Statement by the President Upon Signing the Postal Bill.

I HAVE TODAY approved H. R. 5836, "To establish a postal policy, to adjust postal rates, to adjust the compensation of postal employees, and for other purposes." I have taken this action because it is clear that those provisions which are in the public interest outweigh the objectionable provisions of the bill.

Though inadequate, the increases in postal rates provided by the bill generally are responsive to requests made by me for such legislation as early as January 7, 1954. In January 1958 I also recommended appropriate pay increases for employees in the postal service, and the bill provides liberal increases.

There are in the bill several matters which cause me grave concern. The first is the excessive amount of postal service costs which are assessed against the United States Treasury. Certain items identified as "public services", such as the star route system, are not services at all but are basic components of the system of moving mail between post offices. The consequence of this misconstrual of the public services performed by the Post Office Department is to burden the Treasury annually with $ 100 million or more of operating costs which logically and equitably should be paid by the users of the mails by means of proper rates of postage. The concept of public service which is inherent in the bill is clearly in error and without precedent. The true measure of the cost of the public services performed by the Post Office Department is the loss of revenue arising from specific rate concessions made under the law to certain subclasses of mail users. I am hopeful that the Congress will review section 104 with a view toward restating the "public services" of the Post Office Department to conform with this concept.

The second matter which concerns me is the failure of the Congress to provide sufficient revenues to meet the full cost of operating the postal service. Although the bill adopts the policy that postal revenues shall be approximately equal to postal expenditures other than those incurred in performing certain public services, the rate adjustments provided therein fail by several hundred million dollars to bring the postal account into balance.

The third matter relates to the wage provisions of the bill. Subject to certain well-recognized exceptions, it is only equitable for the Government to maintain its compensation at levels generally comparable with those prevailing in non-Governmental employment for work of similar difficulty and responsibility. That objective guided my original recommendations for postal pay legislation.

The bill provides liberal increases to non-supervisory employees, but it greatly distorts the pay structure by reducing the proportionate benefits to the higher-level postmasters, supervisors, and technical and professional personnel. Including so-called temporary increases, the salaries of employees in the first six pay levels are increased by more than 10 per cent and those of employees in pay level 7 by approximately 9 per cent. At the same time, the salaries of the upper level personnel are regressively increased, starting at 7.5 per cent in pay level 8 and ending with zero for those at the top of the schedule. Were such inequitable wage treatment before me as separate legislation, I would seriously consider withholding approval of it. Such inequities are contrary to every sound management principle and should be corrected at the earliest date.

I am pleased to note that the bill expresses approval of the Department's badly needed modernization program. I regret, however, that the Congress failed to provide additional revenues, as requested, to provide funds for the cost of the program. It is my hope that the Congress will promptly reconsider its action in this respect, so that the program can go forward.

Despite the foregoing shortcomings of H. R. 5836, and despite the costly salary retroactivity which was not provided in the Budget for this fiscal year, I approve the measure in order that postal revenues may be increased promptly and the existing discrepancies in relation to industry wage scales may be repaired without further delay.