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out on the job and see what they can do toward clearing up those difficulties, and they are very successful.
In addition to that, we have our Bureau of Inquiry, which is merely our bureau of prosecution of cases in seeing that the laws are properly observed, and taking care of prosecution in cases of rebates or any other illegal practices.
Those comprise the principal bureaus and activities under our general fund. Of course, the office work that goes with those activities is included and must be taken care of. We have on page 2 of the memorandum I have filed a statement showing that the estimate of the Bureau of the Budget is $2,544,000, which is $50,000 less than our estimate. We may be able to get along without that $50,000. We hope so, because we have really accepted that figure from the Bureau of the Budget. If we are cramped, we will have to come back to somebody or to the Congress through the Budget Bureau and ask for additional money, if we can get it.
Our work is made for us, we do not create any of it; we are simply trying to carry out the provisions of the law and do it in the best interest of the public and without delay or inconvenience.
Mr. WIGGLESWORTH. The amount allowed is exactly what you asked for for this fiscal year, is it not?
Mr. McMANAMY. Yes, it is. But the new activities which we are handling, even those that operate under a separate appropriation increase our work, because every bureau, from the Bureau of Air Mail to the Bureau of Motor Carriers, increases the work of the Commission and increases our expense without reducing theirs, because they have to handle their work just the same.
Mr. FITZPATRICK. The work in connection with motor carriers is quite complicated, is it not?
Mr. McMANAMY. Yes, it is. Commissioner Eastman will tell you more about that.
REDUCTION IN PULLMAN AND RAILROAD PASSENGER RATES
Mr. FITZPATRICK. I was going to ask you a question about the regulation of passenger fares on railroads. While you reduce the rate of fare in the coaches, you increased the Pullman car rates, did you not? In other words, they added 1 cent a mile on the Pullman
? car fare, making it 3 cents instead of 2 cents, which is the fare in coaches. And the fare on the Pullman cars is the 3-cent rate plus the Pullman car price.
Mr. McMANAMY. I am not sure that I understand your question. If it is your understanding that when the Commission reduced fares for passengers in coaches it made an increase in the fares for passengers in Pullman cars, you are in error. What the Commission did was to make reductions in both classes of fares but the reduction was greater in the coach fare than in the sleeping and parlor car fare. The latter is now 3 cents per mile, reduced from about 4 cents, which was composed of 3.6 cents basic fare plus a surcharge of about fourtenths of a cent per mile. If you will read the decision of the Commission on that matter (214 I. C. C. 174) you will see that I dissented from that decision, it being my position that while from a commercial standpoint it might be wise for the eastern railroads to readjust their passenger fares downward, the law did not give us the authority to order such reduction.
Mr. FITZPATRICK. Formerly, we paid $1.88 for the Pullman from here to New York, and now we pay $3.50 for a chair to New York. The coach fare is $4.55, but if you take a Pullman you have to pay $3.50 more for a ride of 3 hours and 35 minutes.
Mr. McManamy. It is correct that the fare between Washington and New York, including a seat in a parlor car, is now $3.50 more than the fare for a seat in a coach and that before the decision it only cost $1.88 more for a Pullman seat than for a coach seat. But both fares were reduced. The former coach fare was $8.14 and the new coach fare is $4.55, a reduction of $3.59. The former fare for a seat in a parlor car was for the railroad $8.14 plus 63 cents surcharge or $8.77, plus the Pullman Co. fare of $1.25, or $10.02 altogether. The new fare is $6.80 for the railroad plus $1.25 for the Pullman Co., a total of $8.05, so that this fare was reduced $1.97. In other words, when we reduced the fares we put the coach fares down to 2 cents a mile and the fares in sleeping and parlor cars only down to 3 cents a mile.
Mr. FITZPATRICK. I suppose the reason the coach fare was reduced was on account of the competition with the bus lines. But there is no competition with the bus lines so far as the Pullman car is concerned, and they realized that.
Mr. McMANAMY. Perhaps it is fair to say that one of the reasons which actuated the majority in making the greater reduction for coach fares than for Pullman fares was the competition with buses. But as the decision will show, that was by no means the only reason. The majority believed that lower fares either in coaches or in Pullmans would attract more travel to the railroads not only from bus lines but to an even greater extent from private automobiles. Further, the cost of transporting a passenger in a coach is materially less than in a Pullman car, because coaches can haul more passengers and the total weight and expense of providing and operating the coach is less.
PROBLEM OF ADJUSTING DOMESTIC FREIGHT RATES TO MEET FOREIGN
Mr. WIGGLESWORTH. In the matter of freight rates, has the Commission ever given consideration to the rates of transportation from foreign countries to this country in arriving at what is or is not a fair rate for the shipment of goods within the country?
Mr. McMANAMY. Do you mean to make a different rate within the United States because the commodity came from a foreign country?
Mr. WIGGLESWORTH. I am told, for instance, that certain commodities can be shipped from the other side to our ports here for less than they can be shipped, for instance, we will say, from Pennsylvania to New York or to Boston. I wondered if the Commission ever takes into account that factor in the making of rates.
Mr. McMANAMY. I do not think it can in the way of fixing rates, on that basis. It has always considered the fact that there are import and export rates. But those are made by the railroads. The railroads, of course, can make such import or export rates, which we could not require them to make. If they desire to follow what might be termed a minimum, reasonable rate or even lower, they have the right to do it, in order to get special business, but under the law we could not require them to do that. It is a troublesome problem,
and no doubt the statement you have made concerning the form of those rates to different ports is true.
Mr. WIGGLESWORTH. It was represented that the railroads of the country had lost a certain amount of revenue, and that a good many people had lost employment as a result of that factor. I assume that
I is more of a Tariff Commission matter than a matter for consideration
a by your commission.
Mr. McMANAMY. Of course, we are not allowed or authorized to so adjust railroad rates that they will perform the functions of a tariff I do not know whether the Tariff Commission could handle it or not. The railroads sometimes make such rates to get business, and they say they do get business by making special rates on certain commodities that are imported or exported.
It is quite a problem, but I do not know that we could go much further than we have on it.
GENERAL ADMINISTRATIVE EXPENSES
Mr. WOODRUM. Your item for general administrative expenses is as follows:
General administrative expenses: For eleven commissioners, secretary, and for all other authorized expenditures necessary in the execution of laws to regulate commerce, including one chief counsel, one director of finance, and one director of traffic at $10,000 each per annum, field hearings, traveling expenses, and contract stenographic reporting services; $2,544,000, of which amount not to exceed $2,350,000 may be expended for personal services in the District of Columbia, exclusive of special counsel, for which the expenditure shall not exceed $50,000: not exceeding $3,000 for purchase and exchange of necessary books, reports, and periodicals; not exceeding $100 in the open market for the purchase of office furniture similar in class or kind to that listed in the general supply schedule.
Your estimate for administrative expenses contemplates about the same personnel, both departmental and in the field, that you have had this year?
Mr. McManamy. Yes, we have in mind no radical changes. We will increase a few places where we can, and probably reduce in others.
SUPPLIES AND MATERIALS
Mr. WOODRUM. Your estimate for supplies and materials, communication service, transportation and per diem are all about the same?
Mr. McMANAMY. Yes.
ESTIMATES FOR NUMBER AND COST OF PERMANENT PERSONNEL, 1938
Mr. McGinty. Will you permit me, Mr. Chairman, to make a brief statement? Turn to page 105 of the committee print of the bill before you. I will lead up to the total for permanent employ. ment, as set down on that page, by saying that the Commission in arriving at its original estimate for 1938 was of the opinion that the least number of employees it should have to carry on its work was the number employed at that time, namely, 820 employees, at a total annual salary of $2,399,140.
That 820, if you will note, includes the 789 employees in the District of Columbia and 31 in the field, with the corresponding salaries. But the 820 employees at $2,399,140 with what the Commission believes
to be the minimum of $211,000 as shown on page 106, for all operating expenses, totals $2,610,680.
The appropriation for 1936 was $2,796,465. Should we have been given an appropriation for 1937 or 1938 in the amount of the $2,610,680 which I just referred to, it would have been a reduction under the appropriation for 1936 of $185,785.
However, the reduction for 1937 under the appropriation for 1936 was $252,465, the current 1937 appropriation being $2,544,000.
Under the circumstances, the Commission did not ask for an increase for 1938 in the amount of the $66,680, which would have increased the current appropriation from $2,544,000 to $2,610,000, but it voted unanimously that the estimate for 1938 should be $50,000 more than the current appropriation of $2,544,000, making the 1938 estimate $2,594,000.
This increase which we requested, of $50,000, was not granted. And may I make it plain that we are not now making any appeal.
Here are the facts which confront the Commission today and the manner in which we will meet them.
We have actually employed today, including persons enroute to enter upon duty and those who have accepted offers of positions, 822 employees at a total annual salary of $2,380,600, to which add $211,540 the minimum for operating expenses, and the total expenditure for the year would be $2,592,140, on which basis we would exceed the appropriation of $2,544,000 by $48,140. We will cut down this expenditure and keep within the appropriation principally by turnover in employment and overtime work. The turn-over during the 1935 fiscal year was 13.3 percent; in 1936 it was 21.2 percent.
PROBLEM OF OVERTIME WORK PERFORMED BY THE COMMISSION
May I say further, Mr. Chairman, that we are required by law to submit monthly reports to the Civil Service Commission showing overtime work performed in our Commission.
This overtime throughout the Commission in July—and this is going to be a most interesting statement for you gentlemen to hearwas 9,960 hours, in August it was 11,545 hours, in September it was 17,427 hours, and in October it was 18,333 hours. Our chief personnel officer at this moment hands me the figures for November, which show 19,896 hours of overtime in the Commission during that month.
Mr. WOODRUM. What bureaus in the Commission are working overtime?
Mr. McGinty. Throughout the Commission. Of course the larger part just now is in connection with the work on motor carriers.
Mr. FITZPATRICK. Are they paid for overtime?
Mr. McGinty. No; I will come to that in a moment. Take the October figure, for instance, although the overtime for November was greater, but I will not take the time now to figure November. The amount necessary to compensate for overtime at the current salary rates for the month of October alone would have been $27,023.
Take the overtime of 18,333 hours for October and divide it by 7 hours per day, and we have 2,619 days. Divide the 2,619 days by 26, using 26 working days for a month, and we have a hundred months. Divide the 100 months by 12 months per year, and the result is 8% years overtime work in the Interstate Commerce Commission during the one month of October 1936.
Mr. FITZPATRICK. What is the remedy for that?
Mr. McGinty. Understand, we are not appealing to you to increase the Budget estimate.
Mr. FITZPATRICK. What would be your suggestion? What is the remedy?
Mr. McGinty. The remedy is to have a sufficient appropriation to enable us to employ a sufficient number of employees with whom to do the work.
Mr. FITZPATRICK. To increase the personnel and not to have the overtime?
Mr. McGinty. Absolutely.
Mr. WOODRUM. There is another alternative, and that is a reduction of the functions that have been given the Commission, if that can be done?
Mr. McGinty. Yes; if it can be done. Of course, there is the law and resolutions of the Congress that we must comply with.
Mr. WOODRUM. I know that, but that is one thing we ought to remember when we talk about cutting expenses, that the way to cut expenses is not to create functions.
Mr. McGịnty. I am simply speaking of this in order to give you the facts in the matter.
Mr. FITZPATRICK. Does all or most of the overtime fall on a certain group?
Mr. McGINTY. We are working overtime throughout the Commission. The larger part of that overtime is in our Bureau of Motor Carriers. But before that Bureau was organized, we had a tremendous amount of overtime, which I have given to this committee in previous years. I have the record of it here now.
PERSONNEL USED AND WORK PERFORMED FOR INVESTIGATIONS
The CHAIRMAN. How much of your personnel is engaged on the Senatorial investigation of railroads?
Mr. McGinty. There are 57 from the Bureau of Accounts alone, and I should say about 20 from other bureaus in the Commission.
The CHAIRMAN. They are giving their entire time to that work?
Mr. McGinty. They are giving their entire time to work in connection with Senate Resolution 71.
The CHAIRMAN. Where are they doing their work?
Mr. McGinty. Our accountants are doing it principally in the field, and our clerical force is doing it wherever the committee is working.
The CHAIRMAN. Does the Senate resolution give you any money for that investigation?
Mr. McGINTY. No; not a cent.
Mr. McGinty. Yes; and you put in the resolution a provision that the Interstate Commerce Commission was to render this assistance.
The CHAIRMAN. The Senate did that.
The CHAIRMAN. You are doing that because of a Senate resolution, are you not?