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Mr. White. The average figure for the month.

Mr. TABER. It is man-years. Does that mean 2,800 or 3,000 positions, or what does it mean?

Mr. WHITE. It means it will probably be around 2,700, a little over, 2,776. That is the total for the field probably, not many more than that, and then it would go down.

Mr. TABER. We cannot tell anything about that of course.
Mr. White. It is going on a sliding scale downward.

Mr. TABER. It is going up or down between now and the 1st of July?

Mr. White. It is going down. That chart shows the positions.

Mr. Taber. Why is there this period of 8 months from the day before you begin to take note of the difference?

Mr. WHITE. I think Mr. Richardson can answer that or Colonel Johnson.

Colonel Johnson. That is the period when we expect to get relief in the acquisition of motors and parts and manpower, so that a citizen can get his own motor and get his own truck. That makes us slide down from there.

Mr. TABER. That is where you expect to have the chance to let them get their own motors?

Colonel JOHNSON. Yes; to take care of themselves.

Mr. White. In making these estimates we checked with the War Production Board as to how the program will probably work out, and our rules and regulations will depend on how quickly we get this equipment. Mr. Rabaut. You figure to have parts by that time? Mr. WHITE. Yes; and new cars. Mr. RABAUT. New cars and new trucks? Mr. WHITE. Yes.

Mr. Taber. That means you are figuring you will begin to get cars by not much before the first of the year?

Mr. WHITE. That is right.

Mr. Richardson. That depends on how rapidly the cut-backs of the Army and Navy take place.

Mr. TABER. That is what this figure is based on?

Mr. RICHARDSON. Yes. We were figuring the beginning of the fiscal year as being VE-day and a one-front war from that time on. We anticipated, and we hope that the war production will revert to civilian rapidly, just as last year we took off about 1,250 employees in October on that basis.

RATE OF EXPENDITURES

(See p. 804) Mr. TABER. I wonder if you could give me a little information about the expenditures down to the 1st of, say, April or May. I do not suppose you can go any further than that.

Mr. WHITE. We can give you the actual expenditures.

Mr. TABER. How much were the actual expenditures down to the 1st of April?

Mr. HOLMES. The total was $10,796,000.
Mr. TABER. Are you dropping off from now on?
Mr. Holmes. We will continue the present rate of expenditures.

Mr. Taber. You mean that the rate will average just about what it has been the first 9 months, or will you drop off from that rate from now on?

Mr. HOLMES. It will drop off from the average for 9 months.
Mr. TABER. How much are you spending now?
Mr. HOLMES. $1,050,000.
Mr. TABER. $1,050,000?
Mr. HOLMES. Yes, sir.
Mr. TABER. In March?
Mr. HOLMES. And in April.
Mr. TABER. April also?
Mr. HOLMES. Yes.

Mr. CANNON. May I say to the remaining members of the committee who have not yet been heard that Colonel Johnson has an early engagement which he must meet. I suggest that if there are any questions they desire Colonel Johnson to answer that they ask him now and permit him to retire. Have you anything further that you desire to ask Colonel Johnson?

Mr. Taber. No; I think I am caught up pretty well.
Mr. WIGGLESWORTH. I will withhold any questions I have.

REDUCTION IN TRAVEL EXPENSES

(See p. 780) Mr. Case. Colonel Johnson, the chairman asked you to explain the reasons why, in your reduction, or contemplated reduction, the reduction in the transportation or travel item was not in the same ratio as the reduction of your personnel, and, instead of answering that question, you proceeded to take credit for having made the reduction,

Now, actually, your 1945 appropriation was $900,000 for travel Your estimate for 1946 is $500,000 for travel, and your total personnel for 1945 was 4,055, and your request for 1946 is 1,813. That means in the current year your average travel per man-year was $221.60. and you are requesting for this next year, per man-year, travel of $275.80. What the chairman was asking you was why are you asking more money for travel in the next year in comparison with the present year?

Mr. HOLMES. The man-year figure is not a factor when we consider the cost per traveler. Travel is peculiar.

Mr. CASE. What proportion of your people have travel status?
Mr. Holmes. Approximately 25 percent of our personnel.
Mr. CASE. Does that continue in your situation for next year?

Mr. Holmes. Yes, sir, that will continue, Mr. Congressman, for 6 months, and then we will drop off because our travelers will drop ofi, in accordance with the cut-back in the over-all personnel. However, when we eliminate field offices in the last 6 months next year it will mean that each traveler will cost us more money because they will have more area to cover in going from place to place, will have to travel greater distances. The departmental force, of course, will continue to devote itself to specific problems of programs. So, the relationship in personnel and travel would not be quite the same curve.

Mr. CASE. Colonel Johnson, in making this revision for the 1916 estimate, did you contemplate any reduction in these directors for whom you asked an increase?

Colonel Johnson. No; not at all.

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OPERATION OF RAILROAD LINES BY OFFICE OF DEFENSE

TRANSPORTATION

Mr. Case. I believe you told Mr. Snyder that you were operating some truck lines. Are you operating any railroad lines?

Colonel JOHNSON. Yes. We are operating the T. P. & W., which is a bridge line across Illinois. We have made $6,000,000 or $7,000,000 and that is in the bank.

Mr. CASE. Do you pay the operating expenses?

Colonel JOHNSON. We pay everything that anybody paid in the operation of it before, all the ad valorem taxes, and everything. I do not know whether there are any privilege taxes involved in that or not. We do not pay any gasoline taxes, Mr. Roddewig tells me.

Mr. Case. What State or States does that involve?

Colonel JOHNSON. The State of Illinois only. It goes to the Iowa line and to the Indiana line.

Mr. CASE. You do not pay State gasoline taxes in the operation of that railroad?

Colonel JOHNSON. No we do not. Mr. Case. Are you familiar with the operation of Montgomery Ward by the Government, and their policy .with respect to paying taxes?

Colonel Johnson. No; only what I see through the paper about it.

Mr. CASE. Do you know whether or not as a matter of fact in the operation of Montgomery Ward the Government pays gasoline taxes?

Colonel JOHNSON. I do not know.
Mr. Roddewig says that he knows they do.
Mr. CASE. You know that they do?
Mr. RODDEWIG. I know that they do pay it.
Mr. CASE. But you do not?
Colonel JOHNSON. No; I do not.

OPERATION OF TRUCK LINES BY OFFICE OF DEFENSE TRANSPORTATION

Mr. CASE. In what States are you operating these truck lines?

Mr. Roddewig. You are speaking of the ones we actually operate ourselves?

Mr. CASE. Yes.

Mr. Roddewig. In the States of North Dakota, Minnesota, South Dakota, Iowa, Nebraska, Kansas, and Missouri. Those are the States that are affected.

Mr. Cass. Do you have any information here as to what proportion of the traffic those truck lines carry is strictly war traffic, and what proportion of it is civilian traffic?

Mr. RODDEWIG. No; we do not, and that is very difficult to distinguish, because hauling gasoline or lubricating oil to a rural community in North Dakota for use on a farm is just as much war traffic as moving something into a war plant.

PAYMENT OF STATE TAXES

Mr. Case. Do you pay gasoline tax in the States of North and South Dakota, Minnesota, Iowa, Kansas, Missouri, and these States you mentioned on these truck lines?

Mr. RODDEWIG. No, sir.

Mr. CASE. Do you pay highway license fees in those States?
Mr. RODDEWIG. No, sir.

Mr. Case. Do you pay for compensation plates, according to the weight of the trucks?

Mr. RODDEWIG. No, sir.
Colonel JOHNSON. No, we do not.
Mr. Case. Do you pay the ad valorem tax?
Colonel JOHNSON. Yes, we do.

Mr. Case. Do you pay any accumulated back wages of employees under wage

awards? Colonel JOHNSON. No, we do not. Mr. Case. Do you pay wage awards in your current operations? Colonel Johnson. Yes, sir.

GOVERNMENT PROCUREMENT OF TIRES

Mr. CASE. Do you give these truck lines you operate the benefit of Government procurement on tires and repairs?

Mr. RODDEWIG. The ones we actually operate?
Mr. Case. Yes.
Mr. RODDEWIG. Yes.
Colonel Johnson. Just like the Government.

Mr. Cass. That is, you get a reduction of price on the tires for them?

Colonel Johnson. Government prices; yes.
Mr. Case. What saving does that amount to?
Colonel Johnson. How much in money?
Mr. CASE. Yes; what percentage do you save?
Mr. RODDEWIG. Speaking about what?

Mr. Case. In the Government procurement of tires, what benefit is it to these lines that you operate?

Mr. RODDEWIG. On tires we have had difficulty. The tire companies, with one exception, will not sell to us on the contracts that they agreed to sell to the Government on, so we have had to buy battle scarred tires and what not to keep the lines going. That is, that were surplus from the Army, but I would expect that if the tire companies would sell to us it would have been a great deal of saving to the Gore ernment, that that would make a substantial saving in operating costs.

Mr. Case. You said that there was one company that does sell to them under Government contract.

Mr. RODDEWIG. Yes.
Mr. CASE. What company is that?

Mr. Roddewig. The Firestone Co., and one or two of the smalle: companies.

Mr. Case. Is that the reason that the profit that you make in these operations

Mr. RODDEWIG (interposing). We are not making any profit en those operations.

Colonel Johnson. We are not making a profit on those operations, but we are making a profit on the railroad.

Mr. Case. You are making a profit on the railroad?
Colonel JOHNSON. Yes, sir; a great one.

Mr. Case. Do you get for these truck companies that you operat: a priority in the allotment of tires?

Colonel JOHNSON. No, not at all.

Mr. Case. If there is Government procurement, is not that charged to the quota allotted to the State for commercial truck operations?

Mr. RODDEWIG. We have to go to the local rationing board to get ration certificates for tires.

Mr. CASE. In that case, though, if you maintain that you are a Government agency, do you not assert Government priority?

Mr. RODDEWIG. No; the Government has no priority in that respect. If the Post Office Department wants tires in Minneapolis, for instance, they have to go to the ration board in Minneapolis, or if the Interior Department wants tires here in Washington they have to go to the ration board here.

Mr. CASE. I have heard that the competing companies that you are not operating are subject to the depletion of the quantities available for the State by reason of the tires that you take under Government priority?

Mr. RODDEWIG. No, sir; that is not true. Actually, they have been helped, Congressman, for this reason: That since we have started to operate the eight lines, we have not been able to purchase the normal amount of tires that those eight lines would have purchased if they had been operated privately.

Mr. Case. Of course, the private lines say that they have not been able to get their normal purchases either.

Mr. RODDEWIG. But under conditions as they are now, because the tire companies do not sell to us, as a result of tires we have not bought in a particular State they become available for other truck lines in that State.

There is a monthly quota that each ration board has, and if we do not buy because the tire company does not sell to us at a ration board, that measns that the other companies will get that many more tires in that particular month for themselves.

Mr. Case. You say you have not been making money on these truck lines in their operation. From what sources will you pay the expenses?

Colonel Johnson, What is that?

SOURCE OF FUNDS FOR OPERATIONS Mr. Case. You say you have not been making money on these truck lines in their operation. From what source would you pay the expenses of operating the lines, if not from the money received from the operation of them?

Colonel Johnson. We have $5,000,000, and we expected to spend it in about 6 weeks. However, we only spent about $800,000, and what they do not make we make up out of that fund.

Mr. CASE. What do you make it up from?
Colonel JOHNSON. Out of this $5,000,000.
Mr. CASE. From where did you get that $5,000,000?
Colonel Johnson. From the President's emergency fund.
Mr. Case. From the President's emergency fund?
Colonel JOHNSON. Yes, sir.
Mr. CASE. For what was that money made available?
Colonel Johnson. For the operating of 103 truck lines.
Mr. Case. For paying all expenses necessary to their operation?
Colonel JOHNSON. That is right.

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