I did not feel competent to settle those disputes between technical men. You get away from the subject and into the executive end of it, and a deputy commissioner would be foolish to try to pass upon a very complicated case. I did not do it and I do not know of any other deputy commissioner who has ever done it to any extent.

Senator COUZENS. You would have a great influence in cleaning up a case, would you not?

Mr. BATSON. Oh, yes. In other words, if a case was brought to my attention that upon complaint or otherwise showed that it had been unduly delayed, I would telephone to the head of the division in charge, the section chief in charge, and tell him I thought the case ought to be adjusted, it had been delayed long enough, or I saw no reason why they should not speed it up.

Senator COUZENS. Where is Mr. Chatterton now?

Mr. BATSON. Mr. Chatterton is in New York, Senator. I do not know just where; I know about where he is.

Senator COUZENS. Is he in like work with you?

Mr. BATSON. Oh, no.

Senator CouZENS. He is not?

Mr. BATSON. He is with a private concern.
Senator KING. With a law firm?

Mr. BATSON. He was not; Mr. Chatterton was not a lawyer and I think he is with English Brothers, a realty firm, or something of that sort. Just what his work is I do not know.

Senator KING. Is he practicing before the department?

Mr. BATSON. He is not to my knowledge. I do not think he ever has.

Senator COUZENS. Are you working for any clients that had claims before the bureau when you were there?

Mr. BATSON. I am not working for any clients in connection with any claims that they had before the bureau while I was there, to my knowledge, Senator. Everything that I am handling so far as I know are matters that have come up since I left. I would not knowingly handle anything else.

Senator COUZENS. But you may have some clients that you met while you were at the bureau, would you not?

Mr. BATSON. I do not have a single client that I know of that I met while I was in the bureau; no. I will tell you how most of cases come if you would like to know.

Senator COUZENS. I would be very much interested.

Mr. BATSON. Usually from reference, out of town reference to represent clients who simply want local counsel who is familiar with the procedure more than anything else.

Senator COUZENS. How do these references come to you?

Mr. BATSON. I suppose they know me by reputation; I do not know.

Senator CouZENS. It seems to me rather strange that these lawyers from out of town would suggest to their clients that they go to you when you had not been set up here very long as a practicing lawyer.

Mr. BATSON. I do not know that there is anything strange about it, Senator; it might appear that way but I do not think so.

Senator COUZENS. Did you write to any lawyers drawing their attention to the fact that you were engaged in this line of business in Washington.

Mr. BATSON. No, I did not; unless you would say that I would like to show you my announcement card and my stationery, and my personal cards, the only ones I have ever used, sir.

Senator COUZENS. Mr. Batson's announcement card says:

Edward H. Batson announces that he has resumed the practice of law with offices in suite 712, Southern Building, Fifteenth and H Streets N. W., Washington, D. C.

Did you send these cards out to law firms throughout the country? Mr. BATSON. I sent them to my old home men who knew me when I was practicing in Kansas City. I sent some to lawyers that I knew; I sent some over to New York, Senator, not very extensively. Senator COUZENS. I would like to know how these lawyers got your name to refer these people to you.

Mr. BATSON. I suppose they heard of me in connection with tax matters. Of course, I was pretty well known in matters that pertain to taxation.

Senator COUZENS. How did you get known like that concerning taxation; because of your position in the bureau?

Mr. BATSON. I suppose so, Senator; yes, sir.

Doctor ADAMS. Does not the deputy commissioner personally sign a great deal of the correspondence?

Mr. BATSON. He signs a great deal of it personally, and a lot of it goes out over his signature signed by subordinate officials in typewriting "E. H. Batson, Deputy Commissioner," by the chief of the section who signed it.

Senator COUZENS. That is probably the way these lawyers knew of your position.

Mr. BATSON. I suppose that is one source of their information; yes. Senator COUZENS. Have you any suggestion as to how the efficiency of the bureau could be improved?

Mr. BATSON. I had hardly expected such a question, Senator; but I studied that very proposition for five years, and gave it a lot of thought. Since getting out I have sort of been content to "let George do it." I am interested in it. I do think this: That above all you must look after your employees a little better; you must house them better; you must pay them better.

Senator KING. Do you mean by housing putting the employees of the Treasury Department that are now in one or more buildings into one building?

Mr. BATSON. Precisely. You have this sort of a situation here. You have a factory turning out a very delicate product. If they want a part, or a screw, they have to send out to this place for it; if they want something else they have to send to that place; and if they want an additional thing they have to send to a third place.

The buildings they occupy are very much crowded; the danger of fire is enomous; and it is necessary to keep the bulk of the returns in one fireproof building and send to the other buildings just enough "raw material" to keep the "mechanics," so to speak, busy; and you have to cart them back and forth. That cannot be helped; that is the situation; nobody is to blame.

Senator COUZENS. If properly housed could the force be reduced? Mr. BATSON. Well, within a short time, yes, Senator, but I should not say that it could be reduced right now by getting into a new building.

I think the peak of this situation has passed and I think if the bureau is separated and given resaonable facilities and the money to better pay its employees, that it is but a question of time when they will pull out. They have been under a full load by reason of this war condition. I remember when I was in charge for the two years the returns, for instance, that came in in the spring of 1921, truck loads of them-I had them piled up on tables and on the floors until along in August, with no place to file them, and the only way we were ever able to get them away was to find some temporary space in some old building and move out some of the oldest returns to replace with the newer ones. That is occuring right now every year, to my knowledge.

Senator KING. A witness the other day testified, as I recall it, that with proper housing facilities, assuming the work now being done would be continued at that time, you could reduce the force 25 per

cent.

Mr. BATSON. Well, I think the Colonel is a little optimistic. I think it can be done inside of a year if there are proper housing facilities. You could not just move these people into a new building and say "Now we are going to cut your force 25 per cent," and expect to go right off.

Senator KING. You now occupy three buildings-the Treasury Department Building proper, the one across the street that you call the annex?

Mr. BATSON. Yes.

Senator KING. By the theater?

Mr. BATSON. Yes.

Senator KING. And another one. Say now that the Veterans' Bureau were allocated to the Treasury Department, would that building provide the housing facilities that were necessary to discharge the duties of the Treasury Department?

Mr. BATSON. If you mean to give the Bureau of Internal Revenue the Veterans' Building you would have your housing problem solved. I figured on that very thing once myself. I think it would hold them; I think it would be a wonderful thing.

Doctor ADAMS. You do not mean the prohibition unit, too?

Mr. BATSON. I do not know that it means the whole thing, because they are not related subjects at all.

Doctor ADAMS. Do you think the possibility of higher salaries for some of the key men would enable the savings among other employees to make up for their salaries?

Mr. BATSON. I do not catch your question, Doctor.

Doctor ADAMS. In other words, most of the witnesses called seemed to think that higher salaries are necessary. Does that mean

that your total appropriation would be higher, or that the higher salaries for some men would enable savings to be made so that the bureau could get along with its present appropriation, or perhaps even with smaller appropriations?

Mr. BATSON. I do not know an employee there that is overpaid. Doctor ADAMS. Then you think it is necessary to have larger appropriations?

Mr. BATSON. For the better class of men particularly.

Doctor ADAMS. If you had more better class men could you spare a considerable number of the subordinate men being paid smaller salaries?

Mr. BATSON. Eventually, Doctor, but not right off. I have heard that advanced before. It sounds good, but it is not practical.

Senator KING. Isn't it your experience that it would not be long after they got one increase before they would want another increase? Mr. BATSON. People are never satisfied, Senator. Real human beings are never satisfied; and you can not expect men to sit down there and pour over these returns, go through these complicated cases, cases that are complicated even to the best talent of the commercial world, for a mere pittance when they meet figures running into the millions of dollars, and hundred of thousands of dollars; you can not expect to keep them satisfied.

Senator KING. Don't you think they would take into account this fact: That this is a contingency; that when these returns are audited and settled; when we get back to Mr. Harding's "normaley" that they will feel that they have their positions and whatever advantages accrue from retirement, and the limited hours which they work, and the freedom from the combats and contentions and difficulties encountered in private activities?

Mr. BATSON. I never regard any Government job as certain, Senator.

Senator KING. Well, it is as certain as civil service can make it? Mr. BATSON. I know; at least I have heard of any number of employees who have been discharged not because of any wrong doing, but because a reduction of personnel was necessary. number of them were good employees, too.

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Senator KING. The personnel was greatly increased by reason of the war from 37,000 in the District to over a hundred thousand. Obviously there must be a reduction in the civil-service list, as well as in the noncivil-service list.

Mr. BATSON. The personnel of the Income Tax Unit was never sufficient, no matter how much you increased it; it was never sufficient to cope with the situation. I remember when I came in in

1918 I looked about the room. I saw the lame, the halt, and the near blind. They were trying to make high-class auditors out of school-teachers. They could not compete with the commercial world. People who were not in the Army were drawing enormous salaries, and we were struggling along for a year and a half or two years with that class of employees, and we never were able to get real men-people of experience until after the war really when there was a depression in business. Then we were able to get a few for the price we were authorized to pay; and through all that period this congestion was accumulating.

The CHAIRMAN. As rapidly as men became expert in your department they were gobbled up by private corporations?

Mr. BATSON. We could not hold them; we could not tell them to get to work or else get out and take a pick and shovel.

Doctor ADAMS. Do you regard the constant resignation of men as responsible in any material way for delay in settling cases?

Mr. BATSON. I do not know what the resignation rate is at this time, but two and three years ago the resignation feature was something terrible. I think the turnover was at one time around 35 per cent or around 37 per cent a year. I do not know what the resignation situation is now, but it is bad enough, from all I gather.

The CHAIRMAN. What is it now, Mr. Nash?

Mr. NASH. About 20 per cent.

The CHAIRMAN. Now?

Mr. NASH. Yes. The gentleman in charge of the Atlanta (Ga.) office was in my office this morning and told me that out of 70 employees, since last August he has had 27 resignations.

Senator KING. Were those collectors?

Mr. NASH. Agents and inspectors, the men who are examining income-tax returns in the field.

The CHAIRMAN. What salary do they get on an average?

Mr. NASH. They average about $2,500.

Senator KING. What is the maximum they get?

Mr. NASH. $4,000 for inspectors and the man in charge gets from $4,000 to $5,000.

Mr. BATSON. I think it will average less than that, from my knowledge, about $2,500.

Mr. NASH. The field agents at Atlanta average $2,500, but the general average over the country is less than that because a great many of them enter at $1,800, which is the entrance salary, and we have been able to make only one promotion a year. We made a promotion a year ago last March, and we made a second promotion on March of this year; and we have been severely criticized by the appropriations committee and the Bureau of the Budget for doing it. Doctor ADAMS. I would like to ask Mr. Hartson whether it is necessary to keep constantly after a case to get action on it.

Mr. HARTSON. I think not. Within the past few years they have inaugurated inventory systems, and they have been checking up the divisions to see that they keep as near current with their work as possible.

Doctor ADAMS. Mr. BATSON, speaking from your experience as a tax lawyer, do you think it is really necessary to get a tax lawyer to keep after an important case if you want to get a really prompt examination of it?

Mr. BATSON. I do not think so, Doctor.

Senator COUZENS. What do people get a tax lawyer for if it is not to expedite their cases through the department?

Mr. BATSON. They usually get a tax lawyer, I suppose, Senator, for the same reason that a man gets a doctor when he is sick. Senator COUZENS. Then the taxpayers are sick.

Mr. BATSON. In many cases, yes; they do not understand the complicated law; and you can not expect them to understand it, as often as it is changed.

Senator COUZENS. Have you any suggestions as to how the organization of the bureau might be corrected so as to speed it up?

Mr. BATSON. I think from my observation, and it is only an observation at the most, Senator, that they are doing very well over there in the way of organization and reorganization and tightening up. I have noticed that they have eliminated a lot of sections that were considered necessary during the war; they are coordinating sections and making the organization more compact. It strikes me they are on the right road, Senator.

Senator KING. Is it more than two; are there more than two sections combined there?

Mr. BATSON. I am speaking now from observation over a period of a year. I see they have abolished several sections and combined other sections, and so on.