Mr. Chairman, H.R. 1012 is needed and needed badly. It is the fervent wish of my constituents who will benefit from its enactment that it will become a law at the earliest possible date. As I stated previously, the Harris bill, H.R. 1012, contains in one package the provisions of my bills, H.K. 1370 and H.R. 1373, and I sincerely hope the legislation will be enacted as quickly as possible and that at a later date the committee will consider the other bills I have introduced to amend the Railroad Retirement Act. Mr. Chairman, that concludes my statement. The CHAIRMAN. Thank you very much, Mr. Van Zandt. We are glad to have your statement on this subject." Mr. ROGERS of Texas. Mr. Chairman. The CHAIRMAN. Mr. Rogers. Mr. ROGERS of Texas. Mr. Van Zandt, in your opinion what is the primary cause of the unemployment situation? Mr. VAN ZANDT. You are talking now about the railroad industry? Mr. ROGERS of Texas. In your district. Mr. VAN ZANDT. First, it is based on a very sick coal industry, because the majority of the freight that originates in my area stems from the coal industry. Secondly, unemployment has resulted from the revolution that is going on within the transportation industry, causing a loss of freight, diversion to other methods of transportation, mechanization that has displaced manpower, and the advent of the diesel locomotive which has displaced the steam locomotive. These are some of the principal reasons why all railroads today find themselves confronted with a loss of business operating with less manpower through dieselization. Mr. ROGERS of Texas. You mean, then, that this is, in your opinion, a permanent decline? There is no chance of getting employment back? Mr. VAN ZANDT. Referring to the figures that I mentioned a moment ago, the peak of employment in Altoona was in February of 1951, when we had 14,361 employees. The Pennsylvania Railroad at that time was hauling all the freight it could haul and was repairing locomotives and building new ones, as well as repairing cars and building new cars. But today freight traffic has declined with the result that the repairing of old locomotives and cars, as well as building new ones, has been sharply curtailed. Frankly, the business is not there and with shortcuts that are now taken in the railroad industry through the use of the diesel locomotive and so forth, the prospect of ever reaching the 1951 high of 14,361 jobs in Altoona is naturally impossible. The railroad management tells us that employment in Altoona will probably level off at about 6,000. It is now 5,300 or within 700 of the 6,000. Mr. ROGERS of Texas. Is any of that unemployment in your opinion, Mr. Van Zandt, traceable to the decline in passenger service? Mr. VAN ZANDT. Very definitely so. Mr. ROGERS of Texas. What percentage of it would you say would be chargeable to that? Mr. VAN ZANDT. First, the number of train-miles has been cut considerably and while I am not in position to tell you percentagewise just what that cut would represent, in diesel locomotives and in equipment it means quite a lot. The diesels, of course, are hauling freight today, but on the sidings in the Altoona yards you see hundreds of passenger cars, sleepers, dining cars, and day coaches that are no longer in use. As a matter of fact, over a period of months the Pennsylvania Railroad repaired no passenger equipment whatsoever, but used existing equipment and drew on a reservoir of repaired equipment on hand. The result was that all of the jobs that were related to the maintenance of this passenger equipment simply were abolished and employees with years of service were without employment. Mr. ROGERS of Texas. Then if some of that passenger traffic could be recovered, you could have a chance of reducing the unemployment insofar as that is affected? Mr. VAN ZANDT. Very definitely so. Starting the first of the year the Pennsylvania Railroad began repairs on a schedule of approximately 10 passenger cars a month. That meant immediate employment for men employed in that department of the railroad. Mr. ROGERS of Texas. Thank you, sir. Thank you, Mr. Chairman. The CHAIRMAN. Mr. Younger. Mr. YOUNGER. Mr. Van Zandt, you have given quite a study to this problem. What are the reasons that the Federal Government ought to continue to handle this retirement? Why cannot it be handled like the retirement of General Motors, or steel, or other private retirement funds? Mr. VAN ZANDT. This is a very unique retirement system. The system itself was conceived by railway employees and railway management and they in turn approached the Federal Government through the Congress and asked that the necessary laws be written so that the Government would simply manage or administer the system. Therefore, railroad retirement is a system that railroad management and railroad employees themselves wanted. Suggestions have been made from time to time that it be absorbed by social security. I know that the railroad employees through their respective labor organizations (and I am a furloughed employee myself), will continue to resist any effort to have the railroad retirement system absorbed by social security. We look at railroad retirement as being a unique system since we are paying for it and hence we receive benefits that are not paid to recipients of social security benefits. Mr. YOUNGER. I mean to handle the retirement benefits over and above the social security by employees and the employers just like is done in the other large industries. Mr. VAN ZANDT. Are you talking about a supplemental pension! Mr. YOUNGER. Yes. Mr. VAN ZANDT. If I recall correctly, firms in the steel industry augment the social security benefits by a supplemental pension and so does the United Mine Workers. That is a matter that would have to be worked out, as I understand it, between the representatives of railway labor and railway management. In some instances the railroads do have a supplemental system--I know they do on the Pennsylvania system, where it is possible for an employee to buy additional retirement benefits. Mr. YOUNGER. That is all. The CHAIRMAN. Mr. Mack. Mr. MACK. I just wanted to see if I understood that reply to Mr. Rogers. Did you say you thought it would level off at about 5,000? Mr. VAN ZANDT. 6,000. Mr. MACK. You do not have 6,000 people employed there? Mr. MACK. Do you not think that the opening of the St. Lawrence Seaway will adversely affect employment in your area or in the general area? Mr. VAN ZANDT. Yes, I do. I think that the bottom of the barrel is yet to be reached as far as this situation is concerned with respect to the railroads. I think when the St. Lawrence Seaway opens up traffic that the freight the Pennsylvania carries from the ports of Baltimore and Philadelphia and New York, and what comes through the Boston and New York gateways, will be diverted to steamers that will deliver the cargo to Great Lake ports. This means that the Pennsylvania Railroad will have lost that cargo. I also think that some of the wheat now being hauled by the railroads will be diverted to steamship and likewise ore and coal. I have tried to establish a figure and the best estimate that can be agreed to is about 15 percent. However, I am informed that it is the consensus of opinion among leaders in the transportation field that the amount of freight diverted from the railroads to ships is contingent on the tolls levied against foreign-flag ships for the use of the St. Lawrence Seaway. In other words, the St. Lawrence Seaway could take 15 percent or more of the cargo now carried by the railroads in eastern United States. Mr. MACK. Then it would be very difficult to continue to increase your employment, in this area especially, in view of the fact that the St. Lawrence Seaway is opening up. Mr. VAN ZANDT. That is right. We are going to be very fortunate in Altoona if we level off at 6,000 and the only reservation I would make is in the event of a national emergency, which, of course, could make it possible that we go beyond 6,000. The CHAIRMAN. Mr. Avery. Mr. AVERY. Mr. Chairman, I would like to ask our colleague from Pennsylvania just one question: Mr. Van Zandt, that question would be in your second bill, H.R. 1373, I believe, dealing with the unemployment insurance. You are aware that the provisions of your bill, assuming they are identical to H.R. 1020 in that section, inject a whole new theory into unemployment insurance, whereas unemployment insurance benefits are extended and they are based on seniority. Mr. VAN ZANDT. Yes. Mr. AVERY. Are you in full support of that concept? Mr. VAN ZANDT. Yes, I am. Mr. AVERY. Even though it is a departure from the unemployment insurance concept that we have accepted now for 25 years? Mr. VAN ZANDT. The provisions of H.R. 1373 are incorporated in the provisions of H.R. 1012 and I am in wholehearted support of H.R. 1012. Mr. AVERY. You feel that is economically sound? Mr. VAN ZANDT. I think it is economically sound. I think that we have to take into consideration management as well as employees and I have done that and I think it is economically sound. Mr. AVERY. That is all, Mr. Chairman. The CHAIRMAN. Thank you, Mr. Van Zandt, for your statement. Mr. VAN ZANDT. Thank you. The CHAIRMAN. At this time I would like to recognize a member of this committee, Mr. Rhodes, for the purpose of introducing a distinguished visitor we have with us today, and also for a brief statement on the legislation. STATEMENT OF HON. GEORGE M. RHODES, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF PENNSYLVANIA Mr. RHODES. Thank you, Mr. Chairman, and my colleagues on the committee. I want to introduce the distinguished Mayor of our city of Reading, Daniel A. McDevitt. He is here in Washington because of his interest in housing for the aged. Reading is a railroad city and I know he is also interested in the legislation which is now being studied by this committee. Will you rise, Mr. Mayor. The CHAIRMAN. Mr. Mayor, we are very glad to have you with us today. You are welcome to this committee any time you have an opportunity to be with us. Mr. RHODES. Mr. Chairman, fellow members of the Interstate and Foreign Commerce Committee, I appreciate this opportunity of stating my views favoring the enactment of H.R. 1012, H.R. 1013, and other identical bills, including my own, H.R. 2925, providing for a 10percent increase in benefits under the Railroad Retirement Act and also making liberalizing amendments to the Railroad Unemployment Insurance Act. On August 23 of last year, only a few hours before adjournment, I expressed regret over failure of the House to act on similar legislation to raise railroad retirement benefits and to amend the Railroad Unemployment Insurance Act. At the same time, I expressed the hope that action on this legislation would be the first act of the new Congress in order to keep faith with retired railroaders, their survivors, and those rail employees who are unemployed. It is, Mr. Chairman, a great credit to you and this committee that hearings on this legislation have been scheduled so promptly. This increase is long overdue. I trust that we will act favorably on the proposal for improved retirement benefits as soon as possible. Persons living on fixed incomes such as pensions and annuities have been most severely hurt by the increasing cost of living. Since the enactment of the last bill raising railroad retirement benefits, Public Law 1013, 84th Congress, the consumer price index for all items has risen by 8 points, medical care, so important to old folks, by 15 points, and housing costs by 7 points. Rises in the cost of living have also worked a hardship on those unemployed railworkers who have been adversely affected because of sharp cutbacks in the industry. I am pleased that the bill contains the January 1, 1959, retroactive date, the effective date of the increases which was contained in the bill last year. This will guarantee that no one will lose benefits because of the failure of the previous Congress to enact the measure before adjournment. H.R. 1012 and companion bills are sound. They provide adequate increases in the present tax rates to cover the actuarial costs of the increases under both the Railroad Retirement and Railroad Unemployment Insurance Acts. Mr. Chairman, I urge the early approval of this needed legislation. The CHAIRMAN. Thank you very much, Mr. Rhodes. We are glad to have with us today the gentleman from Missouri, Mr. Charles Brown. Mr. Brown, we will be glad to hear you at this time. STATEMENT OF HON. CHARLES H. BROWN, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF MISSOURI Mr. BROWN. Thank you, sir. Sooner or later, we Americans of the 20th century must recognize that the vast changes of the past 30 years in our economic and social system, while beneficial to so many, have posed new problems for our retired, disabled, unemployed, and all people not actively engaged in producing and earning. We have become a Nation dedicated to providing every American a fair chance to earn a decent honest living, to educate his children, and to spend a few retirement years honorably and independently. Also, we are determined to prevent economic depression. The Nation, through many elections, has instructed the people's Congress to use the full power of the people's government to achieve these noble and worthwhile goals. Every thinking person recognizes that it is not, nor ever will be, an easy task. Especially, in times of external threats of conquest. It means a heavy tax burden on each citizen, constant inflationary pressures, and an ever present threat of imbalances and inequities among various segments of the population. These facts we must face and face squarely: (1) If the American citizen is to contribute a large share of his earnings to Government for the common defense and the common good, he will probably accumulate less for his retirement years or his unemployment days. So, instead of his basic retirement program-social security, railroad retirement, or company pension plan-being merely a bare base, it is becoming, more and more, a major portion of the retired person's total means of livelihood. (2) If this Nation has indeed achieved a depression-proof economy and certainly everyone who has ever been a victim of a depression hopes we are close to depression-proof, it would mean that present costs of living might level off or adjust downward slightly, but no drop in living costs could be expected in the foreseeable future. So, any retired or disabled or unemployed person who can't "chin it" now will probably not be able to "chin it" any better next year or the year after. World War II and other economic changes in this country have frozen into our economy a new level of living costs. We must-and can-keep it from getting completely out of hand; but that won't help solve the problem of our parents and grandparents who are already hopelessly behind. These people are in trouble-serious trouble; and for them, fear is a constant companion. |