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Mr. MAVERICK. We get a lot of commendations, too, but we want criticisms so we can improve. But every now and then I might be called up by Mr. Wright Patman, who is a very tireless worker and also sees all our faults, and says, “Why the hell do you do so-and-so?”

And we either stop doing it or we justify ourselves.

Mr. Dan Eastwood in the House committee carries on investigations. He receives complaints and relays them to us.

The same is true of several people in the Senate Small Business Committee. Momentarily I can think of Mr. Anderson, a capable man, but there are several others.

I showed you a clipping this morning-I was called before the Senate Small Business Committee investigating the disposal and distribution of surplus property in which they made a very searching investigation of our organization and a study of our policies. We put into the record a four-page statement of a resolution adopted by the board of directors which was very comprehensive. Also, two or three short resolutions about the amount we charge on leases and how we sell it and how we dispose of it.

As to that Senate committee and also the House committee, I would say they have been very active and very cooperative-and sometimes critical. As to criticisms we have accepted them in good spirit and have tried to correct everything they have brought to our attention that was wrong.

I have gotten along with them pretty good.

INCREASE IN WORK OF PROCUREMENT AND CONTRACT SETTLEMENT

DIVISIONS

Mr. CANNON. I note on page 27 of the justifications under Procurement Division you speak of mobilizing the facilities of small business in the production of war matériel; and again on page 46 under "Contract Settlement Division” you speak of informing all sınaller war contractors, and so forth.

Is it not true that the work of both of these Divisions, Procurement Division and Contract Settlement Division, will be greatly reduced as the war production recedes?

Mr. MAVERICK. No, sir. The work of Contract Settlement will greatly increase on account of the fact that there will be more contract settlements in the next year and a half. And the work of Procurement insofar as little business and the S. W. P. C. is concerned will, in my opinion increase, because the competition and the pressure against the small business will be greater than it ever was before. The fight will be harder.

CONTACT WITH CONCILIATION SERVICE, DEPARTMENT OF LABOR Mr. CANNON. On page 51 you outline your labor policy there, or your Labor Policy Division is described there.

Does that Division have anything to do with the settlement of labor disputes ?

Mr. MAVERICK. No, sir.

Mr. Canxon. Do you work with the Conciliation Service of the Department of Labor ?

Mr. MAVERICK. Well, we work more or less as a contact branch. We do not connect ourselves with any industrial disputes, because we believe there are probably enough labor organizations at this time tending to those affairs.

We have an extremely small staff on that a man and a girl.

FIELD BUREAU

Mr. CANNON. I notice that your Field Bureau has a field staff, has those various operating bureaus.

Is it necessary for you to have a separate staff for your field program direction, or Field Bureau ?

Mr. DÉNIT. The Field Bureau has operated in fact as simply a transmittal agent by means of which orders and directions to the field would go out after appropriate field contact in advance.

As to the functional program, operations are directed by the individual office or bureau in the organization which has that part of the work.

You might say the functional direction is from individual bureaus and the transmittal of general programming data is through the Field Bureau.

And I might add there that by reorganization we propose to take those positions into some other unit and thereby knock out this additional organization set-up, but the positions we will preserve elsewhere.

NAVY-INDUSTRY COOPERATION DIVISION

Mr. CANNON. Now, one other question, your Navy-Industry Cooperation Division, page 59 of the justification.

You show an increase there for 1946 over 1945 both in man-years and in total salaries. Why is that possible to make a reduction in the item for the coming fiscal year?

Mr. DENIT. We put the estimate in exactly as the Navy Department asked us, Mr. Cannon. We do not screen it at all. It is their deal.

They pay us back all of that money out of the Navy appropriation.
Mr. CANNON. You accept their figures !
Mr. DENIT. We just accept their figures; yes, sir.

LANGUAGE CHANGES PROPOSED

Mr. Cannon. You may include in the record, if you like, the state. ment of the various changes in language appearing on pages 102 and 103 of the bill.

And explain if you will briefly the purpose and necessity of each change proposed there.

Unless some member of the committee desires to go into this we will just have them extend it in the record.

LEGISLATIVE JUSTIFICATION The only changes in legislative language proposed in addition to the aggregat appropriation estimate are the provision for salary increases for members o the board of directors, and a provision for penalty mail. These increases ar as follows:

Salaries of board members Chairman and general manager.

$10,000 to $12, 000 Other board members.

8,000 to 10,000 At present the board members are in classified position. These positions are established at the highest grade level, CAF-15, but as classified jobs they are within the scope of the Classification Act and are subject to the Civil Service rules governing nonexcepted appointments. As a result vacancies on the board must be filled on a competitive basis and the general circumstances surrounding the position are distinctly at variance with the character of the appointment. The board members find themselves on the same level as operating officials and staff officers within the Corporation. No proper allowance has been made for the particularities of their official station and statutory responsibility.

In few Government corporations are the directors appointed to classified jobs and even in commission forms of organization the positions of the commissioner are excepted. The situation existing in the Corporation, therefore, is at variance with established precedent.

The proposed increase of the chairman's salary from $10,000 to $12,000 reflects a measure of the additional responsibilities conferred upon him by his over-all duties and chairman of the board and general manager and vice chairman of the War Production Board. Congress recognized this degree of responsibility in the current year's appropriation act when by congressional action the National War Agencies Appropriation Act, Public Law 372, was amended to provide a salary of $10,000 for the chairman.

The chairman operates in all respects as a department head and the program complexities, actual and potential, in the Smaller War Plants Corporation are comparable to the most important Federal projects. It is believed that by fact and precedent there is ample justification for the salary adjustment sought, Sinee there are only four Board members besides the Chairman, the cost of these increases would aggregate only the modest sum of $10,000.

Penalty mail

An estimate of $50,000 is for the Corporation's penalty-mail requirements, to be deposited in the general fund of the Treasury as required by Public Law 364.

Mr. WIGGLESWORTH. It is not new language but what is the meaning of the language "and such other functions as may be lawfully delegated to the Corporation"?

Mr. DENIT. Well, I think that that language has appeared in most of the war agencies, Mr. Wigglesworth, to provide for reimbursement arrangements where we can perform a service for another agency which they would like and do not want to set up a full-time staff to handle.

We utilize other agencies on the same basis.

Mr. WIGGLESWORTH. You have provision, salary of the chairman, $12.000; four members of the board, not exceeding $9,000 per annum.

What is the present situation? Mr. DENIT. The present situation is $10,000 for the chairman, and the board of directors other than the chairman are paid at grade 15, Le classified service, at $8,000 a piece.

Mr. MAVERICK. Mr. Chairman, I would like to say at this point that as far as I am concerned I believe the members of the board should be paid $10,000, other than the chairman, who is set up at $12.000.

I would like to say that since this budget was worked up we have gotten additional responsibilities and the House and the Senate passed

law in which—this organization is appointed by the President of the United States instead of by the Chairman of the War Production Board. If the chairman of this organization receives $12,000 and the members $10,000 it will only be in line with similar boards in Washington.

i mean it will just be the customary salaries that are received by similar boards or Government executives.

Mr. WIGGLESWORTH. You have provision in there for employing aliens. Have you any aliens on the roll now?

Mr. Denit. No; we have no aliens on the roll now and we put the provision in in event of development of foreign-trade negotiations. If we are able to build up any small business for foreign-purchase missions and so forth we might have to put on a consultant or two in there, but we have not used it.

Mr. WIGGLESWORTH. Audits and so forth. Does your money request conform to the new requirements under the George bill?

Mr. DENIT. Yes, sir.

Mr. WIGGLESWORTH. In other words, have you reduced the amount required for audits in the light of that legislation?

Mr. DENIT. Yes, sir.

The predominant amount of that money is for engineering service, not for auditing.

Mr. CASE. On that first language-"and such other functions as may be lawfully delegated to the Corporation”-that would undoubtedly cover the transfer of work from other agencies, to which you have referred.

Would it not also make possible the delegation to the Corporation of new duties if set up in executive order which might never have been reviewed by the Appropriations Committee?

Mr. Denit. I cannot answer that question categorically yes or no.

We have at least one delegation but was certainly with congressional consent, and that was from the Veterans' Administration. In the G. I. bill of rights it specifically said the Veterans' Administration might utilize any other agency that it sees fit to carry out the purposes of that statute.

Mr. Cass. But all you really want to have here is language that will permit you to carry on functions of other agencies so that you can be reimbursed?

Mr. DENIT. Yes.

Mr. Case. For other activities already embraced in existing statutes?

Mr. Denit. That is correct.

EXTENSION OF LIFE OF CORPORATION

Mr. Ludlow. Mr. Maverick, your life has been extended to December 31, 1946, has it not?

Mr. MAVERICK. Yes, sir. I hope my life runs beyond that.
Mr. Ludlow. I mean your official life.
Mr. MAVERICK. My official extends to that.

Mr. Ludlow. Do you think there will be a useful peacetime function for such an organization?

I mean-presumably your extension may or may not carry you through the period of reconversion. I do not know whether it will or not.

But looking to the far future, is this instrumentality such as to be useful in peacetime operations?

Mr. MAVERICK. Mr. Ludlow, stating of course that that is not relevant to this agency at this time, my personal viewpoint is that a similar agency should be continued.

My reason for it is that it is not a regulatory body or inhibitory body, but it helps people. And I think the genius of our peoples in this industrial era should be to try to see to it that free enterprise and little business is preserved.

The second reason is that in an industrial age you have scientific and industrial necessities which require that kind of treatment.

And third, I believe that the little businessman should have the same treatment as a farmer.

And I am not talking in this case about subsidies or anything of that kind, but I believe the little businessman should have the opportunity to compete on a fair, nondiscriminatory basis.

And fourth, I believe in the decentralization of industry. I hasten to say I do not mean the forced decentralization of industry. I do believe, however, that a free enterprise economy distributed throughout the Nation is a much better life than the congestion of cities, slums, concentration of industry.

I believe it is better for the cities themselves to have a higher standard of living than just to be big and have a lot of factories there.

So I believe our efforts are worth while, now and for peacetime also, to help the little man.

Mr. LUDLOW. Mr. Chairman, I believe Mr. Maverick has expressed a sound philosophy there.

AUDITING OF EXPENSES

Mr. Cannon. On page 103 of the bill, the last clause on that page: And all such expenses shall be accounted for and audited in accordance with the Budget and Accounting Act.

Do you think that to be necessary in view of the provisions of the George bill?

Mr. DENIT. Yes, sir.
Mr. Cannon. This relates to auditing.
Mr. DENIT. Yes.

Mr. CANNON. And the Bureau of the Budget is for the purpose of estimating.

Mr. DENIT. Yes, sir.

Mr. CANNON. And the George bill provides that all Government corporations shall be audited. Suppose you extend your remarks on this.

Mr. DENIT. Yes, sir. Mr. Chairman, the clause which has characteristically appeared in our appropriation language reads:

That no part of said [amount] shall be obligated or expended unless and until an appropriate appropriation account shall have been established therefor ursuant to an appropriation warrant or a covering warrant, and all such Ipenses shall be accounted for and audited in accordance with the Budget and Accounting Act.

The recent legislation referred to as the George Act provides in substance that the General Accounting Office shall make an audit and

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