There are two further points, which may be made, also supporting the Chamber's policy recommendations. First, the coverage of all American workers-including railroad workers-under one uniform system would offer a permanent solution to the many present anomalies which mar the existing relationship of railroad retirement and social security. Secondly, a uniform program would contribute greatly to over-all administrative simplicity.

Perhaps these points need not be elaborated at this time. However, may I respectfully suggest that the committee invite an appropriate official of the Social Security Administration-perhaps the Chief of the Accounting Operations Division in the Bureau of Old-Age and Survivors Insurance to appear before the committee and explain the complicated, time-consuming, burdensome procedures and the anomalies that nonetheless remain now being used under existing legislation to coordinate old-age and survivors insurance with railroad retirement-particularly on survivors' benefits and on disputed coverage cases. These complexities may then be contrasted with the much simpler procedures employed with respect to persons all of whose coverage has been within the sole purview of social security-as railroad employees would be were the Chamber's recommendations followed.

Questions about anomalies and administrative complexities are not theoretical; they are down to earth matters. There could be a substantial pruning of Federal expenditures for administration, and of Federal administrative personnel, under a uniform social-security system.

Moreover, the present complexities and anomalies will get worse and worse with the passage of time, if a separate railroad program is maintained. In England, anomalies got so bad that special "anomalies regulations" were promulgated. In Germany, the anomalies became so grave that uniform benefits were eventually found to be

necessary.

PRESENT ACTION

No doubt there are many and good reasons why the Committee on Interstate and Foreign Commerce should not, at the present_time, consider legislation looking toward the coverage of railroad employees by old-age and survivors insurance with the eventual abolition of the special railroad program after a transitional period. However, the central point of this testimony has been that-while such legislation may not be immediately practical-at least no legislation should be adopted at this time that would make difficult the eventual adoption of legislation to effectuate this desirable objective. Obviously, an increase in present discrimination is not a step toward the elimination of discriminatory legislation.

Particularly deplorable is the present competitive situation with efforts being made, on the one hand, to keep railroad retirement a few jumps ahead of social security, and on the other, to push socialsecurity benefits up to the level of those under the railroad program, or beyond.

Sound social-security legislation cannot be achieved on a pressure group basis. We must seek to see the Nation's social-security problems in their entirety. We must seek legislation that promotes the welfare of all, but which affords special privilege to none.

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The CHAIRMAN. Mr. Kendrick, I note that the same thought runs through your entire statement, that is, an argument in favor of uniform social security with respect to all employees.

Mr. KENDRICK. Yes.

The CHAIRMAN. I think that one might have that thought in the first instance, but it has seemed to me, first, that there can be a very good reason given for differentiation between railroad workers and those who are in other industries, due to the fact that there is a safety element that is necessary in the operation of our railroads.

I think that we all agree that continuity of employment provides a measure of safety in itself; at least promotes it. Continuity of employment depends upon working conditions, not always just wages; but other conditions, as well. Therefore, when you give a satisfactory retirement system to railroad workers that enables them to look into the future, not with fear and timidity, but with some degree of assurance, it has the effect, in my opinion, of making a better and a more satisfactory worker. That means continuity of employment and with continuity of employment it promotes safety. The public is interested in safety and, therefore, it would seem to me that there is a very good reason, fundamental reason, that might be considered as differentiating this class of workers from others

In the second place, while it may be true for the reasons that I have stated that there should be a more generous recognition of service of the railroad workers, yet I have also been pleased to think that the railroad brotherhoods have been setting a mark. They have been fixing an ideal to which others might likewise aspire, by reason of increased annuities and so forth in retirement. I think the railroad brotherhoods have done a fine job in having emphasized the importance of railroad retirement for their workers on a basis that is helpful. I hope that as the railroad brotherhoods in this instance, as in so many other instances take for instance the sitting down together with railroad management in the consideration of this bill and conferences of that kind which in my opinion are very helpful-over the long period of years have performed a fine service that that which they have done can be recognized in a more remunerative way for industry in general.

Mr. KENDRICK. May I comment?

The CHAIRMAN. Yes.

Mr. KENDRICK. I think the points you have made are well taken. I think they may well be good reasons for the railroad employees to receive special treatment, but there are other groups too that might be able to produce equally persuasive reasons why they should receive special treatment.

There was a bill in Congress several years ago to create a special separate social security system for employees of nonprofit organizations and no doubt there are many arguments that could be developed in favor of such a separate system there and then a few years back, before the present mine workers' pension plan was set up, a suggestion was made-I am not sure that there was a bill to that effect-that a separate social-security system be established for miners; that they have a particularly important role and are especially deserving of favorable treatment; but once you start down that road, where does it end? Does not that result in a whole group of special retirement systems; separate little systems not coordinated and only with diffi

2

culty among themselves; each supported by its own pressure group; all competing with one another for benefits, and do we not lose sight of the fact that the over-all picture where under the Government all persons should be treated alike

The CHAIRMAN. Well, as I pointed out to you in the beginning, this committee only has jurisdiction over one phase of the subject. I am very proud of the fact that legislation that has come out of this committee over the period of years has been of a character that you can look at with a feeling of pleasure and certainly with much greater gratification than we can look at some of the other social security legislation that now prevails in this country; and when you speak of the miners, you strike a very sympathetic cord with me.

Mr. KENDRICK. I meant merely to suggest that for each of these groups there may be excellent reasons why they should receive favorable treatment, but once we start down that road we do not know where it may lead.

The CHAIRMAN. Well, I want to impress upon you that this committee is going to do the kind of a job that we think ought to be done in behalf of the workers, and the committees have jurisdiction over other phases of the subject I am hopeful will have the same feeling of sympathy toward those in other industries that this committee has in this.

Mr. KENDRICK. Well, Mr. Chairman, I think we realize that this legislation in all likelihood will be enacted. I think our purposeThe CHAIRMAN. I will be terribly disappointed if it is not.

Mr. KENDRICK. Our purpose is merely to state for the record and for such future reference as may be made, our position in favor of the uniform nondiscriminatory, all-inclusive social-security program for

this nation.

The CHAIRMAN. Thank you.

Mr. MILLER. Mr. Chairman.
The CHAIRMAN. Mr. Miller.

Mr. MILLER. Before the witness leaves I would like to ask one question. Does it seem fair to refer to this system as discriminatory when the employees and the industry themselves are financing the program? It seems to me that it is perfectly sound. If the railroad labor through our contributions and the railroads through theirs can improve and pay benefits much better than the social-security benefits why should not they do that and why is that not a good thing; why would it not be a good thing for the miners to do likewise and eventually other industries to follow suit and to get a retirement system that the industry can finance? By "industry" I mean both management and labor-and get away from this mere pittance, that they have now under the general social security.

I think that this organization is setting a good example for all other industries.

Mr. KENDRICK. Well, I think there are several answers that could be made to your point, but I have attended sessions of this committee before and I have heard representatives of the union explain that the tax increase would not really hurt the railroads, because they are going to be taken into account in setting the rates. In other words, these preferential benefits, to some extent at least may be paid by the. public at large through higher rates, and that at least is one reason why we favor a uniform social-security program.

Mr. MILLER. It seems to me that as far as some social-security benefits that are now paid are concerned, under the present law they are almost a handicap. I mean by that that a person in certain communities who is known to be receiving $35 or $40 a month is considered to already be taken care of. If he is retired under the social security, he cannot get any benefits. He would be better off if he were completely broke and getting his three meals where he could get them or at least an opportunity to get work.

Mr. KENDRICK. I do not mean at all to imply that the existing social-security program is perfect or anywhere near it. In view of the increase in the cost of living that has occurred, to me, it seems clear, to me at least, that social security benefits should be increased to be in keeping of the objective of protection. I do not mean that the railroad employees should be brought under social security as it is, with the social security system as it is, but rather we should all work together toward having one uniform, comprehensive, nondiscriminatory social security program.

Mr. MILLER. That is all.

The CHAIRMAN. Any further questions?

Mr. HARRIS. Mr. Chairman.

The CHAIRMAN. Mr. Harris.

Mr. HARRIS. Mr. Kendrick, you have not appeared here in opposition to H. R. 6766; have you?

Mr. KENDRICK. Well, I was really presenting some general principles.

Mr. HARRIS. That is right.

Mr. KENDRICK. But, these general principles as applied to H. R. 6766 would oppose an increase in the retirment benefits of that bill, but they would not oppose the adjustments and the unemployment

tax rates.

Mr. HARRIS. I was not sure whether you mentioned that you favored the increasing or improving of the social-security program ultimately to the level of the present level of the railroad retirement program or whether you were opposed to increasing benefits at this time for annuitants.

Mr. KENDRICK. Well, I think, apart from whether I favor it or not, that the social-security benefits are pretty sure to come up and I think if the railroad benefits could be held right where they are now then in a few years the social-security benefits may come up to the present railroad level and that would be beneficial.

Mr. HARRIS. And then, so long as the rates and difference in pay by railroads and other workers in other industry exists, you do not think that they should be brought to the same level?

Mr. KENDRICK. Pardon me.

Mr. HARRIS. Insofar as the rates are different for railroad workers and workers in other industries

Mr. KENDRICK. You mean because railroad workers receive higher wages?

Mr. HARRIS. And they pay higher rates.

Mr. KENDRICK. Well, if everyone were covered under a uniform system there would be a uniform tax rate too.

Mr. HARRIS. I appreciate that viewpoint that you have expressed, but I was wondering if you really were representing the United States

Chamber of Commerce and appeared here opposing the increase in benefits to railroad retirement payments?

Mr. KENDRICK. That is right.

Mr. HARRIS. At this time?

Mr. KENDRICK. That is right.

Mr. HARRIS. Has the Chamber ever taken a position opposing any increase in the rising cost of living?

Mr. KENDRICK. I am not familiar with the Chamber's position on that subject.

Mr. HARRIS. Well, it is a fact that the price for essential living commodities are up higher than they were a year or a few years ago?

Mr. KENDRICK. I think that is right; but I think that the railroad benefits are already so much higher than other social-security benefits; that as these other benefits rise to meet living costs, that creates a particular favoring opportunity to cover railroad employees under social security without having to reduce any benefits.

Mr. HARRIS. Well, have not increases been granted to social-security benefits in the last 2 or 3 years?

Mr. KENDRICK. The last amendments of any consequence were in 1939. Probably there will be some increases in a few years, I should imagine.

The CHAIRMAN. Are there any further questions?

Mr. HARRIS. There was an increase in Federal contributions.

Mr. KENDRICK. That was public assistance. I am speaking of oldage and survivors' insurance.

The CHAIRMAN. Any further questions?

STATEMENT OF HON. EDWARD J. DEVITT, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF MINNESOTA

The next witness will be Congressman Devitt of Minnesota. Mr. DEVITT. Mr. Chairman and gentlemen of the committee, my name is Edward J. Devitt. I represent the Fourth District of Minnesota. I live in and represent the city of St. Paul, Minn., which is a major railroad terminal. Three-fourths of my Irish relatives were railroaders. My father was a railroader and I used to be a coach cleaner on the Great Northern.

Thousands of railroaders live in my district. The city has within it the home office of two major railroads, the Northern Pacific and the Great Northern, and the home office of a relatively minor railroad, the Omaha.

Thirteen railroads serve the city.

I have received on the average about four or five letters a day since I came to Congress urging that something be done about increasing the retirement benefits under the Railroad Retirement Act and Unemployment Insurance Act.

So, I came this morning to urge, with all of the vigor at my command, that this committee proceed with the hearings, and I hope the recommendation and enactment of the bill which has been introduced by the honorable chairman of this committee, Mr. Wolverton, H. R. 6766, containing the principal provisions of that bill, or such other provisions of the Crosser bill as this committee, in its judgment, deems is proper.