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existing law the Service is not authorized to use its funds for this purpose. In consequence, patients and members in hospitals and homes have been denied the facility for cashing their checks at canteens, which occasions a certain amount of hardship, and authorized patrons are denied the ordinary commercial facility of making purchases with payment by check.

In the event this proposal is enacted, it is not the intention of the Administrator to institute a general check-cashing service at canteens but to limit same strictly by regulations. Cash at canteens is not normally available in amounts to make possible the cashing of salary checks of employees or personal checks for large amounts. It is contemplated that personal checks, money orders, etc., in only small amounts as limited by regulations, would be cashed and that cashing of Government checks would be limited to those issued to veterans in payment of benefits under laws administered by the Veterans' Administration. Under the administrative controls which will be established, it is believed that losses from uncollected checks would be nominal. Such losses at all canteens prior to the ruling of the Comptroller General mentioned above amounted to approximately $100 and they should be nominal under the strict administrative controls which will be put into effect if the proposed authority is given.

The proposed amendment to section 4 of the act, which provides for financing the Service through a revolving fund, would modify that section in conformity with the substantive changes proposed in the amendments to subsection (e) of section 2. Another substantive change, however, would be made in section 4 in that the Service would be authorized to pay premiums on fidelity bonds of its employees. It is highly desirable that all canteen employees be bonded due to the loss hazard inherent in the type of business done. Merchandise is more apt to be stolen than ordinary supplies in view of the ready market, and specific individual accountability is not possible. Canteen employees are drawn from a more transient class than the average Government employee and it is impracticable to require the purchase of individual bonds by canteen employees at the high rate demanded for such bonds, due to the comparatively low “take home" pay which is common to retail business. To impose this burden on canteen clerks, all of whom have access to merchandise, would make it extremely difficult to secure the necessary employees and provide the required service. . Commercial enterprises of a similar type generally bear the fidelity bond expense for all employees on a blanket basis and the value of this protection as a necessary business cost is universally recognized in such businesses. The cost to the Service of a blanket bond would be approximately $3,000 per year, or about one-third the aggregate cost of individual bonds. Although the total dollar saving effected through the protection of fidelity bonds is not susceptible of exact measurement, the deterrent effect of such bonds, the investigative facilities of the surety and the actual recoveries facilitated thereby would more than justify the expense.

The principal effect of the proposed bill would be to transfer a major item of cost in the operation of the Veterans' Canteen Service from appropriated funds of the Veterans' Administration to funds of the Service, which would make the Service self-sustaining except for the space, equipment, and services authorized to be furnished by the Veterans' Administration without reimbursement under sections 2 (c) and 2 (d) of the act. This would not increase the cost to the Government and appropriated funds of the Veterans' Administration would be relieved of approximately $1,137,000 annually as follows: The charge of approximately $1,125,000 a year for salaries and expenses of employees now being paid from Veterans' Administration appropriations would be transferred from Veterans' Administration appropriations to the funds of the Canteen Service, and approximately $12,000 a year would be transferred from funds of the Service to appropriations of the Veterans' Administration as reimbursement for utilities furnished. Based on operating experience to date, it is believed that the Veterans' Canteen Service can assume this additional cost of operation and still furnish veterans in hospitals and homes merchandise and service at reasonable prices as contemplated by the act.

It is believed important that this proposed legislation be enacted and there is enclosed another draft bill entitled "A bill to provide that all employees of the Veterans' Canteen Service shall be paid from funds of the Service, and for other purposes,” which is identical with S. 2772, Eightieth Congress. It is requested that this proposed legislation be introduced and considered for enactment.

Advice has been received from the Bureau of the Budget that there would be no objection by that Office to the submission of the proposed legislation to the Congress. Sincerely yours,

CARL R. GRAY, Jr., Administrator,

RAMSEYER RULE

In accordance with clause 2a of rule XIII, House of Representatives, the changes made in existing law by the bill are shown as follows (existing law proposed to be omitted is in black brackets; new matter is in italics; existing law in which no changes are proposed is shown in roman):

Subsections (d) and (e) of section 2 of Public Law 636, Seventy-ninth Congress:

(d) To [furnish] transfer to the Service [for its use such] without charge, rental, or reimbursement such necessary equipment (,) as may not be needed for other purposes, and furnish the Service such services and utilities, (and service, including light, water, and heat, as may be available and necessary for (such] its use [, without charge, rental, or reimbursement except that reasonable charges shall be paid by the Service for electricity and gas furnished for purposes of cooking, refrigeration, and power.] : Provided, That reasonable charges, to be determined by the Administrator, shall be paid annually by the Service for the utilities 80 furnished.

(e) To employ such persons as are necessary for the establishment, maintenance, and operation of the Service, C.] and to pay the salaries, wages, and expenses of all such employees from the funds of the Service. Such personnel shall be excluded from the determinations and reports required by section 607 of the Federal Employees Pay Act of 1945, as amended (5 U. S. C. 947), with respect to personnel ceilings. Personnel necessary for the transaction of the business of the Service at canteens, Farehouses, and storage depots shall be appointed, compensated from funds of the Service, and removed by the Administrator without regard to civil-service laws and the Classification Act of 1923, as amended: Provided, That such employees shall be subject to the Veterans' Preference Act of 1944, the Civil Service Retirement Acts, and laws administered by the [United States Employees' Compensation Commission] Bureau of Employees Compensation applicable to civilian employees of the United States. [Personnel, other than those employed at canteens, warehouses, and storage depots, shall be employed and paid from Veterans Administration appropriations for salaries and expenses as normal Veterans' Administration employees and assigned, detailed, or loaned to the Service without reimbursement by the Service.]

Section 2 of Public Law 636, Seventy-ninth Congress, is amended by adding a new subsection (k) at the end thereof:

Sec. 2. The Administrator of Veterans' Affairs, hereinafter called the Administrator, is authorized and directed

(a) To establish, maintain, and operate canteens where deemed necessary and practicable at hospitals and homes of the Veterans' Administration and at other Veterans' Administration establishments where similar essential facilities are not reasonably available from outside commercial sources.

(b) To establish, maintain, and operate such warehouses and storage depots as may be necessary in operating the canteens.

(c) To furnish the Service, without charge, rental, or reimbursement, for its use in connection with the establishment, maintenance, and operation thereof, such space, buildings, and structures under control of the Veterans' Administration as he may consider necessary, including normal maintenance and repair service thereon.

(d) To furnish the Service for its use such equipment, utilities, and service, including light, water, and heat, as may be available and necessary for such use, without charge, rental, or reimbursement except that reasonable charges shall be paid by the Service for electricity and gas furnished for purposes of cooking, refrigeration, and power.

(e) To employ such persons as are necessary for the establishment, maintenance, and operation of the Service. Personnel necessary for the transaction of the business of the Service at canteens, warehouses, and storage depots shall be appointed, compensated from funds of the Service, and removed by the Administrator without regard to civil-service laws and the Classification Åct of 1923, as amended: Provided, That such employees shall be subject to the Veterans' Preference Act of 1944, the Civil Service Retirement Acts, and laws administered by the United States Employees' Compensation Commission applicable to civilian em.

ployees of the United States. Personnel, other than those employed at canteens, warehouses, and storage depots, shall be employed and paid from Veterans' Administration appropriations for salaries and expenses as normal Veterans' Administration employees and assigned, detailed, or loaned to the Service without reimbursement by the Service.

(f) To make all necessary contracts or agreements to purchase or sell merchandise, fixtures, equipment, supplies, and services, without regard to section 3709 of the Revised Statutes of the United States (41 U. S. C. 5), and to do all things necessary to carry out such contracts or agreements, including the making of necessary adjustments and compromising of claims in connection therewith.

(g) To fix the prices of merchandise and services in canteens so as to carry out the purposes of this Act.

(h) To accept gifts and donations of merchandise, fixtures, equipment, and supplies for the use and benefit of the Service.

(i) To make such rules and regulations, not inconsistent with the provisions of this Act, as he considers necessary or appropriate to effectuate its purposes.

(j) To delegate such duties and powers to employees as he considers necessary or appropriate, whose official acts performed within the scope of the delegated authority shall have the same force and effect as though performed by the Administrator.

(k) To authorize the use of funds of the Service when available, subject to such regulations as he may deem appropriate, and without regard to the provisions of sections 3639 and 3651, Revised Statutes of the United States, as amended (31 U.S.C. 621, 549), for the purpose of cashing checks, money orders, and similar instruments in nominal amounts for the payment of money presented by veterans hospitalized or domiciled at hospitals and homes of the Veterans' Administration, and by other persons authorized by section 3 of this Act to make purchases at canteens. Such checks, money orders, and other similar instruments may be cashed outright or may be accepted, subject to strict administrative controls, in payment for merchandise of services, and the difference between the amount of the purchase and the amount of the tendered instrument refunded in cash.

Seotion 4 of Public Law 636, Seventy-ninth Congress, is amended to read as follows:

Sec. 4. To finance the establishment, maintenance, and operation of the Service there is hereby authorized to be appropriated from time to time such amounts as are necessary to provide for (a) the acquisition of necessary furniture, furnishings, fixtures, and equipment for the establishment, maintenance, and operation of canteens, warehouses, and storage depots; (b) stocks of merchandise and sup plies for canteens and reserve stocks of same in warehouses and storage depots; (c) salaries, wages, and expenses of all employees; (d) administrative and operation expenses and premiums on fidelity

bonds of employees; and (e) adequate working capital for each canteen and for the Service as a whole. Amounts heretofore or hereafter appropriated under the authority contained in this Act, as amended, and all income from canteen operations become and will be administered as a revolving fund to effectuate the provisions of this Act, as amended.

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81st CONGRESS , HOUSE OF REPRESENTATIVES 1st Session

SURVEY AND STUDY OF THE POSTAL SERVICE (UTILIZATION OF RAILWAY MAIL CARS AND STORAGE CARS ON THE RETURN MOVEMENT)

MAY 5, 1949.—Committed to the Committee of the Whole House on the State of

the Union and ordered to be printed

Mr. Rees, from the Committee on Post Office and Civil Service,

submitted the following

REPORT

(Pursuant to H. Res. 176—80th Cong.)

Pursuant to authority contained in House Resolution 176, approved June 5, 1947, the Committee on Post Office and Civil Service made a survey and study of the postal service. The purpose of the survey and study was to determine where savings may be made in order to reduce the $500,000,000 deficit facing the Post Office Department this year. The Post Office and Civil Service Committee requested the Comptroller General to make a study of methods which might be used in order to reduce the amount of space on railway mail cars for which the Post Office Department, under tariff's established by the Interstate Commerce Commission, is required to pay but does not use.

The letter of the chairman of the committee requesting this study follows:

HOUSE OF REPRESENTATIVES,
COMMITTEE ON Post OFFICE AND CIVIL SERVICE,

Washington, D. C., December 26, 1947. Hon. LINDSAY C. WARREN,

Comptroller General, General Accounting Office, Washington, D. C. DEAR GENERAL WARREN: During the course of our survey and study of the postal service our attention has been directed to the practice of deadheading railway mail cars. Under the tariffs authorized by the Interstate Commerce Commission for the carrying of mail, the railroads receive the same amount per tar-mile for empty railway mail equipment as though such equipment were completely utilized.

At times the Post Office Department itself uses this empty space to transport bee and other equipment of the postal service. The railroads, however, do not use this space since if they do they receive less than if it were deadheaded. I am sure that the Government is paying many thousands of dollars in transportation charges to move, under Government bills of lading, material and equipment

for Government departments other than the Post Office over the same routes that this empty equipment is moving,

In discussing the matter with one of the Commissioners of the Interstate Commerce Commission, he voiced the opinion that there should be no objections to using this empty space to move Government supplies and equipment.

I am writing you with the thought that some procedure can be worked out wherein this space may be utilized for Government shipments with a resulting saving to the Government. Sincerely yours.

EDWARD H. REES, Chairman. The Comptroller General, in his letter transmitting the report, points out that the Post Office Department, under present Interstate Commerce Commission rates, pursuant to existing law, pays approximately 100 percent higher for returning an empty mail car from the west coast to the Atlantic seaboard than the commercial rate for full car shipments by freight and states:

To correct this condition and at the same time effect a considerable savings to the Government it would appear advisable to amend the existing law in such manner that the responsibility for returning equipment would be that of the carrier, and to provide for an adjustment of rates to compensate somewhat for the loss of revenue to the carriers. Justification for such revision seems fully apparent in view of the reported substitution by the railroads of different equipment for the return trip in a deadhead status and the use of the space, originally paid for, to any service in the carriers' interests. Such practice would tend to offer the opportunity to the carriers to use the return trip for the transfer of unserviceable equipment to repair points at Government expense and generally appear to operate to the advantage of the carriers only.

The Comptroller General also recommends procedures which could be carried out under present law which would result in a savings to the Government as follows:

(1) All mailable matter of the Government agencies which could use space now deadheaded should be sent through the Post Office Department.

(2) Many Government departments are sending shipments through Railway Express at a much higher cost because they do not have facilities for transporting it to the post office. The Post Office Department should extend a pick-up service to Government Departments in such cases.

(3) Government departments should pay the post service at the regular postal rates, arranging for the interchange of funds through the use of postage stamps.

The report of the Comptroller General and his letter of transmittal follows:

GENERAL ACCOUNTING OFFICE,

Washington, September 17, 1948. Hon. EDWARD H. REES, Chairman, Committee on Post Office and Civil Service,

House of Representatives. MY DEAR MR. CHAIRMAN: Further reference is made to your letter which was received in this Office on December 29, 1947, acknowledgment of which was made by Office letter dated January 5, 1948, wherein you were advised that the matter of utilization of deadhead railway mail space for the transportation of Government shipments would be made the subject of investigation and study and that you would be further advised with respect thereto when report thereon had been completed.

The matter has been made the subject of study and investigation and the report thereon, prepared by representatives of this Office, is transmitted herewith for the information of your committee.

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