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Mr. MILLER. It seems to me that as far as some social-security benefits that are now paid are concerned, under the present law they are almost a handicap. I mean by that that a person in certain communities who is known to be receiving $35 or $40 a month is considered to already be taken care of. If he is retired under the social security, he cannot get any benefits. He would be better off if he were completely broke and getting his three meals where he could get them or at least an opportunity to get work.
Mr. KENDRICK. I do not mean at all to imply that the existing social-security program is perfect or anywhere near it. In view of the increase in the cost of living that has occurred, to me, it seems clear, to me at least, that social security benefits should be increased to be in keeping of the objective of protection. I do not mean that the railroad employees should be brought under social security as it is, with the social security system as it is, but rather we should all work together toward having one uniform, comprehensive, nondiscriminatory social security program.
Mr. MILLER. That is all.
The CHAIRMAN. Any further questions?
Mr. HARRIs. Mr. Chairman.
The CHAYRMAN. Mr. Harris.
Mr. HARRIs. Mr. Kendrick, you have not appeared here in opposition to H. R. 6766; have you?
Mr. KENDRICK. Well, I was really presenting some general principles.
Mr. HARRIs. That is right.
Mr. KENDRICK. But, these general principles as applied to H. R. 6766 would oppose an increase in the retirment benefits of that bill, but they would not oppose the adjustments and the unemployment tax rates.
Mr. HARRIs. I was not sure whether you mentioned that you favored the increasing or improving of the social-security program *ltimately to the level of the present level of the railroad retirement program or whether you were opposed to increasing benefits at this time for annuitants.
Mr. KENDRICK. Well, I think, apart from whether I favor it or not, that the social-security benefits are pretty sure to come up and I think if the railroad benefits could be held right where they are now then in a few years the social-security benefits may come up to the present railroad level and that would be beneficial.
Mr. HARRIs. And then, so long as the rates and difference in pay by railroads and other workers in other industry exists, you do not think that they should be brought to the same level?
Mr. KENDRICK. Pardon me.
Mr. HARRIs. Insofar as the rates are different for railroad workers and workers in other industries
Mr. KENDRICK. You mean because railroad workers receive higher wages?
Mr. HARRIs. And they pay higher rates.
Mr. KENDRICK. Well, iP everyone were covered under a uniform system there would be a uniform tax rate too.
Mr. HARRIs. I appreciate that viewpoint that you have expressed, but I was wondering if you really were representing the United States Chamber of Commerce and appeared here opposing the increase in benefits to railroad retirement payments? Mr. KENDRICK. That is right. Mr. HARRIs. At this time? Mr. KENDRICK. That is right. ... " - Mr. HARRIs. Has the Chamber ever taken a position opposing any increase in the rising cost of living? Mr. KENDRICK. I am not oir with the Chamber's position on that subject. Mr. HARRIs. Well, it is a fact that the price for essential living commodities are up higher than they were a year or a few years ago? Mr. KENDRICK. I i. that is right; but I think that the railroad benefits are already so much higher than other social-security benefits; that as these other benefits rise to meet living costs, that creates a particular favoring opportunity to cover railroad employees under social security without having to reduce any benefits. Mr. HARRIs. Well, have not increases been granted to social-security benefits in the last 2 or 3 years? Mr. KENDRICK. The last amendments of any consequence were in 1939. Probably there will be some increases in a few years, I should imagine. The CHAIRMAN. Are there any further questions? Mr. HARRIs. There was an increase in Federal contributions. Mr. KENDRICK. That was public assistance. I am speaking of oldage and survivors' insurance. The CHAIRMAN. Any further questions?
STATEMENT OF HON, EDWARD J. DEWITT, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF MINNESOTA
The next witness will be Congressman Devitt of Minnesota.
Mr. DEVITT. Mr. Chairman and gentlemen of the committee, my name is Edward J. Devitt. I represent the Fourth District of Minnesota. I live in and represent the city of St. Paul, Minn., which is a major railroad terminal. Three-fourths of my Irish relatives were railroaders. My father was a railroader and I used to be a coach cleaner on the Great Northern.
Thousands of railroaders live in my district. The city has within it the home office of two major railroads, the Northern Pacific and the Great Northern, and the home office of a relatively minor railroad, the Omaha.
Thirteen railroads serve the city.
I have received on the average about four or five letters a day since I came to Congress urging that something be done about increasing the retirement benefits under the Railroad Retirement Act and Unemployment Insurance Act.
So, I came this morning to urge, with all of the vigor at my command, that this committee proceed with the hearings, and I hope the recommendation and enactment of the bill which is been introduced by the honorable chairman of this committee, Mr. Wolverton, H. R. 6766, containing the principal provisions of that bill, or such other provisions of the Crosser bill as this committee, in its judgment, deems is proper.
I am Yo. 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 pro8. out of the bill in the changes made by the Seventy-Ninth ongress. 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 o (The statement referred to is as follows:)
The Honorable CHARLEs Wolverton, Chairman, Interstate and Foreign Commerce Committee, House of Representatives, Washington, D. C. 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 relatives 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 R. Crosser; the ranks of railroad labor, as represented by the Railway Labor Executives' Association and the forces of management 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.
Member of Congress.
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 pheIn OIIlena. 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. A few years ago, at Mr. Lea's request, I appeared before this committee to answer questions on the costs of these programs. I 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