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Congressmen by Representative George M. Fallon, of Maryland. The act of the grand president in suspending a large number of union members, including local officials, throughout the country from the Brotherhood of Railway & Steamship Clerks for their open opposition to the amended Railroad Retirement Act brought a wave of resentment that led to a great number of persons resigning from the union. One in particular, Miss Helen A. Kane, of Baltimore, now secretary of our local pension forum, was informed by the grand president that under the constitution of the Brotherhood of Railway & Steamship Clerks she would not be permitted to resign, but needless to say she is not now a member. Our local organization of the National Railroad Pension Forum has attempted in as many ways as possible to keep the railroad employees of the Baltimore area advised of any new legislation pending which will repeal or amend the Crosser amendments or effect the Railroad Retirement Act of 1937, and we are gaining support more and more every day. I wish to include in the record at this time a statement that neither I, nor any member of this organization, to my knowledge, has accepted funds or any material aid from the Baltimore & Ohio Railroad, or any other railroad. Our mailing list includes more union members—including local office brotherhood representatives—than nonunion, indicating that union members were not given the opportunity to voice their opinion on such a controversial piece of legislation—the Crosser amendments. To aprove this point, prior to the Brotherhood of Railway Clerks convention at Cincinnati in 1947, a resolution was passed on the floor of my local, lodge No. 567, Brotherhood of Railway & Steamship Clerks, one of the largest locals in the brotherhood, to the effect that the delegate of that local to the convention—Mr. James Scharf, division chairman, should take some action toward repeal of the Crosser amendments, after Mr. Hartman Barber, a representative of the grand president of the brotherhood, had threatened everyone present that Mr. Harrison would expel from the organization 4,000, 40,000 or 400,000 members if they persisted in opposing his will along these lines. Mr. Barber also informed the members present that things had been lined up in Congress, and that the rank and file could never get a bill passed over the heads of the brotherhoods. I come before you gentlemen today not to be stubborn or hateful, but to appeal to your sense of fairness and justice to ask support of bills H. R. 6298 and H. R. 6397. I might say when I came in here I did not know of the existence of the bill introduced by Chairman Wolverton. I should like to briefly outline a few of the many objections that railroad employees have raised to the Railroad Retirement Act as it exists today. First of all, we should not lose sight of the most important factor in the present execution of the law—the cost. Throughout these hearings I suggest that you place yourself in the position of the average railroad employee making less than $300 per month. Place yourself in the average railroad employee's position—even $15 a. month would be a lot of money to pay for any type of compulsory insurance, let alone the $17.25 now being paid, when you take into consideration the factors of withholding tax, State income and sales taxes, cigarette tax, luxury tax, contributions to church, Red Cross, welfare, and so forth, and the extremely high cost of living, which we
are told will continue to climb this coming year. The tax burden of 5% percent—soon to be 6 percent—which actually represents a reduction in salary of that amount, should be enough of an argument to stop any further effort to retain the present features of the law at such an excessive cost. Our second objection is the elimination of the death benefit by enactment of the Crosser amendments. Thirdly, where husband and wife—both employees—contribute 5% percent tax, in case of their accidental death only one annuity will be paid to the beneficiary. The greatest fault of all, and the one that has caused the greatest resentment among railroad workers, is the discrimination between male and female employees and widows of railroad workers. Why is a widow of a railroad employee forced to wait until she is 65 years of age before she can qualify for survivor benefits, yet the female employee at age 60 can retire on a full annuity. How can this glaring discrepancy be explained? Why not give widows their full annuity at age 60 also? Their husbands are paying a high enough tax for that. Those railroad employees who have spent 20 or 30 years in the employee of the railroads cannot understand the provision for new employees who earn but $150 in any one benefit year being eligible for full benefits under the Crosser amendments. As example— earns $150, is entitled to a maximum unemployment benefit of $227.50. [Reading: Amendments to these two acts were not prepared on a collective-bargaining procedure, that apparently the provisions of these bills were prepared by certain officers or employees of the Railroad Retirement Board and then approved by the chief executive officers of certain railroad labor organizations, which is not in keeping with the previous agreement between the railroads and the brotherhoods. That quotation from page 340, paragraph 2, hearings before the Committee on Interstate and Foreign Commerce, House of Representatives, Seventy-ninth Congress, on February 14, 1945. Testimony of Mr. John T. Corbett, assistant grand chief engineer and national legislative representative, Brotherhood of Locomotive Engineers. In line with present living costs all annuity and survivor benefits now being paid and provided for in the existing law are much too low. As regional vice president of the National Railroad Pension Forum it has been my good fortune to meet personally a great many railroad men and women employed on all of the lines between the South and the New England States. These have included trainmen, office workers, trackmen, shopmen, signal maintainers, station agents, car builders, and traffic solicitors. The majority of these workers in every walk of railroad activity sought me out in the hope of obtaining early relief from the burdensome features of the railroad retirement i. as it was amended in 1946. The railroaders of America are recognized as a stable element in the various communities of the United States. They have permanent residences, pay their taxes and their bills promptly, and conduct their lives on as high a scale of living as their earnings will permit. The present high tax of 5% percent on employee and employer alike—to be advanced to 6 percent January 1, 1949–actually deprives these people of some of the essentials of decent living. Therefore, I request this committee to consider the reduction as effected by H. R. 6298 of the railroad retirement tax to 3 percent, on employee and employer alike, which would prevail according to the balance now in the Railroad Retirement Fund of over 700 million dollars. I consider it against public policy to allow forthright citizens, such as the railroad workers are, in every city and town in the land, who have been receiving incomes just about large enought to permit them to avail themselves of the services extended by the merchants of their communities for 30 years or more, to find themselves after a life of service to the Nation, through its transportation, suddenly retired at a modest pension too small to allow them to continue their way of life. Gentlemen, under the present set-up of the railroad retirement law the toilworn railroader is provided with a pension that is $120 a month or less even for former high salaried workers, but which averages only $61 a month for all the railroad workers at present on retirement pensions. It is only fair then that the law be changed to provide pensions of at least half pay to all railroad workers whose monthly salaries or wages is $300 or less. Since the railroad retirement law tax takes such a large portion of a railroad worker's income during the years when every penny of money earned is so urgently needed to live, support a family and educate children, I believe that the law should provide for the safeguarding of that money for the continued benefit of the railroad worker. At his death before reaching retirement age his survivors should have restored to them full sum of his payments to the railroad retirement fund, plus interest, and he should be given the right to consider such moneys paid into the fund as his accumulated savings which he might bequeath to any heirs or survivors he might name. The law should be amended to provide this benefit. So that there may be no discrimination between men and women workers I recommend passage of H. R. 6297 providing for retirement at age 60 for men and women alike, after 30 years in railroad service. In addition I recommend that widows of railroad men be allowed to obtain their annuity when they reach age 60 if they were younger at the time of their husband's death, or immediately after his death if they have passed age 60 at time he passes away. Gentlemen, more than a million and a quarter railroad workers, their families and their friends, all over this Nation are looking to your actions today in the hope that you will bring them the relief that they have patiently awaited for the past 2 years. Ease their burden now and you may be sure that they will not forget your goodness to them in the days ahead. The CHAIRMAN. We thank you for your statement, Mr. Byrnes. I note what you said about present living costs and annuities, and survivor benefits now being paid and provided for under the present existing law being much too low. I suppose for that reason you can approve of the bill I introduced. Mr. BYRNEs. Yes, sir; most heartily. The CHAIRMAN. Even though it may not go as far as you would like, you would like to approve of that? Mr. BYRNEs. We would like to approve it. The CHAIRMAN. Are there any questions, gentlemen? The next witness will be Mr. Harry H. Warner, chief clerk of the engineering department of the Savannah & Atlanta Railway Co. at Savannah, Ga.
STATEMENT OF HARRY H. WARNER, SAWANNAH, GA.
Mr. WARNER. Mr. Chairman and gentlemen of the committee: My name is Harry H. Warner. I am employed as chief clerk in the engineering department of the Savannah & Atlanta Railway Co. at Savannah, Ga. On January 1, 1947, when our railroad retirement tax was increased 64 percent, most of us believed it necessary and that the benefits would be increased. However, shortly thereafter fellow employees called my attention to some of the glaring defects in the 1946 amendment which opened my eyes. I found that the estate which we thought we had created by paying into the retirement fund, had been confiscated without our knowledge or consent and the right to name our beneficiary abolished. Instead there is substituted a system of doles to our families, which sounds well enough until examined. But in order for a widow to receive any benefits she must be 65 years of age and a child must be under 18. Now the majority of employees survive until middle age and my own case is typical. My wife is 10 years younger, my children are grown and my parents have died. Therefore, regardless of the amount paid in, should I die before retirement no benefits would be payable unless I died penniless, in which case my funeral bill would be paid. Yet the Government collects on my salary $414 a year. In other words, 1 year's tax would discharge its obligation to me, except that if my wife survived me by 15 years, did not remarry, and did not earn more than $25 a month, in which case she would be entitled to a dole. No wonder the Government is now able to put a dollar in the so-called reserve fund for every dollar cost of benefits and operation. On the other hand, should I retire at 60 my pension would be two-thirds as much as a woman employee would receive, who pays the same tax, while I have a wife to support and the majority of women employees have no dependents. Since discovering these costly mistakes I have devoted my spare time to informing other employees about them and had intended submitting evidence of the almost universal dissatisfaction which has gradually developed as the truth became known. However, this now seems unnecessary, since the present plan has been deserted even by its author. I will say that I sent out several thousand circulars asking if there was anyone who was satisfied with the present law and if anyone could explain why it was written in the first place. No such letter was received but I received many letters from all parts of the country expressing resentment toward the law and commending my efforts to bring about a change. We do not understand why social-security tax is only 1 percent while ours will go to 6 percent January 1 and they receive almost as much benefits as we do. We do not understand why postal employees, who pay the same tax as we do, have a maximum of 80 percent of their salary as a pension while ours is 40 percent. A young man starting in the railroad service today, counting what he pays and what the railroad pays, plus 3 percent interest, will, in the 44 years he has to pay tax, accumulate a credit of 25 or 30 thousand dollars. Only those rare individuals who reach eighty or ninety will ever receive any such amount in benefits. Some will get nothing and leave nothing after a lifetime of taxation.
Last fall I heard about the National Railroad Pension Forum, Inc., and became a member. I am now urging the passage of bill H. R. 6397, introduced by the Honorable Joseph P. O'Hara, in common fairness to the employees who are paying this excessive tax. In the last 2 weeks I have circulated copies of this bill among hundreds of employees and all who have replied are highly pleased with it. No one has made any objections to it. It is noted that the Board reports benefit payments in 1947 increased 46 percent, yet the tax was increased 64 percent—just the reverse. The employees are concerned over the continued accumulation of credits on the books while pensioners and widows go on charity. I thank you for your kindness. The CHAIRMAN. We thank you for your appearance, Mr. Warner. Of course, you realize that the bill that was introduced yesterday does in some measure improve some of the conditions of which you have complained in your statement. Mr. WARNER. We had no opportunity to see the other bill, of course, until this morning. The CHAIRMAN. You are aware of what it contains? Mr. WARNER. I have seen it and so far as it goes, why, I am sure most employees approve of it. The CHAIRMAN. So far as it goes you approve of it? Mr. WARNER. Yes, sir. The CHAIRMAN. Any further questions, gentlemen? We thank you, Mr. Warner, for your appearance here today and for the testimony you have given to this committee. Mr. WARNER. Thank you. The CHAIRMAN. The next witness will be Mr. Herbert A. Haas, 601 Seventy-ninth Street, Brooklyn, N. Y.
STATEMENT OF HERBERT A. HAAS, BROOKLYN, N. Y.
Mr. HAAs. Mr. Chairman and gentlemen of the committee. The CHAIRMAN. About how much time do you think you will need, Mr. Haas? Mr. HAAs. I do not think I will take any more time than the other gentlemen have, Mr. Chairman. The CHAIRMAN. Thank you. The committee is very anxious to conclude the hearings and some of the members have intimated that they would like to have some lunch. Personally I want to hold an executive session as soon as the hearings are completed. Mr. HAAs. I feel the same, Mr. Chairman. Mr. Chairman and gentlemen of the committee: My name is Herbert A. Haas. I reside at 601 Seventy-ninth Street, Brooklyn, N. Y. I was employed by the Pennsylvania Railroad on February 24, 1942. On September 12, 1947, I was dropped from the rolls of the Pennsylvania Railroad by virtue of the management's application of regulation 3–C–1, properly defined as failure to exercise my seniority. But during this hearing the question will undoubtedly be raised thankfully not as yet, as to my interest in being a registered lobbyist when I am no longer considered an employee of the railroad industry. In my personal opinion my case was poorly handled by the Pennsylvania Railroad. At the present time, I am compiling evidence that should prove I was ushered out of the service without fair trial of