Mr. McDONALD. Approximately $6,100,000,000 for the calendar year 1950.

Mr. GARY. Redemptions?

Mr. McDONALD. Redemptions were approximately $5,900,000,000. Mr. CANFIELD. Now Mr. Markham, what new techniques are you employing?

Mr. MARKHAM. We want to do a public drive of the emotional type injecting a lot of patriotism and appealing to the emotions. We feel that 3 million in the armed services-certainly 10 million. members of families are directly concerned and many more millions concerned to the extent that they have a nephew or a relative in the service. We feel we can successfully arouse the emotions through a patriotic appeal to the point where we can do a commendable job of selling bonds.

I would like to point out for the record-and we should in all fairness-that the small-denomination buyer, the man who buys $25's and $50's on payroll savings, is doing the best job of bond buying the best he has done for 5 years. So, when we say it is harder for us to sell the people we should define what we mean by people.

Our difficulty, and I think we all agree, is largely with the $500 buyer and the $1,000-denomination buyer. Redemptionwise as well as saleswise, one of our major problems this fall will be to accomplish greater success in what we call the investor market. The buyer of the larger denomination bonds who, as we all know, has been reluctant to make these investments since inflation reared its head to such an extent in the past year. We have all read comments of the purchasing power of the dollar and why bonds are not a good investment today. We feel that the fault is that of influential volunteer committees and work with banks and groups of that kind. We can overcome that to some extent through an emotional and patriotic appeal and we hope to do it. As Mr. Clark said, it is going to be a difficult job.

Mr. CANFIELD. You make reference to TV as one form of media. What do you have in mind?

Mr. MARKHAM. Eventually we will use TV on our drive kick-off. We will use the networks as extensively as possible. Our Division is making a lot of progress in that field. It is rather new to us and I think if you watch TV now you will notice a growing amount of savings-bonds promotion through that media. We know that during the fiscal 1952, if we get this appropriation, we will do this job as we want to do it. Then we can get into TV while it is young and get a good spot there. It is a rapidly growing field.

Mr. CANFIELD. Reference has been made to the terrible struggle in Korea and I assume therefrom that if our Government were to negotiate a peaceful settlement that would have a bearing on the program.

Mr. MARKHAM. That is right.

Mr. CLARK. I would like to make this particular comment at the moment. On this buyer we fail to get the buyer of the $500 and $1,000 bonds-in a way we have neglected him on account of the size of the staff. It is so much easier to go to Lorain, Ohio, in the steel company where we could get a meeting with 13,000 employees. Our

staff has been tied up making these sales and, as Mr. Markham says, our success in payroll savings is extraordinary. I wish you could see how well we have done with many of these concerns-plants with 13,000 and 14,000 employees participating to the extent of 80 or as high as 96 percent.. But to broaden our market we need more people locally, in the investor class, the self-employed and professional people. It is pretty well concluded that if you are to sell a piece of merchandise to someone who is to invest $375, or $750, you must call on him and it takes a lot of calling at the local level.

SALES UNDER PAYROLL SAVINGS PLAN

Mr. GARY. Can you give us a statement of the number of bonds you sold under the payroll savings plan?

Mr. CLARK. We can give you an estimate. We can not break it down accurately because we do not keep all the extensive records. We never did have the perfect record. We can give you an estimate; will that be all right?

Mr. GARY. If you can give us an estimate by years for the last 3, 4, or 5 years we will be glad to have it.

(The information is as follows:)

United States saving: bonds-Estimate of the operation of the payroll savings plan

Mr. CANFIELD. Mr. Clark, the chairman has referred to the earmarking of $235,000 for travel for this supplemental item. That is about $1,000 per man.

Mr. McDONALD. No, it also includes volunteers and WOC employees. That is, those serving without compensation. For instance, in the field service, that item includes 175 persons who serve without compensation. A limited amount of money is required for travel expenses of key volunteers to permit them to attend and organize meetings. A considerable part of this estimate for travel is for persons of that type.

Mr. CANFIELD. I hope when you buy these new lamps that the fluorescent bulbs that the old Bureau of Federal Supply issues and which they reportedly have in sufficient stock to last the Nation for 100 years to come, are ordered. I hope you will bear that in mind.

SALES AT MILITARY INSTALLATIONS

Mr. PASSMAN. Mr. Clark, what success have you had in the Armed Forces? Do they purchase bonds similar to what they did in World War II?

Mr. CLARK. Very good. We are in the midst of it. They are trying to get me a report of it right now, but they say it looks all right. The Navy was the first to organize. The Army expects to transfer their finance offices. They are having difficulty in making the deduction from the Army and they are asking to hold up their campaign on it.

Mr. PASSMAN. I had an experience similar to Mr. Canfield's. I was an officer assigned to duty at Memphis, Tenn. I accepted the assignment of handling the fifth station in the loan drive and the fifth station led the Nation. We were permitted to go to nearby towns and sell the merchants, or others, and these naval stations received credit for it. We put forth a great deal of effort among the officers and enlisted men, and I understand the percentage was higher than among civilians. Does your record indicate that to be true?

Mr. CLARK. It is probably not at the moment but probably will be later on. Some of the reports from these civilian installations are extraordinarily good. At Norfolk, Va., something like 90 percent. probably. It is extraordinarily good for 12,000 to 15,000 people.

REASON FOR SUBMITTAL OF SUPPLEMENTAL ESTIMATE AT THIS TIME

Mr. PASSMAN. The justification for supplemental appropriation deals entirely with fiscal 1952. Is that correct?

Mr. CLARK. Yes, sir.

Mr. PASSMAN. If this appropriation is allowed, you will have to make it a part of your original justification request; is that true? Mr. CLARK. Yes.

Mr. PASSMAN: And when you come before the committee next year you will have to combine the two appropriations as one.

Mr. CLARK. Yes.

Mr. PASSMAN. The chairman and Mr. Canfield suggested it was out of line. Have you had any experience?

Mr. CLARK. I would like to have Mr. McDonald answer that.

Mr. PASSMAN. Evidently in the past you have had similar experience. You have had to come in for supplementals before the bill passed the House.

Mr. McDONALD. We have not had the experience since the war, I am sure. The procedure in this instance was set as Mr. Johnson outlined it. We did not select the procedure. It was outlined for us. Mr. PASSMAN. I should have thought during the war and subsequent years there would be similar experience, or that this should be termed very urgent or emergent. I am wondering what brought this about since we dealt with this sort of experience during the war. Mr. McDONALD. The national emergency. Our original estimates were prepared back last July and August. The original estimatesand they were processed prior to the time the Secretary of the Treasury was able to determine the effects of the Korean situation and the national emergency on this particular program. Too much time

had elapsed for us to revise our original estimates; so it was suggested that we submit a supplemental estimate when we were in a position to do so.

Mr. FERNANDEZ. That is perfectly in order. The only thing is that when you submit a supplemental request, and the regular bill has not passed the Senate, why shouldn't you submit it directly to the Senate so they can act on it over there? However, I can see some good reasons for this procedure. You single it out and when Congress cuts they know where they are cutting. Another reason may be that if the Budget does the selecting on the basis of this procedure they may have anticipated that by this time the original bill would have passed the Senate.

Mr. PASSMAN. I revert back to the chairman. If this reaches the Senate in time to be consolidated, it should pass. The same thing would be to have it considered together.

Mr. GARY. It would be proper but, as I stated previously, requests from a number of other departments are contained in this document. Mr. FERNANDEZ. They are all of an emergency nature too.

Mr. GARY. And I think the plan is to report out a supplemental appropriation covering these items.

Mr. McDonald, in response to a question from Mr. Passman a few moments ago you stated that this $2,000,000 was for the next fiscal year, 1952. I notice from page 9 of the justifications that $1,900,000 for the next fiscal year and that $100,000 is for after next fiscal year. Will you explain the reason for that?

Mr. McDONALD. These funds will all be obligated during the next fiscal year but it takes some time to make all of the actual expenditures. Because at the end of the fiscal year there may be contracts not completed and delayed bills, we have estimated that about $100,000 will be expended during the following year.

Mr. KRIXTEIN. The appropriation is available for obligation during the year in force and the money is available for fiquidation during the following 2 years.

(Discussion off the record.)

Mr. PASSMAN. On the record. I want to make this one observation for the record. So many times in discussing the national debt with our constituents we use the term "billions of dollars" and I am afraid the majority of them do not realize the tremendous amount of money we do owe. If you break it down another way,I think you will discover that the present national public debt amounts to $15,000 per hour since the birth of Christ. That is a lot of money.

PROMOTION OF G BONDS

Mr. JAMES. Mr. Chairman, I share the general confusion. Some of it has been clarified. I want to ask a question offside the financial considerations here for the moment. I am concerned about the success or the bond-sale program because of existing conditions, economic conditions, the high cost of living, and the reluctance of men who work for wages to have much more deducted from their pay envelopes, and the enormous redemption of E bonds. Maturities will be coming along from now on. That will also bring up a problem as to how much of the matured money will go back into savings bonds.

The plan to continue them for 10 years is going to be made effective at once?

Mr. CLARK. It is.

Mr. JAMES. I have often wondered why you have not separated your market and made special efforts to sell bonds to those who might make investments in bonds that are not so likely to be redeemed. I am thinking particularly of the G bonds. Something has been said about the larger investor but the G-bond program has never been sufficiently well-placed before the public. For a man who has an above-the-average income and who does want to make savings seriously and earnestly, while that bond cannot be redeemed except at a loss, there is an insurance feature that to many persons would be a very attractive selling point.

It occurs to me that if your market was analyzed and separated there might be a vastly greater sale of G bonds under a well-organized campaign stressing the fact that everybody likes to have a check for interest coming in periodically. A man is getting something back regularly and he is restrained from redeeming the bonds early because he could only do so at a penalty. There is an insurance feature which on his death gives his family the entire original investment.

Mr. CLARK. When you sell the G bond the smallest one is $100. It is bigger money and you have to call on the prospects individually. When we approach the farm market and the retired farmer who has sold his farm recently he will want that G bond-it is good for himbut we have to go and talk to him. Or have one of our volunteers call on him. It would probably be his local banker.

Some people have criticized that point slightly because of the discount period. They have thought the pressure should be taken off. It is a 12-year bond. That has to be a matter of personal selling. You do not sell the $500 or $1,000 bond by someone answering an ad. You have to divide your market.

Mr. JAMES. I can agree with that, but if you start with the $100 customer and you divide your market it could mean $100 invested by him 12 times each year.

Mr. CLARK. You mean on the bond a month plan? Featuring the G bond?

Mr. JAMES. Yes. We try to sell E bonds through our plant, but among the executives we talk about G bonds. Among that class of employees it is a matter of ordinary arithmetic, so we try to sell them G bonds. You have to divide your market. You have to take the higher bracket bond buyer into special consideration because he is not likely to redeem his bonds at a loss to himself.

Mr. CLARK. That is true for companies that have done that. They will say, If the boss is buying an E bond I will do it. If the boss buys a G bond they might think it would weaken the program to do

otherwise.

Mr. JAMES. I have not seen the G bonds pushed in any program and it seems to me it is quite a chore to get them. You almost have to hunt for them.

Mr. CLARK. That is a good point.

Mr. JAMES. I am wondering if selling bonds that will stick would not be helpful.

Mr. CLARK. It is good because the man who will buy them will hold them.