SUBCOMMITTEE OF THE COMMITTEE ON APPROPRIATIONS, Washington, D. C. The subcommittee met at 2 p. m., in the committee room, Capitol, Hon. Kenneth McKellar presiding. Present: Senators Glass (chairman), McKellar, and McAdoo. Senator MCKELLAR. I will put in the record a letter from the Secretary of the Treasury dated February 13, 1936. (The letter referred to is as follows:) TREASURY DEPARTMENT, Washington, February 13, 1936. MY DEAR MR. CHAIRMAN: In response to your letter of February 6, 1936, with respect to the Treasury appropriation bill for the fiscal year 1937, H. R. 10919, I submit the following recommendations for amendments, which I hope the Senate Appropriations Committee may find it appropriate to adopt. The recommendations contained herein only cover such items as are regarded by this Department as of imperative necessity for the efficient conduct of the Department. Page 5, line 3, strike out "1,000,000" and insert "$1,099,140." The amount of $1,000,000 contained in the bill under "Expenses, Emergency Banking, Gold Reserve, and Silver Purchase Acts" for the Mint Service is $99,140 less than the estimate of $1,099,140 for this purpose submitted in the Budget. Every effort was made to reduce the estimate to the lowest possible minimum, and it is believed that any further reduction will seriously interfere with the carrying out of the various Mint Service functions under the Gold Reserve and Silver Purchase Acts. The great volume of gold and silver transactions incident to these acts is continuing, and there is no present evidence of any substantial reduction in such activities. The licensing of all dealers in and handlers of gold in the United States has placed a new and important function with the Mint Service; one which, in the Bureau alone, requires a staff of 36 clerks; another unit in the Bureau dealing with matters relating to silver requires 4 clerks, all this the direct result of new monetary policies. The Gold Unit, as now organized, is inadequate to handle the work required of it, much overtime service being necessary. Approximately 50,000 cases are in the live files of the Gold Unit, and the correspondence relating to them is enormous. An average of approximately 750 letters a day coming in must be considered and answered. There is submitted a table showing the increase in the number of deposits of gold and silver during the fiscal year 1935 over the year prior to the initiation of the President's policies: Attention is invited to the important fact that the Mint Service has turned into the general fund of the Government, in addition to the seigniorage on coinage, earnings totaling $4,090,570 for the fiscal year 1935 and $3,080,269 for the first half of this fiscal year. These figures testify to the magnitude of its task and emphasize that its earnings far exceed cost of operation. The very nature of the work of the Mint Service admits of no delay, because of the vast values tied up in the precious metals; also, the handling of the metal and the protection of it necessitates the employment of persons who are highly trained, physically robust, and honest, which service is costly. Replacement and repair of machinery necessitated by the extraordinary strain imposed upon it is another expense that cannot be evaded. Page 6, line 14, strike out "$520,000" and insert "$529,720." The estimate for 1937 under "Salaries, office of Chief Clerk and Superintendent", was reduced $9,720 to $520,000, the amount appropriated for this purpose for 1936. Since the appropriation for 1936 was approved, however, the commitment under this roll has been increased $13,000. In addition, the amount of $1,428 will be required to pay the char force for holidays, as provided in the act of August 23, 1935, making a total of $14,428. Even with the restoration of the amount of $9,720 eliminated by the House Appropriations Committee, it will be necessary to effect a saving of $4,708 on the basis of the present pay roll, and without being able to take over four guards at the Tower Building now on the rolls of the division of disbursement, funds for which were included in the estimate of $529,720 as originally submitted. Unless this item of $9,720 is restored, it will not be possible to carry the present personnel on this roll throughout the fiscal year 1937. It is, therefore, recommended that this item be increased to $529,720. Page 8, line 9, strike out "$150,300" and insert "$160,000." The estimate for "Contingent expenses, Treasury Department" was reduced $9,700 to the amount of the appropriation for 1936, namely, $150,300. The small increase requested above the amount of the 1936 appropriation is considered very conservative in view of the increased activities of the various Treasury bureaus whose needs are met from this appropriation. Certain charges, such as telephones, telegraph, maintenance and operation of motor equipment, upkeep of labor-saving machines, repairs to typewriters, electricity for ordinary use as well as for the operation of the newly installed air-conditioning machinery, must be met before consideration can be given to general items such as typewriters and labor-saving machines. In view of the fact that there appears to be ample justification for a larger amount than the estimate included in the Budget in order to meet the requirements of the various bureaus of the Treasury, it is recommended that the amount of $9,700 be restored. Page 9, line 22, strike out $279,520" and insert "$285,920." The estimate for "Salaries, office of Commissioner of Accounts and Deposits" in the Treasury bill for 1937 is $279,520, which is $6,400 below the Budget estimate. Notwithstanding the additional work thrown on this office as a result of the increase in the number of spending agencies and also increased appropriations generally for the various Government departments and establishments, the amount requested in the Budget for 1937 was the same as the appropriation for the fiscal year 1936. Furthermore, the full amount requested in the Budget will be required on the basis of present pay-roll commitments and in view of the overtime which already has become more or less a permanent condition. It is not seen how the reduction of $6,400 can be met without increasing the overtime work and consequently throwing additional burdens upon the employees concerned. There are several factors which it is desired to call to the attention of the Senate Appropriations Committee with a view to having the full amount requested in the Budget restored in the appropriation bill. The first is that the work of this office is either directly or indirectly affected by the activities of all governmental organizations, and, therefore, is in a sense beyond administrative control. That is, the volume of work cannot be contracted or suspended through administrative action. Secondly, the work is of such character that it must be kept current from day to day. Thirdly, the financing work in connection with the public debt and the liquidation of recoverable assets acquired under the recovery program will place upon this office a heavy burden for several years to come. Aside from the increase in work growing out of the expansion of Government activities, the work of the office has been further increased by statutory enactments during the last session of the Congress, notably the Permanent Appropriation Repeal Act, which reduced the negotiable period for Government checks from 3 years to 1, and which changed the accounting procedure for the handling of certain trust-fund transactions. The Social Security Act will permanently increase the work of this office, from both an accounting and financing standpoint, and the Adjusted Compensation Payment Act of 1936 will also increase to some extent the work of the supervisory staff during the remainder of this year and through the fiscal year 1937. These illustrations are cited only to show that practically all legislation enacted by Congress which carries financial provisions affects the work of this office, and the importance of maintaining the highest standard of service through the employment of adequate and qualified personnel cannot be overemphasized, particularly since the work must be exact and also current. In view of the above, it is urgently requested that the sum of $6,400 be restored to the estimate for "Salaries, office of Commissioner of Accounts and Deposits." Page 10, line 2, strike out "$1,273,210" and insert "$1,473,210." The estimate for "Salaries and expenses, Division of Disbursement" is $200,000 less than the amount included in the Budget for this purpose. It may be appropriately stated that in the preparation of the estimates of funds for this Division for 1937, especial care was exercised with the view to limiting the estimate to the very minimum believed to be necessary for the satisfactory performance of the duties of the Division. The statements and statistical tables submitted to the House Appropriations Committee, which are to be found in the committee hearings (pp. 164-191) set forth in detail the need for the amount requested in the estimate. In reporting the bill the House committee states that, while it is true that without an increased appropriation the division absorbed a large increase in work during the fiscal year 1935, it is the opinion that a consolidation as extensive as that by which this Division was established should result in a substantial saving in appropriation. As is shown in the statements and tables referred to, there was in the fiscal year 1935 a substantial saving represented in the absorption of a large volume of work with no increase in appropriation over what was made prior to the consolidation and on the basis of disbursements made during the fiscal year 1934. It is well to consider that from the beginning of operations by the consolidated Division of Disbursement conditions in all branches of the service have been unusual to the extent that complications heretofore not encountered have had to be met by the newly organized Division. It is confidently believed that under former conditions a greater saving would have been accomplished through the consolidation, and with continued effort in the development of improved methods it is fully expected that as conditions return to normalcy a greater saving may be accomplished through continued absorption of increased work. It is not, however, to be assumed that, with the expected improvement in business conditions generally throughout the country, the business of the regular establishments of the Government will be reduced during the coming year to the extent sufficient to justify the discontinuance of no less than 135 of the employees of this Division which will of necessity follow the proposed reduced appropriation. This would be a reduction of one-sixth of the number of employees engaged on the regular work. At this time there are on the rolls of the Division of Disbursement, exclusive of 474 employees maintained in connection with disbursements on account of operations of the Agricultural Adjustment Administration and exclusive of all personnel paid from emergency funds, 796 employees with annual salaries aggregating $1,411,000. Of these employees, 508 with annual salaries aggregating $876.420 are on duty in the Washington office, and 288 with aggregate salaries of $534.580 are assigned to the 19 regional offices in the field. In the estimate of appropriation for the Division of Disbursement it is shown that transfers of funds from appropriations for other activities, exclusive of funds of the Agricultural Adjustment Administration, to augment the amount to be appropriated for the Division of Disbursement, will amount at the maximum to $33,600. From this the following is developed : Appropriation recommended by the Appropriations Committee of the House___. Transfers__,__ Total available___ Required for present personnel__. Supplies and materials_ Communications. Travel_ Transportation of things_. Rent Repairs and alterations_ Equipment--- $1,273, 210 23, 600 1,306, 810 1, 411, 000 35, 000 14, 300 7, 200 7,700 16, 910 4,700 10, 000 Total required__. 1, 506, 810 Deficit___ 200,000 Any differences between the amounts shown above for personnel and for other objects and the amounts for the same objects as shown in the original estimate of appropriation are represented in amounts included in the original estimates to cover operations on account of the Agricultural Adjustment Administration, which amounts, it was estimated, would be transferred from the funds of the Agricultural Adjustment Administration and which are not considered in this statement. The present personnel of the Division is the very minimum that can be expected to handle the work on a current basis, and the amount proposed for objects other than personal services cannot be safely reduced. There is no branch in the entire organization wherein the personnel is not at the absolute minimum required, and with an appropriation of less than the amount requested, either a deficiency appropriation will be required or payments to public creditors will be seriously delayed, in which event losses to the Government of discounts allowed by vendors as a consideration for prompt payment will aggregate many times the amount of the reduction recommended by the Appropriations Committee. It should be recognized that the Division of Disbursement is purely a service organization for the payment of obligations of all branches of the Government authorized to incur obligations and obviously can exercise no control over the volume of work to be performed. Since the organization of the Division of Disbursement it has been necessary, in order to protect the interest of the Government, for the employees to perform a vast amount of overtime duty. In a single subdivision, wherein the greater portion of overtime duty has been necessary, an accurate record reflects overtime by 75 employees aggregating 1,704 days since July 1, 1934. If the funds requested are appropriated, it is not expected that overtime will be entirely eliminated, but with the reduction recommended, which can be met only through a reduction of personnel, either a vast amount of overtime or the curtailment of annual leave, or perhaps both, will be necessary, and with the best possible management payments cannot be maintained on a current basis. It will therefore be appreciated if you will give consideration to the restoration of the amount of $200,000 under this heading. Your attention is also invited to a change in the language of the appropriation act as submitted by the Bureau of the Budget, as follows: 66* * * Provided, That with the approval of the Director of the Bureau of the Budget, there may be transferred to this appropriation from funds available for new activities or for the expansion of existing activities or for those Federal agencies for which funds to meet the expense of performing the function of disbursement are not included in this appropriation, such sums as may be necessary to cover the expense incurred in performing the function of disbursement therefor." (P. 10, lines 3 to 11.) The language as recommended by the Appropriations Committee of the House will permit transfers of funds of the Agricultural Adjustment Administration, the Federal Housing Administration, Federal Prison Industries, and the Federal Savings and Loan Insurance Corporation only. If there are to be new activities created or if there be expansions of existing activities, whereby additional costs are involved in the function of disburse |