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GOVERNMENT

RAILROAD RETIREMENT ACT i<s<

(REDUCED ANNUI TIES FOR MEN AT AGE 62)

Storage

H E A R I N G

BEFORE THE

COMMITTEE ON 

INT ERS TATE AND FOREIGN COMMERCE 

HOUSE OF REP RESEN TATIV ES

EIG HTY-SEVE NT H CONGRESS 

FI RST SES SIO N 

ON

H.R. 8597

A BILL TO AMEND THE RAILROAD RET IREMENT ACT OF 1937 

TO PROVIDE REDUCED ANNU ITIES TO MALE EMPLOYEES 

WHO HAVE ATTAINED AGE 62, AND FOR OTHER PURPO SES

H.R. 5027

A BILL TO AMEND SECTION 5(1) OF THE RAILROAD RE TIR EMENT ACT OF 1937 TO PROVIDE THAT CERTAIN REMARRIED 

WIDOWS OF RAILROAD EMPLOYEES MAY QUALIFY FOR BENEFITS UNDER SUCH ACT BASED UPON THE EMPLOYMENT OF 

TH EIR SECOND HUSBAND, WITHOUT REGARD TO THE RE ­

QUIREMENT THAT THEY HAVE BEEN MARRIED TO THE 

SECOND HUSBAND FOR 1 YEAR OR MORE

AUGUST 28, 1961

Print ed f or the use of the 

Committee on Interstate and Foreign Commerce

74480

U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 1061
■

. +* • ■

5^'s; f

COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE

OR EN HARRIS , A rk an sa s, C hair m an

JO H N BELL W IL LI AM S, M issis sip pi 

PE T E R F. MACK, J r., Il linois 

KENNET H A. RO BE RT S, A laba m a 

MORGA N M. MO ULDER, M isso ur i 

HA RL EY O. STAG GE RS , W es t V ir gi nia 

WAL TE R RO GE RS . Tex as 

SA MU EL N. FR IE DEL, M ar yl an d 

JO HN J. FL YN T, J r., Ge orgia 

TO RB ER T H. MAC DON ALD, M as sa ch use tts 

GE OR GE M. RH OD ES , Pen nsy lv an ia 

JO HN JARM AN , Ok lah om a 

LE O W. O’BR IE N, New York 

JO HN E. MOSS, Cal ifor ni a 

JO HN D. DIN GEL L, Michiga n 

JO E M. KI LG OR E, Tex as

PA UL G. RO GE RS , F lo ri da

RO BE RT W. H EM PH IL L, Sou th Car ol in a 

DAN RO ST EN KO WSK I, Il linois 

JA M ES C. HE AL EY , New Yo rk

W. E. Wil li am so n, C le rk

Ken n eth J. P ain te r, A s s is ta n t C le rk

Andrew Stevenson

Kurt Borciiardt

JO HN B. BE NNET T, M ichiga n 

W IL LI AM L. SP RI NGER , Il lino is 

PA UL F. SCHE NC K, Ohio 

J. AR TH UR YOUNGER, C al if or ni a 

HA RO LD R. CO LL IER, Il linois 

MI LT ON W. GL EN N, New Je rs ey 

SA MU EL L. DEV IN E, Ohio 

AN CH ER NE LS EN , M in ne so ta 

HA ST IN GS K EIT H , M as sa ch us et ts 

W IL LA RD S. CU RT IN , Pen ns yl va ni a 

AB NE R W. SIBA L, Con ne ct ic ut 

VE RN ON W. TH OM SO N, W isco ns in 

PE T E R H. DO MINICK, Co lorado

Professional Sta ff

Sam G. Spal

Martin W. Cunningham

n
C O N T E N T S

Te xt of— P aE e

H.R . 5027__________________ 5

H.R . 8597__________ 3

Report of—

Bureau of th e Budget on—

H.R . 5027_______________

H.R. 8597_______________

Raiko ad Retirem ent Board on—

H.R. 5027 ........... ............. . ......... ........... ......................... ............. . 6

H.R. 8597____ _________________________ ____ ___________ 3

St atem en t of—

Ben nett, Hon. John B., a Representative in Congress from the State

of Michigan______________ ___________ ______ ______ ____ 8

Fain, Guy F., gran d president, National Association of Retired &

Veteran Railway Employees_________________________________ 21

Habermeyer, Howard W., Chairman, Railroad Retirem ent Board___ 12

Harper, Horace W., labor member, Railroad Retirem ent Boa rd_____ 19

Mack, Hon. Peter F., Jr., a R epresenta tive in Congress from the S tate

of Illinois_________________________________________________ 7

Schoene, Lester P., counsel, Railway Labo r Executives’ Associa tion._ 22

Van Zandt, Hon. James E., a Representative in Congress from the

Sta te of Pennsylvania______________________________________ 10

Additional information submitted for the record by—

Association of American Railroads, letter from R. E. Hollar, vice president and assistant to th e president____________________________ 1

National Railroad Pension Forum, Inc., stat ements of Thom as G.

Stack, president___________________________________________ 26, 27

Railway Labor Executives’ Association:

Letter from A. E. Lyon, executive secretary________________ 1

List of_________________________________________________ 22

Railroad Pension Conference, statem ent of Clarence B. Carter,

national secretary_____________________ 29

zn

^ T£

> REFERENCE '

LI BRARY

. department J

cP

RAILROAD RETIREMENT ACT 

(REDUCED ANNUITIES FOR MEN AT AGE 62)

MONDAY, AUGUST 28, 1961

H ouse of R epr esenta tives, 

Com mittee on I nter state and F oreign C ommerce,

IV ashing ton, D.C.

The committee met, pursuant to call, a t 10 a.m., in room 1334, New 

House Office Building, Hon. Oren H arris (chairman of the committee) 

presiding.

The Chairman. The committee will come to order.

Today the committee, under the previously announced schedule, will 

hear testimony on two bills to amend the Railroad Retirement Act. 

The first bill is II.R. 8597, which I introduced at the request of the 

Railway Labor Executives’ Association and with the approval of the 

Association of American Railroads. I have a joint statement in the 

form of a letter addressed to me as chairman of the committee, dated 

August 9, 1961, which will be included in the record at this point. It 

is signed by the vice president, assistant to the president of the 

Association of American Railroads, and by the executive secretary 

of the Railway Labor Executives’ Association.

(The letter referred to follows:)

R ail w ay L abor E xec uti ves ’ A ss ocia ti on,

Washington, D.C., August 9,1961.

Hon. Oren Harris,

Chairman, Committee on In ter sta te and Foreign Commerce,

House Office Building, Washington, D.C.

Dear Mr. Chairman : The Railway Labo r Executives’ Association favors II.R. 

8597, a bill to amend the Railroad Retirement Act to perm it male employees who 

have atta ined age 02 hut have less than 30 ye ars of service to receive a reduced 

ann uity and to enable the paym ent of spouses’ ann uities with in a shorter period 

after marriage tha n is at present i>ossible. These amendments would bring the 

Railroa d Retirement Act into accord with the 1961 amendments to the Social 

Security Act in the are as involved. The Association of American Railroads 

interposes no objection to enactmen t of the measure.

Section 1 of the bill would make men who have attain ed age 62 and who have 

less tha n 30, but at leas t 10, years of service, eligible for an annuity on an 

actua rially reduced basis. Women alre ady have this right under the Railroad 

Retirem ent Act. Under the Social Security Act. men and women who have at 

lea st the minimum of service needed to qualify for old-age benefits can receive 

such benefits on a reduced basis after attainme nt of age 62.

The proposed amendments in section 2 would perm it a spouse’s annu ity to begin at the same time, rela tive to marriage, as can a wife’s or husband’s benefit under the Social Security Act. Thus, section 2 of the bill would shorten from 

3 years to 1 year the maximum time which must elapse after marria ge before 

a spouse’s annuity could be payable.

It would also perm it a wife or dependent husband, if eligible in the month 

before marria ge for a widow’s, widower’s, or parent’s annuity, to receive a 

spouse’s ann uity immediately upon marria ge if then of sufficient age or immediately upon atta inm ent of the required ag e; and this would also be tru e of a 

1
2 RAILROAD RETIREMENT ACT

spouse so eligible fo r a child’s disability annuity. For example, if a woman who 

was eligible for such an annuity in Janu ary marrie s an annuitant (who is 65 

or more) in February and is then 65 or more years of age, she could receive a 

full spouse’s annuity beginuning in February.

If such a woman were only 64 in February, but became 65 in June, she could 

receive a full spouse’s ann uity beginning in June. In the first case, if she 

were 62 in February, she could receive a reduced spouse’s annuity beginning in 

Feb ruary. In the second case, if she were only 61 in February but became 

age 62 in June, she could receive a reduced spouse’s annu ity beginning in June.

The proposed amendments would affect the spouse’s annuity only as to the 

time, rela tive to marriage, at which it could begin. The age of eligibility and 

other qualifying conditions would remain as they are now.

The proposed amendment in section 1 would result in a relatively small charge 

of approximately $2 million a yea r aga inst the rai lro ad retirem ent account.

The Railw ay Labor Executives’ Association urges th at the proposed bill be 

reported favorably by your committee at this session of the Congress. The Association of American Railroa ds rais es no objection to such action.

Sincerely yours,

Asso ciation of American R ailroads,

By R. E. Hollar,

Vice President, Assistant to tlie President.

'R.kh av ky Labor E xec utives’ Asso cia tio n,

By A. E. Lyon,

Executive Secretary.

The Chairman. Other bills similar to or identical with H.R. 8597 

are H.R. 8390 by our colleague from Pennsylvania, Mr. Van Zandt, 

who I believe is present this morning; H.R. 8745 by our colleague on 

this committee, Mr. Staggers; H.R. 8755 by our colleague on the committee, Mr. Bennett of Michigan; H.R. 8772 by Mr. O’Neill; and H.R. 

8843 by Mr. Boland.

H.R. 5027 was introduced by our colleague on the committee, Mr. 

Mack, of Illinois.

I am well aware of the fact that there are many other bills pending 

before the committee to amend the Railroad Retirement Act. These 

other bills pending before the committee are not scheduled for consideration today.

H.R. 8597 makes three important changes in the eligibility requirements for benefits. First, male employees with less than 30 years 

of creditable service in the railroad industry would be permitted to 

retire at age 62 on an actuarially reduced annuity. Women employees 

already have this right under the Railroad Retirement Act. Secondly, a spouse would become eligible for a spouse’s benefit afte r 

being married for only 1 year instead of 3 years. Thirdly, the bill 

would provide tha t any recipient of a survivor annuity under this 

act who marries a retired railroad worker, aged 65 years or more, 

would become entitled to a spouse’s benefit immediately upon such 

remarriage if he or she is at least 62 years old.

These amendments are being urged in order to make the railroad 

retirement system comparable to the social security system in these 

particular areas.

As I have indicated, the standard railway labor organizations favor 

this legislation, and the railroads interpose no objection to it.

Mr. Mack’s bill, H.R. 5027, provides tha t a widow who receives a 

widow’s annuity under the Railroad Retirement Act and who marries 

an employee under this act shall not be disqualified for a survivor 

annuity as the widow of the second husband if he should die before 

the couple will have been married for 1 year.
RAILROAD RE TI RE MEN T ACT 3

A copy of b oth of these bills, toge ther w ith th e usu al rep orts fro m 

the agencies, will be placed in the record at th is point.

(H .R. 8597, H .R. 5027, and the agency repo rts fo llo w:)

[H.R. 8597, 87th Cong,, 1st sess.]

A BILL To amend the Railroad Retirement Act of 1937 to provide reduced ann uities to 

male employees who have a ttained age sixty-two, and fo r o ther purposes

Be it enacted by the Sena te and House o f Representatives of the United Sta tes

of America in Congress assembled, Th at section 2 (a )3 of the Railro ad Retirement Act of 1937 is am ended to read as follows:

“3. Men who will have attain ed the age of sixty and will have completed 

thirt y years of service, or individuals who will have attai ned the age of sixtytwo and will have completed less tha n thirty years of service, but the ann uity 

of such men or such individuals shall be reduced by 1/180 for each calendar 

month th at he or she is u nde r age sixty-five when the ann uity begins to accrue.”

Sec. 2. Section 2( f) of the Railroad Retirem ent Act of 1937 is amended by 

striking “three yea rs” and inserting in lieu thereof “one year” and by inserting 

af te r the word “filed” where it first appears the following : “, or in the month 

prior to her or his marria ge to such annu ita nt o r pensioner was eligible for an 

annuity und er subsection (a) or (d) of section 5 of this Act or, on the basis 

of disability, u nde r subsection (c) thereof”.

Sec. 3. The amendments made by this Act shall be effective with respect to 

ann uities beginning to accru e in the cale ndar months af ter the calendar month 

of enac tment thereof.

United States of America

Railroad Retirement Board,

Chicago, III., A ugust 25,1961.

Hon. Oren Harris,

Chairman, Committee on Intersta te and Foreign Commerce, House Office Building,

Washington, D.C.

Dear Mr. H arris : This is a report on the bill H.R. 8597, which w as introduced 

by you in the House of Representatives on August 9, 1961, and referred to your 

committee for consideration.

The bill would amend the eligibility requirem ents of section 2( a) of the Railroad Retirement Act of 1937, in cases where disability is not involved, in the 

following manner.

Under the present law, full reti rem ent ann uities are available to men and 

women at age 65. Reduced annuities are available to men between the ages of 

60 and 65 if they have 30 y ear s of service. These earlie r accru ing ann uities are 

reduced by one one hundred-and-eightieth for each calendar month the man is 

und er age 65. when th e a nnu itie s begin to accrue.

Women with 30 years of service may now receive an ann uity under the 

Railro ad Retirem ent Act at age 60 withou t a redu ction because of age, and 

women with less than 30 year s of service may retire on ann uity as early as age 

62, but such ann uity will be reduced by one one-hundred-and-eighieth for each 

month the woman is under age 65.

The bill would perm it also men with less tha n 30 years of service to retire at 

age 62 w ith an annuity, reduced, as in the case of women, by one one-hundredand-eightieth for each calend ar month the man is und er age 65. The Social 

Security Act was recently amended (Public Law 87-64) in a similar manner to 

allow men to retire at age 62 w ith a reduced old-age insurance benefit.

The bill would also amend section 2( f) of the Railroa d Retirem ent Act of 

1937 which defines the term “spouse.” Under the law at present, the wife (or 

husb and) of a retirem ent annu ita nt or pensioner may qualify as a “spouse” if 

(among other requirements) she (or he) was marrie d to such annu ita nt or 

pensioner for a period of not less tha n 3 years immediately preceding the day 

on which the application for a spouse’s ann uity is filed, or is the p are nt of such 

an nu ita nt’s or pensioner’s son or daughter.

Th e bill would change the altern ative requirement first above described, of a 

marria ge of 3 y ear s’ duration, to a requirement of a ma rria ge of only 1 y ear’s 

duratio n, and would add another, a third alterna tive requ irement, at thi s point, 

th at is to say, a wife (or husb and) could qualify as a “spouse” if (among other 

requ irem ents) she (or he), although not m arried to the an nu ita nt or pensioner
4 RAILROAD RETIREMENT ACT

for 1 year, and although not the paren t of the annu ita nt’s o r pensioner’s son or 

daughter, was eligible, in the month prior to the marriag e, for a widow’s an nuity, 

a parent’s annuity, or a child’s disability annuity under the Railroad Retire ­

ment Act. The Social Security Act was similarly amended in recent years.

The amendments would be effective with respect to ann uities beginning in 

calendar months a fte r the month of enactment.

An estimate of the first-year effect of a proposal to provide reduced ann uities 

to male employees aged 62 to 64 with 10 to 29 years of service follows :

Number to he awarded reduced annuitie s________ _____________ 5, 000

Average reduced ann uity (an nual am ou nt)_____________________ $1, 000

Total to be paid in year______________________________________ $5, 000, 000

Of the $5 million, the major pa rt will be reimbursable under the financial 

intercha nge provisions of section 5(k) (2) of the Railroad Retirement Act.

The reduction from 3 years to 1 year in the “living with’’ requirement for 

a spouse would extend eligibility to a very small group of i>ersons denied spouse 

ann uities because they had been m arried less than 3 years.

Enactment of the bill would increase the costs of the railroad retirem ent 

system by an estim ated $2 million a year, or 0.04 percent of payroll on a level 

basis. Although the Board does not usually approve the enactment of any bill 

to amend the Railroa d Retirem ent Act which does not contain a provision for 

financing the costs of the amendment proposed, this bill (the Board is advised) 

has the approval of the Railway Labor Executives’ Association, and is not objecte d to by the Association of American Railroads, which associations repre sent 

the two groups which are responsible for the paym ent of the taxes under the 

Railroa d Retirement Tax Act to supp ort the railroad reti rem ent system.

The Board, therefore, recommends the enactm ent of this bill.

The Bureau of the Budget has advised that in the absence of the adeq uate 

financing of the benefit liberalization proposed in H.R. 8597, enac tmen t of this 

legislation would not be in accord with the program of the President.

Sincerely yours,

Howard W. H abermeyer, Chairman.

E xecutiv e Off ic e of th e Pre sid ent,

Bureau of th e B udget, 

Washington, D.C., August 28,1961. Hon. Oren Harris,

Chairman, Committee on Inters tate and Foreign Commerce,

House of Representatives, Washington, D.C.

Dear Mr. Chairman : This is in reply to your requ est for a report on H.R. 

8597, a bill to amend the Railroad Retirement Act of 1937 to provide reduced 

ann uities to male employees who have attained the age of 62, and for other 

purposes.

The bill would amend the Railroad Retirement Act by providing retirem ent 

at age 62 on a reduced a nnu ity to male railr oad workers with less th an 30 yea rs’ 

service. Present law provides reti rem ent at age 60 on a reduced annuity to all 

railro ad workers with 30 yea rs of service and reti rem ent at age 62 fo r women 

with less than 30 ye ars ’ service, also on a reduced annuity.

The bill also provides th at the wife or husband of an annuitant may qualify 

as a spouse for benefit purposes if she was married to the a nnuit ant for 1 y ear 

preceding application for benefits. Presen t law conta ins a 3-year marria ge requirement. In addition, the bill would add another altern ative requirement 

enabling a spouse to qualify for benefits.

This adm inistra tion recommended and the Congress recently enacted legislatio n providing, among other things, early retirem ent on reduced annuities for 

men under the Social Security Act. The provision of similar early retirem ent 

benefits to railroad workers between the ages of 62 and 65, therefore, appears 

appropriate and desirable. There is a major difference, however, in the provisions of H.R. 8597 for railroad workers and the provisions of the recent 

social security amendments. The reduction factors in the Social Security Act 

together with the provisions relatin g to computation of average wages (pa rticularly the provision which requ ires th ta t the time up to age 65 be included in 

computing average wages) were designed in such a way that in early retire- 

.ruent cases a fully equivale nt actua ria l reduction will be made so th at there
RAILROAD RE TI RE MEN T ACT 5

would be no financial burden on the OASDI system. Under H.R. 8597, the 

reduction factors would be comparable to those under the OASDI program 

but the computation of average wages would not include the period between the 

actua l age of retirem ent and age 65, with the consequence th at the early railroad retirem ent benefits would be greater than act uarially wa rranted and the 

railro ad retirem ent system would, therefore, be subjected to an additional 

financial burden.

The additional actua ria l deficit resu lting from H.R. 8597 would be 0.04 percent of payroll on a level premium basis, or $2 million per year. These are 

significant amounts in rela tion to the number of people who will benefit.

The Bureau of the Budget is seriously concerned with the current actua ria l 

deficiency of the railroad reti rem ent system. The actuarial deficiency of the 

system has risen from 0.60 perce nt of payroll in 1959 to 1.69 perce nt of payroll, 

or $73 million per year on a level basis, according to data from the Railroad 

Retirem ent Board's eighth actua ria l valuation . The burden borne by the 

system can be illustrated by the fac t that the number of people on the beneficiary rolls is alre ady 825,000 as compared to recent covered employment of 

831,000.

It would seem undesirable at this time to provide additional benefits which 

are not fully financed and which would place a fu rthe r burden on a system 

which is in serious financial trouble. Therefore, the Bureau of the Budget 

urges your committee to follow the principle of full actua ria l reduction and 

financial soundness adopted by the Congress in the recent social secu rity amendments. We believe this can be achieved readily and equitably by the following 

modifications in H.R. 8597.

In lieu of providing reduced benefits to men at age 62, using the one onehundred-and-eightieth reduction fac tor in the benefit form ula for each month 

th at the man is under age 65, we would propose th at either a redu ction factor 

of one one-hundred-and-fiftieth or one one-hundred-and-forty-fourth be used 

in computing benefits for male work ers with less tha n 30 years of service. Use 

of either of these form ulas would have the effect of providing a reaso nably full 

ac tua ria l reduction for early retirem ent benefits and produce the desirable resu lt 

of avoiding the imposition of significant additional cost on the system. The 

resulting reduction in an early retire e’s annuity (compared to the one onehundred-and-eightieth reduction) would in all cases be moderate.

In advancing these suggestions, we recognize th at the present reduction 

form ula for male persons receiving early reti rem ent benefits is one one-hundredand-eightieth for each month below age 65. However, da ta supplied by the 

Board indicate th at although this reduction form ula is approxim ately on a full 

actua ria l equivalent b asis for women workers who retire early, it is considerably 

sho rt of full ac tua ria l equivalence for male workers and is sub stan tially sho rt 

of an actua ria l reduction in the case of spouses. Thus, the use of the one 

one-hundred-and-eightieth fac tor is one of a number of reaso ns why the cost of 

benefits on an actua ria l basis u nder the system are now far outrunning revenues.

If the committee were to amend the bill along the lines ind icated above (or in 

an altern ative manner that provides full actua ria l sufficiency), the Bureau of 

the Budget would be in fav or of enactment. However, in the absence of 

assurance of the adeq uate financing of benefit liberalizations proposed in H.R. 

8597, enactmen t of this legislation would not be in accord with the program of 

the President.

Sincerely yours,

P h il l ip S. H u g h es,

Ass ista nt Director f or Legislative Reference.

[H.R. 5027, 87th Cong., 1st sees.]

A BILL To amend section 5(1 ) of the- Railroad Retirement Act of 1937 to provide th at 

certain remarried widows of railroad employees may qualify for benefits under such Act 

based upon the employment of their second husband, without regard to the require- 

• ment th at they have been married to the second husband for one year or more.

Be it enacted by the Senate and House of Representatives o f the United States

of America in Congress assembled, That section 5(1) (1) of the Railroad Retire ­

ment Act of 1937 is amended by a dding a t the end the reo f the-following: ‘ Where 

a woman has qualified for an annuity u nder th is section as a widow, and marrie s

74480—61----- 2
6 RAILROAD RE TI RE MEN T ACT

ano ther employee who dies within one year after the marriage, she shall n ot be 

disqualified for an annuity under this section as the widow of the second 

employee by reaso n of not having been marrie d to the employee for one year.”

Unit ed Stat es op A mebica

R ailroad Retire me nt Board,

Chicago, III., June 7 ,1961. H on. Oren Harris,

Chairman, Committee on Int ersta te and Foreign Commerce,

House Office Building, Washington, D.C.

Dear Mr. H arris : This Is a report on the bill H.R. 5027 which was introduced in the House of Representatives by Mr. Mack on Febru ary 28, 1961, and 

referred to you r committee for consideration.

The bill would amend section 5(1) (1) of the Railroad Retirement Act of 

1937 to provide that where a woman has qualified for an ann uity as a widow, 

and married another employee who dies within 1 year after the marriage, she 

shall not be disqualified for an ann uity as the widow of the second employee 

by reaso n of not having been married to him for 1 year.

At the present time, no widow can receive an annuity under the Railroad 

Retirement Act after she remarries, even after the new husband dies, and 

even if the new husband was “completely insured” under the Railroad Retirement Act, if such new husband dies with in 1 year after such remarriage. 

However, if a widow of a railroa d employee who h ad no “current connection with 

the railroad industry,” or of a person who was “fully insured” und er the Social 

Security Act, marries a “completely insured” railroad employee who dies within 

1 yea r after such marriage, such widow is not disqualified for the widow’s 

ann uity under the Railroa d Retirem ent Act, as the widow of the new husband, 

by reason of not having been married to him for 1 year, but only if in the 

month prior to the month of h er marriage to such new husband, she was entitled 

to, or on application therefor and attain me nt of age 62 in such prior month, 

would have been entitled to a widow’s benefit under the Social Security Act, as 

the widow of her form er husband, or to a paren t’s benefit und er that act. 

Enactment of this bill would, somew hat similarly, make the 1-year requirement 

inapplicable where the widow, prior to her new marriage, had qualified for a 

widow’s annuity under the Railro ad Retirem ent Act.

Although the cost of this bill would not be grea t, there are many proposals 

to liberalize one or more of the provisions of the Railroad Retirem ent Act 

which, when considered individually, would add litt le to the cost of the railroad 

retirem ent system. The Board, however, as a ma tter of policy, has not favored 

any such proposal because if all, or a sub stantial number, of them were enacted, the present actua rial deficiency would be increased substantially. For 

this reason, the Board does not recommend enactment of this bill.

The Bureau of the Budget has no objection to the presentation of this report 

from the standpoint of the administration’s program.

Sincerely yours,

Howard W. H abebme yer, Chairman.

E xecutiv e Off ic e of th e P resid ent,

B ure au of th e Budget, 

Washington, D.C., June 2, 1961.

Hon. Oren H arris,

Chairman, Committee on Inster sta te and Foreign Commerce,

House of Representatives, Washington, D.CJ.

My Dear Mr. Cha ir m an : This is in reply to your recent requests for the

views of this office with respect to H.R. 3795, H.R. 4463, H.R. 5027, H.R. 5094, 

and H.R. 5400, bills which would amend the Railroa d Retirem ent Act.

The Chairman of the R ailr oad Retirem ent B oard in the repo rts he is making 

to your committee on these bills is recommending against their enactment for 

the reas ons set out th erein .
RAILROAD RE TI RE MEN T ACT 7

This office gene rally concurs in the views contained in these rep orts and 

recommends tha t these measures not be enacted.

Sincerely yours,

Phil lip S. Hughes,

Assistant Director for Legislative Reference.

The Chairman. I have indicated tha t there are many other bills 

before the committee in which there is interest. Many Members of 

Congress have inquired about the scheduling of these proposals. I 

do not want anyone to get the idea that I am assuming the full responsibility as the keeper of the railroad retirement program or to 

try to determine all of the facets tha t go into this program. I am 

concerned about it. One thing about which w’e are all unanimous, I 

think, is to try to keep this program on a sound basis. If favorable 

consideration were to be given to many of the bills pending before this 

committee, they would endanger the program. Consequently, so fa r 

as I am concerned personally, I am not disposed to taking up such 

proposals as will obviously endanger the future of th is fund and the 

program which means so much to so many. I want tha t to be made 

perfectly clear so far as my position is concerned.

If ways and means can be found to pay for additional benefits in 

order tha t the program can be maintained on a sound basis, then I 

certainly would be receptive to any proposals which m ight be brought 

to the attention of the committee.

I thought I would make tha t statement because a good many have 

asked the question why we were not taking up this or th at bill. Certain organizations of the country tha t I know of are urging the approval of other and far-reaching proposals. In my judgment, the 

fund and the program cannot stand these unless something else is 

done to support it. For tha t reason, I did not schedule these other 

bills and we shall not take the time to hear them during this particular 

session.

Mr. Mack.

STA TEM ENT OF HON. PE TE R F. MACK, JR ., RE PR ES EN TA TIVE IN 

CONGRESS FROM TH E STA TE OF ILLINO IS

Mr. Mack. Mr. Chairman, in your opening statement you have 

correctly stated the purpose of my bill. Since it would be a very 

minor amendment to the bill which is proposed by the various organizations interested in this field, I feel it could be appropriately included in the bill under consideration today.

As the law stands today, an aged widow’s annuity is payable to 

the widow of a completely insured employee, provided she has reached 

the age of 60 and has not remarried. To qualify as a widow, she must 

have been living with the employee and have been married to him 

for at least 1 year before his death.

Mr. Chairman, I can well understand this requirement in the case 

of a woman who is not receiving a railroad retirement benefit before 

her remarriage, but where she has already been getting a widow’s 

benefit, it is manifestly unfair and adds insult to injury to deprive 

her of such benefit if her second husband should die before they will 

have been married for the 1 year.
8 RAILROAD RETIRE MEN T ACT

He re is a glarin g inequity between the Ra ilr oa d Re tirem ent Ac t 

and the Social Security Act- in ide ntical circumstances. Und er the 

Social Security Act, the wido w who received a widow’s benefit un de r 

social sec urity and subsequently ma rries a fu lly insure d employee 

who is ge tting an old-age benefit un de r the Ra ilr oa d Re tirem ent Act, 

would no t be depri ved of a wid ow’s benefit if he r second husba nd 

should die befo re the y will have been marrie d fo r 1 year. In th is 

event, she wou ld imme dia tely be en titled to a widow’s benefit based 

on he r second hu sban d’s wage record.

I have an e lde rly c onstitue nt who is d rawing a R ailro ad Retirem ent 

Ac t benefit and who wants to marry the widow of anoth er r ail roader. 

He is “completely insured” un de r the Ra ilr oa d Re tirem ent Act, and 

she is receiving a wid ow’s an nu ity un de r this act. Bo th are pa st 70 

yea rs of age. She wou ld, of course, lose he r widow’s an nu ity upo n 

rem arr iag e, and would no t become e ligible fo r a spouse’s ann uit y un til 

she will have been marrie d fo r at least 3 years. I un derst and th at 

un de r the cha irm an ’s bill, H.R. 8597, there w ould be no w ait ing period 

in such a case. I f he r husband should die wi thin 1 year of th ei r 

ma rriage, she wou ld be left wi tho ut any pro tec tion under the ra il ­

road retirem ent syste m.

Now con sider t he case of a woman who is rece ivin g a w idow’s bene ­

fit un de r the Social Se curity Act. If she marr ies a “completely in ­

sured” railr oa d worke r and he dies withi n 1 ye ar of th ei r ma rriage, 

she would not be disqua lified fo r a wid ow’s ann uity un de r th e R ailro ad 

Retire me nt Ac t as the wido w of the second husba nd. I do not quite 

un derst and all the com plexities of the law involved here , bu t I am 

ass urr ed by the Ra ilr oa d Re tirem ent Bo ard th at this sta tem ent is 

correct.

Mr. Ch airma n, by a peculiar qu irk in the law we have in this 

sit uatio n a parad ox. A widow who receives a widow’s benefit un de r 

the Ra ilroa d Re tirem ent Ac t and ma rries a retir ed railr oa d wo rker 

loses all righ t to the benefit if her second h usband dies w ith in 1 year 

of the ma rriage. A widow who receives a wid ow’s benefit un de r the 

Social Sec urity Ac t and marr ies a retir ed railr oa d wo rke r wou ld 

become entitled to a wid ow’s benefit un der the Ra ilr oa d Re tirem ent 

Act imm ediately upo n the death of he r second husban d.

Obv iously, there is a great injustice here. My bill is fo r the purpose of correcting this injustice. Th e cost of this amend ment is very 

nom inal. I hope the com mittee will fav orably conside r this problem.

I wish to th an k you, M r. Ch airma n, fo r th is o pp ortunity to tes tif y 

on this prop osal.

The Chairman. Mr. Benne tt.

STATEM ENT 0E HON. JOH N B. BEN NET T, RE PRES EN TA TIVE IN 

CONGRESS FROM TH E STATE OF MICHIGAN

Mr. Benn ett. Mr. Ch air man and mem bers of the comm ittee, I 

wa nt to t ha nk you fo r a llowing me a few mom ents to express my views 

in supp ort o f th e ch airm an ’s bil l, H.R. 8597. I introduced an iden tical 

bill, II.R . 8755.

These bills pro vid e fo r amend ments to th e R ailro ad Re tirem ent Ac t 

in three r espe cts:
RAILROAD RE TI RE MEN T ACT 9

First, male employees who do not have 30 yea rs of service wou ld be 

pe rm itted to elect r eti reme nt at age 62 on a reduced an nuity . Un de r 

prese nt law, male employees wi th 30 yea rs of service may re tir e at 

age 60 or a ny time subsequent the ret o on a reduce d annu ity , bu t those 

who do no t hav e 30 years of service must wait un til the y are 65 ye ars 

old. Fema le railr oa d employees alr eady hav e th e righ t to retir e at 

age 62 on a red uce d an nuity .

Second, a spouse wou ld become elig ible for a spouse’s ann uity af te r 

1 ye ar o f marria ge ins tea d of ha ving to wa it fo r 3 ye ars un de r existing law.

Th ird , anyone en titled to a survi vor benefit who marr ies a retir ed 

an nu ita nt would immediately upon such marria ge become en titled to 

a spouse’s benefit, i f th en of sufficient age.

I un de rst an d th at all the sta nd ard railw ay lab or org ani zation s, 

being repres ent ed here by the Railwa y La bo r E xecutives’ Association, 

he ar til y endorse this bil i an d will so test ify . Also, I am advised th at 

the ra ilr oa ds will no t object to these amendments .

Mr. Ch air ma n, ha vin g serv ed on this gr ea t com mittee fo r man y, 

many years, I am well aware of the a tti tu de o f the com mittee tow ard 

lib era liz ati on of ret ire me nt benefits witho ut provisions fo r the ade ­

quate financ ing of the costs of the proposed benefits. On many occasions the committee ha s expressed th e view th at in t he considera tion 

of all bills to ame nd the Ra ilroad Re tirem ent Act great emphasis 

wou ld be placed on the effect of the proposed amend ments on the finan cial soundness of the r ailro ad retireme nt acco unt. The committee 

has sta ted th at it was unanimously of the opinion th at , regard less of 

the desir ability of certa in pro posals fo r the lib eralizatio n of benefits 

un de r th is act, no am end ments sho uld be m ade whi ch w ould jeopard ize 

th e financia l soundness of the railr oa d retir em en t system. A gr ea t 

numb er of people dep end on th ei r ret ire men t a nd su rvivor benefits fo r 

a liveliho od and many more who will retir e in the f ut ur e are cou nting 

on these benefits. Hen ce, th e Congress mu st proceed with grea t cau ­

tio n in p rovid ing new benefits with ou t a dequate cost co nsid erations .

I am adv ised th at th e cost of this leg islation is approx im ate ly $2 

millio n a y ear. Th e bill does n ot propo se a ny c han ge in the tax s tru ctur e. Hence, ena ctm ent of this legislation will increase the deficiency 

in the railr oa d ret ire me nt ac count b y a pp roximate ly $2 mil lion a year.

Th is is n ot a lar ge sum a nd i t wou ld no t plac e the re tirem ent system 

in jeo pa rdy since the balanc e in the acc oun t exceeds $3.5 billion. 

Nevertheless, at some tim e in the no t too di stan t fu tu re t he Congres s 

will hav e to tac kle this problem and mak e pro vision fo r ad dit ion al 

financ ing of the system.

Th e benefits we are pr ov iding in this leg islation are no more th an 

wh at employees covered by the Social Se curity Ac t alr eady hav e 

achieve d un der the 1961 and previous amend ments to this act. In 

fai rness and justice to the railr oa d workers we must meet these ad ­

vances by the pr om pt enactme nt o f H.R. 8597.

I hope, Mr. Ch air ma n, th at the com mittee will prom ptly conside r 

-a n d appro ve this me rito rious bill which will br ing the Ra ilr oa d Re ­

tirem ent Act in line with the Soc ial Security Ac t in resp ect to age 

pro vision s an d in ot her respects.

I th an k you.
10 RAILROAD RE TI RE MEN T ACT

The Chairman. We have with us our colleague from Pennsylvania, 

sponsor of the bill H.R. 8390, Hon. James E. Van Zandt.

We are glad to note your continued interest in the railroad retirement program.

STA TEM ENT OF HON. JAM ES E. VAN ZANDT, RE PR ES EN TA TIVE IN 

CONGRESS FROM TH E STATE OF P ENNSYLVANIA

Mr. Van Zandt. Mr. Chairman, the opportunity to testify in suppor t of the proposed amendments to the Railroad Retirement Act 

under consideration at this hearing is greatly appreciated.

As the representative of a congressional district with a large railroad population, I have several bills pending before this committee to 

amend the Railroad Retirement Act, the most recent being H.R. 8390, 

which I introduced on July 27, 1961. This bill would permit men 

having less than 30 years’ service to retire a t age 62 with a reduced 

annuity on the same basis as is presently provided for women.

I am pleased tha t this committee has convened for the express 

purpose of considering legislation permitting optional retirement for 

men at age 62 and, in addition, to consider a proposal enabling spouses 

to become eligible for annuity benefits after 1 year of marriage.

There is no doubt in my mind of the merit of the proposed legislation. As a matter of fact, reducing the retirement age for men by 

offering optional retirement on a reduced annuity at age 62 will bring 

the Railroad Retirement Act in accord with the Social Security Act, 

which permits retirement at age 62 as a result of the 1961 Social 

Security Amendments.

When I introduced H.R. 8390 to permit men to retire at age 62, 

inquiry was made regarding its cost. I was informed that, based on 

past experience, the Railroad Retirement Board estimates that while 

more than 5,000 persons would be eligible, it is expected that not more 

than 5,000 of them would take advantage of the opportunity to retire 

at age 62. It is also estimated tha t the cost would amount to $2 

million and require .04 percent of the payroll tax.

Mr. Chairman, it is pleasing to learn that your bill, H.R. 8597, to 

permit male employees to retire at age 62, was introduced as the result 

of an urgent request you received from the Railway Labor Executives’ 

Association, to which the Association of American Railroads interposed no objection to the introduction of such legislation, which also 

includes a provision enabling spouses to become eligible for an annuity 

after 1 year of marriage.

It is encouraging to receive such strong endorsement of the legislation because such action reveals it has merit and that there is 

compelling reason for its enactment.

In expressing my wholehearted support of the legislative proposals 

under consideration at this hearing, I regret it has not been possible 

to secure consideration for my bill, H.R. 530, which would repeal the 

prohibition against the payment of dual benefits to spouses entitled 

to social security benefits by reason of their employment in a position, 

covered by the Social Security Act. Under existing laws, a spouse 

cannot draw benefits under the Railroad Retirement Act and at the 

same time receive the benefits paid for under the Social Security Act.
RAILROAD RE TI RE MEN T ACT 11

It is also regretted tha t consideration is not being given to the need 

for an increase in widows’ annuities. I have pending a bill, H.R. 

579, providing for a 20-percent increase, and it is my hope that during 

the 87th Congress consideration will be given to the imperative need 

for an increase in widow’s annuities.

Finally, I would be remiss in my duty to many active and 

retired railroaders i f I failed to direct the attention of this committee 

to the two bills I introduced in previous Congresses and which are 

pending in the 87th Congress. The bills referred to are H.R. 576 

and H.R. 577.

There are similar bills to H.R. 576 introduced by other Members of 

the House. Like my bill, H.R. 576, they provide tha t railroad employees may retire on a full annuity at age 60 or afte r serving 30 

years, and tha t the annuity for any month shall be not less than 

one-half of the individual’s average monthly compensation for the 

5 years of highest earnings. When I made inquiry during this session regarding the possibility of holding hearings on H.R. 576, I 

was informed tha t it may be possible to give consideration to tha t 

type of legislation during the second session of this Congress.

H.R. 577 which I mentioned is a bill in which there is keen interest. 

Under its provisions it would—

permit an annuita nt to receive his ann uity even though he renders compensated 

service for the outside employer by whom he was last employed before his 

ann uity began to accrue.

Under existing law, it is required tha t an individual shall cease all 

employment in which he may be engaged before his annuity may 

begin to accrue.

My bill, H.R. 577, would correct many distressing situations where 

railroad employees upon their retirement are compelled under present 

law to resign small-salaried clerical positions such as secretary for 

a fraterna l organization or a building and loan association.

For years I have been trying to secure action on the type of legislation embodied in H.R. 577. During that time an effort was made to 

determine if the Railroad Retirement Board could remedy the situation by administrative action, thus eliminating the necessity for legislation on the subject. I was informed by the Chairman of the 

Railroad Retirement Board in 1955 tha t the requirement tha t an 

individual shall cease all employment in which he may be engaged 

before his annuity may begin to accrue, and the provisions that no 

annuity shall be paid for any month in which he works for his last 

employer, whether or not an employer un der the act, are mandatory 

provisions of the Railroad Retirement Act and, therefore, the Board 

is not empowered to make any exception regarding them.

Therefore, it is my hope th at during the next session of Congress, 

in view of the statement th at hearings may be held on railroad retirement amendments, th at special consideration will be given to the bills 

I have mentioned, because there is widespread support for them among 

active and retired railroaders.

I wish to again express appreciation for this opportunity to sneak 

in favor of the legislation you are considering at ths time, and it is 

my sincere hope th at it will be approved by Congress before ad journment of the present session.
12 RAILROAD RE TI RE MEN T ACT

Mr. Chairman, I would say from the statement you made and other 

members of this committee have made, it appears tha t this bill will 

be favorably reported. That concludes my statement.

The Chairman. Thank you, Mr. Van Zandt. We appreciate your 

statement and your appearance here.

•. ; V tlB ll ' " . } 'r

 :1 , . . L

STATEMENT OP HOWARD W. HABERMEYER, CHAIRMAN, 

RAILROAD RETIREM ENT BOARD

The Chairman. The Chairman of the Railroad Retirement Board, 

Mr. Howard W. Habermeyer.

First let me say on behalf of the committee, we are glad to have you 

with us today. I notice you have your associates with you. I think 

probably you might identify those who are with you for the record.

Mr. Habermeyer. I shall be happy to do that. Mr. Horace W. 

Harp er, the labor member of the Board ; and Mr. Thomas M. Healy, 

the management member of the Board.

The Chairman. Have you some of your staff with you ?

Mr. Habermeyer. We have our Associate General Counsel, David 

B. Schrieber; his assistant, Charles F. McLaughlin; and our Director 

of Research, Samuel Chmell.

The Chairman. We are glad to have all these gentlemen before the 

committee, particularly since it appears there will be no great controversy over this matter.

Mr. Habermeyer. This is rather an unusual experience, Mr. 

Chairman.

Mr. Chairman and members of the committee, my name is Howard 

W. Habermeyer. I am the Chairman of the Railroad Retirement 

Board with offices at the headquarters of the Board, 844 Rush Street, 

Chicago, Ill., and I appear on behalf of the Board in support of the 

bill H.R. 8597.

The desirability of permitting women to retire on reduced monthly 

benefits afte r they have attained age 62 even though they have less 

than the 30 years of service required for a full annuity on the basis 

of age was recognized by the Congress when it amended the Railroad 

Retirement Act in 1959 to provide this righ t for women (Public Law 

86-28). In 1956 the Social Security Act was amended to give women 

the right to obtain reduced monthly old-age benefits afte r attainment 

of age 62 (Public Law 880, 84th Cong.), and in 1961 tha t act was 

amended to give men the same right (Public Law 87-64). Through 

its action Congress recognized tha t many men find it impossible to 

continue working until they reach 65 because of ill health, technological unemployment, or other reasons. The right to obtain retirement benefits after they reach 62 will help to alleviate the hardships 

they face.

With reference to section 2 of the bill, the Congress determined, 

in amending the Social Security Act in 1960 (Public Law 86-778), 

that in any case 1 year was long enough for a wife or husband to wait 

after marriage before she or he could qualify for a wife’s or husband’s 

benefit upon meeting the eligibility requirements. Before that amendment the Social Security Act. did not permit a wife or husband to 

Qualify for such benefits until 3 years had elapsed following the marriage except, of course, where there was a child to make the 3-year
RAILROAD RE TIRE MEN T ACT 13

requirement inapplicable. The Railroad Retirement Act now contains a similar 3-year requirement which the bill would reduce to 

1 year.

Further, the Congress had already found in amending the Social 

Security Act in 1958 (Public Law 85-840), that a wife or husband 

who had rights in the month prior to her or his marriage, or would 

have had such rights had she or he then been of sufficient age, to a 

widow's, widower’s, or pare nt’s benefit, or a disabled child’s benefit, 

should be entitled to receive a wife’s or husband's benefit as soon as 

qualified without waiting the elapse of the period prescribed after 

marriage for other cases. This bill will give persons eligible for 

comparable benefits under the Railroad Retirement Act in the month 

liefore marriage the right to obtain a spouse’s annuity as soon as 

otherwise qualified without regard to the elapse of any time.

The amendment to provide reduced annuities for men after age 62 

would add about $2 million a year on a level basis to the costs of the 

railroad retirement system. The costs of the changes as to a spouse’s 

annuity would be insignificant.

The Board normally does not favor measures which would liberalize the benefit provisions without providing for the financing of 

the added costs. However, we understand that the Railway Labor 

Executives' Association, which represents the employee group which 

pays one-half the costs of the system, favors the bill and the Association of American Railroads, which represents the employers who pay 

the other half, do not object to it. In view of this fact and because 

of the unquestioned good that would be done the Board urges that the 

bill lie enacted.

Mr. Ch airman, I would like to add that I hope nothing in my position with respect to this bill would indicate to the committee any 

lack of interest in keeping this system on a financially sound basis. 

In view of the support of the proposal by the two groups mainly 

concerned with financing our program, I take it that they are willing 

to take on these additional obligations.

With that, I close my statement.

The Chairman. Thank you, Mr. Habermeyer.

Any questions ?

Mr. Friedel. Mr. Habermeyer, I see that you recommend enactment of II.R. 8597.

Mr. II abermeyer. Yes, sir.

Mr. Friedel. Have you any comment on H.R. 5027 ?

Mr. Habermeyer. None other than were submitted with the Board's 

report.

Mr. Friedel. What was that ?

Mr. Habermeyer. The Board opposes the bill.

Mr. M ack. Wi 11 my colleague yield ?

Mr. Friedel. I yield.

Mr. Mack. I want the record clearly to reflect the situation. I 

think I understand your position. The letter which you submitted 

for the record I think clearly explains this problem. As a m atter of 

fact, this is one of the glaring inequities in the retirement program. 

The Board does not question my argument tha t there is a glaring 

inequity, but you have opposed it for a different reason. Is that not 

true?

74480 fil
14 RAILROAD RE TIRE MEN T ACT

Mr. H abermeyer. Yes, sir. There is no question about the equities 

of your bill. Together with the many, many bills which have been 

proposed amending our system, liberalizing benefits, since no additional revenues were provided to pay for those benefits, the Board 

has taken the standard position of being opposed on a cost basis.

Mr. Mack. 1 knew the gentleman from Maryland would be interested in knowing that my bill was a meritorious bill, and it would 

serve a very good purpose. That is the reason 1 wanted to clarify the 

response.

Mr. Friedel. 1 assure the gentleman from Illinois I think it is a 

very good bill. This bill does not have the same standards as the 

Social Security Act. It does not cost too much.

Mr. Habermeyer. The cost is very nominal, Mr. Friedel.

The Chairman. How much is the cost ?

Mr. Habermeyer. I think it is in the neighborhood of $100,000 a 

year.

Mr. Friedel. $100,000?

Mr. II abermeyer. Yes. When the figures become that minute, it is 

hard for our actuaries to make an accurate, computation.

Mr. Mack. I think the problem is that it is difficult to estimate what 

it would cost. It is not anticipated that it will exceed $100,000?

Mr. Habermeyer. That is correct.

Mr. F riedel. I would favor the bill, and that is the reason I wondered why he did not ment ion your bill, H.R. 5027.

Mr. Mack. I am happy to have the gentleman's support.

Mr. Friedel. You have it.

Mr. Dominick. On what basis was the fraction one one-hundredand-eightieth computed, which is the amount of reduction in the 

annuity ?

Mr. Habermeyer. This goes back to 1935, the second Railroad Retirement. Act. In tha t act they allowed an individual to retire as 

early as age 50 on a reduced basis. They computed the number of 

months elapsed between age 50 and age 65, and it happened to be 180. 

They reduced the benefit by one one-hundred-and-eightieth. At age 

50 he actually had no benefit, but at at age 50 and 1 month he could 

get one one-hundred-and-eightieth of the full annuity.

The one one-hundred-and-eightieth does not come too far off from 

the actual actuarial reduction. It is much closer today that it was in 

1935 when the bill was first enacted, because people are living longer. 

The longer wTe reduce the benefit, the more the fund saves.

Mr. Dominick. Even when you are only reducing the age limit by 

3 years instead of by 15 as you suggested before?

Mr.H abermeyer. Yes. In 1935, the one one-hundred-and-eightieth 

was not nearly enough, b ut as the life span has been extended, the 

one one-hundred-and-eightieth becomes more nearly a true actuarial 

reduction. It is not quite sufficient with respect to men. I am informed that, with respect to women, it is a true actuarial reduction.

Mr. Dominick. So you recommend that we retain that fraction ?

Mr. Habermeyer. Yes, sir.

Air. Dominick. Secondly, in section 2, there is a provision in Mr. 

Harris ’ bill which amends section 2(f) of the Railroad Retirement 

Act, and apparently refers to the situation brought up by Mr. Mack. 

Does it or does if not refer to that situation ?
RAILROAD RE TI RE MEN T ACT 15

Mr. H abermeyer. Mr. Mack’s bill deals en tir ely wi th a. widow who 

rem arr ies and loses h er second husba nd w ith in 1 year. In other words, 

it is entirely a wid ow's benefit. When she rem arr ies , H.R. 8597 will 

qu ali fy h er with respec t to spouse’s benefits und er the second ma rriage.

Mr. Dom inick. W ha t is the effect of section 2 of Mr. H ar ris' bill 

whi ch states —

or in th e mon th pri or to her or his m ar riage to su ch an n u it an t or pe ns io ne r w as 

eli gible fo r an an nuit y under su bs ec tio n (a ) or (d ) of section 5 of th is Act.

Mr. H abermeyer. Take Mr. Mac k's widow—m erely taking an 

exam ple. I f she marrie d an an nu ita nt, under ou r prog ram at the 

present time she would have to wait 3 years b efore she wo uld be eligible 

for a spouse's benefit.

Hav ing been en titled to a widow's benefit in the mon th befo re she 

marrie d she would imm edia tely become en titled to a spouse's benefit 

un de r the proposal of section 2 of Mr. H ar ri s’ b ill.

Mr. Dom inick . But this, then, does not tak e up a situation where 

she a gain becomes a widow w ithin a yea r?

Mr. H abermeyer. Xo, sir.

Mr. Dom inick. Do you think the re should be any addition to Mr. 

H ar ris' bill to include tha t typ e of sit uatio n ?

Mr. H abermeyer. Th ere is no question about the merits of Mr. 

Mack's bill. I ’nder ou r pro gra m there are so many ame ndm ents , however, which are very merito rious which do not pro vid e the addit ion al 

reve nue to su pp ort the benefits proposed, so the Boa rd has oppo sed 

them str ict ly on a cost basis.

Mr. Dom inick. I s there any provision in Mr. H ar ri s’ bill for inclu din g th e cost of thi s p rogram ?

Mr. H abermeyer. Xo, sir. In my con clu din g rem ark s I tri ed to 

sta te my concern with resp ect even to Mr. H ar ri s’ bill. How ever, 

with the supp ort of the two gro ups pa ying the costs of the railr oa d 

ret ire me nt system, I tak e it to mean that they are willing and the y 

will assum e the obligations cau sed by this.

Mr. Dom inick . Would the same am ount which they are willing 

to assum e also tak e care of the addit ion al cost proposed un de r Mr. 

Ma ck’s bill?

Mr. H abermeyer. I think you pro bably will hav e to ask the m 

wh eth er they would be wi lling to tak e on the ad dit ion al obligation . 

Mr. Mack’s bill would have very nom inal figures, pe rhaps not exceeding $100,000 addit ion al cost to the fund pe r yea r.

Mr. Dom inick. T hat is all, Mr. C hairm an.

Mr. Rogers of Florida. I have no questions, Mr. Chairma n.

Th e Chairman. As I un de rst an d this, the n, H.R. 8597, which I 

introd uced at the reques t of those intere ste d in th is ret ire me nt pr ogram , is a m atter of new p olicy ?

Mr. H abermeyer. I would not say it was new policy really. Ov er 

the y ears from tim e to tim e one or tlie othe r grou p has proposed such 

lib era liz ati on wi thou t the addit ion al fina ncing. How ever, the y al ­

ways followed it up by prov idi ng th e financin g. I th in k we can view 

the pa st record with confidence with respec t to the futur e.

Th e Chairm an. I t pro vid es fo r reduced an nu ity at age 62.

Mr. H abermeyer. Yes, sir.

Th e Chairman. And th at is based on actua ria l experience?
16 RAILROAD RE TIRE MEN T ACT

Mr. Habermeyer. This one one-hundred-and-eightieth reduction is 

not. a true actuarial reduction, but we have used that figure on many 

other benefits when we reduced them to permit the payment of benefits 

at an age earlier than 65. Therefore, to treat this group we are considering today differently from the employee who retires at age 60 

with 30 years of service or the spouse who draws her benefits at age 

62 on a reduced basis would seem inequitable. I think we would have 

to hold to this figure of one one-hundred-and-eightieth as a reduction 

basis.

The Chairman. In the long run, then, would there be any difference 

insofar as the effect on the fund is concerned ?

Mr. H abermeyer. No, sir. As medical science is finding ways and 

means of extending life, one one-hundred-and-eightieth may in the 

near future be a true actuarial figure.

The Chairman. Tn other words, it is estimated there will be a cost 

of approximately $2 million a year immediately should this program 

become effective?

Mr. Habermeyer. When we talk of a $2 million additional cost per 

year, that is on a long-term basis. T cannot say that the year 1962 

will cost us an additional $2 million. Tt may cost us $3 million and 

we may have a comparable saving somewhere in the future. This is 

what an actuary talks about when he speaks of a level cost basis. lie 

estimates over the long span it will average out to about $2 million a 

year.

The Chairman. Then so far as the fund is concerned we will have 

to accent the fact it will be an increase in cost ?

Mr. Habermeyer. Yes, sir.

The Chairman. Even with the idea of perpetuity ?

Mr. TT ABERMEYE R. Yes, sil‘.

The Chairman. And that is estimated at $2 million ?

Mr. Habermeyer. Yes, sir.

The Chairman. The matter that Mr. Mack has under consideration 

is a matter of equity, is it not?

Mr. Habermeyer. Yes, sir.

The Chairman. There is only $100,000 involved there. How can 

you justify your recommendation in favor of one as against the other?

Mr. Habermeyer. As I said, the groups paying the freight have 

indicated in their reports on the one bill their favorable action. I 

don’t know what the situation is with respect to the other.

The Chairman. I am seeking information only. Does that mean 

your policy of adhering to the soundness of the program goes only 

to the extent of those you refer to as “paying the freig ht” ?

Mr. H abermeyer. T think that is a true statement. It seems to me 

tha t the spokesmen for the Association of American Railroads can 

speak with some authority for the railroads, and similarly the heads 

of the RLEA can speak for the employees who will have to bear the 

taxes and pay the costs.

The Chairman. I can appreciate your willingness to cooperate and 

the willingness of the Board to cooperate. However, it seems to me 

if you are going to adhere to a policy, that the Board had better accept 

its own responsibility in making a determination as to what you think 

is really best because you are the administrative board. I should 

think if you are going to accept a particular situation on the basis
RAILROAD RET IR EM EN T ACT 17

of a particular group being for it and another on the basis that it 

is against it, the Board would not be on firm, ground.

Mr. Habermeyer. Let ine assure you tha t the Board will take up 

its responsibilities, and if the additional financing is not provided 

within the very near future we will have a program to make tha t 

financing sound.

The Chairman. T would like to call your attention to the report 

from the Bureau of the Budget. Are you familiar with it?

Mr. Habermeyer. Yes, sir. I do not know that they made a report 

other than the comments on our report.

Have they filed a report of their own?

The Chairman. They have a letter which I just received dated 

August 28. Tha t is today, is it not ?

Mr. H abermeyer. Yes.

The Chairman. Pretty fast delivery and pretty fast work. They 

suggest certain amendments. Have you seen them ?

Mr. Habermeyer. I talked with the representative of the Bureau 

of the Budget about this particular point last week. He pointed out 

tha t when they supported the similar amendments to the Social Security Act this year th at in order to take care of the costs on an actuarial 

basis it was necessary not only to reduce the benefit by one onehundred-and-eightieth for every month under age 65 but they had to 

use another device which would, in effect, lower the monthly wage. 

Tha t device was to include in the divisor the elapsed months from age 

62 until the individual became age 65.

They suggested that perhaps we should adopt similar provisions 

in order to make this bill H.R. 8597 cost nothing.

Our formula is designed in a different manner from tha t of the 

social security system. I could not see that such an introduction into 

our program could be handled.

Then a second suggestion was tha t we could increase the one onehundred-and-eightieth so tha t it would be a true reduction.

Then we run into a situation where we would be discriminating 

against this one group as opposed to reductions we have already made 

with respect to employees who retired at age 60 with 30 years of service and spouses who take a reduced annuity at age 62.

I thought tha t in order to avoid those complications it would be 

better to handle this as is, even though there was additional cost, with 

the knowledge the additional cost would have to be provided for in 

the future.

There are several avenues open to the Board with respect to providing additional revenue. At the present time the Board is perhaps 

in the unhappy position of getting less interest on its funds than the 

other Federal programs. There was a long period of time when it 

was more favorably treated but at the present time it is not.

We could increase the tax base from $400, to some higher figure. 

Then there is always the third alternative of increasing tax rates.

The Chairman. Will it take legislation in each of those instances? 

I know it would to increase the base or the rate. Would it take legislation on the interest problem ?

Mr. Habermeyer. It probably would. We have spoken to officials 

of the Treasury. They could invest more of the money in long-term
18 RAILROAD RETIREMENT ACT

securities paying more than 3 percent, and from time to time they have 

done that, though not to any great extent.

However, with respect to the social security program with respect 

to the civil service program, and with regard to the veterans program, 

it did require legislation to make such a change possible.

The Chairman. One thing more, and I am in the same situation 

Mr. Dominick was. I must admit tha t I am not an actuary, and in 

these matters of actuarial problems it is difficult for me sometimes to 

understand.

In your report dated June T you sta te:

However, if a widow of a railro ad employee who had no “cur ren t connection 

with the railroad ind ustry,” or of a person who was “fully insured” und er the 

Social Security Act, m arries a “completely insu red” r ailroad employee who dies 

wi thi n 1 year after such m arriage, such widow is n ot disqualified for the widow’s 

annuity under the Railroa d Retirem ent Act, as the widow of the new husband, 

by reaso n of not having been m arried to him for 1 year, but only if in the month 

’prior to the month of her marria ge to such new husband, she was entitled to, 

or on application therefor and attain me nt of age 62 in such prior month, would 

bave been entitled to a widow’s benefit under the Social Security Act, as the 

widow of her form er husband, or to a parent’s benefit under that act.

Tell me what that means.

Mr. H abermeyer. It gets a little complicated. I think Mr. Schreiber had better explain that.

Mr. Schreiber. The Social Security Act defines the term “widow” 

us a woman who was married to the employee for 1 year or who in 

the month before the marriage was entitled to a benefit as a widow 

under the Social Security Act. In other words, she could be the 

widow of her new husband if they were married for not less than 1 

year or if he should die within 1 year of their marriage she still 

would be his widow i f in the month before marriage she was entitled 

to a widow’s benefit under the Social Security Act.

In such a case i f her husband dies within 1 year not fully insured 

she has her former benefits restored. In other words, the marriage 

is disregarded.

The Railroad Retirement Act has adopted tha t definition but the 

restoration provision is not included in the definition.

The Chairman. Don’t forget where you left off because I want to 

stop you for just a moment.

In other words, if she was drawing a widow’s benefit under social 

security in the month prior to the marriage-----

Mr. Schreiber. That is right.

The Chairman. And then went on and got married and he died 

within the year, then she would be entitled to pick up and go along 

with this?

Mr. Schreiber. That is right. If the man were insured in that year 

she would qualify as the widow of the second husband; otherwise her 

former benefit derived from the first husband would be restored beginning with the month within which the second husband died.

The Chairman. All right. I follow that.

Go ahead with the Railroad Retirement.

Mr. Schreiber. The Railroad Retirement Act incorporates the same 

definition for the purposes of the Railroad Retirement Act, th at is, a 

widow must be a woman who is married 1 year or, if her husband dies 

within a year of the marriage, she must have had rights to certain
RAILROAD RET IR EM EN T ACT 19

bene fits un de r the Soc ial Se curity Ac t in the mo nth before the marri age. That is wh at y ou j ust read.

In othe r words, a wido w who has rig ht s to social sec urity benefits 

in the mo nth before marria ge is pro tected if he r new husband dies 

wi thin 1 year of t he m arr iag e, bu t she is n ot so prote cte d if h er rig ht s 

ar e to annuities un de r the Ra ilroa d Re tirem ent Act. Th e difficulty 

ari ses fro m the fact th at when the social sec uri ty am end me nt was 

enact ed it di dn ’t say “in the mo nth before marria ge she ha d righ ts 

to benefits un de r t he Social S ecuri ty or the Railro ad Reti rem ent A ct. ” 

I t sto pped with the “ Social S ecuri ty A ct” an d that causes the difficulty.

Th e Chairman. Th is bring s t his section of th e bill u p to date.

Mr. Schreiber. Mr. M ack’s bill will take care of t hat widow . Yo ur 

bill tak es care of the spouses as Mr. Ha berm eyer testified.

Th e Chairman. Th ere is no conflict, the n, betw een section 2 of my 

bill a nd Mr. Mack’s bill.

Mr. Schreiber. That is righ t, except yo ur bill tak es care of the 

spouses and Mr. Ma ck’s bill t akes care of the widow.

Th e Chairman. Tha nk you, Mr. S chr eib er.

I will say, if you hav e any problem in connection with thi s, wr ite 

Mr. Schre ibe r and he w ill wr ite yo u back the answ er.

Furt her questions?

Tha nk you very much , gentlem en.

Is the Bo ard in unanimous agreem ent on this, Mr. Ha berm eyer?

Mr. H abermeyer. Yes. sir.

Mr. H ar per wan ts to testify with rega rd to H .R . 5027 se parately , b ut 

with respec t to 8597 th e Bo ard is in complete agreem ent.

Th e Chairman. We shall be glad to h ear you, Mr. Harpe r.

STATEM ENT OF HORACE W. HA RP ER , LABOR MEMB ER OF TH E 

RAILROAD RE TIRE ME NT BOARD

Mr. H arper. Mr. Ch air man and members of the committee, my 

nam e is Ho rac e W. H ar pe r. I ap pe ar h ere n ot as a rep res entat ive of 

th e Ra ilr oa d Re tirem ent Bo ard as a whole bu t as the lab or member 

of the Bo ard , wi th offices at the head qu art ers of the Bo ard , at 844 

Rush Str eet, Chicago, Ill.

I do no t oppose Mr. Ma ck’s bill. Th e Bo ard made a re po rt on 

Ju ne 7 and I joined w ith the Bo ard in ma kin g th at re po rt w hich opposed th e bill. Up on f ur th er consideration I decided t h at I h ad m ade 

a mista ke and I wish to wi thdraw my opp osition to t he b ill. T hat is 

my o nly purpo se in presen tin g this sh ort sta tem ent so th at t he reco rd 

will show th at I do no t oppose Mr. Mack’s bi ll; in fac t, I appro ve 

of .it an d endorse i t as a sing le mem ber of th e Bo ard .

As t o the cost, there is no way fo r our resear ch de pa rtm en t or fo r 

our actua ries to det erm ine how ma ny ra ilr oa d widows will remarry 

ra ilro ad men. Tha t is impossible . You sim ply hav e to guess at t ha t. 

Any reason able guess is as good as the other. My guess is th at there 

will no t be 50 railr oa d widows m arry 50 ra ilr oa d men in the en tire 

co un try in a ye ar and, ou t of t hat 50, perha ps 47 of them will live a y ear 

wi th the ir new husba nds and conseque ntly will n ot be affected by th is 

bil l, so the cost is so mi nute in my judg men t t h at the questio n of cost 

is not a r eal issue in the con sidera tion o f t his b ill.
20 RAILROAD RE TIRE MEN T ACT

(Mr. H arper’s prepared statement follows:)

Sta tem ent of Horace W. H arper, L abor Membe r of th e R ailroad R etire me nt

B oard, on th e Bil l H .R . 5027

Mr. Chairman and members of the committee, my name is Horace W. Harper. 

I appear here not as a representativ e of the Railroa d Retirement Board as a 

whole but as the labo r member of the Board, with offices at the hea dqu arters 

of the Board, at 844 Rush S treet, Chicago, Ill.

I concurred in the Boa rd’s rep ort to thi s committee on June 7, 1961, on the 

hill H.R. 5027, now under consideration, which did not recommend enactment 

because while the costs of the amendment to the Railroad Retirement Act proposed in the bill would not be significant the tota l costs which would be added 

to the railroad retirem ent system by enactmen t of all or a sub stan tial number 

of the other proposals to broaden eligibility conditions, and to increase benefits, 

und er the Railroad Retirem ent Act would increase subs tantially the present 

deficit in the financing of the system.

After extensive consideration of the problem with which thi s bill deals and 

in view of the small cost of the bill as compared with the good it would do, and 

because I am informed th at the Railw ay Labor Executives’ Association does not 

oppose the measure, I, at the risk of appe aring inconsistent with my views as 

to financing to which I still adhere, withdraw my objection to the enactmen t of 

this bill to amend the act as it would.

The Chairman. Questions ?

Mr. Mack. I merely want to commend the gentlemen on changing 

his position as regards this bill because it seems to me you have an 

area here where you are discriminating against the widow who is 

receiving benefits under this bill. You have a situation here where a 

widow who has fully qualified and has begun to receive her benefits 

has a chance of losing those benefits for the rest of her life.

As the gentleman has stated, I think it is an isolated case. In the 

many years I have been here this is the first case ever called to my a ttention. I agree it will not be expensive and it will not jeopardize 

the fund but this is an inequity which needs attention and should be 

corrected.

Mr. Harper. I have a letter in my pocket tha t I was given this morning where a lady was married to a railroad man for 40 years. He had 

been in the railroad business 47 years. He died. Five and a half 

years later she married another railroad man and he died in less than 

a year, and that poor old lady, in all of those circumstances, has lost 

any benefits which might have accrued to her as the widow of two 

railroad men.

Mr. Mack. And she probably became a ward of the community, receiving public aid.

Mr. Harper. Tha t is possible.

Mr. Younger. How much is the retirement fund running behind at 

the present time ?

Air. Harper. At our last valuation i t was 1.69 percent of the taxable 

payroll.

Mr. Younger. Is tha t more than it was a year ago ?

Mr. Harper. Yes, sir.

Mr. Younger. With the decrease in number of employees the deficiency continues to rise ?

Mr. Harper. That is right.

Mr. Younger. That is all, Mr. Chairman.

The Chairman. Furth er questions ?
RAILROAD RE TI RE MEN T ACT 21

Mr. Dominick. Suppose this widow we are talking about who re ­

marries has a husband who does live more than 1 year? When he dies 

does she then get a widow’s pension based on his service ?

Mr. H arper. The service of her second husban d; yes, sir.

Mr. Dominick. When you referred to this deficit in the financing 

of the fund, is this a deficit based on current outgo as compared 

with current income or is it on a funded basis?

Mr. Harper. It is based on an actuarially calculated basis, a level 

cost basis, running perhaps 50 years into the future.

Mr. Dominick. It is on a funded basis, then ?

Mr. Harper. Yes.

Mr. Dominick. So tha t at the present moment your payments out 

of the fund so far as you know do or do not exceed the payments 

coming into the fund ?

Mr. Harper. No, they do not. Our payments do not exceed our 

income from taxes and interest on our trust fund and from the 

financial interchange with social security.

The Chairman. Fur ther questions ?

(No response.)

The Chairman. Thank you very much, Mr. Harper.

Mr. Guy F. Fain.

STATEMENT OF GUY F. FAIN, GRAND PRES IDENT OF THE

NATIONAL ASSOCIATION OF RETIRED & VETERAN RAILW AY

EMPLOYEES

Mr. F ain. Mr. Chairman, in view of the fact this program has 

been explained very thoroughly, and I concur with the previous 

statements, I shall merely let my brief go into the record.

The Chairman. Mr. Fain, I believe you are the grand president of 

the National Association of Retired and Veteran Railway Employees?

Mr. Fain. Yes, sir.

The Chairman. We shall be glad to have your statement and it 

will be included in the record at this point.

(Mr. Fa in’s statement follows:)

Statement of Guy F. Fain, Grand President, the National Association

of Retired & Veteran Railway Employees,

Mr. Chairma n and members of the committee, my name is Guy F. Fain , I 

reside in Glendale, Ohio. I am grand presiden t of the National Association 

of Retire d & Veteran Railway Employees, and app ear before your committee 

in support of H.R. 8597 and 5027, bills to amend section 5(1 ) of the Railroad Retiremen t Act of 1937.

We, our association, are in agreement with the provisions of II.R. 8597 and 

5027, and urge your committee recommend its adoption, and in this manner 

elim inate one of the seve ral unfair provisions of the Railroa d Retirem ent 

Act of 1937.

As an org anization we greatly appreciate the many changes in the act of 

1937, made possible through your committee, resulting in increases in benefits 

for retired railwa y employees, the ir wives, widows and other survivors, and 

want to commend your committee for their ear nes t endeavor to protect our 

retirement funds.

Feeling the adoption of H.R. 8597 and 5027 will res ult in a very small 

financial cost, and not grea tly affect the retirem ent funds, we urge your committee recommend its adoption.

Thank you for the privilege of appearing before you r committee.
22 RAILROAD RE TI RE MEN T ACT

Th e C hairman. Th is is in su pp ort of b oth bills ?

Mr. F ain. Yes, sir.

The Chairman. Th e next witn ess is the Ho norab le Lester P . 

Schoene. Mr. Schoene is counsel fo r the Ra ilw ay La bo r Exe cutives 

Associa tion.

STATEM ENT OF L ESTER P. SCHOENE, COUNSEL FOR TH E RA ILWAY 

LABOR EXECUTIVE S’ ASSOCIATION

Mr. Schoene. Mr. Ch airm an and members of the comm ittee, my 

nam e is Le ste r P. Schoene. I am a law yer eng aged in the gen era l 

pra cti ce of law, a member of th e firm o f Schoene & Cram er, with offices 

at 1625 K Stre et NW., Wash ington , D.C.

I a pp ea r h ere th is mo rning a s counsel fo r the R ailwa y La bor Ex ecutives Associa tion.

Th e Ra ilw ay L ab or E xecutives Ass ocia tion is an association of th e 

chief executives of all the stan da rd railw ay lab or organiz ations in 

the U nited Sta tes, some 24 in nu mber.

I have ha nd ed th e repo rter a list of the r ail wa y lab or o rganiza tio ns 

whose chie f e xecutives a re asso ciated wi th t he R ail wa y La bo r Ex ecutives Association.

Th e Chairman. T hat may be ins erted in th e rec ord at th is point .

(T he list referre d to fo llo ws :)

Railway Labor Executives’ Association

American Railway Supervisors’ Association.

American Train Dispatchers’ Association.

Brotherhood of Locomotive Engineers.

Brotherhood of Locomotive Firemen and Enginemen.

Brotherhood of Maintenance of Way Employees.

Brotherhood of Railroad Signalmen.

Brotherhood of Railroad Trainmen.

Brotherhood Railway Carmen of America.

Brotherhood of Railway & Steamship Clerks, Freight Handlders, Express &

Station Employees.

Brotherhood of Sleeping Car Porters.

Hotel & Restaurant Employees’ & Bartenders International Union. 

International Association of Machinists.

International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths,

Forgers & Helpers.

International Brotherhood of Electrical Workers.

International Brotherhood of Firemen & Oilers.

International Organization of Masters, Mates & Pilots, Inc.

National Marine Engineers’ Beneficial Association.

Order of Railway Conductors and Brakemen.

Railroad Yardmasters of America.

Railway Employees’ Department, AFL-CIO.

Seafarers’ International Union of North America.

Sheet Metal Workers’ International Association.

Switchmen’s Union of North America.

The Order of Railroad Telegraphers.

Mr. Schoene. Th is asso ciation was s ign ato ry to the agreement w ith 

the Associa tion of Am erican Ra ilr oa ds back in 1937 which res ulted 

in th eir joint s ponso rship of the R ailro ad Re tirem en t A ct of 1937, and 

this a ssociatio n ha s, w ith ve ry mino r exceptionSj sp onsored and recommended all substan tia l amend me nts to the Railro ad Re tirem ent Ac t 

and the Ra ilroad Un em plo ym ent Insuranc e Act an d amend ments 

there to i n th e pe rio d sinc e 1937.
RAILROAD RE TI RE MEN T ACT 2 3

Th e association m ain tai ns a stand ing committee un de r the c ha irm an ­

ship of Mr. Geo rge M. Harris on , one of the chief executives, preside nt of the Broth erh ood of Ra ilw ay and Steamship Clerks, r re ig nt 

Han dlers, Expre ss, an d St atio n Employees. Th is com mittee gives 

constan t attention to the functio nin g of the railr oa d retir em en t and 

une mp loy me nt insura nce systems and it was respon sible fo r br ingi ng 

to th e attention of the associa tion th e sit ua tio n requ iri ng co rrection as 

pro posed in H. R. 8597.

My purpo se in app ea rin g here this m orn ing is in sup po rt o f th at bill.

I t h as been the general policy of the Ra ilw ay L ab or Executives A ssociation to seek to main tain in g enera l pro vision s in the R ailro ad R etir em en t Ac t which mak es it at least unlikely , and general ly 

impossible, f or a r ailro ad employee to receive, as t he re su lt of his r ai lroad servic e, benefits in a lesser degree th an those which wou ld be 

pro vid ed if railr oa d service were cove red by the Soc ial Security Act.

As a result of the 1961 ame ndm ents of the Soc ial Se curity Ac t it 

was fou nd, however, th at in the area of eli gib ility fo r retirem en t of 

male railr oa d employees un de r age 65, an d wi th less th an 30 years of 

service, th at there ha d been provide d an ine quity, a disc rep anc y, in 

favo r of the social sec uri ty system as ag ains t the railr oa d retir em en t 

system.

By and lar ge such discrepancies can be tak en car e of un de r the 

overall min imu m benefit pro vision in the Ra ilr oa d Re tirem en t Act 

deter mi nin g the am ount of benefits to be no t less th an 110 p erc ent of 

wha t those benefits wou ld be if the railr oa d serv ice ha d been covered 

by the Soc ial Se curity Act.

W ith resp ect to eli gib ility fo r ret ire me nt u nd er age 65, how ever, in 

the case of male employees wi th less th an 30 ye ars of service, th at 

minim um prov isio n wou ld not be effective because it goes to the de ter ­

mina tio n of t he am ount of benefits ra th er t ha n to e legibility .

I t is fo r th at reason th at section 1 of the bill, as the chair ma n explain ed in his opening sta tem ent, is directed towa rd est ablishin g 

eli gibility fo r a redu ced a nn uity in those circumstanc es. A t the same 

tim e the bi ll pro vid es in section 2 o f the p rov isions which alr eady have 

been fu lly discussed here making wives of re tir ed employees elig ible 

fo r spouse’s annuities on the basis of 1 ye ar ra th er th an 3 years of 

marria ge , o r p rior immedia te eli gib ility to su rvivor benefits un de r the 

Railro ad Re tirem ent Act.

Th e chair ma n alr eady h as pu t into the record t he jo in t lette r of th e 

Associatio n of Am eric an Ra ilroads and the R ail wa y L ab or Ex ecu tives 

Assoc iation stat in g to the com mittee th at the Ra ilw ay La bo r Ex ecutiv es Associatio n recommends the ena ctm ent of H.R. 8597, and the 

Assoc iation o f Am erican Rail roads does no t object the reto.

I wa nt to tu rn now to H.R. 5027, whi ch has no t been a matter of 

discussion between the R ailwa y La bo r Executives Association an d the 

Assoc iation o f Am erican Ra ilro ads. Sp eakin g in beha lf of the Rai lway La bo r Exec utives Associa tion, however, we would also recommend 

the enactm ent o f t hat bill. Th e equ ities to w hich it is addre sse d h ave 

been fully developed in the pre vio us discu ssion . Th e cost is insignifican t. I t com plem ents, in realty, the pro vision s of section 2 of H.R. 

8597 by exten din g eligibi lity fo r su rvivor benefits to th e widow upon
24 RAILROAD RE TIRE MEN T ACT

the death of her second husba nd, whereas section 2 of II.R . 8597 is 

add ressed to th e sp ouse’s benefit du ring the existence of such m arriag e.

I think th at is all I need to say, Mr. Ch air ma n and gentlem en of 

the committee, unless there ar e questions.

Th e Chairman. In beha lf of the Ra ilw ay Labo r Ex ecu tive s Association you are in sup po rt o f the bill ?

Mr. Schoene. In su pp or t of both bills , Mr. Chairma n.

Th e Chairman. Mr. Mack ?

Mr. Mack. I have no questions, M r. C hairm an.

Mr. Younger. I h ave no questions.

Th e C hairman. I s th ere anyone who has question s of Mr. Schoene?

(No response.)

Th e Chairman. Mr. Schoene, do you have any comm ent on the 

re po rt of the Bu rea u of the Bu dg et and the amend ments suggested 

the rei n ?

Mr. Sciioene. I hav e not seen the re po rt of the Bu rea u of the 

Bu dget, Mr. C hairm an.

Th e Chairman. I will let you hav e this and rea d one pa ragr ap h. 

You heard the brief com ment of Mr. Ha bermeyer a mom ent ago on 

wh at is the crux o f t he report. You m ay wa nt to read more th an one 

pa ra gr ap h bu t I th in k th at gives the pos itio n of the Bu reau 

fundam entally.

Mr. Schoene. W ith respec t to th at pa rticul ar pa ragr ap h, Mr. 

Ch airma n, I hav e observations to mak e su bstan tia lly com par able to 

those made by C hairm an Haber me yer .

The Chairman. In view of the f ac t you are discussing it, and since 

you hav e the let ter , will you rea d the pa ra gr ap h int o the record ? 

Some of the oth er mem bers have no t ha d an op po rtu nity to see it.

Mr. Sciioene. Th e pa ra gr ap h whi ch the chairma n has ma rke d in 

this letter re ads as fo llo ws:

In lieu of providing reduced benefits to men at age 62, using the one onehundred-and-eightieth reduction fac tor in the benefit formula fo r each month th at 

the man is under age 65, we would propose that eith er a reduction fac tor of 

one one-hundred-and-fiftieth or one one-hundred-and-forty-fourth be used in computing benefits for male workers with less t han 30 years of service. Use of e ither 

of these fo rmu las would have the effect of providing a reaso nably full actua rial 

reduction for early retirem ent benefits and produce the desirable result of 

avoiding the imposition of significant additional costs on the system. The 

resulting reduction in an early retiree’s annuity (compared to the one onehundred-and-eightieth reduction ) would in all cases be moderate.

As Mr. Ha berm eyer exp lained , we have h ad p rov isio ns in the Rai lroad Reti rem ent A ct, eve r since th e ena ctm ent of t he pres ent law, and, 

in f act , even in th e prev iou s law of 1935, which permitted un de r specific 

circ umstan ces ea rli er ret ireme nts , th at is below age 65, on a reducedan nu ity basis.

Tha t the an nu ity factor fo r pur poses of red uction has been one 

on e-h undred-an d-eig hti eth since t hat tim e. I do no t fully a gree w ith 

Mr. Ha berm eyer’s ex plan ati on t hat it s o rig inal adoption res ulted sim ­

ply fro m calcu lat ing the elap sed mo nth s betw een age 50 and age 65. 

I t happens th at th at is 180 m onths, an d no doubt th at circ umstance 

was to some exten t inf lue nti al in roun ding ou t the str ictly ac tuarial 

reduci on to a fra ctio n of one one-h undred-an d-eig hti eth , bu t it ha s 

been reg arde d fo r ove r 25 ye ars as roug hly the equ iva len t of an 

ac tuarial reduct ion.
RAILROAD RET IR EM EN T ACT 25

It is now applied for purposes of reducing the annuities of spouses 

who draw their spouse’s annuity at age 62. It is also used with respect 

to women employees now who retire at age 62. It is used for employees 

who retire at age 60 with 30 years of service, and to introduce a different factor for this particular program would, as Mr. Habermeyer 

pointed out, result in discrimination and accomplish no substantial 

purpose.

The cost here has been stated to be approximately $2 million. 

Two million dollars needs to be appraised in terms of its relationship 

to the total cost.

Air. Younger inquired of Mr. Ha rper as to the extent of the present 

deficit. Air. Harper stated it was 1.69 percent of the payroll, which 

translated into annual cost figures is $73 million. AVe have a deficit 

problem on the order of $73 million now as compared with $2 million 

involved in this particular item.

Relating it another way, I think the estimated cost of the bill in 

terms of percentage of payroll is .04 percent of the payroll as against 

the 1.69 percent involved in the present deficit.

Unquestionably the entire matter of the deficit financing we have 

been experiencing in recent years will require very serious attention. 

Both the railroads and the organizations for whom I am speaking 

this morning are committed to maintaining this fund on an overall 

long-range actuarially sound basis.

The problem, as Air. Younger suggested, results from a very low 

volume of railroad employment and, consequently, low levels of 

payrolls.

I understand that, the actuarial estimate, the most recent one which 

results in this figure of 1.69 percent of the payroll, is based on an 

estimated future payroll of $4.3 billion.

Under normal employment conditions, what I would consider n ormal employment conditions, such as prevailed up to about 5 years ago, 

we would have been well warranted in estimating a payroll of at least 

$1 billion or a billion and a half dollars more than that.

AVhat the picture will be like in a few more years we don’t know.

Alr.Y ounger. I have one question. The payroll involves how many 

individuals?

Air. Schoene. Roughly in the neighborhood of 800,000 at the present time, I think.

Air. Habermeyer. 850,000.

Air. Younger. AVhat is the employment at the present time ?

Air. Schoene. That is the figure I was addressing myself to, Air. 

Younger, the employment level at the present time. It is, as I recall, 

in the neighborhod of 800,000.

Air. Younger. I thou ght it was something around 700,000.

Air. Schoene. If vou take the class 1 railroad figure it is under 

800,000.

Air. Younger. Air. Habermeyer ?

Air. Habermeyer. The figure righ t now is 850,000, total covered 

under the act and the $4.3 million anticipated is a continuation of tha t 

figure.

Air. Younger. Thank you.

The Chairman. Are there any further questions ?
26 RAILROAD RET IR EM EN T ACT

Mr. Schoene, thank you very much. We are glad to have your 

testimony. We appreciate your contribution to the record.

If there are others who desire to file a statement on these two bills 

for the record they may have permission to do so at this point.

I have statements for the record from Mr. Thomas G. Stack, president, National Railroad Pension Forum, Inc., which will be included 

in the record.

(The statements referred to follow:)

Statement op Thomas G. Stack, President of National Railroad Pension

Forum, I nc., Chicago, II I., in Support of Certain Provisions of H.R. 5027 

and H.R. 8597, With Comment on Serious Need for Congressional Action

to Adjust Railroad Retirement Benefits, August 28,1961

Mr. Chairman, my name is Thomas G. Stack, president of the National Railroad Pension Forum, Inc., with headq uar ters at 1104 Wes t 104th Place, Chicago, 

Ill. I have appeared many times before this committee on railroad retirem ent 

measures. Therefore, I shall not burden you with my background nor that of 

the forum, membership, which consists of about 90 perc ent curre nt rail workers 

and the remainder, retired workers, who are otherwise virtually withou t 

represen tation.

It is the unanimous opinion of our legislative committee th at the forum go on 

record in supp ort of some lowered requ irement with respect to the period of 

marria ge to a covered railro ad worker, to become eligible for spouse benefits as 

proposed in H.R. 8597.

The purpose of H.R. 5027, which would eliminate the period of marriage 

requiremen t for qualifying, again, a widow, once a recipient of widows’ benefit, 

who gave up the benefits to rem arry a covered railroad worker and was subsequently widowed again will have to be dea lt with so to not res ult in claim 

of discrimination ag ainst a once married widow who w as not married sufficiently 

long enough to qualify.

With respect to that portion of H.R. 8597, which deals with retirem ent for men 

at age 62, with 10 or more years service, but reduced by one one-hundred-andeigh tieth for each month, in advance of age 65, our committee feels strongly th at 

this change is a step in the r igh t direction and so not to lag behind the benefits 

available to workers covered by social security, the change should be effective at 

once.

The committee likewise should consider similarly un fai r provisions, such as 

the requirement that vete rans eligible for railroad retirem ent annuity must report such payments as “income” when atte mpting to qualify for veterans’ benefits after July 1, 1960. Those who applied for vetera ns’ benefits prio r to th at 

date need not re port ra ilroad retirem ent annuity payments as income. Such payments are not subject to Fed eral income taxes. This discriminatory circumstance should be adjusted.

Then, too, there is the proviso which prevents the spouse of a railroad retirement annuitant from receiving her ju st spouse benefits, paid for over the yea rs 

by her railroade r husband, simply because she qualifies for and accepts social 

secu rity pension paym ent based on her own earn ings and paid for through tax 

assessments on her wages an d on her employer.

Most needed of all is the red uction in retirement age for men railroad employees 

to 62 yea rs of age, with full benefits, as proposed in H.R. 4239 introduced in 

this session and referred to your committee for action. This bill is designed to 

make it possible for older men age 62 to 64, who are at this time unemployed, 

to receive a full annuity, thereb y relievin g the tremendous drain on the unemployment and sickness division, which is in dire financial straits. A late report 

shows the Unemployment and Sickness Division indebted to the railroad retirement reserve fund in the amount of $216 million.

One of the finer aspects of age 62 retirem ent is the beneficial effect on the 

stubborn national unemployment problem. For each worker choosing to retire 

at age 62, 63, or 64, one currently unemployed person would be absorbed. 

Some a re old before their time and the rigors of the daily grin d are a burden 

which furth er shorten their lives. To these individuals a full ann uity at 

age 62 would be a godsend, res tric tive though it would be compared with full 

earnings.
RAILROAD RET IR EM EN T ACT 27

These position would be filled by younger, able-bodied, more alert workers, 

who are fit to perform the duties safer for himself and the public and with 

less liability exposure for the railroad. His replacement would be in regular 

attendance, eliminating the frequent need for substitutes and diminishing “Time 

paid for not worked” accounts. Others, through wise and prudent handling 

of their earning over the years have accumulated a little something to augment annuity payments. These persons have littl e desire to go on working 

but less desire to give up a portion of a justly deserved and well paid for 

annuity.

The large number of annuitants who paid little or nothing into the fund 

are swiftly diminishing. This group was carried for the last 24 years mainly 

by the workers now in the 55 to 64 age bracket. For a burden shouldered 

so magnificently, they should be rewarded. An actuarial study of reasonable correctness would, we are satisfied, show the reduction to age 62 for men can be accomplished safely, what with the railroad retirem ent reserve fund at approximately $4 billion, and the railroad retirement taxes scheduled for sharp 

increases over the next 9 years, beginning in 1962. It is our genuine belief 

that the age of 62 retirement should be authorized without further delay, 

bringing the retirement program for railroaders more in line with the many 

successful programs in business and governmental agencies over the country.

One other item worthy of attention at this time is the inadequate 3 percent 

rate of interest paid by the Government, on the reserve fund of railroad 

retirement. The FHA and other agencies receive a much higher rate of 

interest. Series E bonds pay more, and prectically every savings bank or 

building loan organization now pay 4 or 4% perecent interest to depositors. 

We ask in this connection, t hat interest rate be raised to 4 percent.

Reports have been released that no further obligation can be borne, as the 

payments today nearly equal the retirement taxes collected. The actual situation seems quite different. The ninth actuarial survey of the railroad retirement account dated June 30, 1961, reports through the financial interchange 

provision of the railroad retirement account a credit of almost $337 million 

were owed the railroad retirement account by the Social Security. This, 

coupled with only 3 percent interest on the reserve fund makes a substantial 

figure in favor of railroad retirem ent; and, under those circumstances, the 

reserve is growing.

I wish to convey my thanks for the opportunity to outline the views of 

thousands of railworkers who are looking to the members of this committee to 

give them security more compatible with the tax now being extracted.

Statement of Thomas G. Stack, President of National Railroad Pension

Forum, Inc., Chicago, III., In Support of H.R. 5027 and H.R. 8597, and a

Comment on Serious Need for Congressional Action to Increase Railroad

Retirement Benefits, August 28, 1961

Mr. Chairman, my name is Thomas G. Stack, president of the National Railroad Pension Forum, Inc., with headquarters at 1104 West 104th Place, Chicago, 

Ill. I have appeared many times before this illustrious committee on railroad 

retirement measures, so I will not burden you with our background. I am today, 

after consultation with our Committee, submitting a statement of facts relative 

to the pending bills. Our membership comprises 90 percent actual railroad 

workers and about 10 percent retired workers who have no other representation.

It is the unanimous opinion of our legislative committee that the forum favor 

enactment of H.R. 5027 which tends to remove the restriction preventing widows 

of railroad employees from receiving widow’s benefits if they remarry another 

railroad employee. We believe this provision should be extended to the widows 

who voluntarily remove themselves from the rolls in order to obtain the pleasures 

and advantages of a subsequent marriage, and find tha t they cannot qualify for 

benefits as they are declared inelible because they are not married a sufficient 

time to qualify for benefits. This provision, we feel, should also be made applicable to railroad widowers.

The committee likewise will consider similarly unfa ir provisions, such as the 

requirement that veterans eligible for railroad retirement annuity must report 

such payments as “income” when attempting to qualify for veterans’ benefits 

after July 1, 1960. Those tha t apply for veterans’ benefits prior to tha t date 

do not have to report railroad retirement annuity as “income,” which is also
28 RAILROAD RE TI RE MEN T ACT

not considered “income” in connection with Federal income taxes. We believe 

this fea tur e should be elim inate d entirely, and no discrimination should exist.

Then too, th ere is a feature of the act which prevents a spouse of an annuitant 

from receiving her just spouse benefits, paid for over the yea rs by her railroad 

husband, simply because she accepts social security pension payments based on 

her earn ings and mandatory social secu rity tax assessments.

Most urgently needed of all is the reduction in retirem ent age for men railroa d 

employees to 62 years of age with full benefits as proposed in H.R. 4239 which 

has been referre d to your committee f or review and action. This bill is designed 

to make it possible for older men aged 62 to 64 who at this time are unemployed, 

to receive a full annu ity at age 62, thereby relieving considerably a drain on 

the unemployment and sickness bran ch of the act, which is at present in dire 

financial straits. The las t report shows th at the unemployment division is 

indebted to the railroad reti rem ent reserve for some $216 million. Hence, 

enactmen t of this bill would have beneficial effects on the stubborn national 

unemployment problem ; for each worker who chooses to retire a t ages 62, 63, 

and 64, one presently unemployed individual would be absorbed in the labor 

field. Some men are old before their time, and the rigors of their daily occupation are a burden to this type of employee. A full ann uity would be a godsend, 

restric tive though it would be financially. These positions would be filled by 

younger, able-bodied, and more ale rt individuals who are fit to perform the 

duties, saf er for himself and the public, and less liability exposure to the railroad. His replacement would be in regular attendance, eliminating the need 

for frequ ent su bstitute workers, and diminishing the “tim e paid for not worked.” 

Others through wise and pru den t handling of the ir earn ings over the years have 

accumulated a litt le something to augment ann uity payments, who have no 

desire to go on working; but, neither do they wish to give up a portion of the 

jus tly deserved and well-paid-for annuity.

The large number of annuitants who paid litt le or nothing into the fund 

are swiftly diminishing. This group was carried for the las t 24 years mainly 

by the workers now in the 55- to 64-age bracket. For a burden shouldered so 

magnificently, they should be rewarded. An actua rial study of the reasonable 

correctness would, we are satisfied, show the reduction to age 62 fo r men can 

be accomplished safely, what with the railroad retirem ent reserve fund at approximately $4 billion, and the railroad retirem ent taxes scheduled for sharp 

increases over the next 9 years, beginning in 1962. It is our genuine belief that 

the age of 62 retirem ent should be authorize d without furth er delay, bringing 

the retirem ent program for railroade rs more in line with the many successful 

programs in business and governmental agencies over the country.

On other item worthy of atte ntion at this time is the inadequa te rate of 

intere st paid by the Government, the present 3 percent on the reserve fund of 

railroad retirement. The FHA and other agencies receive a much higher rate 

of interest. Series E bonds pay more, and prac tically every savings bank or 

building loan organization now pay 4 or 4'/^ percent inte rest to depositors. 

Hence, we ask to defray expenses in this connection, that our present interest 

ra te be raise d to 4 percent which is more appropriate with present financing.

Reports have been released that no furth er obligation can be borne, as the 

paym ents today nearly equal the retirem ent taxes collected. The actual situa tion 

seems quite different. The nin th actua rial survey of the railroad retirem ent 

account dated Jun e 30, 1961, reports through the financial interchange provision 

of the railroad retirem ent account a cred it of almost $337 million were owed 

the railroad retirem ent account by the Social Security. This coupled with the 

meager 3-percent intere st on the reserve fund makes a substan tial figure in 

favor of railro ad retir em en t; and, under those circumstances, the reserve is 

always ge tting larger.

We have some 40 bills on railroad retirement today pending before your committee. It is hoped in the nex t session of Congress th at we shall get action and 

that we can come forward with a practical plan to finance the benefits we desire.

Let me take this opportunity to extend my thanks to all members of this committee for the careful consideration you have always given to the needs of 

American railroad employees for adequate security in the field of railroad retirement legislation. I am sure th at ther e will be no change in your a ttitude during 

the forthcoming second session of this Con gress; and, I extend my gra titu de to 

you on behalf of the railroaders of the United States, for all you have done and 

in anticipa tion of all th at you inte nd to do for an outstand ing group of fine 

American citizens.
RAILROAD RE TI RE MEN T ACT 29

Testimony of Clarence B. Carter, National Secretary, Railroad Pension

Conference, New Haven, Conn.

The Railroa d Pension Conference wishes to go on record in favor of H.R. 

8597 and its companion bill in the U.S. Senate, S. 2395, to amend the Railro ad 

Retirem ent Act of 1937 to provide reduced ann uities to male employees who 

have attained the age of 60 and will have completed 30 y ears of service, or individuals who will have attain ed the age of 62 and will have completed less 

tha n 30 years of service. And especially so since female railroad employees are 

alre ady provided with these provisions by the Railroa d Retirement Act and 

those covered by social security by the Social Security Act.

While we are in favor of H.R. 8597 and 2395, as the provisions will be 

helpful to some of our senior male employees and some rem arried widows of 

form er railroad employees, we must in all honesty point out th at this legislation, worthy as it is, fails to meet the rea l retirem ent needs and demands of 

the ra ilro ad workers as this committee well knows.

earlier retirement needed says representative dingell

We agree with Representative John D. Dingell (a member of the House 

In terstate Commerce Comm ittee), when he stated ear lier this year: “I believe 

it is time to revise the reti rem ent age requirement so th at it will more nearly 

conform to modern conditions. Today many thou sands of older workers find 

themselves forced into retirem ent prior to age 65. * * * Still othe rs are forced 

into retirem ent by employers whose retirem ent policies emphasize youth rather 

than experience. * * * it seems to me the time has arrived, if it is not already 

overdue, when we should recognize these facts, and lower the retirem ent age.”

AUTOMA TIO N H A S SL AS HED RAIIJtO AD JOBS

Over 600,000 rail employees have been laid off in the railroad industry since 

1946 due to autom ation, especially in m aintenance w or k; dieselization and longer 

freigh t trains ; cen tral traffic control and electronic yards; defe rred maintenance, etc. And increased automation is still coming, which will cause many 

more thousands to join the ranks of those already jobless.

“Unfortunately, the trend at the present time is downward. It does not 

appear th at there is anything on the horizon that is going to arrest it.” (H. P. 

Crotty, testifyin g before the House Subcommittee on Unemployment and the 

Imp act of Automation, March 27,1961.)

The report of the committee had this to say : “Autom ation is the problem 

of the present and the promise of the future. It is the means whereby the 

conquest of na tural forces can be opened to the abu nda nt benefit of mankind.”

While we hope this statem ent proves to be correct, we must point out that 

as fa r as railroad management is concerned, they have not put this theory into 

practice, and as fa r as we can see they haven’t the slightes t intention of doing 

so. Their sole purpose of automation is to seek the enrichment of a few financiers and speculators a t th e expense of the workers.

Individuals in their late fifties and early sixties need the protection offered by 

the Powell bill (H.R. 3795) for earlier railroad retirem ent now before this 

committee.

One of the studies cited by the House Subcommittee on Unemployment found 

th at most of those over 60 who had been laid off never found another job. Thus 

we find that earlie r retirem ent as provided by the Powell bill (H.R. 3795) becomes necessary and mandato ry in this age of autom ation. The present pension setup for those covered by railroad retirem ent and social security has become a burde n to its recipients.

H .R . 3 7 9 5 ON LY PRACTIC AL RAILROAD RETIR EMENT BILL NOW BEFORE CONGRESS

Ben efits: Full ann uity at age 60 and 30 yea rs’ service ; reduced ann uity age 

55 to 60. Average annuity about $190 a month. Maximum annuity $300 a 

month.

Financ ed: (1) Taxable income rais ed from $400 a month to $700 a month. 

(2) Inter est paid on reserve fund in railroad retirem ent account increased 

from present 3 percent to 4 percent. (3) If reserve fund drops below $3 billion, 

the entire earnings of all railroad employees will be taxed, including any ea rnings paid as bonuses, stock options, and pension set-asides. If (2) and (3) 

fail to keep the reserve fund in the railroad retirem ent account at $3 billion,
30 RAILROAD RET IR EM EN T ACT

Congress sha ll appropriate additional funds from the general revenues to bring 

the railroa d retirement account up to th at amount.

Another source of additional revenue to the railroad retirem ent account (not 

provided in the Powell bill) would he for Congress to enact legislation requ iring railroad management to pay twice the retirem ent taxation as paid by the 

employee. This method of taxp aym ent (2 to 1) was provided in the 1934 and 

1935 Railro ad Retirement Acts. However, the rail roa ds forced equal taxpayments on us in 1937, and 50-50 taxp aym ent has remained since that time.

We feel the carriers could easily pay 2 to 1 taxa tion from the millions of dollar s they have saved from installation of automation in the las t decade, and 

from the many many millions they will be saving from increased autom ation and 

mergers planned for the fu ture.

Actually, 2 to 1 taxatio n would be putting into p ractice the theory expounded 

by the House Subcommittee on Unemployment and the Imp act of Automation, 

th at is, automation “is the means whereby the conquest of na tural forces can be 

opened to the abundant benefit of mankind.” We feel we should benefit from it 

now—today.

If the rail roa ds cann ot afford it, we can only once again repeat the words of 

U.S. Senator Wayne Morse (Aug. 22, 1958) : “I respectfu lly say that all the 

argu men ts of the railroads, namely, th at they cannot stand the cost, in my judgment does not constitute sufficient basis for voting aga inst it. If the railroads 

need more subsidies, let us face that fact. Our first responsibility is to provide 

fa ir treatm ent for the workers.” Our Nation is loaning billions of dollars to 

help those in other countries. We feel they can spend a few million to help our 

own senior citizens.

Th e Chairman. Th is concludes the hearing. I wou ld like to ask 

the members of the com mittee to stay fo r a brief executive session.

(H ea ring conc luded at 11 :32 a.m. and the com mittee wen t int o 

executive session.)

o

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