Statement by the President Upon Signing Bill Relating to the Railroad Retirement and Unemployment Insurance Systems.

I HAVE approved H.R. 8100, a bill to improve the financial condition of the railroad retirement and unemployment insurance systems. This bill carries out my 1961 request for the Railroad Retirement Board to develop legislation to put these funds in sound financial condition. The bill also reflects agreement by the railroad carriers and unions to improve the financial condition through increased contributions by them.

However, I consider undesirable provisions in the bill providing a 3-percent guaranteed return of the retirement fund's investments, and requiring the immediate investment of the fund's assets at a rate of interest substantially higher than now being paid.

Neither of these two provisions was contained in the administration bill transmitted to the Congress. Their effect would be to give this account special treatment not accorded any of the other similar trust funds. The immediate conversion would increase budget costs by approximately $25 million in the first year. To give other trust funds the same treatment would cost almost a third of a billion dollars in the first year alone. The guaranteed 3-percent return is inconsistent with the basic objective of bringing the retirement fund interest rates into conformity with the market yield of long-term Government securities.

During congressional consideration of the measure, however, the point was stressed that those special provisions developed in the legislation for the railroad industry were not applicable to the other retirement systems and were not to be regarded as a precedent. Congress thus felt that the railroad retirement system was unique and warranted this special treatment. The report of the Senate Labor and Public Welfare Committee dealt with this in detail. Relying on this assurance I have approved this bill.