doubt they are adding greatly and unnecessarily to the cost of producing railroad service.

In the records of National Railroad Adjustment Board proceedings cases such as the following illustrate still another source of rules that require railroads to employ more men than they need:

An eastern railroad paid a maintenance-of-way engineer and fireman to operate a steam ditcher on a yard track. But it also had to pay an engine service engineer and fireman for not operating the steam ditcher. They just sat by and watched.

One day the maintenance-of-way fireman didn't report for work, and the engine service fireman had to leave his soapbox and do the actual firing. He