Page images

As a forerunner for Government ownership, not only of railroads but of many other industrial systems in which the public is vitally interested, nothing could be more helpful than further riveting of special social benefit legislation for railroad workers by Congress.

There is no proper defense for congressional favoritism of employees in a particular industry other than anticipation of the responsibilities of an employer through nationalization of the industry.

Respectfully submitted.


To the Honorable Committee on Interstate and Foreign Commerce:

My name is William E. Young and I reside at 7614 Kaywood Drive, Dallas 9, Tex. I am a regional vice president of the National Railroad Pension Forum, Inc., a nonprofit organization chartered under the laws of the State of Illinois, with headquarters in Chicago. The forum was organized by, and has as its members, employees of railroads (and associated industries) who are opposed to the unjust provisions of the Railroad Retirement Act as presently in effect. As a regional vice president, my duties consist primarily of obtaining new members, distribution of information and literature and otherwise being a connecting link between the Chicago headquarters and members in my region which is composed of Arkansas, Louisiana, and Texas. I have been employed by the railroads continuously since 1920, the last 15 years of which have been with the Texas & Pacific Railway as a freight tariff compiler. Let me state here how I happened to become associated with the Pension Forum. On or shortly after February 21, 1947, two petitions were handed to me for my signature. Being addressed to Senator W. Lee O'Daniel and Representative J. Frank Wilson, these petitions were a general protest of the Crosser amendment of the Railroad Retirement Act. At my suggestion, the originators of these petitions agreed to a rewording and an enlargement thereof with six definite objections set forth. This new petition, bearing 603 signatures, was sent, with appropriate letters, to Chairman Wolverton of this committee, Senators Tom Connally, and W. Lee O'Daniel, Representative J. Frank Wilson, and Speaker Martin, asking their support of Mr. Gillette's H. R. 2169 which proposed repeal of the so-called Crosser amendment and would restore us to our former status with which we were more satisfied. A copy of this petition was also sent to Mr. Tom Stack, president of the Railroad Employees' Pension Protective Committee of Chicago area and as a result thereof, Mr. Stack wrote me on June 25, 1947, announcing their intention of forming a national organization and, subject to my acceptance, my name would be submitted to his committee as a regional vice president. I accepted the nomination and was advised that at a meeting held on September 15, 1947, the National Railroad Pension Forum, Inc., was organized and that my name was approved as vice president of the southwestern region. I am appearing here in support of Representative O'Hara's H. R. 6397 and I shall try to cover the proposed changes in the same order as they appear in the bill. The first change here contemplated is to reduce the retirement age from 65 to 60. The benefits of this are so apparent that I hesitate to take up the time of this committee by elaborating thereon but I will say that, especially in the operating end of our railroads, such a change will not only benefit the individual employees but will have a direct bearing on the public safety. Sections 2 and 3 of this bill propose changes which will result in increased retirement annuities and their benefits will be covered as one. The best way I know how to show the effects of these changes is by a concrete example. There is a stenographer in my office who plans to retire on January 1, 1949, after 40 years of service. Her annuity, being based partially on the lean years of the 1920's and 1930's, will amount to $73.20 which does not afford an existence in these times especially with a dependent brother. Under the amendments here proposed, this lady would receive approximately $132 per month which is quite an improvement. This is brought about by the proposed increase in the percentages in the annuity formula coupled with the provision that said formula is to be applied to her average salary for her five highest paid years of service. As a matter of information, the change proposed in section 3 of this bill increases her average monthly compensation from $146 to $239. To my knowledge, the removal of the so-called lump-sum death benefit on January 1, 1947, created more dissatisfaction among rail employees than perhaps any other change brought about by the Crosser amendment including the increased tax rate. Up to that time, a man could tell his wife, almost to the dollar, how much she would receive in the event of his death. Under the present complex law, this is impossible and forces an employee to practically ignore these benefits, if any, in his insurance program. The restoration of the lump-sum death benefit, as proposed by section 4 of H. R. 6397, would actually put the plan back on a “paying basis” and tend to make the “contributors” feel like they will get their money back out of it. This is particularly true of single employees or childless couples where the widow is still in her thirties or forties. In my bulletin No. 5 of January 10, 1948, I set forth in detail the method of arriving at the “survivor's monthly annuity” for my wife and two daughters in the event of my death on January 1, 1948. My wife would have received the magnificent sum of $39.11 and my daughters $26.06 per month, subject, of course, to the many restrictions and conditions imposed by the law and which I dealt with at length in said bulletin. With the increases proposed in section 5 of Mr. O'Hara's bill, these figures would become $44.89 and $30.57, respectively, and are very near to the maximum. Even if these figures were doubled they are not enough to see the girls through high school. The basic trouble with this entire plan is that it tries to cover too much territory, or in the vernacular of the insurance fraternity, it is a “Mother Hubbard.” Most “Womb to the tomb” plans are weak. If we are to have a retirement plan let it be retirement and an adequate one where we can look forward to the earliest day we can take off instead of dreading the day when we are forced to. With the interests of railroad workers and their families at heart, it is hoped that H. R. 6397 will receive favorable action in this session of Congress. Respectfully submitted. WILLIAM E. YoUNG, Regional Vice President, National Railroad Pension Forum, Inc.

P. S.–As we understand the only favorable legislation we can expect at this session of Congress is the enactment of H. R. 6766 introduced by the Chairman,

I support H. R. 6766. - WILLIAM E. YoUNG.

To the Honorable Committee on Interstate and Foreign Commerce: My name is Walt Sands, I reside at 1429 East Marquette Road, Chicago, Ill. As public relations director of the National Railroad Pension Forum, Inc. (a voluntary organization of union and nonunion rail workers who are opposed to their }." pension law), I am also editor of Rail Pension News, published by the Oru in. I have worked over 25 years for the railroads. For the past 20 years, I have been employed as a freight inspector with the Eastern Weighing & Inspection Bureau, in Chicago. My duties (at various railroads) keep me in steady contact with white-collar workers, freight handlers, yardmen, switchmen, engineers, conductors, shop mechanics, and others. A composite picture of their reactions to the Crosser amendments convinced me to safely assume that the vast majority of those people are bitterly opposed to their present high tax rate in comparison to the low benefits received. Thus, Rail Pension News was born and it will keep going forever, unless you gentlemen do something to correct this unjust situation. At this point, I want to emphasize for the benefit of the brotherhood leaders, the Rail Labor Executives Association, and the brotherhood weekly newspaper Labor, that any of my activities have never been influenced one iota by management. wish to emphasize one feature in connection with H. R. 6397. , Section 3, in toto, would eliminate the formula of “monthly compensation” based in the period of 1924 to 1931, a fixed period, a nonproportional period, and unrelated period and substitute in lieu thereof a “highest paid 5 years of earnings not exceeding $300 per month” period. When the Retirement Act went into effect in 1937, any basis, at that time was reasonably fair and very welcome to a retired rail worker who had paid nothing into the fund. However, with 11 years experience rating, including the fact that the majority of future annuitants have paid taxes during those 11 years, why not apply “the highest paid 5 years of earnings not exceeding $300 per month” during the first 11 years, 1937 to 1948, as a base in a flexible period, where earnings have proportional relation to the pension fund, wherein a proportional unit based on those earnings would be used to measure out justice to all? A unit based on the related earnings of the period of 1937 to date of retirement will give a unit that has a proportional relation to the pension fund. Thereby eliminating the discrimination and unfairness that now exists by using a nonproportional unit.

Two individuals, each having 30 years' service, and having contributed the same amount into the pension fund, a proportional unit will give them the same pension, whereas the nonproportional unit will give them a pension with a variation of from $10 to $40.

The 1924 to 1931–37 period It does not require a genius to see the inevitable discrimination and unfairness resulting from the application of the 1924 to 1931–37 period, in any proportion, or by a unit established on this unrelated base, in determining the amount of annuity or pension. This base is an unrelated base, with no proportional relation to the pension fund. This unit is not a measure of service; neither is it a proportional unit of measure, due to the differences, substandard and standard wages, as existed in this period. One individual working 2 hours for the same amount of earnings as another may be required to work only 1 hour, and such base having no proportional relation to the pension fund. This base is a fixed base. It is one that never changes with the up and down costs of living and wages. It is one that was obsolete in less than 3 years after its adoption. To tie this base on to a flexible base spoils the flexible base in proportion to their respective time each represents.

The 1937 to date of retirement basis This base is a flexible base. It is one that swings up and down with the cost of living and wages. It is one on which a pension, or annuity, can be determined in proportion to the amount contributed into the pension fund or by a proportional unit. It is one in which the amount contributed to the pension fund is proportional to the amount earned, up to the limit of $300 per month. The amount earned is proportional to the living cost of the respective period. A unit established on this base will be a proportional unit, thus measuring out a pension or annuity with justice to all. A and B each have 30 years service, and have each contributed $2,000 into the pension fund. A proportional unit would give A and B equal pension. But a unit based on the related earnings of 1924 to 1931–37, such earnings having no proportional relations to the pension fund, would give A and B a pension of unequal amount, varying from $10 to $40 due to the nonproportional unit. The only fair way to distribute any fund is on a proportional basis, in proportion to the contributions to the fund. Surely there can be no mathematical nor moral reason under such a condition of equal contribution, for one individual to receive a pension of $75 per month and another $95 when the length of service are the same. It is possible, and no doubt it has often occurred, where two individuals have a service of 30 years each, and the one contributing the most into the pension fund, receives the less pension. In the period of 1924 to 1931, the employees of many railroads, including the Pacific Electric Railway Co., and certain other properties, were far underpaid, due mostly to lack of labor organization. To penalize these men by using such a period as 1924 to 1931 in conjunction with the period 1937 to date the retirement, in determining the amount of pension they are to draw, and at the same time permit others, who were more fortunate, drawing or receiving standard wages for this period, to receive a pension of from $20 or more per month, even though all were contributing equally into the pension, is discrimination. To select a period in which living standard was $100 per month as a basis to determine the amount of a pension for a period when living cost is $200 or more, is unfair to all. Eliminate the 1924 to 1931–37 period. Use the 1937 to date of retirement as a basis to determine a unit of measure with which to multiply the years of service. Change the present method of determining the dollar-service unit (H. R. 6397, sec. 2, lines 9, 10, and 11) as follows: 3 percent of first $50, 2 percent of next $100, and 1 percent of balance. Thus creating a maximum proportional unit of 5; $300 being the amount on which the unit is based. With the above solution as a basis, I hereby petition the Congress of the United States to enact the following provisions, which I sincerely believe are well within the bounds of sound reasoning as well as practical and timely. (1) Change the present maximum of $120 to $150 based on 30 years' service, an increase of 25 percent. (2) Change the present retirement age from 65 to 60. (3) Establish 1937 to date of retirement (highest paid five years of earnings, not exceeding $300 per month) as a base for all.

Although I have included several extracts from H. R. 6397 in parts of this testimony, the major portion deals specifically with a proposal to establish 1937 to date of retirement, as a fair base for all, rather than the present outmoded, obsolete, nonproportional unit (based on the period of 1924 to 1931–37) that has no proportional relation to the pension fund.

Gentlemen, in closing, may I ask your kind consideration to enact legislation at this session, in keeping with progressive thinking. While we have been busy helping foreign countries, we have seriously delayed much needed financial aid to help our own people of the Iron Horse, without whom, we might have lost the recent War.

The nation's rail workers, especially the old-timers who must depend on charity to exist, patiently pray for your legislative help.

“Times change and wise men change with them.” Gentlemen, it is time for a change. I thank you.

Editor, Rail Pension News,
National Railroad Pension Forum, Inc.

P. S.—As we understand, the only favorable legislation we can expect at this session of Congress is the enactment of H. R. 6766 introduced by the chairman.

I support H. R. 6766.

To the Honorable Committee on Interstate and Foreign Commerce: My name is Floyd A. Ross. I reside at 407 East Forty-eighth Street, in the city of Minneapolis, Minn. I am regional vice president of the National Railroad Pension Forum, Inc., a nonprofit organization chartered under the laws of the State of Illinois, which organization I became interested in of my own volition and not at the request of railroad management. I have been employed by the Minneapolis & St. Louis Railway Co. for over 36 years in the revenue accounting and the comptrollers office. I am appearing before this honorable committee in the interest of the rank and file railroad employees and urge the prompt enactment of bill H. R. 6397, introduced by the Honorable Joseph P. O'Hara, of the State of Minnesota. At the present time monthly compensation of $250 is very prevalent, and I will use that monthly average as a basis for any figures I may use. On January 1, 1947, our retirement taxes were increased by 60 percent: They will be further increased under the present law and during the 30-year period the total increase in tax will be 65.85 percent greater than the tax in effect December 31, 1946. This will result in the payment of $2,212.50 more during this period for which we will receive no increase in our retirement annuity. H. R. 6397 will increase annuities 25 percent for all railroad employees (maximum $150 per month). This increase in annuities is entirely justified and compensates us to some extent for the large increase in our retirement taxes under the present law. Aside from the exorbitant increase in our retirement taxes, I wish to call attention to the fact that under the present law, and for the 30-year period after January 1, 1947, the lump-sum death benefit will be decreased by $3,106, or to the amount of $494, which is not enough to provide a decent burial. To make a further comparison, after paying retirement taxes amounting to $5,572.50 over the 30-year period, some one of our dependents may receive $494 if they file claim for it within 2 years. The present law denies us the right to name our beneficiary and has confiscated our equity in the amount we have contributed to the retirement account in the form of taxes. During the period January 1, 1937, to December 31, 1946, on average monthly compensation of $250, this would amount to $915. The retirement taxes we are paying reduces our take-home pay and is either coming out of our living expenses or is decreasing the meager savings we are accumulating for a rainy day. The railroad employees in general were fully aware that the lump-sum death benefit would be paid their beneficiary, which amount would be somewhat more than had been paid in, and would augment any life insurance. H. R. 63.97 provides for a lump-sum death benefit based on 4 percent of earnings (up to $300 per month) for the period January 1, 1937, to December 31, 1946, inclusive, and 7 percent of earnings (up to $300 per month) thereafter. On this basis the lump-sum death benefit for 30 years' service at average monthly compensation of $250 would amount to $5,400. This is to be compared o, $494 which would be payable under the present law.

Under the present law annuities are payable to female employees at 60 years of age after 30 years of service. This discriminates against the male employee who must wait until age 65 or suffer a reduction in his annuity.

This is also taken care of by H. R. 6397, which provides for retirement at 60 years of age for both male and female employees. It also provides annuity for widows at 60 years of age instead of at 65.

Respectfully submitted,

Floyd A. Ross,
Regional Vice President,
National Railroad Pension Forum, Inc.

P. S.—As we understand, the only favorable legislation we can expect at this session of Congress is the enactment of H. R. 6766, introduced by the chairman. I support H. R. 6766. FLoyd A. Ross.

To the Honorable Committee on Interstate and Foreign Commerce: My name is George K. Wenig, Jr., I reside at 4822 West Walton, Chicago, Ill., and am an advisory member of the National Railroad Pension Forum, a nonprofit organization chartered under the laws of the State of Illinois. This organization represents the rank and file of the railroad industry who are opposed to certain features of the Railroad Retirement Act, as covered by the Crosser amendment, enacted in the Seventy-ninth Congress under Public Law 572. I have worked over 19 years for the Western Pacific Railroad in their off-line Chicago office. At present I am chief clerk of that office. I want it known that my activities with the National Railroad Pension Forum are not influenced in any manner by management. We are in favor of H. R. 6397, submitted by your fellow Congressman, Representative O’Hara, of Minnesota., at our request. This bill, if approved, would permit retirement at age of 60 of all railroad employees with 30 years of service at a higher pension than now provided. On February 1, 1948, the report of the Railroad Retirement Board outlined the reserve fund as being over $1,300,000,000. This tremendous reserve would supply sufficient cushion to absorb the extra cost of additional employees immediately retiring under this bill and the increased benefit payments, still leaving a tremendous reserve for future pensions and death benefits. H. R. 6397 insures payment upon death of lump-sum payment at least equivalent to amount paid into the fund with interest. H. R. 6397 would permit a widow to take a pension in place of the lump-sum death benefit is she so chose. This bill also would permit 25 percent increase in the amount of allowances presentlv received by those now on pension. We understand before a bill is considered, having to do with the Railroad Retirement Act, the Railroad Retirement Board makes a report. It should be understood that, while the railroad retirement employees receive their pav checks from the United States Government, their pav is actually charged to our retirement fund. Therefore, as our indirect emplovees, we do not feel the v should have the right to recommend or not recommend any bill—their duties should be strictlv confined to honestlv, thoroughlv, and promptlv administering the operation of the plan in effect under the Railroad Retirement Act as amended. Certain union officials have taken the at titude that what they decide to recommend to Congress in connection with anv amendments to the Railroad Retirement Act, as they did when the Crosser amendments were considered in 1946, is final. It should be understood that the Crosser amendments to the Railroad Retirement Act were made without the general knowledge or consent of the railroad emplovees. While the railroad union officials generally have the right to represent the emplovces on matters concerning rates of pay, hours of work, working rules, etc., the railroad employees have not given up their rights as American citizens to the union leaders.

« PreviousContinue »