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SALARIES, OFFICE OF COMMISSIONER OF ACCOUNTS AND DEPOSITS

of way.

The first item is the elimination of a $4,600 position in the office of the Commissioner of Accounts and Deposits, which is really in our economic section. We need that position in the worst kind

Senator Spoor. Who holds it now?

Secretary Muls. We have not been able to fill it. It has been vacant for some time. The economic section is the section on which we rely for all of our estimates, all of the expert breakdowns of the many economic problems that come to the department, and the preparation of the many letters which we have to send in response to all manner of economic inquiries.

The pressure of work on that particular bureau has been something terrible. The men and women in that bureau have worked, to my certain knowledge, every night and practically every Sunday for months. I consider that that position is absolutely essential, under existing conditions, to relieve the pressure on the members of the Bureau of Economic Research, and in order to permit us to function adequately, and to answer promptly all of the communications that come to us.

Senator Smoot. Was the necessity for the place called to the attention of the Appropriations Committee of the House ?

Secretary Mills. Not specifically, because we had not assumed that it would be eliminated. I think it was eliminated because there happened to be a vacancy which had not been filled.

Senator Jones. The vacancy has been existing since last July, Mr. Secretary

Secretary Mills. Mr. Senator, it is extraordinarily difficult to find just the kind of man we want for that kind of a position. It does not help us if we just take the run-of-the-mine economist. We want just the right kind of a man, because the force is a very small one.

Senator JONES. How long do you figure that you are going to have to wait before you get the right kind of a man? This position has been vacant since July.

Secretary Mills. I have spoken to Mr. Stark, and he thinks he has the man he wants now.

Senator JONES. Can he get the man?

Secretary Mills. Yes; I think he can get the man all right. It is taking a little time; but in our great organization I do think that the whole force working immediately under the Secretary of the Treasury is short-handed. I suppose it has always been that way, as Senator Glass will probably tell us; but I know that I am there myself until 7.30 every evening, and most of the men who are working immediately under me are there until 7.30. They are always available when I want them; and I know that a good many of them come back in the evening to work, and they work Sundays. There is a very real pressure there.

Senator Jones. Do you expect to fill this vacancy by finding some one in the present force, or are you looking outside?

Secretary Mills. We are looking outside.

EXPENSES OF RADIO ADVERTISING

Senator ODDIE. Mr. Secretary, the next item is on page 9, after line 16.

Secretary Mills. That is the question of radio advertising. We found, in connection with the refunding of the second and third Liberty loans, that the talk on the radio was cheaper than advertising in the papers throughout the country. We have not had occasion to use that appropriation since 1928. I do not know that we would use it next year; but if we do carry on extensive refunding operations next year it would be desirable to have it available.

Senator ODDIE. Your letter states that similar authority for the payment of radio services from expenses of loans has been carried in the appropriation acts since 1929, but has been eliminated by the House committee in the present bill.

Secretary Mills. Yes. We asked it in 1929. We have had it ight along, and we have not used it, because it has not been neces sary; but we should like to have it in the bill.

DISTINCTIVE PAPER FOR UNITED STATES SECURITIES

The next provision is a limitation on the price per pound that we may pay for distinctive paper. If we are to have competitive bidding, I do not see any occasion for this kind of a limitation; and if those who bid for the paper should not meet the price specified in the law, I do not know what the Treasury would do. With the proviso that has been inserted, permitting us to accept two bids, it seems to me that the Treasury is amply protected from the situation which, as you gentlemen know, has existed for some time.

Senator Smoor. Can the department secure paper of the highest type-which is necessary, I suppose, for the paper required under this amendment-at 38 cents a pound?

Secretary Mills. I think we might do so; but it is by no means sure, is it, Mr. Broughton?

Mr. BROUGHTON. It is not sure at all. We are paying 43 cents this year. As you know, prices have gone down to some extent; but there is no certainty. We have had no prices quoted at all.

Senator Smoot. What class of paper do you purchase?

Mr. BROUGHTON. This is the distinctive paper for money, bonds, etc.

Senator SMOOT. That is what I thought. That limitation has never been put in the appropriation bill before, has it?

Secretary Mills. It has never been put in before.
Senator Smoot. Do you know the reason why it was put in?

Secretary Mills. Why, yes. It was put in, I think, because of the situation which has existed for some time. The Crane Co. up to a few years ago was the only company that ever was in a position to bid. Subsequently other companies did bid, but they never were in a position to bid for the whole lot; and the Crane Co. for two or three years has made its bid in this form—that it would furnish all of the paper at a given price, which would be a low price, but if 100 or 200 tons were granted by the department to another bidder, then the Crane alternative bid was much higher.

The House has given us authority to split the awards, so that we can accept part from one bidder and part from the other. I think we can keep competition alive in that way, and accomplish all that really should be accomplished; but, theoretically, to have competitive bidding and give the contract to the lowest bidder, and then arbitrarily fix a price which is below the prevailing price seems to me to be a very unsound business practice.

Senator ODDIE. You do not oppose this House provision, then?

Secretary Mills. Yes; I do most decidedly oppose putting in a limitation of that kind.

Senator ODDIE. I refer to the last clause of the House provision.

Secretary Mills. The one authorizing us to split the award? We favor the last clause, Mr. Chairman.

Senator Oddie. I am referring to the last clause.
Secretary Mills. We favor that.

Senator ODDIE. There have been some experiments conducted in regard to the use of more cotton than linen in the paper. Do you think it is a practical thing eventually to use more cotton than linen?

Secretary Mills. Mr. Broughton tells me that when he was before the House committee, the committee asked him to go as far as possible in trying out cotton, and the department undertook to do it; but the committee was perfectly willing to leave it to the discretion of the department, with the understanding that they would proceed slowly along these lines.

Senator GLASS. Would not that make inferior notes?
Secretary Mills. That is the question.

Senator Smoot. That has been tried before, years ago, and proved a failure, I understood.

Mr. BROUGHTON. The House committee asked us if we would experiment gradually in introducing additional cotton, perhaps under different methods of manufacture, and see if we could produce a satisfactory paper with a larger percentage of cotton.

Senator Smoot. It is not mandatory?

Mr. BROUGHTON. Not at all. The paper now is 25 per cent cotton. Possibly it could be 30, 35, or 40 per cent cotton without impairing its quality.

Senator Smoot. Do you mean that the paper you are using to-day is 25 per cent cotton?

Mr. BROUGHTON. Twenty-five per cent cotton.
Senator SMOOT. When did you start that!
Mr. BROUGHTON. In 1925.
Senator Smoot. Has it been satisfactory?

Mr. BROUGHTON. Yes, sir. You see, after the war we went all linen.

Senator Smoot. You were all linen before.

Mr. BROUGHTON. It was all linen before the war. During the war it was necessary to have it all cotton. Then, when it was possible, we went back to all linen. Subsequently, it was the consensus of opinion of experts of the Bureau of Engraving and Printing, the contractor, and the Bureau of Standards, that part linen and part cotton would give us a more satisfactory paper; and three-fourths linen and one-fourth cotton has been standard for several years. Now the House Committee has asked us to introduce more cotton if it is found that it will produce a satisfactory paper.

this paper.

Senator Smoot. How are your tests on the present paper, which you say is 75 per cent linen and 25 per cent cotton?

Mr. BROUGHTON. Entirely satisfactory.
Senator Glass. How many tons do you use in the production of

Mr. BROUGHTON. Roughly, between ten and eleven hundred-a thousand tons, say, each year.

Senator ODDIE. But there is one point that must be borne in mind: The department must have the paper that it requires at the time it requires it.

Mr. BROUGHTON. That is true; and it must keep coming all the time, without interruption.

Senator Smoot. What about the wear generally on this new paper? Have you made an examination as to whether it is really as good paper as you had when it was all linen?

Mr. BROUGHTON. Yes; I think I can say that it is the opinion of the Treasury and of the Bureau of Standards that a part-cotton paper is equally good.

Senator Smoot. Do you use the long-staple cotton?

Mr. BROUGHTON. As to that, I can not tell you. It is new cotton cuttings.

Senator Smoot. Do you use the cuttings?
Mr. BROUGHTON. We do not use cotton direct.

Senator Smoot. You use the cuttings, the same as you use the cuttings of the linen?

Mr. BROUGHTON. That is right.

Senator SMOOT. So, of course, you could not tell whether it was long or short staple cotton.

Senator JONES. How do you determine the amount of cotton that is needed

Mr. BROUGHTON. It is determined on the recommendation or agreement of the Bureau of Engraving and Printing, the Bureau of Standards, and the contractor as to what is the proper percentage for the most satisfactory paper.

Senator JONES. Are they carrying on experiments all the time?

Mr. BROUGHTON. All the time-tests at the bureau and tests of the currency actually in circulation, to find how it wears.

Senator Jones. What are the prime necessities of the paper ?

Mr. BROUGHTON. First, it must be adapted for the wet intaglio process of printing. It must be able to withstand being wetted and dried without distortion. Then it must be uniform, so that one note will look like another note. Third, it must wear well when it is in use.

Senator Glass. The figures you gave me a while ago were the total tonnage, not simply the tonnage of cotton?

Mr. BROUGHTON. Oh, no. The tonnage of cotton would be onefourth of that_250 tons.

Senator BROUSSARD. A 5 per cent increase on that would not amount to much.

Senator Oddie. Then the question of the length of the use, irrespective of the durability of the paper, comes in pretty largely, because more grease accumulates through the use of automobiles to-day. Bills gather dirt and wear out more quickly because of the grease they accumulate.

Mr. BROUGHTON. I presume that is a fact, but we have not any data on that specifically. The currency wears about nine months in the case of the $1 bills, and longer in the case of the bills of higher denominations, at the present time.

Senator ODDIE. There will be other testimony on this matter, so we do not want to keep the Secretary too long on that. Have you any further questions?

Senator Smoot. No.

BUREAU OF CUSTOMS

Senator ODDIE. Mr. Secretary, what is the next question?

Secretary Mills. The next question, Mr. Chairman, relates to the positions of appraisers, comptrollers, and surveyors.

The House committee failed to appropriate for any of these positions with the exception of the appraiser at the port of New York. As I wrote Senator Jones, the Treasury Department is willing to go along with this program with the exception of the comptrollers. The comptrollers are those who audit the accounts of the collectors; and if there is to be a real audit, it seems to me that the comptroller should not be a subordinate of the collector, but rather should have equal rank with him. I think there is a very real distinction there. Sentaor ODDIE. They are both presidential appointees? Secretary Mills. They are both presidential appointees.

As to the general run of appraisers, we are not prepared to make any protest. Captain Eble tells me that in most of the ports the chief examiner can do the work, and we are not going to protest. I do make a distinction as to the comptrollers on a ground, which I think is a sound one.

Senator Smoot. What about the surveyors?

Secretary Mills. The surveyors, I think, we can dispense with, though I want to raise a question as to the position of surveyor at the port of New York.

The reason why the appraiser at the port of New York was retained was because the volume of business is such, and the organization is so large, that it was thought that he should be retained in order to have an administrative officer there of that rank. The appraiser has some 800 men working under him, and the administrative work is such as to justify retaining that position. That was the position taken by the House committee, and it is sound.

The surveyor at the port of New York has some 1,800 men working under him. He is really in charge of the outside force, working on the docks, and protecting the customs revenue by supervision and general police work. The present surveyor, Mr. Whittle, is a very competent man, who has made the position a very real position; and, as I wrote Senator Jones, I thought upon further consideration the reasons for retaining the appraiser of the port of New York applied with equal force to the retention of the surveyor. Before writing that letter I called up Mr. Byrns, and told him that on further consideration I thought that point ought to be made before your committee; and he said that while he would not assume, of course, to speak for the Committee on Appropriations, he thought it was perfectly proper for me to make that suggestion to you.

Senator Smoot. Do you think it is proper to have all the appraisers abolished outside of the port of New York?

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