comes under the appropriation for the field force and we thought the supervising tea examiner ought properly to come under the same appropriation as the rest of the tea-examining force.

Mr. BYRNS. Then it is not proposed to eliminate this position, but simply transfer it to the lump-sum appropriation?

Mr. PETERS. Yes.

Mr. BYRNS. How long has he been carried in this bill-do you recall?

Mr. PETERS. I do not recall, but I think for a very long time. Mr. BrRNS. Mr. Peters, why is it that you want to transfer him from the statutory roll to the lump-sum appropriation?

Mr. PETERS. Because all the other field service of the tea-examining force is under the lump-sum appropriation.

Mr. BYRNS. This man has an office here?

Mr. PETERS. He has an office here, but he spends most of his time traveling around in the field, and we have field service men stationed at six of the principal tea-importing ports.

Mr. BYRNS. What particular advantage would be gained by transferring him from this appropriation to the lump sum?

Mr. PETERS. It will bring him under the same appropriation that the other tea examiners are under. We have tea examiners stationed at a number of the principal ports, and this would put him. on the same roll as the rest of them.

Mr. BYRNS. Do the others get the same salary?

Mr. PETERS. No, sir; they get various amounts, but all less than this.

Mr. BYRNS. How long has this assistant chief of division whom you wish to promote from $3,000 to $3,600 been in the service?

Mr. PETERS. Twelve years. He entered the customs division in 1904 as a law clerk at a salary of $1,800 per annum.

Mr. BYRNS. I find that this supervising tea examiner was transferred to the statutory roll at the second session of the Sixty-third Congress at the request of Mr. Hamlin, and it seems to have been a very earnest request. Therefore this transfer was made at the instance of the department and not by the committee, in the first instance, two years ago; in fact, he made the point that it was no increase, but simply a transfer from the office force to the field force, the idea being, as he said, "I think it is a very important office, and should be directly provided for."

Mr. PETERS. We are having much less difficulty with the tea question than at that time. At that time the tea question was at its most acute stage, and since then the difficulties we have had with importations of teas have grown very much less and the situation. is quite changed. It is probable that we can in the near future consolidate the work of the supervising tea examiner with the work of one of the tea examiners and thus save the salary of one man. To do this it will be necessary to transfer the supervising tea examiner from the statutory roll to the lump-sum appropriation.

Mr. BYRNS. Is there anything else you want to add. Mr. Peters? Mr. PETERS. If I might add this: The Customs Division has accomplished a great deal in the last few years in the way of economy, and it has had the loyal support of the chief of the division and these two men who are assistant chiefs, and the work, both in the Customs Service over the country as a whole and the work through the con

solidation of the special agents into the Customs Division, has brought on the assistant chiefs much greater responsibility and very considerably more effort, and it seems to me this is a reasonable recognition of it. For the last few years the Customs Division has been run each year at a substantial saving over its predecessor. The loyalty to the service of the men in the Customs Division has been responsible in no small part for this showing.

Mr. BYRNS. And, as I recall, and as I believe you have stated, you effected this consolidation with a saving of $12,000 in this force alone?

Mr. PETERS. $11,140 in our own force in the Treasury Department. The department has effected this economy by consolidation. The salary of one of the assistant chiefs was fixed at $3,600 as a part of the whole plan of consolidation and to be commensurate with the work and responsibility of the position. It is earnestly hoped Congress will recognize this and authorize the salary at this figure.

MONDAY, NOVEMBER 27, 1916.

SECTION OF SURETY BONDS.

Mr. BYRNS. The next is the Section of Surety Bonds, in which certain increases and new positions are asked for.

Mr. NEWTON. Mr. Chairman, I have asked Dr. Jordan, who is in charge of that section, to come up here, and I would like him to explain to you the reasons for the changes which are asked.

Mr. JORDAN. Mr. Chairman, before I attempt any explanation of the estimates I would like to call the chairman's attention to the designation "Section of Surety Bonds." You will probably recall when this section was created by act of Congress there was some question as to whether it should be called a division of surety bonds or a section. Congress in its wisdom at that time, although the Senate did not agree with the House, created the Section of Surety Bonds. Now, in my judgment, Mr. Chairman, the work which is assigned to this particular branch of the Secretary's office is entitled to as full a recognition, so far as its dignity and importance are concerned, as any other branch of work in the Secretary's office. I therefore think that Congress should give consideration to creating a Division of Surety Bonds. The word "section" was adopted when the bonding work incident to the supervision over surety companies. was taken from the Division of Appointments.

If the chairman will indulge me for a brief explanation, I would like to say that when the work incident to the supervision over surety companies was transferred by act of Congress from the Attorney General to the Secretary of the Treasury, there was no appropriate place, apparently, in the Treasury Department to which the work could be properly assigned. It was therefore given to the Division of Appointments. The transfer of jurisdiction was made by act of Congress of March 23, 1910. The work was continued as a part of the Division of Appointments until the Secretary, on June 20, 1911, realized that some change should be made in the assignment

of work, and upon the recommendation of a committee appointed by the Secretary, of which our worthy chief clerk was a member, decided that the work should be separately organized as a section in the Division of Appointments, requiring the person in charge to report directly, as any other division chief in the Secretary's office is now required to do, to one of the Assistant Secretaries of the Treasury Department. It therefore became necessary to officially designate the work, and, pending any action by Congress, the Secretary adopted the name "Section of Surety Bonds." The work was carried on in that way until the act of July 16, 1914, when Congress, in its wisdom, saw fit to create what is now known as the Section of Surety Bonds. I believe, Mr. Chairman, that every consideration of justice will justify Congress in changing the name from "Section of Surety Bonds" to the "Division of Surety Bonds," as the latter designation very aptly describes the work.

Mr. BYRNS. I may be mistaken, but if I recall correctly, about twoyears ago the committee reported a change of that kind to the House, and a point of order was made on it on the floor and it was stricken

out.

Mr. JORDAN. I think you did, but even prior to that, if you will recall a conversation I had with you, when you reported this separate organization in the Secretary's office, the question was raised in the discussion on the floor, and I am quite clear upon this point: The minority leader at that time, Mr. Mann, suggested it ought to be called the Division of Surety Bonds, and the House in its wisdom adopted that designation; but when the matter was considered by the Senate Appropriations Committee the committee restored the name "Section of Surety Bonds." It is no more a section in the Secretary's office than the Division of Public Moneys, or the Division of Bookkeeping and Warrants, or the Division of Appointments. Now, we call the disbursing clerk the Office of the Disbursing Clerk, because that is his proper official designation. You might designate the work as a "Division of Disbursements." Now, "section" usually means something within a larger organization, but the official in charge of the bonding work is answerable directly to the Assistant Secretary or to the Secretary himself, and because of the dignity and the importance of the work, as I shall explain later, it seems to me Congress ought to give it an appropriate name.

Mr. BYRNS. It would appear clearly to be an anomaly, but the department has not recommended a change.

Mr. JORDAN. We are here now to ask that a change be made. I know that the department would be glad to see a change in the designation made, Mr. Chairman.

Mr. NEWTON. I do not recall whether we made any definite or specific recommendation when the matter was up before or not, but I know that it was the viewpoint of the Secretary and myself that it should be designated as a division rather than as a section.

Mr. JORDAN. It is a very illogical arrangement. Now, Mr. Chairman, turning to the question of these estimates, at the time this work was assigned to me-I will have to use the personal pronoun herethe committee recommended that a rearrangement of the salaries be made, and I am going to ask the indulgence of the chairman to incorporate as a part of my statement the recommendation of the

committee. I shall not read it, but it is significant to suggest that the committee in the rearrangement of the salaries proposed for the new organization recommended a chief of division at $3,500 a year, a law clerk at $2,500, a clerk of class 4 at $1,800, a clerk of class 2 at $1,400, a stenographer and clerk of class 1 at $1,200, and an assistant messenger at $720, making an aggregate estimate of $11,120.

Now, Mr. Chairman, I have been continuously in charge of the work since the date of my assignment on June 20, 1911. Not a single change in salary has been made. When the work was assigned to me, despite the recommendation of the committee, I was appointed as law and bond clerk at $2,000 per annum, and given two clerks at $1,200 each, one clerk at $1,000, and an assistant messenger at $720. I found that the force assigned to me was wholly inadequate to conduct the work with any ordinary degree of efficiency, and upon my recommendation the then Assistant Secretary assigned to me an additional clerk now carried on detail to the Section of Surety Bonds. The work incident to the supervision which the Federal Government gives to the bonding companies is distinctive in character, technical in its nature, and highly specialized. The work demands a knowledge of the fundamental laws of insurance and a thorough familiarity with insurance accountancy and reserves. The person in charge must be trained in the law, and around him must be employees who have a knowledge of the law. I have insisted, since I have been in charge of the work, that no one should come into the section unless he had a working knowledge of the law and of accountancy, or unless he was prepared to take up the study of both.

Since I have been in charge of the work the volume of the bonding business of the Government has increased 50 per cent. Now, mark you, there has not been a single change in grade or in salary since I took charge, nearly six years ago. It has become necessary, because of the conditions that affect the solvency of the surety companies, for the Assistant Secretary to detail me, and when available, the Government actuary of the department, to examine into the continuing solvency of these surety companies, and despite the most effective and efficient supervision such as we are able to give under existing law, the companies fail and will continue to fail. Now, when I am compelled to be away from my official duties, as I have been in the last (and I might say here that I have had very little annual leave for nearly six years) I have had to designate a clerk who formerly received $1,200 on the roll of the Section of Surety Bonds (who is now receiving $1,400 on another roll under assignment to me), to conduct the work in my absence, with the understanding that questions of more than ordinary importance are referred to me in the by correspondence for consideration before final action. The Section of Surety Bonds, Mr. Chairman, is to-day one of the most dependable sources of information, as it properly should be, of the Government bond approving officers along the lines of its proper functions in very much the same manner as the insurance departments of the several States. Since I have been in charge of that work, it has been my desire and constant effort to keep the work fully up to date: to introduce as many constructive changes and improved methods in the dispatch of the business as possible. Through the section there.

are recorded for permanent file in the section or forwarded to the several auditors of the departments (except the Auditor for the Post Office Department), upward of 40,000 bonds annually. The Secretary of the Treasury can obtain in 24 hours through the system which has been adopted, a complete summary of the bonding business of any one of the companies, and I have so codified the work that I can not only give it by departments, but by the larger bureaus of the departments as well. The information is of great value and is very helpful when the companies retire from business either through enforced or voluntary liquidation. It gives the bond approving officers of the Government a quick and ready means of checking bonds in force and of determining the contingent or actual liability thereunder.

The wide disparity in salary between the person in charge, receiving $2,000, and $1,200, although it happens to be $1.400 now, as explained, is not justifiable. If this work is to be continued, it should be placed upon a safe basis of continued efficiency. You can not secure the services of the best men for the salaries paid, who will fearlessly and honestly protect the interests of the Government, with no chance for advancement or promotion in the section itself. There is no chance for any one below me to get a promotion except the person in the $1,000 grade. There is alsolutely no chance for the person in charge to ever aspire to any other position, because he is not in competition with any other chief of division in the Secretary's office. The work is of a very highly specialized character, and I will say very frankly, Mr. Chairman, that I am learning every day. I sometimes think I know something about the insurance business as it affects the work of the Government, but it is like all new subjects. It is going through periods and stages of evolution, and each day I am learning something new. The responsibility which attaches to the position of the Chief of the Section of Surety Bonds justifies a salary commensurate with the responsibility assumed, and if it is the purpose of Congress, in its wisdom, to increase the salary of the official in charge, then it follows that the person next in immediate authority should receive a salary somewhere near that of the chief.

The arrangement in salary grades which I have proposed, Mr. Chairman, involves a change in actual figures of $4.300, and it provides promotions for people who otherwise can not be promoted unless they leave the section or division. The new schedules of pay will act as an incentive and as an inducement to get competent employees who will be reasonably contented, and will continue with the work in the expectation of being advanced. Therefore, I say. Mr. Chairman, by every consideration of justice these salary increases which have been approved by the Secretary of the Treasury, after careful consideration, are fully justified if it is the purpose of the Government to conduct its bonding business in an efficient manner. I will be glad to answer any question of the chairman.

Mr. BYRNS. You provide for an assistant chief at $1.800?

Mr. JORDAN. Yes, sir; that is a new position. At the present time the gentleman who acts in that capacity is getting $1.400 on another roll. He is a lawyer, compelled to graduate in law under my instructions, and he would have been receiving $1.200 now, if I had not been able to arrange for his promotion on another roll.