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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 this paper.

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.

cuttings.

Senator SMOOT. Do you use the cuttings?

Mr. BROUGHTON. We do not use cotton direct.

It is new cotton

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 SMOOт. 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?

Secretary MILLS. Yes; I think administratively it is perfectly possible.

Senator ODDIE. Are there any questions on that matter?

Senator MCKELLAR. Mr. Secretary, as I understand, then, it meets your approval to abolish these 29 appraisers, with annual salaries aggregating $153,800, and that much will be saved?

Secretary MILLS. There are 15 appraisers, Senator.
Senator MCKELLAR. It says here 29.

Secretary MILLS. There are 29 positions all told.
Senator MCKELLAR. Oh, yes-29 all told. Very well.

Senator GLASS. Take some of the ports inferior to New York. How would your combination of the positions affect those ports? Secretary MILLS. I have talked to Captain Eble, the commissioner; and he tells me he is here to speak for himself that at most of these other ports the volume of business is such that the chief examiner can be designated the appraiser and handle the work. In the port of New York, in addition to the actual technical work of appraisal, the force is so large and the volume of business is such that I think it justifies the position of an administrative officer at the head of the entire organization who does not have to deal with the technical side.

Senator BROUSSARD. Will not the chief examiner have to be replaced in his position while he is doing this other work?

Secretary MILLS. He will do his work as chief examiner and perform the administrative duties of the appraiser, and he can handle both tasks at most of the ports in the United States.

Senator BROUSSARD. Will it require an additional man to balance his present position?

Secretary MILLS. I think not; and the Committee on Appropriations of the House has forbidden us to go out and get an additional

man.

Senator BROUSSARD. I want your opinion about it, Mr. Secretary. Secretary MILLS. Yes; we are willing to accept the change. Senator BROUSSARD. What is your opinion about it? Take the port of New Orelans, the second port in the United States: Will this affect it in such a way that you will have to put another man in the place of the chief examiner?

Secretary MILLS. I think not.

Senator BROUSSARD. In other words, what I am driving at is this: If you are just going to change the name and abolish the office, and then put another man in his place, there is not much economy accomplished.

Secretary MILLS. There is no economy there at all; and if that were the situation, Senator, we would not be here accepting the House limitation.

Senator BROUSSARD. You see, Mr. Secretary, frequently heads of departments feel obligated, under the rules of the Budget, to come here and agree with the Budget. We are trying to find out what actually is your opinion with reference to the abolishment of all these offices, disregarding the Budget and disregarding the House of Representatives.

Secretary MILLS. I tell you in all sincerity that we are willing to accept this cut, with the exceptions I have stated.

Senator MCKELLAR. I want to say that that is fine.

Senator SMOOт. There are 300 of them now, approximately?
Secretary MILLS. There are 300 ports of entry.

Senator SMOOT. You have appraisers at each one of them?
Mr. ELBE. We have acting appraisers in 285 of them.

Senator SMOOT. There are 16 of those that are Presidential appointments. Now you want but the one at New York?

Mr. EBLE. Yes, sir.

Senator SMOOT. And you are willing to have the others abolished?
Mr. EBLE. Yes.

Senator SMOOт. That is very good work, if it can be done.
Senator MCKELLAR. I am tickled to death.

Senator ODDIE. At this point I desire to place in the record letters from the Secretary to Congressman Louis Ludlow, of the House, and to Senator Jones, which tell the story clearly.

(The letters are as follows:)

Hon. LOUIS LUDLOW,

House of Representatives, Washington, D. C.

TREASURY DEPARTMENT, Washington, March 5, 1932.

MY DEAR MR. LUDLOW: I have your letter of February 20, 1932, relative to the proposal to abolish the offices of surveyors, comptrollers, and appraisers of merchandise in the Customs Service.

There are practically 300 ports of entry, and surveyors and comptrollers are appointed by the President at only seven of these ports. While there are appraisers at practically all of the 300 ports, only 16 of them are presidential appointees. The others are designated and appointed by the Secretary of the Treasury, but have all of the authority of an appraiser appointed by the President.

In the interest of economy and in cooperation with the Congress I see no objection to the elimination of the presidential offices of surveyors and appraisers, except the appraiser at the port of New York.

The situation with respect to comptrollers is quite different. The office of comptroller of customs, formerly known as naval officer, has existed since the foundation of the Government. He is a presidential appointee the same as the collector of customs, and acts entirely separate from and independent of the collector. The law requires that he shall verify all assessments of duties and allowances of drawbacks made by collectors, and in case of disagreement between him and the collector he shall report the facts to the Secretary of the Treasury for his decision. He is also required by law to examine the collector's accounts of receipts and disbursements of money, and receipts and disposition of merchandise, and certify the same to the Secretary of the Treasury for transmission to the General Accounting Office. There is a complete examination of every transaction by the collector and the comptroller, each independent of the other.

It seems proper that the officer whose duty it is to review and revise the collector's account should not be of less rank than the collector himself. Differences necessarily arise and both officials should have equal standing. I think, therefore, that there are sound practical reasons for retaining the comptrollers of customs as presidential appointees.

I assure you of my desire to cooperate in every way in reducing the expenditures wherever it may be done without injury to the service.

In accordance with your request, I am attaching a list of the ports at which surveyors, comptrollers, and appraisers are appointed by the President and the receipts from customs at those ports for the fiscal year 1931.

Very truly yours,

Hon. WESLEY L. JONES,

Chairman Committee on Appropriations,

OGDEN L. MILLS, Secretary of the Treasury.

TREASURY DEPARTMENT, Washington, March 12, 1932.

United States Senate, Washington, D. C.

MY DEAR SENATOR: In connection with the proposed legislation abolishing the presidential offices of surveyor, comptroller, and appraiser of merchandise in the Customs Service, I stated in a letter under date of March 5, 1932, ad

dressed to Hon. Louis Ludlow, chairman of the Treasury and Post Office Subcommittee of the Committee on Appropriations of the House of Representatives, in reply to an inquiry from him, that in the interest of economy and in cooperation with the Congress, I see no objection to the elimination of the presidential offices of surveyors and appraisers, except the appraiser at the port of New York.

After further and very careful consideration I now wish to make another exception, in addition to the appraiser at the port of New York. This second exception is the position of surveyor at that port. The reasons for concluding that the position of surveyor should be retained at New York are similar to those which governed in the case of the appraiser.

In addition to the supervisory officers and clerical force which are carried on his pay roll, numbering 125, the surveyor has supervision over 589 inspectors, 634 customs guards, and 458 laborers, who, while they are paid on the rolls of the collector, perform their duties under the direction and control of the surveyor. In other words, what is known as the outside force, embracing the inspectors, customs guards, and laborers referred to, perform their official duties under the jurisdiction and direction of the surveyor. That officer, therefore, directs the activities of a total of 1,806 employees, more than 48 per cent of the total customs employees at the port of New York.

The New York customs organization collects approximately 60 per cent of the total customs revenue. This means that this one port collects more duties than the other 46 customs collection districts throughout the continental United States and Hawaii. No other surveyor has under his direction a force in any way comparable to that operating under the New York surveyor, the next largest force being less than one-sixth of that of the New York surveyor.

The work connected with the collection of the vast customs revenues received at that port, handled by the outside force at New York, covering a water front of approximately 700 miles; the magnitude of the problem of baggage examination there; and the direction of the many and varied activities of the outside force, combine, I believe, to make the retention of this position desirable in the interest of efficient administration.

I am inclosing a copy of my letter of March 5, 1932, to Representative Ludlow, in which I recommend that the position of comptroller of customs be retained at all the ports where it now exists.

Very truly yours,

OGDEN L. MILLS, Secretary of the Treasury.

PUBLIC BUILDING, SEGUIN, TEX.

Senator ODDIE. All right. What is the next item?

Secretary MILLS. The next item is on page 35, lines 4 to 7. That proviso makes it mandatory to construct a post office on the site now owned by the Government.

Senator SMOOT. That is under "Public buildings."

Senator ODDIE. This, I understand, will upset the policy that is now being followed by the department.

Secretary MILLS. Under which the discretion is vested in the Secretary of the Treasury and the Postmaster General.

Senator BROUSSARD. Has there been undue delay there, Mr. Secretary? What is the purpose of this provision? What is the reason for it?

Secretary MILLS. To be honest, I do not know the history of this particular item; but Mr. Martin is here. What is the reason for this?

Senator MCKELLAR. That is the post-office building at Seguin, Tex.

Mr. MARTIN. Before the public-building program was started, the Government had accepted a donation of a site at Seguin in May, 1914. This site was located at a place that was considered all right at that time, and probably is all right now.

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