COMPENSATION OF CERTAIN CUSTOMS EMPLOYEES

JUNE 11, 1930.-Committed to the Committee of the Whole House on the state of the Union and ordered to be printed

Mr. BACHARACH, from the Committee on Ways and Means, submitted the following

REPORT

[To accompany H. R. 12742]

The Committee on Ways and Means, to whom was referred the bill (H. R. 12742) to amend the act entitled "An act to adjust the compensation of certain employees in the Customs Service," approved May 29, 1928, having had the same under consideration, report it back to the House without amendment and recommend that the bill do pass.

On May 29, 1928, President Coolidge approved the act of Congress (Public Law 575) commonly known as the Bacharach Act, which provided increased salary ranges for certain employees in the Customs Service. This legislation was adopted by Congress after a very thorough investigation of the needs of the Customs Service. Its provisions did not represent all the adjustments in salary ranges which your committee felt was warranted by the facts brought out by the investigation. It did, however, give relief to employees in the lower grades, and it was the best adjustment that could be made at that time.

In accordance with the provisions of the act of May 29, 1928, the Treasury officials made various changes in the pay status of certain customs employees in harmony with what the administrative officers of the department believed to be a correct interpretation of the intent of Congress. After these changes and promotions had been made, the Comptroller General rendered a number of decisions bearing upon his interpretation of the several provisions of the act, which decisions completely nullified the interpretation made by the department officials and set aside the action taken by the department in certain transfers and promotions made. In a number of cases the decision of the comptroller has resulted in ordering certain employees who had been transferred from one branch of the service to another,

supposedly at an increase in salary, to accept a lower salary than they were receiving and to refund back to the Treasury the difference between the higher salary which they had been paid (prior to the comptroller's decision) and the lower salary in the grade to which they had been transferred. Of course the money had been spent by these employees before the comptroller's decision was rendered, and they have been called upon to pay back to the Treasury something which they do not now possess. The amount ordered refunded is about $6,000 and payment of the refund must be made not later than June 30, 1930, unless relieved by Congress. The purpose of this bill is to afford relief to these employees and to so amend the original act that there can be no misinterpretation of the intent of Congress. The interpretation of the act of May 29, 1928, by the comptroller and the decisions rendered by him bearing upon the scope of the authority of the Treasury officials under the provisions of the act, may be legally sound and correct, but they do not, in the opinion of the committee, reflect the plain intent of Congress.

There is attached hereto the correspondence transmitted to the Speaker of the House by the Secretary of the Treasury bearing upon the need of this legislation. The Secretary's letter and accompanying documents set out the situation in detail.

THE SECRETARY OF THE TREASURY,

Washington, May 10, 1930.

DEAR MR. PRESIDENT: I submit herewith draft of a bill to amend the act of Congress approved May 29, 1928, entitled "An act to adjust the compensation of certain employees in the Customs Service" (45 Stat. 955), so as to make certain changes therein, necessitated in the interest of good administration of the Customs Service by interpretations placed upon the act by the Comptroller General, and to afford relief to certain of the customs field employees of the Treasury Department.

Under the provisions of the act of May 29, 1928, referred to, known as the Bacharach Act, various changes have been made in the pay status of customs employees in accordance with what the administrative officers of the Treasury Department believed to be a correct interpretation of the provisions of the act. In certain classes of cases the salary status fixed by the administrative officers has been disapproved by the Comptroller General. In view of the adverse rulings, the employees affected thereby will lose the benefit of the promotions given them, and, in addition, will be compelled to refund considerable amounts which they have already received, unless Congress sees fit to alleviate their situation by remedial legislation. A statement is attached showing the employees who have been affected by the Comptroller General's rulings, and a detailed discussion of the cases involved follows.

For convenient reference in considering the cases, the act of May 29, 1928, is quoted in part below:

"That the following annual rates of compensation are hereby established for the employees in the Customs Service hereinafter specified:

"(a) Laborers, $1,500.

"(b) Verifiers, openers, and packers, $1,680, $1,740, $1,800, $1,860, $1,920, $1,980, and $2,040.

(c) Clerks, entrance salary, $1,700; clerks having one year's satisfactory service, $1,800; clerks having two years' satisfactory service, $1,900; clerks having three years' satisfactory service, $2,000; clerks having four years' satisfactory service, $2,100; thereafter promotion of clerks to higher rates of compensation shall be in accordance with existing law.

"(d) Customs guards, $1,860, $1,920, $1,980, $2,040, $2,100, $2,200, $2,300, and $2,400.

"(e) Inspectors, $2,100, $2,200, $2,300, $2,400, $2,500, $2,600, $2,700, $2,800, $2,900. $3,000, $3,100, $3,200, and $3,300.

"(f) Station inspectors, $3,000, $3,100, $3,200, $3,300, $3,400, $3,500, and $3,600.

"SEC. 2. All new appointments of employees specified in section 1 shall be made at the minimum rate of the appropriate salary range.

"SEC. 3. Nothing in this act shall be construed to prevent the promotion of any employee at any time to a vacant position in a higher grade, and when so promoted such employee shall receive the compensation fixed in accordance with law for such position; and nothing herein contained shall be construed to reduce the rate of compensation of any employee in the Customs Service.

"SEC. 4. There are hereby authorized to be appropriated such sums as may be necessary to pay the rates of compensation herein established."

The cases in which the Comptroller General disapproved the action of the administrative officers are classified as follows, and they are considered in the order in which they appear:

1. Clerks given increases in pay under section 1 (c) of the act, allowing credit for previous service in positions in the Customs Service requiring a first grade civil service examination, such service not having been continuous.

2. Clerks given increases in pay under section 1 (c) of the act, allowing credit for previous service in positions in the Customs Service requiring a first grade civil service examination with designations other than clerk.

3. Employees promoted, transferred, or reinstated to positions of clerk, allowing credit under section 1 (c) of the act for previous service in positions in the Customs Service requiring a first grade civil service examination, such service not having been continuous.

4. Employees promoted, or transferred to positions of clerk, allowing credit under section 1 (c) of the act for previous service in positions in the Customs Service requiring a first grade civil service examination with designations other than clerk.

5. Clerks given increases in pay and employees transferred to positions of clerk allowing credit under section 1 (c) of the act for previous clerical service in the Bureau of Customs, Washington, D. C.

6. Clerks promoted under authority of section 3 of the act, before completion of more than four years' clerical service, and other employees specified in section 1 of the act, promoted to clerk vacancies allocated to Grade CAF-5, or a higher grade, at a salary of $2,000 per annum, or above.

7. A clerk promoted from a temporary position at $1,700 per annum to a vacant position of clerk, CAF-5, $2,000 per annum, before the completion of three years' continuous clerical service in the Customs Service.

8. Employees transferred from positions in the Customs Service to positions specified in section 1 of the act and given a salary above the minimum rate of the range provided in that section for the position to which transferred.

Classes 1 to 4, inclusive: In increasing the pay of clerks on July 1, 1928, and on subsequent dates, under the provisions of the Bacharach Act, they were given credit for all previous service in first-grade civil-service positions in customs, with the exception of the position of sampler, regardless of whether such service was continuous. The same practice was followed in transferring, promoting, or reinstating persons to clerical positions. The Comptroller General holds that transfers from one position to another within the Bacharach Act and that transfers from any other position in the Customs Service or from a position in the Bureau of Customs, to one within the Bacharach Act, are all new appointments within section 2 of the Bacharach Act, and that, therefore, they must be at the minimum salary, notwithstanding the fact that the employee transferred may have had the requisite number of years of satisfactory customs service. He holds further that in any such case no credit may be allowed for previous satisfactory customs service in fixing the salary of a clerk under section 1 (c) of the act, unless: (1) Such service was rendered in a clerical position or in a position the paramount duties of which are clerical in character; (2) such service was rendered in the Customs Field Service; (3) such service was continuous; and (4) such service was rendered immediately preceding the date of the transfer or reinstatement. The decisions of the Comptroller General to the foregoing effect are cited below, and copies of those decisions, as well as any other decisions referred to herein, are inclosed:

A-24392, dated September 29, 1928; 8 Comp. Gen. 152.

A-26082, dated February 27, 1929; 8 Comp. Gen. 467.

A-28672, dated September 24, 1929; not reported.

A-28057, dated October 2, 1929; not reported.

A-24392, dated July 17, 1929; not reported.

Class 5: In increasing the pay of certain clerks on July 1, 1928, and later in making a transfer to the field, credit was given for services rendered in the Bureau of Customs. The Comptroller General, in his decision A-24634 (not reported), dated July 19, 1929, construes the act to be limited in application to employees in the field service of customs, and as precluding any credit being given for service rendered in the Bureau of Customs in Washington in fixing the pay status of a clerk transferred from the bureau to the field service.

Class 6: Certain clerks not having more than four years' continuous clerical service, and other employees specified in section 1 of the_Bacharach Act, were promoted to vacancies in clerical positions in grade_CAF-5, or higher, under the provisions of section 3 of the Bacharach Act. However, the Comptroller General, in his decision A-29202 (9 Comp. Gen. 198), dated November 9, 1929, construes the act as limiting the pay of customs clerks with less than four years' service to the salary rates provided in section 1 (c), notwithstanding the provisions of section 3 of the act.

Class 7: A clerk was promoted from a temporary position at $1,700 per annum to a vacant position as clerk, grade CAF-5, at $2,000, before the completion of three years' continuous clerical service in the Customs Service. The Comptroller General's decision, A-29202 (9 Comp. Gen. 198), dated November 9, 1929, holds this action to be illegal.

Class 8: Employees have been transferred from one of the positions named in section 1 of the Bacharach Act, such as inspector, verifier-opener-packer, etc., to another of the positions named therein and given more than the entrance salary for the position to which transferred. In some instances, the employee was receiving prior to transfer a higher salary than the minimum of the position to which transferred. The disapproval of the Comptroller General of the pay status fixed by the administrative officers in the case of employees in this class is based upon his construction of the statute as outlined in connection with classes 1 to 4, inclusive, above.

As construed by the administrative officers of the Treasury, section 1 (c) required that automatic promotion in $100 steps be made for satisfactory service over periods of 1, 2, 3, and 4 years, but since section 3 of the act expressly provides that nothing in the act was to be construed to prevent the promotion of any employee at any time to a vacant position in a higher grade, the act contemplated that promotions would be made where a vacancy in a position in a higher grade occurred and where an employee exhibited unusual ability and aptitude for the position, regardless of his length of service, so long as he possessed the necessary civil-service status. It is not in the interest of good administration that an employee who has shown exceptional ability should be barred from the higher grades until he has served four years in the lower grades.

In making changes in the pay status of customs employees within section 1, subsection (c) of the act, the administrative officers of the Treasury Department also felt that that section did not intend that the 1, 2, 3, or 4 years of satisfactory service necessarily need be continuous. The reasonable view of the act seemed to be that when clerks had rendered the specified number of years of satisfactory customs service they were entitled to the specified increase in salary, without regard to whether or not such service may have been continuous. As construed by the administrative officers of the Treasury, section 2 of the act applies only to original appointments in the Customs Service or to transfers from branches of the Government other than customs of persons having no previous service or insufficient service in customs work. The knowledge and experience gained by an employee in certain positions in section 1 of the act add materially to his qualifications for certain other positions. That is true regardless of whether or not the service was continuous or immediately preceded the date of transfer or reinstatement. Consequently, in transferring an employee from certain positions to certain other positions in the same service, or in reinstating a person having previous customs service of the requisite character, it is highly desirable that allowance should be made for the knowledge and experience gained by him in his former position in fixing his salary status in his new position.

The act of May 29, 1928, as construed by the Comptroller General, does not permit of a wise and equitable adjustment of the salaries of the employees affected thereby or in a manner deemed to be in the best interest of the service. For example, it is often extremely advantageous at the smaller ports, particularly Canadian and Mexican border ports, to fill vacancies in clerical positions by transferring and promoting inspectors of customs to such positions. The salary range for inspectors of customs fixed in the act of May 29, 1928, is from $2,100 to $3,300

per annum. The salary range for clerks, fixed in the same act, is from $1,700 to $2,100 per annum, i. e., for 1, 2, 3, and 4 years of satisfactory service. Under the provisions of section 2 of the act, as construed by the Comptroller General, such transfers constitute new appointments and must be made at the minimum salary for clerks, namely, $1,700 per annum. Such a transfer, although in the interest of good administration, can not be made without a substantial reduction in salary. Moreover, frequently it becomes very advantageous to fill vacancies in clerical positions by transferring and promoting to such positions other customs employees, such as verifier-opener-packer, customs guard, sampler, storekeeper, etc. However, to make such transfers would in most cases result in a reduction in the salary of the employee under the Comptroller General's construction of the act and the transfers thereby are in effect prohibited. In other words, regardless of the knowlege and experience the employee may have acquired in the other positions and notwithstanding the fact that it is such knowledge and experience that makes it advantageous to make the change, he can be given no credit for previous service in any of those positions in fixing his salary as clerk under the provisions of section 1 (c) of the act.

Under the provisions of the act, as construed by the Comptroller General, a customs clerk in one of the grades created by the act may not be given an increase in pay when promoted to fill a vacancy in a clerical position in a higher grade until after he has completed four years' service, notwithstanding the fact that he may have all the qualifications for the higher position and may be the only clerk with the necessary qualifications available. For example, a Bacharach clerk having two years' service and receiving $1,900 per annum, when promoted to a vacancy in a position of clerk CAF-6, the minimum salary rate of which is $2,300 per annum, can be given no increase in pay at the time of promotion and can not be given the minimum of the grade ($2,300) until after he has completed two additional years of continuous satisfactory clerical service.

Under the present act, as construed by the Comptroller General, a clerk who resigns after years of service and is reappointed must be reappointed at the entrance salary of $1,700 per annum and may be promoted only in successive steps of $100 per annum, after 1, 2, 3, and 4 years' service, dating from his reappointment.

The bill which I submit is designed to give relief to the employees affected by the Comptroller General's ruling and to so change the language of the Bacharach Act that in future credit may be given for previous satisfactory continuous Customs Service, rendered in the Customs field service or in the Bureau of Customs, when transfers are made from one position to another within the Bacharach Act, or from any other position in the Customs Service or in the Bureau of Customs to one within the Bacharach Act, and that vacant positions in the Customs Service may be filled by promotion on merit from the ranks of employees in customs without the employees being forced to accept the minimum rate of the range provided for such position-which latter often would involve a reduction in salary for the employee notwithstanding the fact that the change is a promotion for the employee and an increase in the importance of his duties or responsibilities.

Inasmuch as the situation created by the Comptroller General's interpretation of the provisions of the present act imposes a serious handicap upon the administration by the Treasury Department of the Customs Field Service, seriously interfering with the proper carrying on of the customs business and affecting the morale of the personnel, may I ask that you submit the bill to the proper committee, and that you use your good offices to secure enactment of the measure into law at this session of Congress?

The Comptroller General has agreed to postpone until June 30, 1930, the demands for refund from the employees whose salaries already have been increased upon the basis of the administrative interpretation of the statute, in order to permit of relief and remedial legislation, and, therefore, the matter is urgent. The Director of the Bureau of the Budget has advised that the proposed legislation will not be in conflict with the financial program of the President.

Very truly yours,

The PRESIDENT OF THE SENATE.

A. W. MELLON, Secretary of the Treasury.