This document is a transcript of hearings held before the Subcommittee on Compensation and Employee Benefits of the Committee on Post Office and Civil Service, House of Representatives, into a bill requiring that allowances available to teachers in the Department of Defense Overseas Dependents' Schools be provided without regard to the location at which the teachers are recruited. Current regulations provide that differentials for living quarter allowances, transportation allowances, and other fringe benefits are to be paid to teachers recruited within the United States (but not to those hired overseas) in order to obtain the most capable and highly qualified employees to serve in the Dependents' School System. Testimony of representatives of the Department of Defense, Office of Civilian Personnel and Office of Defense Schools is presented in opposition to the bill. The American Federation of Teachers, representatives of overseas teachers' organizations, and individual teachers within the Dependents' School System present testimony in favor of the proposed legislation. (MJB)