81st Congress, 1st Session House Report No. 627 INQUIRY INTO CERTAIN OPERATIONS OF FEDERAL PRISON INDUSTRIES, INCORPORATED, BASED ON GENERAL ACCOUNTING OFFICE AUDITS FIRST INTERMEDIATE REPORT OF THE COMMITTEE ON EXPENDITURES IN THE Hearings held by the subcommittee appointed MAY 18, 1949.-Committed to the Committee of the Whole House LETTER OF TRANSMITTAL Hon. SAM RAYBURN, HOUSE OF REPRESENTATIVES, Speaker of the House of Representatives, Washington, D. C. DEAR MR. SPEAKER: By direction of the Committee on Expenditures in the Executive Departments, I submit herewith the first intermediate report of its subcommittee. WILLIAM L. DAWSON, Chairman. INQUIRY INTO CERTAIN OPERATIONS OF FEDERAL PRISON INDUSTRIES, INCORPORATED, BASED ON GENERAL ACCOUNTING OFFICE AUDITS MAY 18, 1949.-Committed to the Committee of the Whole House on the State of the Union and ordered to be printed Mr. DAWSON, from the Committee on Expenditures in the Executive Departments, submitted the following FIRST INTERMEDIATE REPORT OF THE GOVERNMENT OPERATIONS SUBCOMMITTEE OF THE COMMITTEE ON EXPENDITURES IN THE EXECUTIVE DEPARTMENTS On May 18, 1949, the Committee on Expenditures in the Executive Departments, had before it for consideration the report of the subcommittee inquiry into certain operations of Federal Prison Industries, Incorporated, based on General Accounting Office audits. After full consideration of the report as submitted by the subcommittee, upon motion duly made and seconded, the report was unanimously approved and adopted as the report of the full committee. The chairman was directed to transmit a copy to the Speaker of the House. INTRODUCTORY STATEMENT Federal Prison Industries, Incorporated, is one of 85 Government corporations engaged in business activities, including production, transportation, power, housing, insurance, and banking. In the early history of the Federal Government, the corporate form of Government agency was simple and rarely employed. The use of this type of organization gained some impetus during the World War I period, when 19 corporations were created, a number of them for the purpose of aiding the war effort. The economic emergency period of the 1930's witnessed a pronounced change in the Federal Government's role in promoting the "general welfare." This change was accompanied by an accelerated use of the Government corporation as a means of avoiding the complications of the established Federal system and as an answer to the need for a higher degree of autonomy and flexibility in conducting |