(Witnesses: Pinchot, Zappone, Price. )

Mr. ZAPPONE. I think Mr. Samuel is trying to bring that out, and it is entirely possible under the law. But the interchange between the statutory and lump-fund rolls is prohibited, as explained by Mr. Pinchot and Mr. Price.

The CHAIRMAN. I understand, of course, you have to find a person for the $1,200 position from the $1,000 grade, to which you are going to add the one and take the other.

Mr. ZAPPONE. Yes, sir; you exchange the clerks.

Mr. PRICE. In this specific case we made formal application for that reduction, and it was refused on that ground. That possible solution was not suggested.

Mr. SAMUEL. I understand, naturally, that if you wish to reduce a person from $1,200 to $1,000, and have no vacancy in the $1,000 class, you have no authority to reduce him.

Mr. PRICE. No.

Mr. SAMUEL. But if at the same time you make a vacancy in the $1,000 grade by promoting a man from $1,000 to $1.200, would it not then be possible?

Mr. PRICE. It would be possible; yes.

The CHAIRMAN. Whether or not, under those circumstances, there is any understanding that would prevent the carrying out of an arrangement of that sort, you would not be able to say?

Mr. PRICE. I simply know that this case came up and was refused on that ground-that such a change could not be made on the statutory roll.

The CHAIRMAN. You proposed to reduce this man one grade on the statutory roll?

Mr. PRICE. To reduce him $200 in salary as the result of bad work. Mr. SAMUEL. Was it proposed to continue him in the same kind of work?

Mr. PRICE. No, sir; he was to have different work.

The CHAIRMAN. Did they not take this attitude, as a legal proposition, that it was simply a desire on your part-perfectly proper, no doubt to reduce the salary or compensation of a clerk in that grade, without reducing him a grade?

Mr. PINCHOT. No; we wanted to reduce him a grade.

The CHAIRMAN. And your effort to reduce him a grade was not approved because of this arrangement, as you understand it? Mr. PINCHOT. Precisely.

Mr. ZAPPONE. Did you at the same time recommend some one for promotion?

Mr. PRICE. No.

Mr. ZAPPONE. That was the reason why it could not be done. If there had been an exchange of places it would have been possible.

Mr. PINCHOT. The difficulty is this, that anything that makes demotion or promotion depend on anything besides merit is a bad thing, and the statutory roll is simply an obstacle and a hindrance to the executive officer who is trying to get efficient work.

The CHAIRMAN. The other suggestion is, I suppose, that with the lump-fund roll the matter is entirely in the discretion of the head of the Department?

Mr. PINCHOT. Where it ought to be.

The CHAIRMAN. Yes; where it ought to be; but unfortunately, on

(Witnesses: Pinchot, Price.)

account of the weakness of human nature, some men have been put at the heads of bureaus that are not quite as good as other men and have succeeded in pretty vigorously abusing that discretion.

Mr. PINCHOT. That is true. You can not make good administration possible without making bad administration possible at the same time; and the way out, in my view, is to give the man the power he needs to run his business properly and hold him responsible for the use of that power, which the statutory roll does not do. The statutory roll is harmful because it is a determination, by a body of men who can not possibly be in touch with the details of the work as the executive officers are, as to just what we can or can not do in regard to a point that is vital to the conduct of the affairs for which we, and not they, are responsible.

The CHAIRMAN. It eliminates the flexibility that you have in a lump-fund roll?

Mr. PINCHOT. Absolutely.

Mr. PRICE. And increases the expense.

Mr. PINCHOT. And increases the expense very largely.

The CHAIRMAN. It increases expense very largely because, as regards the operation of the statutory roll, you get in after a time, through regular methods of rotation, a lot of men who are drawing salaries that they do not earn, and you can not very well get rid of them?

Mr. PINCHOT. Exactly. You can not correct it.

The CHAIRMAN. Now, is it not possible to have a system of promotion and demotion in connection with the statutory roll depending upon merit which will eliminate some of the evils involved in that proposition?

Mr. PINCHOT. I do not see how, because with a statutory roll you can only promote by getting out somebody higher up. You must either change your statutory roll every year to provide for the promotions which in September you can foresee you may desire to make the succeeding July-and of course that is a very vague and unsatisfactory attempt at a guess-or you must depend upon chance. And the minute your clerks get the impression that promotion depends on good luck instead of on good work you have cut out the most important influence you can use in getting good work out of them.

The CHAIRMAN. Suppose you have a system, applying to your statutory roll, by virtue of which it is distinctly understood by the men that not only their promotion but their continuance in their places depends upon the efficiency record that they make from time to time?

Mr. PINCHOT. How can you have such a system under the statutory roll?

The CHAIRMAN. Let me make this suggestion. In the first place, there is no difficulty in making your promotions on that basis when you have an opportunity. Of course, the opportunity for promotion may be minimized and in a sense almost eliminated; but, so far as the opportunity for promotion exists, there can be no difficulty, as it seems to me, in applying your efficiency plan to your statutory roll. Mr. PINCHOT. When you get a chance.

The CHAIRMAN. Yes; when you get a chance. Of course that is embarrassed by the fact that your roll is full, and may remain full,

(Witness: Pinchot.)

and therefore you don't get a chance. But suppose at the same time you had an efficiency system by virtue of which, unless the man maintains his record for efficiency, he goes down and some other man goes up. If you have a $1,200 man whose record discloses that he is not able to do the work that a $1.200 man is expected to do in order to earn his salary, that puts him in a position where you must reduce him; then if you find you have a man in your $1,000 grade who can do the work in the $1,200 grade, and whose efficiency record has disclosed that fact, you can move him up and move the other man down. Why would not that tend to relieve the embarrassment to quite a degree?

Mr. PINCHOT. It would relieve it to a small degree. But it is not the fear of punishment that makes people do the kind of work you desire.

The CHAIRMAN. It is not a question of punishment; simply a question of value received.

Mr. PINCHOT. It is not the fear of being demoted, then, that keeps the clerks doing good work. Demotion must always, under our Government system, be a very small factor. The demotions in the Government service are exceedingly few. I once heard the chief of a great bureau testify that he had been in office seven years, and in that time had never dismissed or demoted a single person.

The CHAIRMAN. I suppose he was satisfied that he had not fully discharged his duty?

Mr. PINCHOT. He went on to say that if he had had the right to choose his own clerks, and handle them in his own way, he could have accomplished better results with half the force.

The CHAIRMAN. On its face that simply disclosed the fact that he had not reduced the men he should have reduced, did it not?

Mr. PINCHOT. It did.

The CHAIRMAN. No matter what he swore to, that of itself would disclose this fact.

Mr. PINCHOT. But the thing that will give you good service in Government bureaus is the chance of promotion, not the fear of demotion. The CHAIRMAN. Is not one the correlative of the other?

Mr. PINCHOT. The demotion part of it will always play a small part, in my judgment.

The CHAIRMAN. That depends largely upon the stage of the service to which you apply the proposition, does it not?

Mr. PINCHOT. I don't think I understand that question.

The CHAIRMAN. For instance, the life of a clerk. He begins when he is a young man, and as he grows older the time comes when he can not render efficient and valuable service, and can not earn his compensation?

Mr. PINCHOт. Yes.

The CHAIRMAN. And in the end he will die.

Mr. PINCHOT. Yes.

The CHAIRMAN. And some of them, until the year before they die, can do almost as much work as they could when they entered the Department or at any time of their service in the Department, because that is the peculiarity of some men. But, on the other hand, the average man, I suppose, begins to deteriorate in his efficiency several years before he comes to be entirely useless. Now, when you

(Witness: Pinchot.)

reach that period of the clerk's career, certainly demotion must prove a most important and controlling factor, must it not?

Mr. PINCHOT. It would if it had a fair chance to operate, but it will not have a fair chance to operate.

The CHAIRMAN. Assuming, for the purpose of argument, that it has a fair chance to operate; at that stage, at any rate, it becomes an important controlling factor?

Mr. PINCHOT. It then becomes an important factor; yes.

The CHAIRMAN. I suppose it would be true that you could not apply any general rule to men 60, 65, or 70 years of age, that would result in giving the Government the right kind of service, because there is great difference in men?

Mr. PINCHOT. There is an enormous difference in men. The chief clerk of one bureau told me that he had 160 people who were of the class that ought to be demoted, and that substantially all of them were getting their same old salaries. And you gentlemen in Congress are very largely responsible for that. Take the case of a woman who has no other means of support, who has been in the Government service twenty, thirty, or forty years. When she gets to the point where she can no longer earn her salary, and the proposition is made to reduce her, she goes to her Congressman; and it seems an outrage to him and I do not blame him-that this woman, who has served the Government faithfully so long, should lose her means of livelihood. He goes to the chief of the bureau. The chief of the bureau, to state it plainly, yields to pressure, and in a very large proportion of cases she is not reduced, but goes on receiving pay for service that she is not rendering. That condition will continue just as long as we do not have some form of retirement. I think you have two separate things under consideration. One of them is the question of retirement at the end of long service, which has a very vital relation to getting good work from the clerical force, but is not the main thing. The other is the question of promotion during the period of active, vigorous work. And at the end of the scale demotion cuts a very small figure. It is the chance for advancement which is the spur. The CHAIRMAN. I understand your position, because I can see where each proposition applies at different periods of time.

Mr. PINCHOT. Precisely.

The CHAIRMAN. In other words, it is a more important factor at some periods of time than at others. But why should they not operate at all periods of time upon the same general principle-on the basis of value received by the Government for the compensation paid?

Mr. PINCHOT. They should.

The CHAIRMAN. That being the case, what is to hinder the operation of that rule under the statutory system of salaries when you come to the question of demotion and elimination from the service? Of course, if there were an absolute retirement from the service that might be a soluble proposition, but if it is simply reduction in salary it would be embarrassed by this fact that you have no places to which to reduce them, I suppose?

Mr. PINCHOT. Yes; that is the story exactly. In order to provide, for example, for a promotion or a demotion-the agricultural bill having just passed, we will say, on the 4th of March-I am compelled

(Witnesses: Pinchot, Zappone.)

to look forward to a year from the following July. I must look forward a year and four months for any change that I want to make. Now, you can not run a business in that way, for the efficiency of the clerk depends upon immediate recognition of good work. He does not want to wait that length of time for a deserved promotion, and I don't want him to do so. If I have been good, I want my doughnut now, and the promise of a possible promotion so far ahead is very little of an incentive. The thing you want is to be able to say to a clerk: "Do good work and I will recognize it promptly. Whenever you have shown that you deserve to move up a peg I will move you up a peg."

The CHAIRMAN. Your judgment, then, is that the question of efficiency of the personnel and proper compensation can not be practically and accurately solved without the lump-fund salary proposition?

Mr. PINCHOT. That is exactly my position.

The CHAIRMAN. To what extent does the statutory salary system apply in the various Departments of the Government, if you know? Mr. PINCHOT. It applies very widely, and the tendency of Congress is to make it apply still more widely.

The CHAIRMAN. How long has it been in operation?

Mr. PINCHOT. I dare say since the Government began; I do not know.

Mr. ZAPPONE. The law I read to you yesterday establishing grades was passed in 1853, I think.

Mr. PINCHOT. There was a statutory roll, I imagine, before that, was there not?

Mr. ZAPPONE. Possibly; but in that year Congress established certain grades.

The CHAIRMAN. Do the other Departments have as large a proportion of lump-fund salaries as the Agricultural Department? Mr. PINCHOT. Most of them do.

The CHAIRMAN. Has there been any such experience in the various Departments, so that you are able to predicate results upon the two systems?

Mr. PINCHOт. Yes.

The CHAIRMAN. In what Departments, and what was the result? Mr. PINCHOT. You may make the general statement that the efficiency of the clerical force of the various bureaus is found in practice to have a direct relation to the presence or absence of a statutory roll. In general, so far as my experience has gone, those bodies of clerks who are on lump funds are more efficient than other bodies of clerks who are on statutory rolls.

The CHAIRMAN. Is that the result simply of your general observation and the opinion you have formed, or can you give us some concrete facts that show that the Government is getting more "value received" from the class of men who are doing work under the lump fund than from the other class?

Mr. PINCHOт. I can.

The CHAIRMAN. Let us have them.

Mr. PINCHOT. Take, for instance, a comparison between the Forest Service and two other organizations of similar size, in the Government service. The clerical force of the Forest Service grew up