MINT INVENTORY Mr. MYERS. OK. Now, I notice here the Bureau of the Mint. I guess this is a hypothetical question. I notice for the last 4 years they have delievered more coins than they have manufactured. How do they do that? Mr. BETTS. They manufacture at the present time as many as they can. They ship on demand to the Federal Reserve bank as the Federal Reserve banks need them. We have been able over the recent years to build up a slight inventory, particularly in some denominations, but for most of the period of the midsixties and the late sixties, until the late sixties, we were in what we called a coin crisis. We didn't have any inventories on many denominations, and we still do not have a large inventory of pennies. The inventory of other coins is in pretty good shape. Mr. MYERS. You have a surplus of 50-cent pieces? Mr. BETTS. Not 50-cent pieces; no. Fifty-cent pieces have not been manufactured in the calendar year 1971. There were some manufactured in the calendar year 1970. The new cupro-clad half dollars will be in production later this calendar year as a result of the new authority that was granted. Mr. MYERS. Is somebody else from the mint going to testify more in details? Mr. BETTS. Yes. Mrs. Brooks and her staff will be here next week. TRUST FUNDS Mr. MYERS. Another question on the trust fund. I know what the Pershing Hall Memorial Fund is. What is the National Defense Conditional Gift Fund and what is the Ester Cattell Schmitt Gift Fund? Mr. BETTS. The words "trust funds" means that the donor has probably put some special requirements on it to administer it, and trust funds do not of course require any further appropriation action on the part of the Congress. We put this data in merely to reflect the total operations of the Treasury Department. Mr. MYERS. Then this shows as income some place else, revenue? Mr. BETTS. Yes. There would be income reported someplace else in the budget. This is merely the expenditure side and it does not require specific appropriation on the part of this committee except claims, judgments, and relief acts. That does not get automatically appropriated. That has to come before the Appropriations Committee, and it is usually in the form of a supplemental as the claims are settled. Mr. MYERS. Then the same is true on seized goods and other items of that nature? Mr. BETTS. Yes. SAVINGS BOND DIVISION Mr. MYERS. One other question. Do you keep cost accounting in your various departments such as the Savings Bond Division? Do you know what money costs you to borrow? I see last year you borrowed $4 billion-plus in savings bonds. Do you know what that money cost relative to the administrative cost of operating the fund? Mr. BETTS. The Savings Bond Division is a small division of 470some people and their principal role in life is to sell savings bonds. Mr. MYERS. I realize that. Mr. BETTS. And their costs can be measured by the fact that there is an allocation for them under "Administering the Public Debt." This year the Savings Bond Division is costing $9 million; $9.2 million is projected for 1972. So to get the $4 billion sales the taxpayers spent $9 million. I think that is a fairly good return. Mr. MYERS. How does that compare to other Treasury borrowings from bonds and bills, and so forth? Mr. BETTS. I am not sure we have ever conducted a study as to the relative administrative costs of different types of financing. This is a policy determination that the public debt should be as broadly dispersed as possible and the savings bond program permits this. In fact, 23 percent of the entire debt held by the public is in the form of savings bonds, E and H. Mr. MYERS. I realize that, but the reason I am asking this question is because I was a banker, and still am I guess. I ran a little bank before I came to Congress and I remember a number of times locally you would have a bond selling drive either in industry or communitywide. You sign up a bunch of people on a payroll deduction, and honest to God the minute they sign up they are in there within 30 days, as soon as the calendar month Mr. BETTS. Sixty days. Mr. MYERS. Well, 31 days. That is where you are technically wrong. It can be done in 31 days as long as there is a calendar month intervening. You understand that? Mr. BETTS. Right. Mr. MYERS. The minute they are available to be cashed they are in there cashing that bond and it puts a burden on the country bank, or any bank, to do this, and I just wonder if it makes you any money when these people sign up and the next week they are in here trying to cash them. Mr. BETTS. Mr. Rustad, the National Director, will be before you and he can give you more details on it, but let me just say for the last 4 months sales have greatly exceeded redemptions and in February we had the best February, going back some 3 or 4 years, so the sales are picking up and redemptions have slackened off. The reason for that, of course, is that the interest rate at the present time is much more competitive with the savings and loans and passbook type of savings. Mr. Rustad can Mr. MYERS. He will be prepared to answer these questions? Mr. BETTS. Yes, sir. Mr. MYERS. Thank you. That is all, Mr. Chairman. CONCLUSION Mr. STEED. Well, gentlemen, in behalf of the committee, I want to express our appreciation for your very fine presentation. Mr. PASSMAN. Mr. Chairman, may I clear up one thing before you dismiss the witnesses? Mr. STEED. Yes. Mr. PASSMAN. When we were discussing deficit borrowing as being one of the items that created inflation I didn't say it created all of the inflation. I realize it could not create inflation to a greater extent than the deficit. Did you understand the question? Mr. BETTS. I will reread it, and also I would like to be able to clarify my answer a little bit on the record, Mr. Passman. Mr. PASSMAN. That is quite all right, but I just don't want to charge deficit borrowing with all of the inflation; only to the extent of the amount borrowed, but I will stick with that as being accurate regard- Mr. PASSMAN. Thank you, Mr. Chairman. Mr. BETTS. Thank you, Mr. Chairman. Mr. STEED. The committee will stand adjourned until 10 o'clock This appropriation, in addition to paying the salaries of the Secre- tary and his assistants, provides for the executive direction of the various functions of the Department, general supervision of the legal and enforcement activities of the several bureaus, and for general ad- ministrative services, including maintenance of the main Treasury |