I am very happy to note by the news release the chairman of this committee has issued that it is contemplated to have a 20 percent across-the-board increase and I think very important to reinstate the lump sum benefits. I have received many letters complaining about taking that provision out of the bill in the changes made by the Seventy-Ninth Congress. I know literally hundreds of railroad men. Many of them are in dire straits as the result of the small retirement income they are getting. I have one in mind, a retired engineer from the Great Northern, whose sons and family I know very well, who when retired was just not able to support his family. It is always a very pathetic situation to me to see him being obliged to get a job with the F. W. Woolworth Co., in St. Paul-a man 71 years of age-as a janitor, as is the case with many retired railroad men who just cannot make a go of it under the present retirement benefits. I ask your consent, Mr. Chairman, that I may file a written statement with you? The CHAIRMAN. You will have that permission, Mr. Devitt. We appreciate your having come before the committee today expressing your interests, and interests that all of us were aware of and we appreciate the support which you give to this legislation. Mr. DEVITT. Thank you very much. (The statement referred to is as follows:) The Honorable CHARLES WOLVERTON, Chairman, Interstate and Foreign Commerce Committee, DEAR SIR: I wish to commend you and the members of your committee for your expeditious handling of proposed legislation to increase railroad retirement annuities. As an ex-railroader myself, as the descendant of a veteran railroader, and as the representative of a community fortunate enough to boast a goodly number of railroad residents, I have been acutely aware for many months of the sorry plight of these fine citizens whose railroad careers are over. They find themselves unable to continue their active and admirable participation in community life because they are ashamed of their shabby clothes, because they can't afford car fare to attend community meetings, because dues in even the most modestly-financed organizations are beyond their means these days. These are people who all their lives have been leaders in their neighborhood, church, fraternal, and civic groups. Today, after lifetimes of hard work, they not only must deprive the community of their valuable services, but they must many of them actually rely on help from friends and rela * * * * * * tives to get enough to eat. This, I submit, is a situation little short of disgraceful in our land of bounty. It is particularly inexcusable when money to alleviate the hardships of these deserving citizens is ready at hand in the railroad retirement fund * put there by these men and women themselves during their working years and by their colleagues in the railroad industry. * * I am in hearty accord with the expressed beliefs of the Committee on Interstate and Foreign Commerce and its distinguished chairman that it is important not only to relieve the suffering of railroad oldsters by increasing their retirement income but also to preserve the financial stability of the railroad retirement fund. Only in this way can we protect the interests of those who are to retire in the future as well as those who have already retired. The agreed-upon bill, introduced by the committee's chairman as H. R. 6766 and by Mr. Crosser as H. R. 6768, is a moving and encouraging example of what can be achieved through cooperation. In this situation, all parties concerned are to be congratulated on their willingness to rise above special or private interests. The Republican Party, in the person of the committee chairman, and the Democratic Party, in the person of Mr. Crosser; the ranks of railroad labor, as represented by the Railway Labor Executives' Association and the forces of manage ment as represented by the Association of American Railroads, have all joined together in a gesture of good citizenship. It is my earnest hope and sincere belief that the Congress as a whole cannot do otherwise than follow the splendid lead given them by you and your committee. Sincerely yours. EDWARD J. DEVITT, STATEMENT OF W. RULON WILLIAMSON, ACTUARIAL The CHAIRMAN. The next witness will be Mr. W. Rulon Williamson, actuarial consultant, Washington, D. C. Mr. Williamson, may I ask that you give your full name and the organization for which you speak? Mr. WILLIAMSON. W. Rulon Williamson. I am an independent actuarial consultant and I am speaking as a citizen, not as an actuarial consultant, I might say, but as a student of social insurance phe nomena. The CHAIRMAN. There has been no indication given to the chairman as to the length of time that you will speak. Mr. WILLIAMSON. About 8 minutes. The CHAIRMAN. Very well. Mr. WILLIAMSON. My statement is a plea for adequacy of consideration, not alone of benefits and costs, but of the position of this legislation in the whole economy. This is a year of tremendous problems. This class legislation should not claim attention at this time. The railroad retirement system is unique in dealing with one single body of employees, not Government employees, but employees of private enterprise. The first two acts were declared unconstitutional, the first by the Supreme Court, the second by the district court. No test of constitutionality has been attempted as to the third act. There is no question, however, that it is class legislation, and that its brief history has shown the earmarks of most class legislation, steady efforts to liberalize and extend the benefits, first to unemployment, and then to survivors and to temporary disability. As Dr. Rainard Robbins has consistently indicated in his articles on this system and its interrelation to any soundly conceived national program of social security, the continued existence of this special privilege should be questioned, rather than should there be an aiding and abetting of further special privilege to the group. There are special limitations when the Federal Government goes into the insurance business. There is no Federal insurance department comparable to the State insurance_departments, nor any actuarial staff within or coordinate with the Bureau of the Budget. In Great Britain it is taken for granted that the Government actuary's office will review legislation of this type before it comes up for hearing. Somewhere in the Federal Government there ought to be more responsible auditing and technical analysis on this type of financial benefits. Social security has been all too much class legislation too. It should function as a broad national program, ironing out what seem to be serious anomalies, at times rather capricious and discriminatory in their relationships to the individual citizens. The remedying of social security should surely have precedence over further special privilege under railroad retirement, and the broad floors of protection should include railroad employees. In one way the railroad retirement system is superior to the social security system. It is more nearly current in dealing with today's need today. It is in this respect more social than the larger program. But this does not warrant having the railroad employees continue to stay out of a broad national program, nor trying to meet the broad national trouble of inflation by attempting to protect a special group alone from the loss of buying power which all of us suffer today. I A few years ago, at Mr. Lea's request, I appeared before this committee to answer questions on the costs of these programs. emphasized then, and I repeat now, that the presumption exists that costs can range rather widely in absolute amounts and still more widely as a percentage of pay roll. But the ramifications of these benefits go much further. They are benefits more won by debate and exerting pressure, than they are benefits studied thoughtfully as to their relationship to the whole body of citizens, and their rights. They do not stand alone. Within the Office of the Actuary, Social Security Administration, are some significant cost analyses. For example, there are Actuarial Study No. 10, the chart of the 16 rectangles, Actuarial Study No. 24, and other studies which serve to point up the widom of more maturity in governmental plans. I plead with this committee to postpone legislation until a more balanced analysis of the whole social-security area has been completed, and to consider most seriously the immaturity of the present system, and the need for a serious unhurried, competent study before urging further benefits now. The CHAIRMAN. Mr. Williamson, I assume you were in the room when I made a statement a few moments ago as to the jurisdiction of this committee? Mr. WILLIAMSON. That is right. The CHAIRMAN. We only have jurisdiction with respect to railroad retirement benefits and the best that we could do as to measures such as this is to measure up as near as possible to the obligation that is placed upon us and we do not have it within our province to increase all social security; but as a then pointed out, and I again emphasize that this committee is anxious to do its part in providing proper retirement annuities for our aged and within the limited scope that we have the jurisdiction we have acted and we will continue to act. Mr. WILLIAMSON. It is because of that, Mr. Chairman, that I asked the privilege of making this brief statement, that there is no adequate coordination between these Government programs. I am a student also of conditions in Latin America and in Europe in the social-security plans and I may say that the most serious difficulty is the competition between the funds that deal with limited groups. There is no way of guaranteeing equity as between system without an over-all coordination and then there must be eventually a nondiscriminatory social-security system which constitutes a floor of protection beyond which individual employers or groups of employers can build up separate systems, otherwise they are in competition and it amounts to a clash one with the other. The CHAIRMAN. Well, we appreciate the thought that you have expressed; but we do want you to realize that this committee has endeavored over a period of years to set the pace for others to follow and we are out front so far as railroad employees are concerned, and we are hopeful that some day there may be more general recognition to those in general on social security. We feel that we have done justice to those who come within our province and it will be hoped that others will do likewise in groups that they have jurisdiction over. Are there any questions, gentlemen? Thank you. Now, I would like to inquire as to these witnesses. to answer to their names. I will ask them (Thereupon, the chairman called the names of the witnesses who subsequently testified, and they answered "present".) The CHAIRMAN. Now, I may inquire whether you gentlemen represent one group or are you representing different groups? The reason that I ask that is this, that I notice that there is a considerable amount of time asked for by each witness and if you are speaking for one group, I was wondering whether it would not be possible that you could agree among yourselves and have a spokesman rather than to have many, assuming that you are all speaking for the same group. Mr. HAAS. Mr. Chairman, I believe as to the time allotted on the program, that we will not take nearly as much as that. We put down more than we really needed. We probably will be perhaps 6 to 8 minutes each. The CHAIRMAN. Well, that will be very helpful if that suggestion is carried out, because the committee as you recognize is very busy and then the business on the floor today is rather important, and in addition to that we are anxious to act on this bill today in order that it may be reported to the House. Who will speak first for you? Mr. HAAS. Mr. Stack. STATEMENT OF THOMAS STACK, PRESIDENT OF THE NATIONAL RAILROAD PENSION FORUM, CHICAGO, ILL. The CHAIRMAN. Mr. Stack. Mr. STACK. Mr. Chairman and honorable Committee on Interstate and Foreign Commerce. My name is Thomas Stack; I reside at 1104 West One hundred and fourth Place, Chicago, Ill., and am president of the National Railroad Pension Forum, a nonprofit organization chartered under the laws of the State of Illinois. This organization represents the rank and file of the railroad industry who are opposed in principle to certain unjust amendments to the Railroad Retirement Act, enacted in the Seventy-ninth Congress under Public Law 572. I have worked over 38 years for the railroads. For the past 27 years, I have been employed as a rate analyst in the office of overcharge claims of the C. R. I. & P. Railroad in Chicago. At this point, I want to emphasize that my activities with the National Railroad Pension Forum are not influenced in any manner by management. I have been an active member of the Brotherhood of Railroad and Steamship Clerks for the past 25 years, in fact, until March 1947, at which time I incurred the displeasure of Grand President Harrison, because I questioned his arbitrary action in forcing upon railworkers the masterpiece of confusion commonly termed in railroad circles as the "Double Crosser Act." I was convicted by Mr. Harrison, and then afterward was offered a "commissar trial" which I naturally refused to accept. However, I did challenge my accuser, Mr. Harrison, to a debate on the lodge floor where the points in controversy could be discussed openly. For the benefit of the record, I want to make it known now that the Crosser amendments were never discussed on a lodge floor. We were not informed of the unions' support of these amendments until after they had become law. We then attempted to bring our objections to the lodge floor, but this privilege was denied. At every meeting grand lodge officers were sent to lecture to us on the great benefits that they had succeeded in obtaining for the railroad employee. The questions that were answered proved only one thing, that the interests of the rank and file were not protected. I was successful in having a motion passed on the floor to the effect that the entire matter be submitted to the members on a secret ballot. George Harrison, citing an article of the constitution which he had fathered, denied the request. In February 1947, the union leaders called an open meeting of railroad employees at the Hamilton Hotel in Chicago. The union officials attended the meeting en masse and introduced as their principal speaker, a former labor affiliate, who was then connected with the Railroad Retirement Board. This gentleman floundered desperately in an attempt to show the good points of the Crosser Act. Finally, after I succeeded in getting the floor, Grand Vice President Gobel refused to let me speak. The railroad workers protested his refusal and the meeting became disorderly. The meeting was eventually brought to order when I was granted permission to ask the speaker some 20 questions. The answer to the questions I raised resulted in the founding of the Railroad Employees Protective Committee of the Chicago area at requests of many hundreds of railroad employees, the forerunner of the present National Railroad Pension Forum, Inc. A great philosopher once said, "By their fur you shall know them." Let us apply this maxim to the Crosser Act which is now entering its second year. The Board's report for the fiscal year of 1947 discloses the following: That 240,026 on the retirement rolls, average benefits $61.10; widows 65 or over, $28.24 per month; widowed mothers $25.27 per month, children $15.70 per month, dependent parents $16.84 per month. Gentlemen, it is obvious that these token allowances are grossly inadequate in the face of present-day living costs. Several States give better old-age pensions. Even charities would refuse to offer such nominal amounts. It is difficult to reconcile these figures with the statements of those people who assure us we have the finest pension plan in the world. Prompt enactment of H. R. 6397 offers Congress the opportunity of correcting the wrong perpetrated on railroad employees under Public Law 572. This bill has been introduced by your colleague Representative O'Hara of the State of Minnesota where we have thousands of employees looking to Congress for passage of this badly needed legislation. The following Rail Brotherhood magazine each month lists names. of its deceased members, with benefits received, and their ages: |