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all this kind of work to them. In other words, these fellows are hard-working men.

INFORMATION POSITIONS HAD PRIOR BUDGET APPROVAL

Mr. DENIT. I would like to add in that connection, with reference to the budget handling of this part of the organization that the Budget Bureau allowed all of those positions in the ceiling determination and in the apportionment for the last quarter of the current fiscal year. We did staff completely, however, and in the man-year showings, for the fiscal year 1945, we do reflect a less expenditure than that which we are proposing for 1946. That is merely due to the difficulty of recruitment of the men. The Budget Bureau did go into that matter very thoroughly several months ago, and did allow the positions in the last quarter of the current year.

SALARY AVERAGE AND PROMOTION OF EMPLOYEES

Mr. WIGGLESWORTH. Now, you also presented to this committee a statement of salaries in the higher brackets, reallocations upward during the past year sometime.

According to my mathematics, that shows a salary average in the department of about $3,500, and in the field a salary average over $3,000. Something less than 50 percent of your total personnel in the $3,200 bracket or above received promotions during the past fiscal year. I do not know if you care to comment on that, but I just wanted to make that observation for the record.

Mr. MAVERICK. We will be glad to comment on that fully, and we will, too.

Mr. DENIT. I might say, in that connection, that the promotion policy of the Corporation has been as stringent as we could make it.

The personnel office has had constant instructions not to make exceptions to Civil Service Regulation 257 which provides that a man serve at least a year in his present grade before he can receive a promotion of $600 or above.

I would like to call the attention of the committee to the fact that the rate of turn-over in war agencies is extremely high, and on our average figure we run about 6-percent turn-over and, therefore, the promotions we made must be analyzed in view of 104 high-bracket vacancies caused by this turn-over problem.

We are consttnaly reducing the turn-over, I might say, and in the face of far less enterprising conditions, from a recruitment standpoint, we now have it down to 4 percent, and it is steadily declining, as we build up our administrative procedure and policy.

Mr. WIGGLESWORTH. If I understand your report, it shows 822 persons have been promoted in the upper brackets that I referred to, and that is 822 out of a total personnel of 1,789.

Mr. DENIT. Mr. Wigglesworth, I do not believe that those figures are entirely accurate. I read from our report to you. Of a total personnel of 1,727 there were 99 promotions of employees who received a base pay of $3,000 or more per annum. That 99 promotion figure compares with a turn-over of 104 people.

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Mr. WIGGLESWORTH. Will you state that again? Mr. DENIT. There were 99 promotions of employees who received a base pay of $3,000 or more per annum during the current fiscal year. I am quoting you our letter of April 17 to you, sir. I think you will find that the eight-hundred-odd figure to which you refer represents the number of people in the agency who receive better than $3,000 per annum.

Mr. WIGGLESWORTH. That is 822 out of the one thousand-seven-hundred-odd personnel were in the upper brackets, but only 99 of those in the upper brackets received promotions? Mr. DENIT. That is right.

CAPITAL OF CORPORATION

Jr. WIGGLESWORTH. Now, you had $150,000,000 capital to start with. That is, available for loans and expenditures.

Mr. MAVERICK. It has been increased to $350,000,000.
Mr. WIGGLESWORTH. When was the increase, I forget ?

Mr. MAVERICK. The increase was the last authorization of the previous Congress, and then we got an additional appropriation of $50,000,000. In other words, we have, you might say, roughly speaking, $200,000,000, and we have for future authorizations, $150,000,000. We have not asked for that because we have not thought it necessary. As soon as this legislation comes in we will ask for it if it is necessary, but not unless it is necessary.

Mr. WIGGLESWORTH. Of the $350,000,000 you have drawn down in loans, and so forth, to the extent of $200,000,000?

Mr. DENIT. We have obtained appropriations for that amount$200,000,000.

Mr. MAVERICK. Yes.

BALANCE SHEET OF CORPORATION

Mr. WIGGLESWORTH. Well, as the loans are repaid, do those go into the Treasury or are the receipts used in the nature of a revolving fund?

Mr. DENIT. They are returned to the working capital of the Corporation.

Mr. WIGGLESWORTH. Of the Corporation?
Jr. Denit. Yes.
Mr. WIGGLESWORTH. How much do you have available now?

Mr. DENIT. As at March 31 we had cash in the Corporation in the amount of $120,987,420.62. Against that is a reserve of $63,011,396.54 for unpaid commitments on loans and losses. That is, for example, where we have a loan, in which there is a provision that only a certain amount may be outstanding at any one time a funded reserve is set up against our total cash asset value.

Mr. WIGGLESWORTH. Can you give for the record a table that will gire that over-all picture?

Mr. DENIT. I shall be glad to put in the balance sheet of the Corporation, if you desire it. That reflects the complete picture.

Mr. WIGGLESWORTH. All right.

(The matter referred to is as follows:)

SMALLER WAR PLANTS CORPORATION, WASHINGTON, D. C.

EXHIBIT A.Balance sheet, Mar. 31, 1945

ASSETS

Current assets :
Cash on hand and in U. S. Treasury-

$120, 987, 420. 62
Available for loans and leases.- $52, 368, 992. 35
Reserved for unpaid commitments:
Loans and leases---

* 63, 011, 396. 54
Reserved for administrative expenses :
Fiscal year 1943.

771, 206. 37
Fiscal year 1944.

372, 516. 86 Fiscal year 1915.

4, 463, 283. 50 Petty cash

25. 00

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Accounts receivable :

Due from Defense Plant Corporation.
Due from Government procurement agencies--
Loans receivable---

$40, 156, 000. 97 Less : Reserve for loss on loans.-

623, 605. 31

6, 660, 175. 21

322, 808. 63

Interest receivable-
Other receivables.-
Judgments receivable (schedule 1)------

Contract termination charges, reimbursable_
Fixed assets:
Machinery and equipment.--

$15, 461, 512. 94
Less: Reserve for depreciation --

1, 597, 375. 42

39,532, 395. 66 207, 206. 23 7, 846. 69

5.00 205. 259. 57

13, 864, 137.52

Office furniture and equipment_

Less: Reserve for depreciation.

499, 081.95
128, S29. CO

Total assets.

370, 152.35 182, 157, 407.34

763, 204.41

LIABILITIES AND CAPITAL
Current liabilities:
Accounts payable (schedule 2)

$38, 413. 91 O‘her liabilities (schedule 3)

13, 024, 93 Oiher payables (administrative)

711, 735. 57 Reserves: Reserve for adjustment of profit on price contract

(schedule 4)-Capital stock and surplus: Capital stock authorized.

$350, 000, 000.00 Capital stock issued and outstanding- 200,000,000.00 Deficit: To June 30, 1941, as adjusted. 13, 646, 786. 86 Current fiscal period-

5, 037, 082. 34

78, 072.33

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DATA ON LOANS AND LEASES Mr. WIGGLESWORTH. Now, you told us you made $40,000,000 of loans, I think. Mr. DENIT. We have that many outstanding, Mr. WIGGLESWOKTH. $40,000,000 outstanding? Mr. DENIT. The approved loan applications actually total $319,380,741. Mr. WIGGLESWORTH. How many loans does that represent? Mr. DENIT. That represents 2,834 loans. Mr. WIGGLESWORTH. Could you give us a brief statement for the record that would break those loans down into classifications, as to amounts, so to speak, showing the amounts that are out and the security and the loans repaid, and the loans defaulted, if any, and the interest charge?

Mr. DENIT. Would you care to have that in a summary? You do not want us to list them by the name of the borrower, do you?

Mr. WIGGLESWORTH. You said there were how many of them? Mr. DENIT. Two thousand, eight hundred and thirty-four applications approved.

Mr. WIGGLESWORTH. I think if you would take a reasonable number of categories that it would suffice.

Mr. ĐENIT. All right, we could do that. (The matter referred to is as follows:)

Cumulative to March 31, 1995

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1. Food and kindred products...-
2. Tobacco manufacturers... .
3. Textile and other fiber manufacturers.
4. Apparel and other finished products made from fabrics.
5. Lumber and timber basic products.
& Furniture and finished lumber products.
7. Parer and allied products...
& Printing and publishing, etc...
9. Chemicals and allied products.
10. Products of setroleum and coal
11. Rubber products....
12. Leather and leather products...
2. Stone, clay, and glass products....
14. Imo. steel, and their products, munition (except ma-

chinery)-------- --
15. Nonferrous metals and their products.
14. Electrical machinery ..
1. Machinery (except electrical)..
18. Automobiles and their equipment

Transportation equipment (including airplane parts) 22. Miscellaneous industries....

Total....

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Mr. WIGGLESWORTH. What can you give us on the procurement end of things? That has run up to $3,308,682,013.

Mr. DENIT. We can put a summary in the record showing the dollar volume and the number of contracts involved in our procurement oper

ation.

Mr. WIGGLESWORTH. Have there been any cancelations? The Agency does not stand to lose or profit on that branch of the work at all?

Mr. Denit. On the lending branch?
Mr. WIGGLESWORTH. No, in procurement.

Mr. DENIT. The Agency would have no profit or operating income derived from that operation at all.

Mr. MAVERICK. Other than prime contracts if we take any, and we have taken very few of them.

Mr. DENIT. Yes.
Mr. MAVERICK. But we do not make a profit on those either.

Mr. Denit. The only income-producing activity we have in the literal sense of the word, is the loan activity, and we are segregating administrative accounts to the extent to which we can, to compare the income produced with the cost of that operation. If you would care to have it, I would be glad to submit an analysis of that kind for the record.

Mr. WIGGLESWORTH. All right.
(The matter above referred to is as follows:)

SMALLER WAR PLANTS CORPORATION EXHIBIT B.-Statements of operations for the period July 1, 1944, to Mar. 31, 1945 Operating income: Interest on loans

$874, 397.56 Compensation earned on deferred participations in bank loans. 42, 410.94 Rentals on leased machinery and equipment.

1,675, 865. 39 Total operating income

2, 572, 673. 89 Operating expenses :

Defense Plant Corporation charges for servicing loans and leases

390, 119. 63 Expenses relating to loans and leases absorbed by Smaller War Plants Corporation.

9, 528.50 Depreciation on machinery and equipment.

1, 130, 525. 62 Depreciation on office furniture and equipment

41, 800.44 Estimated loss on loans.-

176, 710, 16 Administrative expenses, corporate operations.

619, 104. 26 Other expenses -

1.586, 28 Total operating expenses.

2, 399,374.89

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