Mr. CAMP. I think in New York it is down to something like twotenths of 1 per cent.

Mr. WATSON. What is the salary expense in collecting the revenue, as compared to the revenue, and the expense of collecting the revenue at the present salary.

Mr. CAMP. Yes.

Mr. BACHARACH. Mr. Keddy, I do not know what the sense of the committee is as to when we shall adjourn, but how much time are you going to take? Could you come back to-morrow morning and finish?

Mr. KEDDY. Yes, sir; I would be glad to.

Mr. BACHARACH. I think the members very likely will want to go to the House at noon to-day, and, if it would suit your convenience, could you come back here to-morrow morning at 10.30? Mr. KEDDY. Yes, sir.

Mr. BACHARACH. And have you any other witness you want to bring along?

Mr. KEDDY. I have not; no, sir.

Mr. BACHARACH. Has Mr. Camp any further witnesses for to-morrow?

Mr. CAMP. If the committee wants further information, we will be glad to supply it.

Mr. BACHARACH. We are very glad to get all the information we can at this time and will give you ample time to revise your statement; but since we are here in Washington now, we would like from the department as much information as they can supply at this time, so that if you think of anything further to-night you gentlemen may come back to-morrow morning at 10.30 and we will continue the hearing.

Mr. Dow. We will be glad to come and answer any questions and give any information we can.

Mr. BACHARACH. All right, we will adjourn now until to-morrow morning at 10.30 o'clock.

(The subcommittee thereupon adjourned until to-morrow, Thursday, February 17, 1927, at 10.30 o'clock a. m.)

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE OF THE COMMITTEE ON WAYS AND MEANS,

Thursday, February 17, 1927.

The subcommittee met at 10.30 o'clock a. m., Hon. Isaac Bacharach (chairman) presiding,

Mr. BACHARACH. Mr. Magee is present and I think desires to make a statement.

STATEMENT OF HON. JAMES M. MAGEE, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF PENNSYLVANIA

Mr. MAGEE. If the committee please, I have been very much interested in this subject for three years. The reason I did not appear at your previous hearings is because I went to Congressman Stephen's funeral and only got back yesterday afternoon. I did appear before your full committee and made a statement regarding

my interest in this, but no record was made and, at the risk of lengthening the record, I would like to repeat that, because I think the committee will see the need for a special bill.

Mr. BACHARACH. You understand this subcommittee has been appointed by the chairman to investigate the entire subject and we will not report at this session, but will report to the next Congress. Mr. MAGEE. Yes; I understand that, and I think my experience may be of help.

Mr. CRISP. We would be only too glad, Mr. Magee, for you to make such statement as you see fit, to go into this record. I think it ought to be made a matter of record, because you understand we will make a report to the House and we would like to have your views.

Mr. MAGEE. Then, with the subcommittee's permission, I will make a statement. Nobody ever tried to interest me in this bill. It was the uniform courtesy, I think, of the inspectors that first interested me. I got to know one or two of them and they explained that their case was just as deserving of a salary raise, and their salaries just as much out of proportion, as were those of the postal employees. That was at the time of the postal employees' drive.

I understand Mr. Keddy has been before the committee and he can give you a better history of the relative percentage of increase, say, in the last 15 years. I went to the Treasury Department about this, as soon as I became interested, and found them, as I thought, very sympathetic with the porposition of adjusting salaries in the service. They told me they thought my best chance to do something for these men was to leave it to the Treasury Department and helping out, if I could, with the Budget officer-the Director General of the Budget. I did that and the history of what has happened this last year is probably typical of what will happen unlesss some special relief in the way of a special bill is given these men. 'General Lord, a year ago, told me the Budget would recommend $800,000 increase for these men, which was about an average of $100 a man-no; an average of about $50 a man, as I understand. Is that right, Mr. Keddy?

Mr. KEDDY. It would be $100 a man; there are 8,000 men.

Mr. MAGEE. Yes, that would be $100 a man. The postal employees averaged a $300 raise, so that it was about a third what I thought Congress would be apt to give them if it was called to the attention of Congress. That was this year. It came up from the Budget cut down to $400,000. Then our Appropriation Committee cut even that out and included no sum at all in its Treasury appropriation bill for an increase for the Customs Service. It went over to the Senate and the Finance Committee of the Senate put in $200,000. It was amended on the floor, I believe, by Senator Wadsworth, to $400,000. It came back to conference with that sum included and the conferees cut it down to $200,000. That is an average increase of about $25 a man.

The Treasury Department, under our present law, has a right to raise the salaries and, if they would do this every year until they worked these men up to what I think should be their proper salary, no special bill would be needed. But with the Budget and our Appropriation Committee of a disposition to cut this down, as would seem to be the case, I think a special bill is absolutely needed.

I found, when I started to prepare such a bill, that it was a big job and I did not have the data at hand which would be necessary in preparing such a bill, and the Treasury Department suggested that perhaps a survey should be made. A survey had already been made within the department, but they thought perhaps a bill calling for a survey by the Treasury Department and report back to Congress would be the best I could hope for at this time, and I introduced my bill which is before the committee.

Mr. BACHARACH. Yes; I understood you did introduce a bill, but we have not considered any bills as yet.

Mr. MAGEE. I understand that. So I introduced that bill. It has a proviso which the committee may not like and I want to explain that. The 15 to 20 per cent specifically named in that bill would give those men, as I am informed, a salary raise averaging $300.

I am going out of Congress on March 4 and I earnestly trust that somebody may take up the cause of these men. I am sure this subcommittee will, because I feel they have a very just cause for complaint.

Mrs. Kahn also introduced a bill providing for a salary increase in one classification of those men, only, and a rather small class, I believe the guards. She asked me to appear and indorse her bill, and I did; but I told the full committee at that time I was interested in the broader proposition of a salary adjustment to all employees of the customs service.

Mr. BACHARACH. Has the appropriation committee ever had any hearings on this particular matter?

Mr. MAGEE. They have, but I did not attend them.

Mr. BACHARACH. Why I ask that is because you said they cut it out entirely in the appropriation bill. Do I understand you correctly that the Budget recommended $400,000?

Mr. MAGEE. The Budget recommended $400,000 this year; yes, sir. Mr. BACHARACH. And the appropriation committee of the House cut it out entirely?

Mr. MAGEE. Cut it out entirely.

Mr. BACHARACH. Then the Senate made it $200,000?

That

Mr. MAGEE. No; the Senate amended it on the floor and made it four and the conferees cut that in half and it is now $200,000. is an increase averaging $25 a man.

Now I have not been able to attend the other hearings, and I would merely like to stay and listen. I just wanted to get on record and Congressman Campbell wants to indorse the proposition of a salary raise, too.

STATEMENT OF HON. GUY E. CAMPBELL, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF PENNSYLVANIA

Mr. CAMPBELL. Mr. Chairman and gentlemen of the committee, I just want to add my indorsement to what my colleague has said. Í have had some little experience and have gained some information with reference to the customs service and I feel these men are inadequately compensated and a substantial increase should be granted them.

There does not seem to be the disposition on the part of the Treasury Department to increase them in accordance with the work

performed. I am going to criticize them a little by saying they have abundant funds to pay extravagant salaries and are expending money extravagantly in the enforcement of the Volstead Act, and here are men employed in a far more important duty who are not compensated in accordance with the service rendered. And I want to go on record as favoring a substantial increase for the customs service, to put them on a parity with other employees in the Treasury Department.

I thank you.

Mr. MAGEE. I want to introduce, if I may, to the committee Mr. Bond, who is president of the Inspectors' Association.

Mr. BACHARACH. We will hear from him later.

Mr. MAGEE. Yes; I understand that. I just wanted to introduce him to the committee.

Mr. BACHARACH. We will continue now where we left off yesterday. FURTHER STATEMENT OF JOHN L. KEDDY, INVESTIGATOR, UNITED STATES BUREAU OF EFFICIENCY

Mr. KEDDY. In my testimony yesterday, I realized I did not give all the history of this present classification that the bureau has proposed for the customs service. I want to show just what had been done heretofore.

In 1923, a committee of the customs service worked with one of our investigators and a classification was worked out for the customs service, using as a basis the classification act of 1923. Later on, after this classification had been worked out, there was a disagreement between the customs service committee and a member of our bureau, and two different classifications were set up. To make a long story short, the Appropriations Committee accepted the classification as worked out by our bureau and that is what the customs service is working under at the present time.

Since 1923, the Bureau of Efficiency has conducted a salary survey (this was done in the winter of 1925-26) of the industries and business in New York, Boston, Philadelphia, Chicago, Detroit, and Pittsburgh. After that had been done, General Andrews, as I said yesterday, requested our bureau to make another survey of the salaries in the customs service and this was done.

Before the classification was gone into in any detail by me, I actually visited New York City and Boston and spent something like 10 days in studying the job on the ground, particularly those positions which are still considered to be underpaid. So that this classification which is now before the committee is a revision, you might say, of the existing classification, based on all of the experience and data collected since 1923.

I just wanted to be sure the committee realized this was not a brand new thing; that it is based on a great deal of information and it is really a revision of the classification that is already in effect.

Now, realizing the importance of getting over to you members of the committee, in a clean-cut fashion, just what I have actually done, I have had typed these forms showing just how I grouped the 47 customs districts into 8 groups, and the tabulation shows that Salt Lake City is the smallest and least important office, and New

York City is the largest and most important office, and the others range in between.

If any of the members of the committee want me to answer any questions about that grouping, I will be very glad to do so.

Mr. CRISP. I understood you to say yesterday that, in making your grouping, you took into consideration not only the amount of revenue but the administerial responsibilities involved in the administration of the duties of the particular port.

Mr. KEDDY. Yes, sir.

Mr. BACHARACH. I notice in these groupings that you rate San Francisco and Philadelphia and then you say "Massachusetts?" Mr. KEDDY. Well, I have given the descriptive title to the district, rather than the number of the district.

Mr. BACHARACH. The others you refer to as cities and you refer to this as a State.

Mr. KEDDY. Yes,

Mr. WATSON. In making the investigation in New York and Boston relative to an increase of the salaries, what do you do; what was your method in order to find out why the salaries should be increased, so that, in case this committee should go to New York, it would have some idea as to procedure?

Mr. KEDDY. Í am an old investigator for the Personnel Classification Board and I have actually studied several thousands of jobs in the District of Columbia, ranging all the way from custodial work to attorneys and engineers in P-6, which is $6,000 to $7,500, and I followed my usual method of investigating, particularly these controversial positions. I went to Boston first and interviewed the collector and assistant collector, and was introduced to the chief of the entry division. Then I went with the chief of the entry division to his office, sat down, and discussed in a general way the salary problem that he had for his own division. After that general discussion, I had him introduce me to the entry clerks. Then I sat down with his best entry clerk, as he considered, and I went through all the details of his job, step by step, and I spent something like two hours with that particular man who was representative of all of the entry clerks in that division. Then I went to another individual and studied that particular job. There were really two groups of positions in that office; you might say there were the veteran entry clerks, and the junior entry clerks who waited on the counter.

After going through that office, I went to the liquidation division, discussed the salary problems that he had in a general way with him, and then actually went to one of the head liquidators and went through the task of liquidating entries in detail with him. I also went to the chief drawback man and studied the details of the drawback work with him and discussed the various employees that were under them. The work is similar, you see.

After that, I went into various offices where I thought the salaries seemed to be in excess of the salaries paid in the District of Columbia and my previous opinions were confirmed that there were, as I recall, about three positions (I think they were all filing positions), where the salaries were somewhat in excess of what file clerks are paid in the District of Columbia.

Then I went to the appraisers stores. I went through every one of the eight floors of the appraisers stores and talked with the ap