said that they needed an extended benefits provision which would give an employee benefits, as I think I said this morning, for from 11⁄2 to 412 years more than the period for which they can be received today. In fact, they made, generally speaking, a presentation similar to that Mr. Schoene made before this committee 2 or 3 days ago.

We told them that we could not afford to pay the bill; that we thought they were not entitled to additional benefits; that we did not think the extended benefits provision was warranted, and that we were going to have to oppose their legislation.

We also said that we had in mind the introduction of a bill to take care of some of the flaws in the present system, for example, the payment of benefits to strikers, the payment of benefits to those who have been discharged for cause, and with that note the meeting ended.

Mr. JARMAN. How much representation of employees and management was at the meeting you referred to? I do not ask for names.

Mr. FINNEY. The president of the Association of American Railroads was there and three other representatives of management. Mr. Schoene was there and Mr. Leighty and probably 3 or 4 presidents or high-ranking executives among the various crafts of the labor brotherhoods were present. It was a luncheon of, I would say, 10 or 11. Mr. JARMAN. Would the gentleman yield further?

Mr. FLYNT. I shall be glad to yield further.

Mr. JARMAN. Well, to your knowledge, was there any other similar meeting? Was there any other meeting other than the one you mention?

Mr. FINNEY. To my knowledge there was not, and I am almost certain that had there been an earlier meeting or a subsequent meeting I would have been informed of it.

Mr. JARMAN. Thank you.

Mr. FLYNT. I have one more question I wanted to ask Mr. Loomis. Thank you, Mr. Finney, for your contribution.

Mr. Loomis, as to this question I am about to ask at this time, it was clear to me in your initial presentation earlier this morning, but in view of certain questions that have been asked I want to reclarify the impression I gained from the statement in your testimony.

Was it your statement a few minutes ago and is it still your statement that any failure to be protected by senior years of service lies not with railroad management but with the brotherhoods themselves?

Mr. LOOMIS. I would say very largely that that is true.

Mr. FLYNT. Is it your position that so far as seniority rights of employees are concerned, the railroads for whom you are speaking today are generally willing to accept anything reasonable that the brotherhoods say should be done with regard to seniority rights?

Mr. LOOMIS. The answer to that as a general proposition is "Yes." Mr. FLYNT. Then if there are any hardships worked, it is because of the action taken by the brotherhoods, which presumably represent the employees, rather than any action made or taken by the railroad management?

Mr. LOOMIS. Well, insofar as seniority is concerned, I would not say that all hardship came from seniority alone, but that is one of the principal problems.

Mr. FLYNT. I mean hardship that is worked by reason of seniority rules.

Mr. LOOMIS. Yes.

Mr. FLYNT. Could you give a flat statement as to this: Who determines seniority rights among employees? Management? Or the brotherhoods?

Mr. LOOMIS. The brotherhoods generally.

Mr. FLYNT. I have no more questions.

The CHAIRMAN. In order that my mind may be clarified on it, is it not determined by the contract between the railroads and the employees?

Mr. LOOMIS. That is right. But the contracts insofar as seniorities are concerned are generally drawn the way the brotherhoods want them drawn.

The CHAIRMAN. Mr. Jarman?

Mr. JARMAN. Mr. Loomis, I would like to continue very briefly with just another question or two on the subject matter we were talking about just a moment ago as to what discussions between management and employees have been held.

We were talking specifically about 4353. Could you comment on the general and normal practice on the introduction of major legislative matters.

Mr. LOOMIS. Well, I would not be in a position to comment with any authority. That does not generally fall within my function or experience, Mr. Congressman.

Mr. JARMAN. What I had in mind: Could you, from your own experience, comment as to whether normally an effort is made to get together on discussions and comparison of ideas in advance of major legislation being introduced?

Mr. LOOMIS. I do not think that I could. That is generally handled by the Association of American Railroads. I have participated in discussions with respect to the Cabinet Committee report. There are conferences at the State level at times, with respect to State legislation.

We have had meetings from time to time with the brotherhoods with respect to the competitive situation of the railroad industry and what can be done to improve it. Those have mostly been on a broad general basis rather than with respect to any particular legislation. I think the answer to your question really would have to be given by a representative of the Association of American Railroads.

Mr. JARMAN. I wonder if I might ask for a comment from Mr. Finney? You mentioned one meeting after the bill had been introduced. A luncheon meeting was the first and only meeting you had. Is that in line with the usually accepted, if there be such, policy?

Mr. FINNEY. I can only speak, Mr. Jarman, from the experience over the past couple of Congresses. I have only dealt with railroad retirement or unemployment insurance since about 1954. As I recall it, in the last Congress, when the proposition for the 15 percent increase in benefits, the 1 percent increase in tax, and the tax exclusion feature, was presented, some time after the legislation was introduced--and I assume it was at the request of the labor organizations-a meeting was held, which I did not attend.

I believe perhaps Mr. Monroe was at that meeting.

Were you there, Mr. Monroe?

Mr. MONROE. I was.

Mr. FINNEY. Mr. Monroe was there, and he could probably tell you what went on better than I could.

If there was jockeying back and forth, for lack of a better term, it did not result in anything. The labor organizations came forward as you know and supported as best they could their bill, and we were here opposing it as best we could.

I can say certainly, though, that in last year's Congress, and in this year's Congress, there were no conferences or discussions with railroad management prior to the introduction of the railroad brotherhoods' bills and submission to the appropriate committee.

Now, in the past I am not sure what the situation was. I know that a number of years ago there was what was termed an "agreed" bill. I think both sides gave a little bit and came up with what they thought was best. That may have occurred on more than one occasion. I just have no personal recollection regarding it.

Mr. JARMAN. Thank you very much.

The only point I was trying to clarify in my own mind was: How much effort is made on both sides to, if possible, arrive at a joint agreement on these major legislative proposals before they come into the Congress?

In that connection, I think my final question to Mr. Loomis would be: If you remember, when did you first hear, sir, of the introduction or plans for introduction in this session of provisions that are now in 4353?

Mr. LOOMIS. After the bill was introduced.

Mr. JARMAN. Thank you.

The CHAIRMAN. Mr. O'Brien?

Mr. O'BRIEN. Mr. Loomis, I would like to clarify one point that was raised by Mr. Flynt. You stated in your testimony that there might have been an indication in the testimony of Mr. Oliver that the railroads would profit in some way by hiring new employees instead of older ones? Well, I do not know what the indication was in the minds of the other committee members, but I think the figures were rather startling.

Now, I think we have here a shifting to some degree of the implication. We are left with the thought now that the seniority system is responsible for the whole thing.

Mr. LOOMIS. I did not say it was responsible for the whole thing. I said it was a major problem.

Mr. O'BRIEN. Yes, in large measure. But the question I wanted to ask: Do you not think that the seniority insisted upon by the unions in many instances is justified.

For example, if you close down a large shop, we will say in West Albany, and all the workers from that shop converged at some place in Michigan, it would create a very difficult problem for people who were employed there in Michigan; is that not true?

Mr. LOOMIS. That is certainly a part of it, and is probably one of the reasons why the Brotherhoods are reluctant to dovetail men in. Mr. O'BRIEN. Yes, there is some justification.

Mr. LOOMIS. Although when you have consolidations or coordinations there is quite frequently an arrangement of dovetailing in seniority of the men affected.

Mr. O'BRIEN. You stated-and this is my final question that in recent times the Railroad Retirement Board and the railroads have been making serious efforts to handle the problem of displaced employees. Mr. LOOMIS. Yes.

Mr. O'BRIEN. And do you not think there is room for further improvement? And I am thinking specifically of hiring the younger man with the stronger back.

Mr. LOOMIS. I think they are certainly trying to work that out. Mr. O'BRIEN. Thank you very much.

The CHAIRMAN. Mr. Loser?

Mr. LOSER. It is quite a problem, of course, if there is a vacancy for a mechanic in Kalamazoo who has been laid off in Los Angeles. Mr. LOOMIS. That is right.

Mr. LOSER. That is the problem, rather than seniority, is it not?

Mr. LOOMIS. Well, that is a problem, but where seniority comes into it is that even if he were willing to move to Kalamazoo as in your example, the one thing that would make him reluctant to move was the fear that he was the youngest man on the roster and he would be the first man to be bumped, and he might rather stay at home, take his unemployment insurance for a period in the hope of being called back to the point where he had previously been employed. Because he retains his rights to be called back.

Mr. LOSER. Now, this rule of seniority-does it apply over the entire system? Or just certain divisions?

Mr. LOOMIS. Well, there is seniority over an entire system, but broken up into districts; that is, it may be an operating division, or it may be a particular point of location.

Mr. LOSER. In other words, a mechanic on a particular division of the Pennsylvania Railroad will have seniority on that division, but on some other section or division he would not have seniority?

Mr. LOOMIS. Generally speaking, in the shop crafts, they have point seniority, which means a particular point, city or town or location. And they do not have division seniority.

The operating crafts generally do have division seniority.

Mr. LOSER. Your answer to my question, I take it, would be "yes,” from what you say?

Mr. LOOMIS. He does not have division seniority as a general rule. He would be confined, say, to Altoona, if that is where he held his seniority. He would not have seniority over the division of which Altoona was a part.

Mr. LOSER. Yes.

Mr. LOOMIS. But in the operating crafts, it generally is an operating division, or a superintendent's district. He can take any run on that district or division.

Mr. FLYNT. Will you yield to me right there?

Mr. LOSER. Yes, sir.

Mr. FLYNT. On this question, my question was directed to the answer to this primary question which underlies the whole phase of seniority as discussed by you today: that many phases of the present seniority rules are, as Mr. O'Brien just said, fully justified?

Mr. LOOMIS. Oh, I think that is true.

Mr. FLYNT. And regardless of whether each phase of it is fully justified or fully unjustified, they are there because of what the Brotherhoods want rather than what management wants?

Mr. LOOMIS. That is right.

Mr. FLYNT. And they are based upon the various contracts?

Mr. LOOMIS. Yes.

Mr. FLYNT. I have no further questions.

The CHAIRMAN. Mr. Loomis, let me again thank you on behalf of the committee for your presentation here this morning.

The House is in session. The rollcall is just underway. That means that our presence is desired over on the floor of the House.

Personally, I am very glad to have you here with us and I am sure I can speak for the other members of the committee in saying that we welcome you this morning.

Mr. Loomis, this is not the first time that you have appeared before this committee on matters pending before us on behalf of the industry that you represent. I think it is a very helpful and hopeful sign as well to see you people in the industry becoming actively engaged and interested in these problems before you, as with all the others affecting the industry, including the employees, and as it affects the general public, the American people. So, from that standpoint, I am very glad to see you as a representative of industry, and others, who are presidents and vice presidents, members of the brotherhood organizations, and so forth, come before us expressing your views on these important problems, which I know will have great bearing on the industry itself and, therefore, the American people.

The committee will adjourn until 10 o'clock in the morning, at which time we will expect to have with us Mr. Leonard J. Calhoun and Mr. J. Elmer Monroe.

(Whereupon, at 12:15 p. m., the hearing was adjourned until 10 a. m., Wednesday, March 27, 1957.)