ment service in the States will receive from his children. Our children, unfortunately, have not very many opportunities down there, and if they do come up here, instead of helping their families they get out of touch with them. I will conclude by saying that the employees who may be retired down there are at a great disadvantage in many respects, as compared with employees who may be retired in the Government service here in the United States. We have to come back here after having devoted the largest part of our lives to the service of the Government in the Tropics and find that we know no one, that we are completely out of touch with conditions here, and are, in most instances, forced to live almost entirely on the annuity which the Government may see fit to pay us, and with little or no opportunity of augmenting that annuity, and for that reason the annuity should be, at least, sufficiently large so that a man may support himself and his wife upon it. I believe I have no further statement to make. We also quote the following statement from the testimony of Gov. Harry Burgess, of the Panama Canal, at the hearings: Of course, the principal object of a retirement bill for Government employees is to enable the supervising officers to put out of active service men who, on account of age or physical disability, may become less efficient than they should be. That is the primary purpose. The secondary purpose, of course, is to take care of old Government employees after they are retired. These are the purposes, as I understand it, of all retirement bills. In our case, employment in the Tropics undoubtedly deteriorates a man physically earlier than corresponding work in the United States, and for that reason we are proposing to permit retirement at the age of 62 years, with not more than four years' extensions, under the approval of the governor. There are occasional instances where an employee who is doing work of a clerical or administrative nature is competent to continue that work after he is 62 years old, and the bill, as originally proposed, gives the governor authority to make two extensions of two years each. That explains why I feel that the automatic retirement age ought to be somewhat lower than it is in the United States. Mr. DENISON. Are there any other reasons you care to mention? Colonel BURGESS. Not in that connection, but I am going to say here that I think there should be more retirement pay. An employee of the canal or of the railroad on the Isthmus is separated from all connections with business life in the United States. He is not able, by making small savings, to buy a home for himself, as many of the employees in the United States do in the territorial limits of the United States. That is entirely prevented by the distance of these employees from the United States and the fact that all the land in the Canal Zone is owned by the Government and can not be sold. Our employees also have not that contact with industry in the United States that enables them to place their children in positions for which they have fitted themselves when they have gone through school, whereas a mechanic here, for example, has contacts which will enable him to get his son started at the time the boy leaves school. Hence, in a general way, I say that when a man separates himself from the service in the Canal Zone he will depend entirely on what the Government allows him for his retired pay or his pension, whereas an employee in the United States, as a rule, has a home mostly paid for, possibly wholly paid for. He will also have certain connections which will enable him to find some small amount of work of a character similar to what he has done before, to help him out with his Government pension or retirement pay. Those are essentially the reasons why I believe the rate for retirement should be greater for tropical employees than it is for those in the Temperate Zone. THE MAINTENANCE OF A HIGHLY EFFICIENT ORGANIZATION FOR OPERATING THE CANAL REQUIRES SPECIAL PROVISIONS IN RETIREMENT LEGISLATION FOR CANAL ZONE EMPLOYEES Not only was the construction of the Panama Canal one of the world's greatest achievements but the efficiency with which it has been maintained and operated has been observed and acclaimed by the people of the world who have been there. The canal is the world's greatest gateway of commerce. In the years to come more of the commerce of the world and of the traveling public will pass that way than at any other place in the world. It is important that we maintain this splendid efficiency in the permanent organization with which we maintain and operate the canal. The great ships of commerce and of war are lifted up 85 feet above sea level on one side through three lock chambers, and taken along an artificial lake which winds through a cut in the mountains to the other side of the Isthmus, and are there lowered 85 feet through three lock chambers to the other ocean. These operations, and every activity of the Government in connection with them, require the highest degree of skill and efficiency; and it is important that the administrative officials have authority to retire employees who have lost their mental or physical alertness and replace them with younger men. Manifestly this would be difficult as well as unjust or inhumane to the employees, in the absence of quite liberal retirement privileges. Therefore, in order to provide this right of involuntary retirement by the order of the governor of the canal when he finds that it is necessary to preserve the high efficiency of the organization, the bill carries provision for such retirement at an earlier age than would be necessary for retirement of employees engaged in the Government service in the United States. And the committee believes that the policy is sound. The annuities provided in the bill are about 25 per cent above those provided by the general civil service retirement act recently passed by Congress. This is substantially in harmony with the policy approved by Congress in 1912, which authorized the payment of compensation to our employees on the canal of 25 per cent higher than compensation paid for similar work in the United States. The normal cost to the Government of this bill will be less than the normal cost of the Lehlbach bill as applied to the Government employees in the United States; although it is somewhat larger than the normal cost of the Lehlbach bill when applied to the Government employees on the Canal Zone. This is due to the fact that this bill only provides retirement for those employees of the Canal Zone who receive high compensation, generally speaking. In other words, the low-paid employees of the Canal Zone are nearly all West Indian colored laborers, none of whom are included within the provisions of this bill; so the bill only applies to the more highly paid employees of the Canal Zone, which makes a material difference in the percentage of pay roll that reflects the normal cost of the bill. It must, of course, be noted that the employees to whom the bill applies will contribute 5 per cent of their basic pay or compensation, as compared with 3% per cent contributed by employees under the Lehlbach bill. The following is a short statement of the cost of this bill as compared with the cost to the Government of H. R. 12759, which this bill replaced, and the cost to the Government of the Lehlbach bill: Table showing the annual cost to the Government of (1) H. R. 12759, containing the principles of the civil service retirement law as amended and approved May 29, 1930, with an increase of 25 per cent in annuities; (2) H. R. 15865, which permits employees of the Panama Railroad Co. to retain their rights under the provisions of the existing Panama Railroad pension plan, in respect to service rendered prior to July 1, 1931, and also to allow the annuity of $36 per year of service during the construction period, in addition to the minimum annuity otherwise allowable, but only to employees who shall be retired from the service of the Panama Canal. The figures are based upon the combined pay roll of the Panama Canal and the Panama Railroad Co. as of June 30, 1928, i. e., 2,814 employees receiving total annual salaries of $7,924,770 Accompanying the above statement of cost is a letter from Mr. R. R. Reagh, Chief Actuary of the Bureau of Efficiency, as follows: Hon. EDWARD E. DENISON, UNITED STATES BUREAU OF EFFICIENCY, House of Representatives, Washington, D. C. MY DEAR CONGRESSMAN: There is inclosed herewith a table showing the estimated cost of the proposed retirement legislation (H. R. 12759), as recently amended by your committee, covering employees of the Panama Canal and the Panama Railroad Co. on the Isthmus of Panama, who are citizens of the United States. There were two amendments to H. R. 12759 affecting the cost of the proposed legislation. The amendment which will permit employees of the Panama Railroad Co. to retain their rights under the provisions of the existing Panama Railroad pension plan in respect to service rendered prior to July 1, 1931, will cost the Government approximately $9,000 per annum. The amendment which allows the annuity of $36 for each year of service rendered during the construction period, in addition to the minimum annuity which would otherwise be allowable under the provisions of section 6, but only to employees of the Panama Canal, will cost the Government about $19,800 per annum. The inclosed table presents a summary of the cost estimates. Very truly yours, R. R. REAGH, Actuary This legislation is urged by the American Federation of Labor, by the Government employees on the Isthmus of Panama, and by the Governor of the Panama Canal, who is also president of the board of directors of the Panama Railroad Co. The committee recommends that the bill be passed. O HR-71-3-VOL 1- -30 TO AMEND THE ORGANIC ACT OF PORTO RICO JANUARY 10, 1931.-Referred to the House Calendar and ordered to be printed Mr. KNUTSON, from the Committee on Insular Affairs, submitted the following REPORT [To accompany H. R. 14560] The Committee on Insular Affairs, to whom was referred H. R. 14560, a bill to amend the organic act of Porto Rico, approved March 2, 1917, having had the same under consideration, reports thereon with the recommendation that the bill do pass without amendment. The amendment of section 13 of the organic act is for the purpose of establishing an independent department of labor. Under the existing law section 13 reads as follows: SEC. 13. That the following executive departments are hereby created: A department of justice, the head of which shall be designated as the attorney general; a department of finance, the head of which shall be designated as the treasurer; a department of interior, the head of which shall be designated as the commissioner of the interior; a department of education, the head of which shall be designated as the commissioner of education; a department of agriculture and labor, the head of which shall be designated as the commissioner of agriculture and labor; and a department of health, the head of which shall be designated as the commissioner of health. The attorney general and commissioner of education shall be appointed by the President, by and with the advice and consent of the Senate of the United States, to hold office for four years and until their successors are appointed and qualified, unless sooner removed by the President. The heads of the four remaining departments shall be appointed by the governor, by and with the advice and consent of the Senate of Porto Rico. The heads of departments appointed by the governor shall hold office for the term of four years and until their successors are appointed and qualified, unless sooner removed by the governor. Heads of departments shall reside in Porto Rico during their official incumbency, and those appointed by the governor shall have resided in Porto Rico for at least one year prior to their appointment. The heads of departments shall collectively form a council to the governor, known as the executive council. They shall perform under the general supervision of the governor the duties hereinafter prescribed, or which may hereafter be prescribed by law and such other duties, not inconsistent with law, as the governor, with the approval of the President, may assign to them; and they shall make annual and such other reports to the governor as he may require, which shall be transmitted to the executive department of the Covernment of the United States to be designated by the President as herein provided: Provided, |