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I do not feel that this committee, nor would the Members of Congress want to see a situation come about where there would have to be an appropriation for the continuation of this operation. I do not believe that is the desire of the Congress.
It may well be that, given sufficient time, the facility once again may operate on a more sound fiscal basis than it is today. I pointed this out in a letter addressed to Mr. Coar on the 19th of May, and I have a reply to that letter from Mr. Coar.
Certain accounts receivable have been recommended by the General Accounting Office. Whether or not that can be implemented remains to be seen. And without taking further time of the committee, I might say, that I have considered this from several different angles, and I am not a radio or television technician; however, I have considered this along with Mr. Trice with a view to bringing about, in all fairness, a better administration of this facility, and I trust that we will arrive at some answer which will bring about that result.
That is all I have to say at this time.
COST OF OPERATIONS
Mr. BUSBEY. What was the cost to the Congress for the operation of this facility in fiscal year 1952, and what is the estimated cost for 1953?
Mr. Coar. I can go from the General Accounting Office report only, because up until the first of this year, slightly before that, we were privileged to have an employee of the Stationery Room, who was an accountant, audit our books once a month, and prepare & financial statement for my use. I have not had his services available, although I have asked for them several times, since this man died, which was last fall some time--Mr. Morrison was his name. He did a very good job in analyzing our accounts, accounts receivable and accounts payable, and the inventory that we had on hand.
He prepared a rather thorough statement of our conditions, comparable to a business statement, such as any business house would normally use, showing the total operations. We used that to guide
And, I asked for an increase, a very small increase, to cake care of the increased cost of records. We did not get the increase that was asked last fall. It was asked last fall; it was not asked in January. Therefore, not having had the monthly statement available to me, I am depending upon the General Accounting Office audit that was made the first of the year, as is customary in the change of administration, and it was a very thorough one.
And, according to their statement, which I believe is thoroughly accurate, at the end of the year, on January 3, 1953, there had been taken in a total, net sales, of $373,613
Mr. BUSBEY. That is not what I wanted. I am asking what was the cost of this operation to the Congress.
Mr. COAR. Actually the cost to the Congress, if you take money earned into consideration, there has not been any up until this point.
Mr. BUSBEY. There has been a net profit?
Mr. COAR. Yes, up to the 3d of January of this year, up to that time, there was $23,882 over and above the cost of materials and the cost of salaries.
Mr. BUSBEY. That includes overhead?
Mr. Coar. Yes.
Vír. Coar. I mean by that that they have ti ken the entire gross
Mr. BUSBEY. Yes.
Mr. Busbey. Where does that balance of $23,000 show up?
Mr. Busbey. In order to get at the cost that I am trying to arrive
Mr. Coar. Yes, but we have done that. That is just the point I
Mr. Busbuy. You had added the salaries that had been appropri-
Mr. Coar. Yes. The appropriated salaries, and this is the net
Mr. BUSBEY. Should not the balance go up, then, by $160,000, if
Mr. Coar. There has been no amount set up for that. What
Mr. Busbey, I may be wrong, but according to my way of thinking,
Mr. Coar. No. The $184,000 was the total put out for the cost of
Mr. Coar. The total cost of equipment is represented in this
Mr. BusBEY. Your inventory is how much?
Mr. BUSBEY. You are valuing the equipment that you have at $108,000; is that right?
Mr. COAR. The difference between the $108,000 and the $124,000 represents the merchandise
Mr. BUSBEY. That would be about $ 16,000.
Mr. BUSBEY. Where is the cash? Between the $184,000 and $124,000 is about $60,000. Is it kept in a special account?
Mr. COAR. Yes.
Mr. Coar. It is kept in the National Capital Bank. I will have to check these figures, to see what the cash is.
Mr. BUSBEY. Unfortunately I have not seen the balance sheet of the operation, so I am not familiar with the exact figures, although I think there should be about $60,000 somewhere.
Mr. COAR. It was in the bank, cash in bank, $60,908.
I do not want to take a great deal of the time of the committee, Mr. Chairman, but before we mark up the bill I would like to study the balance sheet.
Mr. Bow. Mr. Coar, as of March 1, additional positions were placed on your rolls which increased salary costs approximately $23,000?
Mr. COAR. Yes.
EXPLANATION OF OPERATIONS
Mr. Coar. I would like, if I may, to have the privilege of making an explanation of this operation.
When it was decided a little over a year ago by the Speaker of the House and Mr. Biffle, and a number of Members of the House and Senate, that the expenditure was to be made for this motion-picture facility, at the time when I presented the estimated cost of operation to them I clearly indicated that the film facility would not be selfsupporting within the first year. In the testimony that I gave in 1947 before Senator Bridges, as the Chairman of the Senate Appropriations Committee, I said that the radio facility, if it were set up, would in my judgment, become self-supporting within 3 years.
That judgment has subsequently proved to be correct, because the facility, with the first year's operation, according to the General Accounting Office report, reflected a deficit the second year broke even but the third year made up the deficit for the first year's operation.
I made the same statement concerning the operation of the film facility, that it could not possibly become self-supporting within a year, that it would be an impossible thing to do.
Mr. BUSBEY. Does each Member reimburse you?
Now, I can understand Mr. Snader's feeling about the situation as it stands, from the standpoint of the vouchers that come to him, because, as busy as Mr. Snader has been, it is almost impossible to get sufficient time to go over complete operations and analyze them. The expenditures that are disturbing him, I believe are expenditures for capital assets, and the cost of equipment which was necessary in putting in the motion picture operation.
Now, those expenditures have been completed, as I indicated, with the exception of two items, and there are no requirements for any additional capital expenditures. Normally we would not expend any money unless we are operating. In other words, we would not buy films for any long period ahead and hold them in stock. We would use film only if Congress is in session, and we would not have expenditures for film otherwise.
As I indicated before, there will be no further expenditures for capital equipment.
I wanted to make that clear, but as I indicated, according to my present analysis of the motion picture facility, the same thing is true as occurred with respect to the radio facility operation. It has made a good profit, and has been entirely self-supporting. Just as the film facility soon will be.
It looks now as if film operation will wind up this year with a deficit of about $13,000, but next year with an election coming along, We are bound to get a much greater demand for more film and for more radio programs.
FINANCIAL PROCEDURES Mr. Busber. What committee passes upon the policy with respect to the purchase of equipment, and things of that kind?
Mr. Coar. I report direct to Mr. Snader, and Mr. Trice, and on purchases that are necessary for the operation of the motion picture facility, we make out requisitions and send them to both Mr. Snader and Mr. Trice for their approval. There has never been any committee set up to guide or control it. Heretofore it has been done by Mr. Roberts and Mr. Biffle, under the direction of the Speaker and the Vice President.
Mr. Busbey. Do you have the right to draw checks on this account with the National Capital Bank?
Mr. Snader. The only right I have is to sign the checks, drawn for functions of this facility which requires the joint signature of Vir. Trice and myself.
Mr. Busbey. Let us say that this operation goes on for a period of 5 years and the balance on hand in the bank is $150,000, where do Pou meet charges on that? Mr. Snader. It remains in the fund that is available only for use of the motion picture and radio facility.
There is currently before the House Administration Committee a request from the chairman of that committee, in a resolution which will have the effect of transferring the fund to the Treasury to earmark the fund, I understand.
However, the Clerk of the House and the Secretary of the Senate both must sign any checks for the disbursement of any funds in the bank, which are kept in the National Capital Bank.
Mr. BUSBEY. Somewhere along here provision should be made to Can give the Members that do use the facilities—I do not happen to one of them—the benefit of lower cost to them if the status of the fund would permit.
Mr. SNADER. I agree very much. As to the current rates, I believe Wi. Mr. Coar made the statement the rates were determined by Mr. Trice and myself.
The rates presently in effect were submitted at a meeting in the office of the Secretary of the Senate, before the Speaker of the House and the Chairman of the Senate Rules and Administration Committee, by Mr. Coar, with the understanding that there was sufficient margin in those rates to take care of depreciation and the cost of taking care of Members with a minimum of profit.
In Mr. Coar's reply to me and to Mr. Trice he stated that was one astrol contributing factor for the lowering of rates on January 3, 1953, by all approximately one-half the scheduled charges which had originally al been set up.
Is This can either be on the record or off the record, at the pleasure of the chairman and the members of the committee.
I take the position that I am happy we have cut those rates one-half. If it were possible to cut them three-fourths and still have a going operation, I would be in favor of that. And the representation was made to all concerned at that time that there was a sufficient amount in those rates to take care of the operation. I reiterate, I believe that there is, with proper administration.
The cold hard facts of this are simply this, gentlemen, and we may as well talk about it: Mr. Coar has stated and has written me that we now no longer have to make large expenditures from this fund. I trust that is true, because from a $61,000 cash position as of January 3, 1953, and when I sign some $26,000 of checks that are in my office at the moment, we will be down to around $26,000 in the bank. That is exclusive of $68,000 worth of salaries that are being charged out of the appropriations. If we were paying salaries today out of this supposedly self-sustaining operation, we would have been closed some 3 months ago.
I am not a technician in this field, but I am in effect, without benefit of legislation, along with Mr. Trice, of the Senate, charged with this operation, and if it becomes defunct, or if it ceases to operate because of poor administration and poor business practices, I am in effect charged with my share of that responsibility. I am not so concerned about that, but above that, it will be the end, I fear, of a service of which a great number of members avail themselves, and I think they should avail themselves of that service--it is very goodbut I maintain that an operation can show a profit, can charge a reasonable rate, and still give the members a service at the least possible cost.
Mr. BUSBEY. It is not a self-sustaining operation. We are appropriating for the salaries.
Mr. Snader. The audit will show it was a self-sustaining operation up to January 3. Those figures look nice, but it certainly has not been a self-sustaining operation since the first of the year. It may well be that it will come back in another year, but I am a little con