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recognize and which we take care of to the best of our ability in the bill that has now been presented as agreed bill.

We will take a recess until a quarter of twelve.

(After a recess for the purpose of answering the roll call, the following proceedings were had.)

The CHAIRMAN. The committee will please be in order. The first witness will be our colleague from the State of Massachusetts, Mr. Clason.

Mr. Clason, we will hear you at this time.

STATEMENT OF HON. CHARLES R. CLASON, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF MASSACHUSETTS

Mr. CLASON. Mr. Chairman and gentlemen of the committee, I am delighted that the committee is taking up this legislation at this hearing today.

During the 2 years of the present Congress I have introduced three separate measures looking for benefits, retirement pay and benefit provisions for retirement for veteran railroad men. I believe that the provisions of my separate bills have merit. Some of them have been worked out at very considerable expense to the railroad men interested in them and they have been assured that they were sound from an actuarial standpoint.

I have also felt that railroad men should be allowed the right of retirement pay below the age of 65 and so in my bills I have provided in various provisions for the right to retire after 30 years service regardless of age. However, I realize that in the closing days of a Congress it is both well and wise to take such legislation which is fair and just as it is possible to get and while, of course, I retain the interest in the provisions of my own bill and certainly will be back, I hope, to argue in favor of them at some other time, before some other Congress, nevertheless I do feel that the bill which is before you today and which has been filed by your chairman (Mr. Wolverton) contains provisions which will be very helpful and will improve the present retirement law. I know that your distinguished chairman (Mr. Wolverton) has put a lot of effort into the bill which he has presented, and I certainly wlll vote in favor of it if I have that opportunity.

My remarks are brief, because I feel certain that all of the members of the committee are fully cognizant of the provisions of the chairman's bill and I hope that all will be in support of it. I will support it. I wish to thank you for this opportunity to be heard.

The CHAIRMAN. Mr. Clason, we are glad to have your appearance before the committee. We are all aware of the interest you have had in the workers on our rail system and this appearance before the committee this morning is an additional evidence of your interest in their behalf.

Mr. CLASON. Thank you, Mr. Chairman.

The CHAIRMAN. We will hear Congressman Ellis of West Virginia. STATEMENT OF HON. HUBERT S. ELLIS, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF WEST VIRGINIA

Mr. ELLIS. Mr. Chairman and gentlemen of the committee, I appear here today in support of H. R. 6766. It appears to me that the committee has come to a very satisfactory and happy solution of a

very complicated problem. Most of us have felt for a long time that these retirement payments should be increased and I note that this has come about through a reduction of the unemployment insurance taxes, which is unusual, within itself.

These advantages for all concerned have been accomplished without an increased cost to the public.

I think that the committee should be congratulated upon its work. I am glad to lend my assistance to support of the measure in the House. Thank you.

The CHAIRMAN. Thank you for your appearance, Congressman Ellis. As I have stated with reference to Mr. Clason, we are all aware of your interest in the legislation and we are glad to have you here and especially your assurance of support.

The CHAIRMAN. The next witness will be Mr. William J. Kennedy, Chairman of the Railroad Retirement Board.

STATEMENT OF WILLIAM J. KENNEDY, CHAIRMAN, RAILROAD RETIREMENT BOARD, CHICAGO, ILL.

Mr. KENNEDY. Mr. Chairman and members of the committee, my name is William J. Kennedy. I am Chairman of the Railroad Retirement Board located at 844 Rush Street, Chicago, Ill.

The Board, as you know, has lent its approval to the original bill, H. R. 5993, and the Board is now wholeheartedly approving H. R 6766 and H. R. 6768.

The CHAIRMAN. Are there any questions?

Mr. HARRIS. Mr. Chairman.

The CHAIRMAN. Mr. Harris.

Mr. HARRIS. I would like to ask the Chairman one question. Did I understand from Information we received that there was a division on H. R. 5993 in the Board?

Mr. KENNEDY. I did not get your question, Congressman.

Mr. HARRIS. Did I understand from previous information there was a division in the position of the Board on H. R. 5993?

Mr. KENNEDY. That is correct. But now, the Board is unanimous. Mr. HARRIS. You are in entire accord with H. R. 6766 and H. R. 6768. The Board is unanimous?

Mr. KENNEDY. That is correct.

The CHAIRMAN. Before I call any further witnesses, may I be advised as to whether the Railroad Brotherhoods or the Association of American Railroads have any other witnesses they wish to hear at this time?

Mr. SCHOENE. We have no further witnesses, Mr. Chairman.

STATEMENT OF BENJAMIN B. KENDRICK, SOCIAL SECURITY ANALYST, FOR THE CHAMBER OF COMMERCE OF THE UNITED STATES, WASHINGTON, D. C.

The CHAIRMAN. The next witness will be Mr. Benjamin B. Kendrick, social-security analyst of the Economic Research Department of the Chamber of Commerce of the United States.

Do you have a prepared statement, Mr. Kendrick?
Mr. KENDRICK. Yes, I do.

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Mr. HARRIS. Mr. Chairman, it is 12 o'clock and I wonder if we can get some idea of how much time the witness will require.

The CHAIRMAN. I have a notice here to the effect that it will be 15 minutes. I hope it will not be longer than that and if shorter I will be better pleased.

Mr. KENDRICK. I think I can hold it down to less than 15 minutes, Mr. Chairman.

The CHAIRMAN. Thank you. That will be very, very helpful to the committee.

Mr. KENDRICK. Mr. Chairman and members of the committee, my name is Benjamin B. Kendrick. I am a social-security analyst with the United States Chamber of Commerce and I am appearing on behalf of the chamber.

In general, the chamber urges that the committee take an over-all view of the social security matters in general legislation, other than railroad retirement and unemployment system. We are opposed to discriminatory social security provisions. We favor coverage under social security of the 20,000,000 workers not now having any protection. We favor adequate benefits for all employees covered under the social security. We oppose discriminatory treatment in favor of any special group.

The CHAIRMAN. A statement to that effect finds a sympathetic accord in me, but as I pointed out, the fact is that this committee only has jurisdiction over the subject so far as it relates to railroad workers.

Mr. KENDRICK. That is right; and so my point is that while it may not be practical for the committee at this time or for this committee to bring within the general social security system, railroad employees, still present action should be shaped with that in mind as an ultimate goal, and in particular railroad retirement benefits should not be increased at this time because an increase in the discrimination which already exists would obviously not be a step in the direction of eliminating discrimination.

The Chamber of Commerce of the United States has long supported social security legislation as well as proposals for extending and improving the Nation's existing social security structure. Under the guidance of its distinguished Committee on Social Security, the chamber has ever sought to maintain a constructive attitude, to seek the development of sound, comprehensive, adequate programs providing basic security not only for the 50,000,000 workers not having any social security protection. In addition, the chamber is of course anxious that the two or three million railroad employees-now protected by the special railroad social security programs should also have suitable coverage.

Incidentally, the special railroad legislation is definitely within the purview of the chamber's social security committee. Thus, although Federal legislation treats railroad employees as though completely apart from other private employees, the chamber attempts to keep the entire social security picture in focus.

BASIC PRINCIPLES

In social security matters it is especially important to keep a firm grasp on basic principles. Decisions based on expediency when piled on top of one another-can have consequences, not immediately

apparent, perhaps, but which eventually may prove disastrous. In retirement system legislation, where the full effects of present action may not be felt for half a century, basic principles should never be forgotten.

Let me suggest, then, two basic social security principles, which the committee may wish to bear in mind in considering the proposed

measures:

1. There should be a sound, comprehensive, equitable, and administratively simple program of social security for all American workers. The program should provide a minimum layer of basic protection against major economic hazards of life with respect to which private effort, either individual or group, has been demonstrated to be substantially inadequate.

2. All compulsory social security legislation should be uniform and nondiscriminatory (as, indeed, should legislation generally). The Government should never engage in unjust discriminations among the Nation's citizens. It should furnish the sort of example which Americans would like to see the rest of the world emulate.

May I digress here for just an instant to offer one suggestionnot germane to the present bills which, however, might prove of real value as a step toward a comprehensive, nondiscriminatory social security structure. The suggestion is that the Federal Government should have one, and only one, agency in which are centralized all Federal social security functions. Apart from administrative savings, such an agency could take a broad, over-all view, and might be expected to make constructive recommendations to Congress for the elimination of unwarranted gaps in protection, overlapping benefits, anomalies, inconsistencies, and discriminations. In large measure the Federal Security Agency is already such an agency. As soon as reasonably possible, Congress should therefore consider legislation including the Railroad Retirement Board within that agency.

POLICY RECOMMENDATIONS

Because of its belief that social-security legislation should be uniform, comprehensive, and nondiscriminatory, the Chamber of Commerce of the United States favors an extension of coverage under the old age and survivors insurance provisions of the Social Security Act to all employed and self-employed persons including railroad employees who are not now covered thereunder. In this regard, the following policy declaration was adopted by the membership of the chamber on April 28, 1948, at the annual meeting:

The present system of old age and survivors insurance should be extended to employees of nonprofit organizations, governmental employees, railroad employees, agricultural employees, and other employees not now covered thereunder, including the self-employed, to the extent feasible.

This position, it may be noted, is in close agreement with the recent recommendation of the Advisory Council on Social Security to the Senate Finance Committee in its report on "Old age and survivors insurance." The Advisory Council, in recommending that a study be made of how best to make the railroad retirement system supplementary to old-age and survivors insurance, clearly implied that an extension of old-age and survivors insurance coverage to railroad employees was desirable.

Once it is agreed that old-age and survivors insurance coverage should be extended to railroad employees, the next question is: What should be done with the existing railroad retirement system? This much is clear: No legislation should operate to reduce the total amount of retirement protection which present railroad employees now possess. Consequently, an extension of old-age and survivors insurance coverage to railroad employees would require the revision of the railroad system, for at least a transitional period, in order to provide benefits, supplementary to old-age and survivors insurance, sufficiently large to insure that no railroad employee would suffer or should suffer any loss of present or prospective benefits.

Should such supplementary railroad retirement benefits be payable for a transitional period only or should they be made permanent? The Chamber of Commerce believes that such benefits should be transitional only. In this regard, the following policy declaration was also adopted by the chamber on April 28, 1948:

Existing legislation creating the composite social security program for railroad employees comprising retirement benefits, survivors' benefits, unemployment benefits, sickness benefits, and maternity benefits, is discriminatory and otherwise inconsistent with sound social-security principles. Such legislation should be repealed, with suitable transitional provisions to protect the rights already acquired by individuals under it. Railroad employees should then be included within the coverage of appropriate general social security programs.

While supplementary benefits would be needed, for a period, to avoid a breach of faith with present railroad employees, to continue them in perpetuity would be to continue-in a less objectional form, it is true the present unjust discriminations against the many millions of employees now covered by an old-age and survivors insurance and against the additional millions not having any social-security protection.

Apart from the issue of discrimination, the continuance of preferential railroad benefits would involve heavy and unpredictable costs. Concerning costs, the following policy declaration of the Chamber of Commerce was adopted by the membership on April 28, 1948:

The eventual costs of social security are bound to be large, and excessive costs would impair the basic economy upon which all security rests. Therefore, a primary consideration in evaluating proposals for social security benefits must be the impact of their present and future costs upon the Nation's economy.

One further point in this regard: there is much evidence that within the next few years the benefits of the old-age and survivors insurance program will be increased substantially. They may well be increased to a level that would not compare unfavorably with the present level of railroad retirement benefits. In such event, the transitional benefits should or could then be discontinued-except for special cases--with the over all result that the special discriminatory system would have been eliminated without any loss in benefits or in benefit exceptions to a single railroad employee.

FURTHER REASONS FOR RECOMMENDATIONS

The Chamber's policy recommendations, which I have given, are based squarely on the general social-security principles which were set forth at the outset. In a word, the continuance of the discriminatory railroad retirement system in perpetuity is inconsistent with the sound aim of developing a comprehensive and equitable socialsecurity program for all American workers.

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