opinion as to whether that is a Treasury or a finance function. I think generally the experience of the country-when I speak of the experience I mean in States, cities, municipalities-has been to regard it as a fiscal function, and therefore to tie it up with the great fiscal department of the Government.

Senator BYRD. Procurement is purely spending, though, is it not? Mr. Buck. It is spending for other departments, though it is not spending for the Treasury itself. It is buying supplies to be passed on to and used by other departments. The source of the money for these operations comes from the appropriations of other depart

ments.

Senator BYRD. Then the Treasury becomes a self-auditor for these supplies and purchases. That is a self-preaudit.

Mr. BUCK. Well, yes; but not any more than Internal Revenue is now self-auditing its own receipts, and so is Customs.

Representative TABER. Now, Mr. Buck, the trouble, to my mind, with your set-up is this: You are welding right into the Treasury Department the Division of Disbursements and the Commissioner of Accounts and Deposits, the only effective audit you set up for the Government. The Auditor General would simply be a side line with no power. You are giving your entire operation of spending your money and your disbursements right over, and your auditing, right over to the same function and putting them all in together. Now, that is the course of your recommendation, to my mind.

Mr. BUCK. No. If I may finish the picture I will try to make it clear. This unit or office of fiscal control that we spoke of a few minutes ago should have only the functions of central control and accounting, divorced entirely from revenue assessing, collecting, custody, and disbursement. That sort of an arrangement does not exist in the Treasury at the present time. It is very important in the set-up of the Treasury under this proposed scheme that those lines be clearly marked out and that they be observed. At the present time, you do have there a unit of the Treasury which is divorced from these other operations, and that can exercise this power of review and check, audit, accounting, and reporting.

Representative TABER. That is why an independent outfit divorced from the Treasury itself would be much more effective.

Mr. BUCK. On the contrary I feel that it would be less effective, because it would be removed from the actual financial operations. It would not be part of the machinery through which these operations would clear.

Representative MEAD. Mr. Buck, pursuing my questioning and bringing out another weakness.

I do not believe your congressional joint committee is going to be the check you think it is. I think that the check we have now through our Appropriations Committee, and through our continuing fiscal field agent, the Comptroller, is a fine system, but if you set up a minor committee, or a passive committee

Mr. BUCK (interrupting). It was not my understanding that this was to be that kind of a committee.

Representative MEAD. We have that kind of a committee now. That is the Committee on Expenditures.

Mr. BUCK. I can explain why your Committee on Expenditures does not function.

Representative MEAD. I mean the creation of the committee is perhaps another source of weakness and that you have placed too much confidence in it.

Mr. Buck. The reason it does not function at the present time is that it does not have adequate sources or agents through which it can draw the information to function with.

Representative GIFFORD. No administration that appoints this joint committee will even investigate its own expenditures.

Representative MEAD. You say, Mr. Buck, that you are having the Department investigate its own expenditures, then you are having a committee of this administration investigating its own expenditures. Representative VINSON. Is your joint committee to be a legislative committee?

Mr. BUCK. Yes.

Representative VINSON. Then you have immediately a conflict of jurisdiction with every committee of the House and Senate. Mr. BROWNLOW. Not a legislative committee, Mr. Vinson. The CHAIRMAN. He means composed of legislators.

Mr. BROWNLOW. I think he misunderstood the question. I think he thought you meant a committee composed of members of the legislature.

Representative VINSON. Of course, if he did not understand it his answer would not apply.

Representative MEAD. It would be merely a committee to check on expenditures.

The CHAIRMAN. Now, gentlemen, it is near 12 o'clock. I think we might conclude with the witness this afternoon, in spite of the fact that the Senate is in session. We will adjourn until 3 o'clock.

(The hearing was resumed at 3 p. m., pursuant to the recess.) The CHAIRMAN. The committee will please come to order. It was announced before the recess today that there were further questions to be asked of Mr. Buck. It is desired, if practicable, to conclude his hearing today. He has been here for several days and subjected himself to the processes of the committee. Does any Senator or Member of the House present on the committee desire to ask Mr. Buck further questions?

Representative COCHRAN. The only thing I would like to have Mr. Buck tell us-I think he ought to tell us if he can-is where some of these bad set-ups are in the various Government agencies as far as the accounting system is concerned, like he referred to in the Post Office Department and the Bureau of Internal Revenue. Do you know of any more situations of that kind?

Mr. Buck. Well, I don't know that I brought it out this morning, but I would say probably the Treasury has the worst set-up of any. Now, that may seem a rather extravagant statement, but it does have its accounting system terribly scattered.

Representative COCHRAN. Still you want to put the accounting in that Department.

Representative TABER. And yet you want to turn over to the same layout that is responsible for that Treasury set-up the entire job of auditing for the Government?

Mr. BUCK. On condition that the Treasury will be thoroughly reorganized, and a real genuine accounting system established. I think that even those who work in the Treasury appreciate that that is necessary at this stage in our fiscal development. I think this is the opportunity to pull those loose ends together and get a centralized system that will provide adequate controls and will produce information.

Senator HARRISON. Who is the accounting system under in the Treasury Department now?

Mr. BUCK. Who is it under? The appropriations part of it is under the Commissioner of Accounts and Deposits in the Bookkeeping and Warrants Division.

Senator LA FOLLETTE. Mr. Buck, in order to reorganize that there would have to be some action either by Congress or delegation of power in order to permit it, would there not?

Mr. BUCK. There would. You would either have to have statutory provisions or delegation of power.

Senator LA FOLLETTE. In other words, I mean is there something the Treasury can do at this time just because it happens that its system is not perfect?

Mr. BUCK. It could make some improvement in it, but it could not make as thorough a change as we are proposing. You see the Bookkeeping and Warrant is a statutory establishment set up in the Dockery Act of 1894.

The CHAIRMAN. You think the plan you have proposed here would accomplish that reform or correction?

Mr. Buck. I would think, Senator, it is an important step in that direction. With a few legal provisions and some qualified direction, I would think it could be done.

The CHAIRMAN. You think then there is not only necessity for an amendment of the law, but there is also a necessity for a change in the personnel in charge of it, is that the inference to be drawn from your last answer?

Mr. BUCK. No. I think, if the personnel were carefully selected, there is very good material over there for a reorganization.

The CHAIRMAN. In your opinion is the existing personnel, insofar as its supervisory authorities are concerned, adequate, or do you mean to say there ought to be a change in personnel?

Mr. BUCK. I would say that the personnel, if it were carefully handpicked, would be far superior to the system. In fact, the system is mostly at fault right now.

Senator BARKLEY. Would it be easy for men who have become habituated to that system to change their habits of thought and action so as to synchronize with a new and more modern set-up?

Mr. Buck. It might be advisable to have some new blood. It is always a good thing. You might bring in some departmental accountant. There are some very good departmental accountants.

Senator LA FOLLETTE. Mr. Buck, is it not a fact that this system, or the lack of a system, has grown up with the Government without very much restudy or resurvey until you find these complicated devices have become incrustated into the system of accounting, and that what is needed here now is a resurvey of the whole situation, and an attempt to reform it in the light of the enormous increase in the busi

ness which the Government of necessity has to transact? Is not that the situation we are confronted with?

Mr. Buck. I would say that is very close.

Senator LA FOLLETTE. You are not criticizing anybody in control or anything of that kind? It is just a situation that is here?

Mr. Buck. No. That is correct. I would say there are some men in the Treasury Department who have a very good grasp of the situation and are fully aware of the need for a new system of accounts. There are others, off in the eddies perhaps, who do not appreciate this need. They might appreciate it if they were put in a somewhat different position. But I should think the Treasury has some very good timber, from the point of view of personnel, to use in devising a new accounting system.

Senator HARRISON. If the committee should want to look into that further, who is the party up there that we might ask to come here and give us the information?

Mr. Buck. I should say Mr. Bartelt and Mr. Bell are as familiar as anyone with the accounting procedure. Certainly, I think Mr. Bartelt is quite familiar with all phases of it, and he has quite a liberal point of view on what ought to be done about it.

Representative COCHRAN. Mr. Buck, recently the Congress created what we call a Statistical Board, one of the duties of which was to cooperate with the various Government agencies and stop duplication and overlapping in statistics and to improve our system of gathering statistics. Would you suggest that it might be advisable for the Congress to set up by legislation a special committee for just a given period to improve the general accounting system of the Government, get a system that would be perfect to take the place of this system that you say is now imperfect? Would that be a good idea? Mr. BUCK. A committee might be helpful. I had not thought so much about the approach to the development of such a system as I had thought about the requisites of the system itself.

Representative COCHRAN. I do not mean a permanent board, but let them go to work on it and work out a new method that will bring the accounting up to date, taking advantage of all the new systems that have been worked out by private industry.

Mr. BUCK. Oh, those things are always helpful, you know.

Representative COCHRAN. Now, for instance, you have a bill pending in the House and a bill in the Senate, and you have had it in there for about 6 years, to provide a cost accounting system for the Government. It happens that we held hearings on that bill, and in the final analysis I would say that it was going to cost the Government millions of dollars with thousands of additional accountants if we put the system in force.

Mr. Buck. Of course, there are different types of accounting sys

tems.

Representative COCHRAN. Please explain.

Mr. BUCK. There are different types of accounting systems. I do not think that the Government needs any cost-accounting system that is nearly so elaborate as that of private industries. It is not ascertaining manufacturing costs, or anything of that kind.

Representative COCHRAN. That is what they wanted us to do. The accountants came before the committee and insisted we provide a cost-accounting system for the Government whereby we would in

clude the money that the Government would never expend, such as insurance, taxes, local, State and Federal, and all such things as

that.

Mr. Buck. I should say they are beginning at the wrong end of the thing. Cost accounts, as you know, are very detailed accounts. We have not yet a central accounting system, by which we can establish control and by which we can get full information on the operations of the Government. I should say we ought to begin up at the top and develop a central system first before we branch out into these detailed cost systems. I should think cost accounts would be advisable only in certain departments and certain corporations.

Representative COCHRAN. If we have an impractical system certainly it should be up to Congress to improve that system, if it is possible for us to do so.

Mr. BUCK. I should say you could give great assistance.

Representative COCHRAN. If it is possible for us to do it we should go ahead and do it, or should require the officials in charge to change the system so it would be up to date, and the more efficient it becomes the less it should cost.

Mr. BUCK. Of course, the way it operates now, the system has been creaking along almost on the point of breaking down of its own weight under the pressure of added expenditures and added work. Representative COCHRAN. You do not know where we might be able to get a paper that would set out in detail where these improvements can be made?

Mr. BUCK. I think such a paper could be worked up for you. Representative COCHRAN. I think it would be very valuable to the committee.

Mr. BUCK. Which would give you the details.

Representative COCHRAN. Yes.

Representative TABER. NOW, Mr. Buck, I have got in front of me this table on "Control of expenditures" that you brought in here a week ago. Under that set-up in the Treasury just what units would you have to handle this situation, whether or not they would be independent of each other, and just exactly how would they function; that is, would all these different units that you would have in the Treasury be independent of everything, and report direct to the Secretary of the Treasury, or would they be intertwined amongst themselves?

Mr. Buck. When you delegate functions such as we mentioned here this morning, that is, the revenue gathering to one unit of the Treasury, control to another, custody and disbursement to another, procurement perhaps to another, you have the functions pretty well separated. Perhaps there would be assistant secretaries in charge of each group of functions who would be permanent officers. Necessarily those different functions, although lined up under separate units, must be interrelated in procedure in order to pass the information along that is needed for financial control.

Representative TABER. How are you ging to have any kind of independent audit and have the head of the Treasury Department. himself, who is over your so-called auditing outfit, also be in charge of the disbursing outfit and the allotment outfit? Now, do you not think you are just giving the Secretary of the Treasury two contradictory functions that ought not to be under the same head at all!