ployment benefits under present law would receive additional benefits for days of unemployment not exceeding 65 days which occur in registration periods beginning on or after June 19, 1958, and before April 1, 1959.

Sundays and holidays could be compensable days of unemployment just as any other day, whether or not such Sundays and holidays are preceded and succeeded by a day of unemployment.

The maximum taxable base for unemployment insurance would be increased from $350 to $400 a month for each employee effective January 1, 1959, and the tax rate would be changed from a minimum of 112 percent to a maximum of 32 percent depending upon the balance in the railroad unemployment insurance account.

The increase in taxes and in the compensation base to which the taxes apply would reduce the present actuarial deficit of 4.18 percent of taxable payroll or some $213 million a year to an estimated 0.60 percent or some $34 million a year.

In 1956 there was a bill providing for a 10 percent increase in benefits to retired railroad employees and their survivors. At that time no provision was made for the financing of the additional cost of these benefits. My bill would correct the actuarial deficiency in the fund.

I wish to thank the chairman, and the committee for hearing me at this time. It is my hope that you will see fit to take prompt and favorable action on the increases in benefits provided for in this legislation.

The CHAIRMAN. Thank you for a very fine statement, Mr. O'Neill. Mr. O'NEILL. Thank you for the opportunity, Mr. Chairman. The CHAIRMAN. We will now hear another colleague from Massachusetts, the Honorable Thomas J. Lane.

STATEMENT OF HON. THOMAS J. LANE, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF MASSACHUSETTS

Mr. LANE. Mr. Chairman, we are well aware that our common carrier transportation system, and especially the passenger branch of that service, is in serious difficulties.

The Congress knows the importance of the railroads to our people and our economy. I am confident that legislation will be enacted, providing tax relief or subsidies, in order to maintain adequate railroad service.

At the same time, we must show some consideration for the railroad employees who have devoted their lives to this type of work in the expectation of receiving adequate retirement annuities when their working years have ended.

The decline in railroad revenues is no reason for cutting down the original pledge made to the railroad employees. In fact, the rising cost of living is all the more reason why annuities should be increased to compensate for the depreciated retirement dollar.

The purpose of the bills under consideration is to increase all retirement annuities by about 7 percent, and to increase the minimum daily benefit rate paid for unemployment by an average of 20 percent.

We face the fact that this will increase the annual operating costs. of the railroad industry by approximately $125 million. With this

bill goes the obligation to enact remedial legislation that will enable the railroads to absorb these costs without financial strain. The railroads are essential. So, too, are their skilled workers. We cannot very well come to the aid of one without providing assistance for the other.

The pride of the railroad worker in his special work is an important factor in the operating reliability and safety of our railroads. We cannot afford any decline in his morale occasioned by neglect of the retirement and unemployment compensation programs in which he has had full confidence-up to now.

In a changing economy like ours, with its constantly shifting rewards for work done, we sometimes fail to notice the decline in real security and status of those groups that we take for granted. Then, we suddenly realize that adjustments are imperative.

As the report of this committee stated

The need for increasing retirement and survivor benefits is obvious in the light of the fact that living costs have increased significantly since the last 10 percent increase in benefits was provided in 1956. The 7 percent increase recommended in the bill (H. R. 4353) will undoubtedly help to alleviate the hardships of annuitants and pensioners who are trying to live on a fixed income. The committee feels that the increase proposed in the reported bill is very modest and should be granted. The committee regrets that the present financial condition of the railroad retirement system and the railroad industry does not permit an increase in benefits by a greater amount.

There was general agreement until recently that the railroad retirement system was virtually without peer among plans of its kind. However, with the passage of the 1950 and later amendments to the Social Security Act, and the gains made in the past several years by employees in many industries through the adoption of private supplemental pension plans, the railroad retirement system has fallen behind. Recognizing this problem, many Members of Congress have introduced bills proposing to improve the benefits under the Railroad Retirement Act. **

This was in the report dated August 12, 1958.

On August 28, 1958, Public Law 85-840 was approved, known as the Social Security Amendments of 1958.

These provided for a 7 percent increase in benefits for recipients of old-age, survivors' and disability insurance. Bigger social security checks went into the mails yesterday to more than 12,500,000 persons, the first to include the increases voted by Congress last year.

So, the reasons advanced by the committee in 1958, as to the need for increasing benefits under the Railroad Retirement Act, are even more convincing in February 1959.

The CHAIRMAN. Thank you, Mr. Lane. We appreciate your interest in this legislation.

Mr. LANE. Thank you, Mr. Chairman.

The CHAIRMAN. The next witness is our colleague from California, the Honorable George P. Miller. Mr. Miller, we will be glad to hear

you now.

STATEMENT OF HON. GEORGE P. MILLER, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA

Mr. MILLER. I am George P. Miller, Member of Congress from the Eighth District of California, comprising part of Alameda County. I was elected to the 79th Congress on November 7, 1944, and have served continuously since that time.

Members of this committee are already aware of my interest in the pending proposals to amend the Railroad Retirement Act, Railroad Retirement Tax Act, and the Railroad Unemployment Insurance Act. I am, indeed, already on record as one of the sponsors of this legislation, having introduced H.R. 2916, which is identical to the bills sponsored by your chairman, the Honorable Oren Harris, of Arkansas, and the ranking minority member of this committee, the Honorable John Bennett of Michigan. I am pleased to join the leading member of my own party as well as the leading member of the other party on this committee in advocating prompt and speedy enactment of these amendments, which are intended to eliminate inequities now existing under the railroad retirement and railroad unemployment insurance systems in relation to recent improvements voted in the Social Security Act.

Coming from the great State of California, part of that great land area which profited directly from the opening of the West that was made possible by the building of the transcontinental railroads, I am, of course, fully aware of the great debt our Nation owes to its railroad workers. Without their strenuous toil, courage and devotion to public duty, the unification and resulting progress of our land would have been long delayed. Indeed, even with full knowledge of the later development of highway and air transport, it still is no exaggeration to say that the United States could not have attained its present greatness without the contribution of the workers who built, maintain, and operate the railroads. There is not a single part of our Nation which is not better off as the result of their service.

As a group, those railroad workers have shown a sense of responsibility and dedication to duty which can only draw forth the highest praise. The labor organizations which they have set up to represent them have established a record for responsibility and integrity that is recognized by all. Their adherence to the orderly procedures for the settlement of railway labor disputes that were spelled out in the Railway Labor Act has made possible the relative freedom from work stoppages that the railroad industry has enjoyed in recent years. The record shows that, in their recognition of the public interest, railroad workers need bow their heads to no other group of workers in this great democracy of ours.

Today the Nation owes a debt to these workers and the members of their families. It is a debt that involves far more than mere recognition of how much the railroad worker has served the general public. The debt I am speaking of is one, owed to them by Congress, of restoring both equity and stability to the system of retirement and unemployment benefits which they have helped to finance through the relatively heavy deductions from their earnings.

To offset recent inflation, Congress last year increased social security benefits by 7 percent. Moreover, last year's social security amendments provided for the granting of an additional 13 weeks of benefits to unemployed workers in other industries who exhausted their unemployment insurance in 1958. This action was deemed necessary to help these unemployed workers in the face of the heavy unemployment which existed in many areas last year. It is ironic, however, that Congress last year adjourned before completing action on the pending legislation to also extend benefits under the Railroad Unem

ployment Insurance Act. This failure was all the more an act of injustice to railroad workers because, not only had their industry suffered the effects of the depression along with other industries, but automation and mechanization of many railroad operations in recent years has made rail unemployment unusually severe.

If any group of workers needed an extension of benefits, certainly those laid off by the railroads are among them, for rail unemployment has bitten into the rolls so hard that it has even reached workers with as many as 30 years of seniority. Under such circumstances, many veteran railroaders with even 15 or 20 years of service have been laid off and not recalled. An extension of benefits in such circumstances certainly is both needed and justified. Let us not forget that the injustice that railroad workers suffered when Congress voted extended benefits to workers in other industries but failed to vote similar aid to them was compounded all the more, from the humanitarian standpoint, when Congress nevertheless did find time last year to vote considerable concessions and aid to the railroads themselves. Entirely apart from the merits of the latter legislation, I want to point out that Congress, by failing to complete action to aid railroad workers and their families while voting substantial aid to the railroads, thus placed itself in a position of seeming to put the welfare of the industry ahead of the welfare of its employees. You will note that I stress the word "seeming," because those of us who served in the last Congress know that a majority of the Congress was ready to enact this pending legislation then and that it failed only because of the rush for adjournment. Nevertheless, the fact remains that retired and disabled railroad workers and their wives and dependent children have suffered real injustice from these circumstances.

I want therefore at this time to commend Chairman Harris and the members of this committee for the prompt action they have taken to hold hearings and pave the way for early action in this session of Congress. I also want to commend the chairman and the ranking minority member for including in their bill the same provision as in mine for retroactivity of this legislation which will make the increased benefits effective as of January 1 of this year. So far as I know, this provision is not under attack, but I urge you to keep in mind the history of this legislation and to resist any effort to change this retroactive feature. Only by preserving it will Congress succeed in repairing the wrong it did railroad workers by not passing this legislation last year.

The recession of 1958 and the continuing unemployment situation on the railroads has brought home the fact that the existing railroad unemployment insurance system is defective in several respects, and the pending legislation is intended to correct the more glaring shortcomings. Testimony before this committee has already brought out what the proposed amendments would provide in the way of modest increases in benefits (ranging from 50 cents to $1.70 a day higher than present rates) and in an extension of payments for additional periods of 65 to 130 days, depending upon length of service. These provisions would merely provide for railroad workers a system of unemployment insurance similar to that granted workers in other industries covered by the Federal-State unemployment insurance system. To pay for these benefits, the railroad unemployment insurance tax maximum

would be increased modestly until the balance in the fund is restored to $300 million, at which point the tax would again be subject to reduction, with step changes as the balance in the fund increases, with a minimum rate of 12 percent when the balance reached $450 million. It is important to note that, should railroad unemployment decline, the tax rate under the proposed schedule can ultimately drop again to a point well under the 3 percent currently being paid. Viewed in this light, the proposed increase is modest and, in my judgment, entirely fair and reasonable. By providing for its reduction as unemployment decreases, the tax method proposed should do much to encourage railroad management to stabilize employment as much as possible in order to obtain the benefit of a lower tax through the adoption of wiser employment policies.

In regard to the proposed increase of 10 percent in all annuities payable under the railroad retirement system, including retirement, spouses' and survivors' benefits, I would like to point out that testimony before this committee has already indicated that this amount will not fully offset the rise in living costs which has taken place since 1956. Let us not forget that it is the people to whom this legislation applies those living on small fixed incomes-who are the chief victims of inflation. We cannot in good conscience stand by and allow these retired, disabled, widowed and surviving dependents of railroad workers to be victimized by our failure adequately to stabilize the economy. These railroad men, women and children are entitled to have their railroad retirement system benefits kept in a reasonable relationship to the value of the money they invested in it. Under the present inflationary situation, an increase of less than 10 percent in benefits would be a grave injustice to them.

It has not been my purpose here to review all of the technical aspects of this legislation, since they have already been discussed in great detail at these hearings. Therefore, I shall only say of the other amendments proposed in my bill and in H.R. 1012 that, like the provisions I have already discussed, they are intended either to remove inequities now existing in a comparison of the railroad retirement system with social security, or to eliminate provisions which work undue hardship without just cause. I urge that the measure be approved in its entirety, without debilitating in any way the proposed extension of benefits to railroad workers and their families.

The CHAIRMAN. We appreciate your appearance, Mr. Miller, and the testimony you have given.

Mr. MILLER. Thank you, Mr. Chairman.

The CHAIRMAN. The next witness is our colleague from Oregon, the Honorable Charles O. Porter. Mr. Porter.

TESTIMONY OF HON. CHARLES 0. PORTER, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF OREGON

Mr. PORTER. Mr. Chairman, I deeply appreciate this opportunity to appear before you and the members of this distinguished committee as it examines proposed legislation which would make more realistic the existing Railroad Retirement Act, Railroad Retirement Tax Act and the Railroad Unemployment Insurance Act.