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Mr. BYRNS. What other roll is he on?
Mr. Jordax. He is on another roll in the Secretary's office at the present time.
Mr. BYRNs. You mean in the office of the Secretary?
Mr. JORDAN. That position, I take it, Mr. Chairman, would be served for the use of the Secretary.
Mr. Byrns. He is now with you, as I understand it?
Mr. JORDAN. Yes, sir; I have given the Secretary's office a $1,200 clerk in order that I might promote my acting assistant to $1,400.
Mr. Byrns. The point I was trying to get at is whether or not in the office of the Secretary provision is made for his permanent transfer to your roll.
Mr. Jordan. If that party or some one succeeding him should be appointed as acting chief of the section or division, of course that would release the $1,400 place now under the control of the Secretary for other purposes.
Mr. Bynns. He is a clerk of class 2, I take it, in the office of the Secretary?
Mr. JORDAN. Yes, sir; at $1,400.
Mr. WILMETH. Mr. Chairman, I should say it would be rather difficult for the Secretary to release that $1,400 place, because we have had to supply a stenographer all the time.
Mr. Jordax. It has been a great inconvenience to the Secretary, I would like to say, to recognize this deserving employee in this way. You will see, Mr. Chairman, that under the present arrangement, leaving out this gentleman's promotion to $1,400, the Section of Surety Bonds, as now organized, consists of a $2,000 place, two $1,200 positions, a $1,000 place, and a detail from the Secretary's office at $1,600 and an assistant messenger at $720.
Mr. Byrns. How many clerks have you detailed to your office now in addition to this $1,400 clerk?
Mr. JORDAN. I have one, sir.
Mr. JORDAN. $1,600, carried upon the roll of the Secretary's office, and has been loaned to me for three years.
Mr. Brns. Then, as a matter of fact, you have two transfers from the office of the Secretary to your division?
Mr. Jordan. It would amount to that in effect; yes, sir; and I call the chairman's attention to the fact that the arrangement of salaries now proposed is $90 less than the estimate recommended by the committee nearly six years ago. I have reduced the estimate, Mr. Chairman, by making the salary of the chief $2,500 instead of $3,500, as recommended by the committee. I might say, although I do not like to appear egotistical, that the salary as now proposed is not commensurate with the responsibility which attaches to the position of the person in charge of this work, but I like to see men under me satisfied and contented, and I have been entirely willing to waive my own claims in favor of other deserving employees in the section.
Mr. BYRNS. Then, taking into consideration those who have been detailed to your office, you are really not asking for any additional force?
Mr. JORDAN. No, sir; only deserved promotions.
Mr. Berns. We are taking into consideration those that have been detailed to your office. You are not asking for any additional force ?
Mr. JORDAN. No, sir; not at all. In fact, I am running to-day with the minimum number of people, and, as I have said, I have not had any annual leave myself for nearly six years.
Mr. Byrxs. One thing that might occur to the committee is this: Take those clerks up in your office--clerks who have been detailed continuously to your office from the Office of the Secretary, with no corresponding reduction in the Office of the Secretary.
Mr. JORDAN. Mr. Wilmeth can answer that, and if he can not I will supplement what he has to say.
Mr. WILMETH. For that $1,400°man we have a stenographer detailed into the Secretary's Office. In the place of a clerk of class 3 we have detailed a stenographer at a higher salary. He is an expert stenegrapher who goes about with the Secretary and takes his dictation.
Mr. BYRNs. Where are they detailed from?
Mr. WIL METH. That particular one is detailed from the Appointment Division, and the other one is detailed from the office of the Treasurer of the United States. So that the Secretary can not afford to give up either one of those two places.
Mr. BYRNS. That is quite apparent. Now, why could not the Division of Appointments give up a clerk?
Mr. WILMETH. The Division of Appointments could not.
Mr. Byrns. The fact remains that you are asking for no additional force to that which is actually engaged in your office.
Mr. JORDAN. None whatever, sir.
Mr. BYRNS. And the only thing you ask is that you be given an assistant chief at $1,800, which is to take care of the $1,400 clerk who has been detailed to your office from the office of the Secretary.
Mr. JORDAN. Yes, sir.
Mr. Byens. And you are asking that the detailed clerk of class 3, from the office of the Secretary, be placed on your roll.
Mr. JORDAN. Yes, sir; and I am dropping one $1,200 place.
Mr. Byrxs. You are dropping one $1,200 place, but you provide for a place at $1,400, which is a promotion.
Mr. JORDAN. Yes, sir.
Mr. Byrns. Now, it appears that the office of the Secretary can not be without these two positions, because he has details from the Division of Appointments and the office of the Treasurer, but it would seem that in the general scheme, if these details have been made and have been continuous, the Division of Appointments and the office of the Treasurer could very easily do without one clerk each, and in that way there would not be any increase in the number of clerks, while at the same time the Section of Surety Bonds would have a permanent roll, as I think it ought to have.
Mr. JORDAN. I entirely agree with you, Mr. Chairman.
Mr. Byrns. Unless, of course, it should appear that these details from the Division of Appointments are taken care of by details from some other office.
Mr. WILMETH. No, sir; the Treasury Department is making some considerable reduction, but that particular man, who is an expert stenographer, fills a place that can not be abolished.
Mr. JORDAN. Mr. Chairman, I am trying, as I stated at the outset, to run the bonding business of the Government, as long as I am privileged to have charge of it, with a due regard to efficiency and economy, but I can not conscientiously continue to carry on the work without telling frankly how I feel about it.
Mr. Byrus. You handle some 40,000 bonds, I believe you said?
Mr. JORDAN (interposing). They cover every variety of bondsfidelity and surety bonds, indemnity bonds, etc.—and every one of the bonds is examined as to its legal sufficiency, so far as the corporate surety is concerned, and all are recorded in the section. At the end of each year the results are tabulated for the use of the Secretary and Congress, if required.
Mr. Byrns. How many of those bonding companies do business with the Government?
Mr. JORDAN. At the present time we have 31, and we will have 3 more coming in after the first of the year. Of course, they come and go. They are like the leaves in autumn-some fall because they can not stand up under the stress of keen competition.
Mr. Byens. You say that you make an examination of each company?
Mr. JORDAN. Every surety company that voluntarily seeks to do business with the Government is subjected to an examination of its financial condition before authority is granted by the Secretary to write Government bonds.
Mr. Byrxs. How often do you make that examination?
Mr. JORDAN. We made three examinations last year, and the year before we made three. Three new companies came in in each one of
Mr. Byrns. When you make an examination of a company, of course, there is no additional examination made for, at least, a stated period of time, I presume?
Mr. JORDAN. That, Mr. Chairman, touches a very vital point in this work, and I am glad you referred to it. As the Assistant Secretary has reminded you, "Congress has made a provision that the Secretary of the Treasury may institute inquiries into the financial solvency of these companies, but owing to the fact that there is no available appropriation for the purpose when a company has become established and we want to know whether its reserves are adequate we are compeleld to call upon the company to make a deposit to cover the cost of the examination. Now, to answer your question, when these companies first seek to do business with the Government they are required, under the regulations of the Treasury Department, to make a deposit to cover the cost of the first examination. The deposit required is $2.000, but the cost of the examination rarely erer exceeds $1,000, estimated to actual and necessary expenses only allowable under the regulations of the Treasury Department based upon existing law.
Now, if a company should get into trouble, or it should be determined on an examination of its financial statements, which are ren
dered four times a year and audited in the Section of Surety Bonds, that the company was not adequately protecting its policyholders, including the Government, or was not carrying adequate reserves, the department has no available appropriation to defray the cost of an examination and must await the impairment of the capital of the company below $250,000, fixed by law, before revoking the authority previously granted. That condition is an unfortunate one and ought to be remedied by Congress providing a specific appropriation to cover such contingencies.
Mr. BYRNS. You could decline to accept it.
Mr. JORDAN. Yes, sir; but you must have grounds for your action, and you must be able to prove that the company is insolvent. Now, how can we prove the insolvency of a company unless we examine it? Statements are rendered quarterly by the companies. Examinations made by insurance departments frequently show that the statements rendered do not always truly reflect the financial condition of the company, and if a company wants to swell its assets and reduce its liabilities the Treasury Department has no means available at present by which it can overcome that situation in the absence of a specific appropriation to cover the cost of periodical examinations. Congress intended that these examinations should be made, and the law says that it shall be done, but there is no way of enforcing the law, because there is no available appropriation to cover the case. It might interest the chairman to know that the volume of bonding business done in 1915 represented by the penalties in the bonds accepted and approved, which were recorded in the Section of Surety Bonds, amounted to over $200,000,000, with total premiums charged of over $100,000. That did not include the Post Office Department bonds, which are not recorded in the Section of Surety Bonds. The work is growing rapidly, and Congress ought to take cognizance of it in some form.
I have an exhibit. Mr. Chairman, which I will submit to you to-morrow so as to get it in the record.
TUESDAY, NOVEMBER 28, 1916.
DIVISION OF PUBLIC MONEYS.
STATEMENT OF MR. H. P. HUDDLESON, ASSISTANT CHIEF.
INCREASE IN SALARY, ASSISTANT CHIEF OF DIVISION.
Mr. Byrxs. The first change you are asking is an increase in the salary of the assistant chief of division from $2,500 to $2,750.
Mr. HUDDLESON. Yes; I am the assistant chief of that division. I have been in the Government service for 23 years; I have never been late to office in all that time; I have, perhaps, had an average of four or five days annual leave in each year; I get to work in the mornings now at about 8 o'clock, very often earlier, and it is half past 5 or 6 o'clock before I get away, and more than two-thirds of the time I do not even get out to lunch. I work a great many nights until midnight, and when occasion has required it I have
worked all night. The work is heavy and I have to carry on most of it myself.
Mr. "BYRNs. How long have you been holding that particular position?
Mr. HUDDLESON. About four years, nearly four years.
Mr. Byrns. And you have been in the Government service how long!
Mr. HUDDLESON. Twenty-three years. I do not believe there is a man in the Treasury Department who is familiar with my work who will not say that I am entitled to that much or more.
Mr. Berns. You are asking for a principal bookkeeper at $2,000?
Mr. HUDDLESON. Yes; that is for Mr. Moon. Mr. Moon has been in the department-not in that office all the time, but in that office a number of years—for 36 years, and he is an expert man, a good man, the best man we have in the division. We rely on him a great deal, especially in connection with our accounts. The salary of $2,000 is less, as you know, than that paid for similar work in the bookkeeping and warrants division in the Treasurer's Office and in other branches of the service. A few months ago Mr. Fort, who is the Assistant Treasurer, asked for Mr. Moon to be transferred to his office, but we told Mr. Moon that if he would stay with us we would try to get him an increase to $2,000. I do not believe we can keep him unless we can get this increase, and it would seriously cripple our division to lose his services; he is a very valuable man to us.
Mr. Evans. What is his salary now?
Mr. HUDDLESON. Yes, sir. I would like to say this, that Mr. Moon has been there so long that I can put him on any desk in the office and he is really a better clerk than any one else in the office; he can take any desk, because he is thoroughly familiar with the entire work of the office, in addition to his knowledge of bookkeeping, which is a valuable asset to the division.
ADDITION OF ONE CLERK,
Mr. Byrns. This estimate really includes the addition of one clerk?
Mr. HUDDLESON. Mr. Byrns, that was occasioned by dropping Mr. Glover from the Treasurer's rolls last year; I did not know that he was dropped, or else I would have asked to have him transferred at that time, as was done with reference to other clerks detailed from the Treasurer's Office; they were cutting down the Treasurer's force, and all clerks who were detailed therefrom to the various offices were transferred to the offices in which detailed. I did not know that Mr. Glover was at that time being dropped from the Treasurer's roll; it left him without a place and us without a clerk. In view of the fact that he had been brought from New York to the Treasurer's office we put him back on the New York Subtreasury roll until we could make some other provision for him.
Mr. Bynns. He was employed in your office at the time?