dependencies and we urge that the system be made to cover all of that service both general and municipal, to the end that the spoils system may not become rooted anywhere therein and thus make necessary a long struggle to overthrow it. 7 The League calls attention to the fact that the operation of the civil service law has neither caused nor increased superannuation among government employees; that the percentage is not increasing and that the loss is less than 1% of the salaries paid. The League emphatically approves of the report of its superannuation committee and is earnestly opposed to any system of retirement or civil pension requiring any considerable draft upon the public treasury. 8 The League continues its support of the administration and the commercial bodies of the country in the struggle for Consular Reform, in which so much has already been accomplished, to the end that the Consular Service may be removed from politics and put on the basis of merit and good public service. 9 The League approves the policy under which many of the Indian agencies have been put in charge of appointees classified under the competitive system to the great benefit of the wards of the country and to the public business and urges the extension of this policy to the remaining Indian agencies. ΙΟ The country is to be congratulated upon movements in so many states and cities to establish a reformed civil service system. We believe the most effective weapon to abolish patronage is the competitive system now so thoroughly established in the federal service. Its efficiency, simplicity and economy have been completely proved after long trial and we commend it to all seeking to better municipal or state service. SUMMARY of the Report of the Superannuation Committee of the National The Facts. The superannuation reports of the League in 1901 and 1906 show that (a) the operation of the Civil Service Law has neither caused nor increased superannuation; (b) superannuation in the national civil service is small, only 1.2 per cent. of the employees being over 70 years of age; (c) this percentage has not been increasing; (d) the total loss through old age inefficiency, expressed in terms of salary, is less than 1 per cent. of the salaries paid; and that (e) there is no such pressing need of old age provision as to involve the government in any considerable expense. The Keep Sub-Committee's Plan. The plan of the Sub-Committee of the Keep Commission seeks to provide for old age mainly By the government hereafter holding back each month a portion of the salaries due its employees and ultimately repaying these forced loans with 4 per cent. interest compounded annually; and By giving to each employee already in the service when the plan goes into effect and whose salary up to that date will, of course, have already been paid) as a pure gratuity on his attaining the retiring age in the government's service a supplementary annuity a little larger than if the plan had been in force when he entered the government's employ. The total cost of these supplementary annuities it is estimated will be in the end from $50,000,000 to $60,000,000. Each employee hereafter separated from the service for any cause, at any age, and in case of death his estate, is to receive back the amount of his forced monthly loans with 4 per cent. compound interest. Criticism. (1) Resignations are far too numerous now among the more efficient amounting to almost 8 per cent. of the whole number of employees annually. (See p. 73.) (2) The holding back by the government of a portion of an employee's salary with a guaranty to return it at any time with 4 per cent. compound interest if he leaves the service offers a premium for his resignation. (See pp. 72-73.) (3) A good pension system will not only weed out the superannuated but will tend at the same time to keep in the most efficient, and will not give special inducements to the most efficient to resign, leaving the least efficient, not good enough to be in demand outside, as the only ones to remain in the service until old age. (See pp. 72-73.) (4) It might prove an economic gain to the government to make the proposed gratuity of fifty to sixty millions of dollars, which the plan provides shall be distributed among those now in the service and remaining until they attain the age of seventy, provided that this were the only expense of the plan and that without further burden upon the taxpayer this expenditure would surely eliminate from the service inefficiency through superannuation. But sixty million dollars are an insignificant matter in comparison with the enormous cost of the whole plan. (See pp. 71, 75-78.) (5) The 4 per cent. compound interest proposed to be paid to its employees by the government, which pays only 2 per cent. on its bonds sold to outsiders would cost the taxpayers several hundred millions of dollars before even those now in the service had all died. (See pp. 75-77.) (6) The government is to pay annuities based upon what insurance companies earn from their investments. This is very much in excess of anything the government can be said to earn. This involves a heavy loss to the taxpayer. (See pp. 77-78.) Recommendations. (1) The League recommends again the Australian system, under which the government employees would be required to take out deferred annuities from insurance companies, payable at the age of 70, to be supplemented by a gift of annuities from the government to those already in the service, as in the Sub-committee's plan, (3) the insurance companies to make deposits from time to time with the United States treasury to secure these annuities, (4) and also to issue these policies at reasonable rates, before being allowed to undertake the business. (5) These annuities can be made as varied and flexible as in the Sub-committee's plan; (6) and the policies can be so arranged as to discourage resignations during years of usefulness. (7) Such a plan will cost the government nothing beyond the expense of providing, under proper conditions and restrictions, annuities for those now in its service, as is contemplated by the Keep Sub-Committee; the amount of each annuity being proportionate to the length of service already rendered when the plan goes into effect and its payment conditioned upon the employee remaining in the service until superannuation or permanent inefficiency due to no fault of the employee. (See pp. 79-82.) [REPORT IN FULL] Report of the Superannuation Committee of the National THE FACTS. There has been a persistent agitation in recent years. to secure the enactment of some form of civil pension or retirement annuity law to remedy the evil, asserted to be very great, of superannuation in the civil service of the United States. The Council of the Civil Service Reform League in 1906 made an investigation as to how far the civil service law was responsible for the existence or alleged increase of superannuation in the service, and the cost to the public treasury through the inefficiency of superannuated employees. In September, 1906, the Council published a report of its investigation. None of its statements of fact has been contradicted. Among these facts are the following: The civil service law was passed in 1883, and for at least three-quarters of a century prior to its enactment superannuation among the civil employees of the government had been well known and frequently commented upon; (') Only 5.1 per cent of the employees over 65 years of age now in the service entered it through competitive examination; (2) (') League's Superannuation Report of 1906, pp. 2-3. (2) Twenty-third Report U. S. Civil Service Commission, PP. II-12. |