The Washington herald. [volume] (Washington, D.C.) 1906-1939, 1910-01-16

Editor The Washington Herald.
I have noted with interest and approval
The Washington Heralds agitation for a
revision of the salaries of employees IN
the classified civil service, and should
like TO call attention to one phase Of the
situation that has probably not occurred
to some of your readers,
The statement is made in your issue OF
January 9 that hand in hand with the
demand for a readjustment of the salary
scale is the call for provision for retire
ment on pension of superannuated civil
service employees" That is emphaucally
correct. The relationship between the
two-an increase Of salary and retire
ment measures even closer than most
people realize. The approximation prob
lem can hardly be satisfactorily solved
without a general increase Of salaries.
on the other hand, If Congress were TO
authorize the IS Is per cent increase Of
salaries recommended by the Chamber OF
Commerce in its report OF December l4-or
even a much less increase-the chief OBJ
stacle 10 the enactment OF a proper re-
tiremeut measure would be removed.
mere is the money.
The need Of a retirement system for the
benefit Of civil employees is generally rec
ognized. The only practical question TO
be settled in order 20 obtain the enact
ment of legislation is this
Where is the money coming from? II
can only come from one OF two sources
from the Federal government or from
the clerks themselves. There are those
who argue that the pension should be paid
by the government as pure gratuity, and
There are others vino hold that the clerks
should contribute the fund. looking TO the
government only for interest on their con-
triDutiOns / am one of those who III
dorse a contributory plan.
pension system is always enormously
expensive. The same benefits cost gov
eminent more absolutely under a pension
system than they cost the employees under
Ii contributory plan where the contribu-
tio1s are funded. In the first case, the
money is appropriated directly from the
treasury as needed; i'm the second place.
fl is accumulated gradually through con-
tr.butious which are invested and bear
interest from the minute they are con-
tri5uted.
Actual Sum Less.
Through the potency of compound in
terest. it follows that the actual sum
which the employees have TO contribute to
create fund adequate for the payment
of the benefits provided is much less than
the sum which the government would
have 10 Appropriate directly. I'm England
the civil pension costs the government
from &c TO 20 per cent of the payroll on
the same basis in this country, similar
reasion would cost the goyernment-that
is the taxpayers OF the country-frOm
100000 10 S4GGOO00 a year Owing to
The interest factor, the same benefits
could be obtained by the employees them
selves for less than half that sum-
great many OF the government EN-
ployes are Indifferent TO what the cost of
a civil pension might be They argue that
Uncle sam is rich and can afford 10
pension them, whatever the cost and that
they merit such recognition quite as
much as do members of the niiI lary and
naval service. They think a free and
universal pension system is more de
sirable from their viewpoint. than a svs
TEN Of deductions from salaries already
inadequate. The history Of pension sys
TENS in this and other countries shows
however that they err in their reasoning
a pension paid out Of the Treasury (:
less advantageous for the clerks than Is
one paid for by themselves u may star
as a pure graJuity, but it is certain Il
be taken into account in fixing salaries
human nature being what it IS, until Tux
system becomes, as has happened in the
case of England, essentially a contribu
tory system.
This works a hardship on the employt
who resigns or dies before reaching pen,