1 The changes in these items are reflected on the program and finance schedule.

61, 386

62, 361

66, 260

86, 360

55, 094

56, 668

60, 668

80, 668

6, 292

5, 693

5,592

5,692

Mr. ANDREWS. Are there questions?

INCREASE IN REVOLVING FUND RELATED TO INCREASE IN VOLUME OF

BUSINESS

Mr. LANGEN. I don't know whether I have understood all of this discussion correctly, but the revolving fund process started in 1962: is that right?

Mr. HARRISON. No, sir; it started in 1954.

Mr. LANGEN. It was increased in 1962.

Mr. HARRISON. In 1963 we got the first increase in the revolving fund.

Mr. LANGEN. That was an increase from

Mr. HARRISON. By $10 million.

Mr. LANGEN. What was it at the end compared to what it was before?

Mr. HARRISON. In the beginning it was $32,218,000; $32,218,000 to begin with, and then in 1963 there was $10 million added to that, making it $42,226,000.

Mr. LANGEN. You are now asking for an additional $20 million to be added to that?

Mr. HARRISON. Yes, sir.

Mr. LANGEN. So that from 1962 and if this should be approved now it would be a total increase in the revolving fund of some $30 million; is that correct?

Mr. HARRISON. That is correct. That would cover an increase in business from $42 million for plant work to $171 million for all work. Mr. LANGEN. $42 million when?

Mr. HARRISON. 1954. That was the volume of business the plant did.

Mr. LANGEN. What was it in 1962 ?

Mr. HARRISON. In 1962 it was $122 million.

Mr. LANGEN. And in 1963?

Mr. HARRISON. $129 million. In 1964, $136 million.

Mr. LANGEN. So in round figures from the time you received the last increase up until now there has been an increase in the business of something in excess of or approaching $40 million?

Mr. HARRISON. Yes, sir. 26 percent.

Mr. LANGEN. And this requires an increase in the revolving fund of $30 million?

Mr. HARRISON. No; $20 million, sir.

Mr. LANGEN. If you get the $20 million now plus the previous $10 million, the total request is $30 million.

Mr. HARRISON. That would be all that had been added to the revolving fund since 1954 when it was established.

Mr. LANGEN. This is quite true, but relating it to the period of the addition, and the point from which you start and the point where you are now, it means an increase, if this is granted, of $30 million in the revolving fund because of an increase in business of about $40 million?

Mr. HARRISON. Yes, sir.

Mr. LANGEN. How much has the inventory gone up during that time?

Mr. HARRISON. Twenty-six percent in that length of time. You will notice on page 2 of my statement I chart that out.

Mr. LANGEN. And that increase in inventory, a part of it, is due to increased prices of the commodity, whether it is paper or something else?

Mr. HARRISON. Some of that; yes, sir.

Mr. LANGEN. And some to volume. Do you have much greater volume now than you had in 1962 or 1963?

Mr. HARRISON. Yes, we do. It is a little difficult to give you a definite percentage of increase in volume because of the increase in prices and increase in wages. It all goes in to make up the figure, including the increase in cost.

An interesting observation, since 1954, when the revolving fund was established, from that date to the present, the volume has grown $100 million.

Mr. LANGEN. What puzzles me about all of this is the fact that there was an increase of $10 million beginning in 1963, actually, and that since that time there has been some increase in business, but at the same time the total amount of the revolving fund is used up in some fashion or another and it leaves, as indicated, a balance on hand today of $1.2 million. That must mean that during the course of this increase business there is at least $8 million-and I am sure you had some balance on hand prior to the addition of the $10 million-but there must have moved some $9 million into inventory, into outstanding indebtedness or into something, because the balance is down again. This would seem to indicate that there is a slippage of some kind, or the money is tied up in inventory or-I fail to see the exact need for this increase coming up so fast.

Mr. HARRISON. Well, it seems to me that it is a mathematical thing, Mr. Langen. It takes a certain amount of capital to operate a business of a million dollars a year. If you kick that volume up 50 percent, then you need 50 percent more operating money.

Mr. LANGEN. This is true, but let's not forget we appropriate money for salaries and so on.

Mr. HARRISON. No, you don't. No, sir. Not in our plant you don't. Mr. LANGEN. A part of

Mr. HARRISON. No, sir. Every last dollar that is spent for printing and binding in the Government Printing Office comes out of this revolving fund.

Mr. LANGEN. So it comes out of the revolving fund, but by the same token, let it be a revolving fund or let it be appropriated money; it all comes out of the income that comes in every day.

Mr. HARRISON. That is right, sir.

Mr. LANGEN. And as your business increases, the income that comes in every day is bound to go up along with it. If it doesn't go up, there is something wrong.

Mr. HARRISON. You have more work in process. You have to carry more. The greater your volume, the greater the amount of work in process and the greater accounts receivable and the greater the amount of material you have to have.

Mr. LANGEN. This I understand, and I understand it very well. By the same token, business having gone up by $40 million, requesting an increase in the revolving fund of $30 million seems a little out of pro

63-051-66—— -34

portion and it just kind of puzzles me as to why it is. Obviously with the business having improved, then the income every day ought to be greater.

The only slippage that would be involved in the revolving fund is what is tied up in either outstanding accounts or in inventory. There are two basic categories. There may be other smaller ones, and this seems like an awful rapid increase in those two items, on a $40 million increase in business.

Mr. HARRISON. Let me remind you, sir, the $40 million you are speaking about is as of the close of this fiscal year.

We are anticipating that this 26 percent increase will continue throughout fiscal year 1967 and this is what we are going to have to have to cover that.

We are trying to avoid having to come back for a deficiency before fiscal year 1967 is over.

We are going to be able to make it this year some way or another. We may have to do some advance billing. I mean this current fiscal year, but we are talking about the next 12 months after this year ends on June 30.

If this trend continues, at the current rate-and we don't see any letdown because each month this year has just shown a constant increase

Mr. LANGEN. What was your cash on hand at the end of fiscal year 1965 ?

Mr. HARRISON. $6,593,000.

Mr. LANGEN. So that within a period of 8 or 9 months that cash on hand has been dropped by more than $5 million?

Mr. HARRISON. Yes, sir.

Mr. LANGEN. So that drop has been-a major part of it has been within the last 8 or 9 months?

Mr. HARRISON. That is right. As I said earlier, the business in fiscal 1964 and 1965 leveled off and the fiscal year 1966 is where the big increase has come about.

Mr. LANGEN. This would be fiscal year 1966 according to this.
What was your business in 1965?

Mr. HARRISON. $137 million. That is jumping this year to $171 million so the big increase has been in this year. That has reduced our cash reserves.

Mr. LANGEN. What was the volume of business in 1964?

Mr. HARRISON. $136 million. Those are the 2 years that pretty well leveled out. In 1963 it was $129 million.

Mr. LANGEN. As I recall, when the $10 million increase was granted in 1963, applicable to fiscal year 1964, the big item then was the cost of inventory with the price of paper having gone up.

Mr. HARRISON. And the accounts receivable. It is the same identical problem we are faced with today because we jumped from $97 million in my first year to $129 million, and had jumped from the volume of $71 million in 1954, when the revolving fund was started, to $129 million in 1963 so we needed some additional cash in our revolving fund very badly.

Mr. LANGEN. Most of this business comes from the respective Government departments.

Mr. HARRISON. All of it does. Either the legislative, executive, or judicial.

Mr. LANGEN. So, putting all of this together, this is what accounts for the increased business we have been talking about.

Mr. HARRISON. That is right.

INCREASE IN CONGRESSIONAL PRINTING

Mr. LANGEN. How much of that increased business is legislative? Mr. HARRISON. 1962, legislative, appropriations obligated for that year were $14,400,000.

In 1963 it increased to $16,400,000. In 1964, $17,400,000. In 1965, $18,500,000.

Mr. LANGEN. I am puzzled somewhat about those increases. I am aware of the changes in demand as far as the sessions are concerned and so on, but looking at the chart we were talking about yesterday, for instance, I am kind of surprised to find there are six different items in there that are down from the request for fiscal 1956 and there are only four of them that are up and the unique part of that is which ones are down and which are up.

The Congressional Record being down, the miscellaneous publications being down; however, miscellaneous printing and binding is up substantially.

Mr. HARRISON. We will have to remember, Mr. Langen, these estimates were made nearly 2 years ago. From 9 to 21 months ago and, as I said, no one at that time expected worldwide problems to increase the way they have.

We feel now that this is too low, but we have now nearly 2 years of experience behind us in order to arrive at this conclusion. It is a case of an estimate based on the facts as we have developed them over the years. You just can't control trends. You have to live with them when they come and make the best of them.

Mr. LANGEN. I fully appreciate that. At the same time, I am wondering how you arrived at the decision that miscellaneous publications would be down substantially in 1967 whereas miscellaneous printing and binding would be up.

Mr. HARRISON. There is a great deal that history shows us at the Printing Office. For instance, at the beginning of a new session of Congress as a rule the printing doesn't cost as much. "As a rule," I

say.

In the second year of a Congress there is a greater demand for printing than there is in the first session. The first session is the shakedown session and although a lot of bills are dropped in, it is late before the committees are organized and before we really get to work.

Mr. LANGEN. You see, when you are making the comparison there, most of those factors would apply to all of these items

Mr. HARRISON. No, not necessarily.

Mr. LANGEN. I can't see where the printing and binding should be up as much as it is, and miscellaneous publications should be down.

Mr. HARRISON. It is a peculiar thing about congressional printing and the two sessions. In the first session of the Congress, they usually stay longer so your Congressional Record will run high, but they don't