cents, because the stamps sold only run around $18 million a year, or about $1.5 million a month. There is not a lot of money involved, but they feel that the effect on the youth of our Nation in stimulating thrift is a very important program. (Discussion off the record.) Mr. GARY. Mr. Steed? Mr. STEED. No questions. REDEMPTIONS SUBJECT TO FEE Mr. GARY. Will you bring up to date for the record the table of redemptions subject to fee appearing at page 17 of the urgent deficiency hearings of 1958? Mr. KILBY. Yes, Mr. Chairman. I have that table with me and it shows the final figures for both fiscal year 1957 and fiscal year 1958. Mr. GARY. We will insert that table in the record at this point. (The material referred to follows:) ($11,191,555) ---- 89, 890, 025 Mr. GARY. Thank you, gentlemen. Mr. KILBY. Thank you, Mr. Chairman and members. Subtotal 21, 575, 675 Grand total ($11,531,986) 92, 456, 612 BUREAU OF CUSTOMS SALARIES AND EXPENSES Mr. GARY. Next we have the Bureau of Customs. The appropriations for the Bureau for 1958 were $48 million; the appropriation in 1959 is $48 million; as a supplement there is an estimate of $150,000 which will bring the proposed total for 1959 to $48,150,000. We will insert pages 15, 16, and 17 of the justifications in the record at this point. (The pages referred to follow:) SCHEDULE OF SUPPLEMENTAL APPROPRIATIONS AND REVISED ESTIMATES Salaries and expenses, Bureau of Customs, 1959 9. Estimated supplemental required_ 10. Estimated supplemental included in latest budget.-. 11. Date needed: For obligation, July 1, 1958; for expenditure, July 23, 1958. 12. Estimated expenditures from supplemental: In current fiscal year In next fiscal year.. After next fiscal year.. Total...--- 13. Actual obligations last 3 months: None. GENERAL STATEMENT In budget 13, 812, 580 14, 131, 605 57, 256, 000 57, 106, 000 150, 000 150, 000 Revised 143, 100 6, 900 150,000 The salary rates of certain types of employees in trades, crafts, and manual labor occupations are established by local wage boards in conformity with the Wages of comparable private employment in the community. The determinations of these wage boards are binding upon agencies having such employees in those areas. PURPOSE AND NEED FOR SUPPLEMENTAL FUNDS This supplemental covers a number of wage adjustments which have been made since the submission of the 1959 budget. Customs workload continues to increase. In 1959, even with the same appropriation as was available in 1958, the absorption of additional retirement contributions and normal personnel cost increases will mean that Customs must operate with nearly 100 less man-years of employment. This supplemental will permit the retention of the employment level proposed in the President's budget and approved by the Congress. The absorption of these costs would mean the loss of an additional 30 man-years of employment to customs. This supplemental will be applied by activity as follows: Activity No. 6. Executive direction_... Activity No. 1. Assessment and collection of duties, taxes, and fees... Total.... 150, 000 Mr. GARY. We have with us this morning Commissioner Kelly of the Bureau of Customs and we will be glad to hear from you at this time, Mr. Kelly. GENERAL STATEMENT Mr. KELLY. Mr. Chairman, before we make our presentation I would like to pay a tribute to Congressman Ben James, who was my Congressman for many years. He was not only a great Congressman for his district but a great Congressman for the United States. I would be very happy to make this tribute at this time. Mr. GARY. Thank you, Mr. Commissioner. We all agree with you, I assure you. Mr. KELLY. Mr. Chairman, I am here to present a supplemental appropriation request for the Bureau of Customs for fiscal year 1959, amounting to $150,000. The reason for making this request is to recover a wage board increase quite general throughout the country. Our workload has increased approximately 6 percent in this fiscal year 1958 and there is every evidence it will continue to increase during fiscal year 1959. There is every evidence that it will increase at least the same amount and we think even a greater amount. I just visited the port of Seattle and also the port of Los Angeles and in each of those two areas the increase was over 10 percent at the present time over the corresponding period last year. We also have & problem coming up of handling jet planes which will be in service by the end of this year. We also have the St. Lawrence seaway which will open up in 1959, and our whole business in general will increase. It is startling to me how many people are going abroad. I bought a few geraniums last Saturday at a modest country stand.. The lady who sold them to me and her daughter are going to fly to Germany next month. They have never flown before and never been abroad. That is typical of the whole country and the whole country seems to be going abroad. We have to handle them when they come in and the reason we need this increase is so that we will not have to reduce our force and so that we can handle satisfactorily the increase in travel and also in trade. The $48 million for fiscal 1959 that you gentlemen appropriated for us, or recommended for appropriation, is the same as the preceding year, but with increased personnel costs, it will give us 94 less men than the current year. As I stated, we can handle our job quite well with an appropriation of $48 million, but if we are forced to absorb this $150,000 it will mean a further decrease of 30 men which, again, will cause us to reduce our services by that number of people. I am making this request for the supplemental appropriation for the Bureau of Customs and I will be very happy to answer any questions. regarding our work or workload. DECREASE IN ESTIMATED REIMBURSEMENTS Mr. GARY. On page 15 of the justifications, additional amounts available are shown at $9,106,000. The budget for 1959 at page 799 shows these items at $9,650,000. What is the reason for the reduction? Mr. GATCHELL. That was a decrease in our estimated reimbursables, primarily in overtime. We brought it up to date as best we could at this time and our reimbursables are running slightly under the estimates. We have adjusted the 1959 estimate accordingly. OBLIGATIONS FOR ADVANCED PROCUREMENT Mr. GARY. How much of the $340,000 estimated to be obligated in 1958 for advance procurement has in fact been obligated? Mr. GATCHELL. Mr. Chairman, I cannot say exactly how much has been obligated to date, but we have issued authorizations to obligate, and they will be obligated before the end of the year. We had authority for $150,000 in equipment and we have issued authorizations up to $145,000. On the supplies side, we had $180,000, and we have issued author izations to approximately $105,000. 27544-58-2 EFFECT OF INCREASE ON EXECUTIVE DIRECTION Mr. GARY. The wage-board adjustments, which are the indicated bases for this supplemental, appear to include two employees in the District of Columbia. Of the cost increase, these 2 account for $520. On what basis is $300 of that ascribed to activity No. 6, "Executive direction"? Mr. GATCHELL. One of those employees is on the collector's force at Baltimore and is, therefore, in activity No. 1, the "Assessment and collection of duties, taxes, and fees." The other one, the $270 man, is on the rolls of the Bureau here in Washington and we get to $300 by adding his proportionate share of the additional items, such as the 261st day, group insurance and retirement contributions. There is but one of those men in activity No. 6. The other one is in activity No. 1. NECESSITY FOR SUPPLEMENTAL AT THIS TIME Mr. GARY. Why is this item necessary now when there will obviously be a further increase required for classified employees pay? Mr. GATCHELL. Sir, I can say only that we are under instructions from the Department and the Bureau of the Budget to submit this estimate at this time. INCREASES IN CUSTOMS WORKLOAD Mr. CANFIELD. Commissioner, it is interesting to hear your statement that it is almost startling the number of people that are traveling and so many of them going abroad these days. You accompany that statement by figures showing an increased workload and in numerous important port areas. Would you say that these are signs of a general betterment in conditions in our country today, economic conditions? I Mr. KELLY. There is no recession in our business, Mr. Canfield. would say that universally I do not know of any district that does not have an increase of some size. These which I mentioned are two on the heavy side and I just happened to be there. I would say that in every district there is some increase and at least 6 percent in 1959 over 1958. I would estimate that it would be between 6 and 10 percent. That is not only an increase in collections but an increase in activities, invoices, paperwork, people traveling, and so forth, in all of our activities. Mr. CANFIELD. When you say further that you are operating in fiscal 1959 with 94 fewer employees and if you do not get this $150,000 additional you will be operating with another deficit of 30 employees in 1959, does that mean in any sense that essential obligations of the Customs Department will be lessened? Mr. KELLY. No, sir; but there will be some increase liquidation and other backlogs. Mr. CANFIELD. You will suffer? Mr. KELLY. Yes. We will definitely slip back and we will also process people a little slower. It is again the straw on the donkey's back. You do less and less. It will not be measurable, but there will |