Mr. HUDDLESON. Yes.

Mr. BYRNS. On detail?

Mr. HUDDLESON. Yes; he had been there perhaps for two years and a half.

Mr. BYRNS. While this is really, so far as the estimate is concerned, an increase of one clerk, as a matter of fact it is not an increase of the force that you have had for the past two and a half years?

Mr. HUDDLESON. That is it exactly. As a matter of fact, at the time clerks were taken off of the Treasurer's roll and put on various other rolls of the Treasury Department we had three people on detail, but we have but one now.

Mr. BYRNS. You have no difficulty in keeping your work current? Mr. HUDDLESON. Well, we work a great deal of overtime in our division. I suppose there is not a night that there is not one or more clerks on duty there.

Mr. GOOD. Is the work increasing in that division?

Mr. HUDDLESON. Well, I do not know that you could really say it is increasing, although whenever the work of the subtreasuries and the work of the national banks increases it increases our work and, as you know, the work of the entire fiscal system of the United States has been increased wonderfully in the last few years. We are really running now with two less clerks than we had a year and a half ago, at which time we had three people on detail in our office. Mr. EVANS. Have you any clerks detailed from your office to other offices?

Mr. HUDDLESON. None; no, sir; but we have one clerk on detail to our office, and this is the clerk we now desire to have transferred to our division.

Mr. EVANS. But none from your office to any other offices?

Mr. HUDDLESON. No, sir; we have had a number of demands for them, but it is impossible to turn them loose; we could not keep things going and get along without them, because we are working at night right along all the time.

Mr. BYRNS. If there is nothing further, we are much obliged to you, Mr. Huddleson.

SUBTREASURIES.

[See p. 541.]

Mr. HUDDLESON. Do you want to take up the subtreasuries before I leave?

Mr. BYRNS. Yes, but before we take up the question of the subtreasuries let me say that last year the legislative bill carried a provision directing the Secretary of the Treasury to report

to Congress at the beginning of its next session which of the subtreasuries, if any, should be continued after the end of the fiscal year 1917, and if, in his opinion, any should be continued his reasons in full for such continuance; also if any or all of said subtreasuries may be discontinued what legislation will be necessary in order to transfer their duties and functions to some other branch of the public service or to Federal reserve banks.

Has that report been made up to this time?

Mr. HUDDLESON. It is in the hands of the Secretary now, but Mr. McAdoo is out of the city. I think the report is practically prepared.

Mr. BYRNS. You would not care to speak about it until he has submitted it formally?

Mr. HUDDLESON. No, sir; I could not do that, although I have seen a rough draft of it.

Mr. BYRNS. Would it be possible for you to furnish the committee with an advance copy of that report, and before it actually comes in formally?

Mr. HUDDLESON. I can not say that I could do it, but I will try. I think Mr. McAdoo would be very glad to send it to the committee just as soon as he gets back to the city and can sign it.

Mr. BYRNS. I think that under the circumstances we had better ask Mr. Huddleson to come back at the conclusion of our hearings; I do not know exactly when we will finish these hearings, but it may be that the report will be in such shape that an advance copy can be furnished to us before that time.

Mr. HUDDLESON. All right.

TUESDAY, NOVEMBER 28, 1916.

DIVISION OF LOANS AND CURRENCY.

STATEMENT OF MR. W. S. BROUGHTON, CHIEF DIVISION OF LOANS AND CURRENCY.

Mr. BYRNS. Mr. Broughton, you are asking for some increases. You ask for seven clerks of class 4, whereas for the current year you have six.

Mr. BROUGHTON. Yes, sir.

Mr. BYRNS. You are also asking for the promotion of certain expert counters?

Mr. BROUGHTON. Yes, sir.

Mr. BYRNS. Does that involve an increase in the number of clerks? Mr. BROUGHTON. It involves an increase of four and the readjustment of salaries.

We are asking for two skilled laborers, one at $1,200 and one at $1,000.

We are also asking for a subcustodian of vault, at $1,400.

Mr. BYRNS. Will you just explain to the committee why those changes and increases are considered necessary?

Mr. BROUGHTON. The increases are really of three classes-one clerk at $1,800, one skilled laborer at $1.200, and one subcustodian of vault at $1.400 being in one class and occasioned by the increase of work in connection with the public debt. This office handles all the transactions connected with the public debt, and during the last year there have been 10 new issues of United States bonds; there will be 10 new issues next year and 10 new issues the next year. Two of those are occasioned by the operation of the postal-savings act; there are two new issues each year and there will be two additional issues until 1921, when the first two issues will be paid off. Section 18 of the Federal reserve act, which authorizes the refunding of 2 per cent bonds, bearing the circulation privilege, into 3 per cent securities without the circulation privilege, became operative during the past year, and under

that $30,000,000 of 2 per cent bonds are refunded into threes, half into one-year notes and half into 3 per cent 30-year bonds. The refunding operations occur four times a year and there are four series of notes issued during the year and four issues of the bonds, making one series for the year. The law authorizes this refunding to continue for a period of 30 years. That is actually new work, and each of those issues, two under the postal-savings bill and five under the Federal reserve act, becomes actually a new bond issue and has to be kept separate against the date of payment.

In addition to those increases the office is called upon to act as the registering and transfer agent of the loans issued by the insular governments, except Hawaii, those issued by the Philippines and Porto Rico. We have more than 75 of those issues outstanding now which we have to care for. Within the last two months we issued seven series for Porto Rico and one series for the Philippines. That is new work. We are asking, in order to care for that work this next year, for a $1,800 clerk who will be competent to supervise, more or less, the details; we are asking for a skilled laborer at $1,200. We have developed the use of the addressograph in the office; we use it for opening accounts, inscribing bonds, and for almost every purpose where the name of the payee has to be written or addressed; that has supplanted the use of pen and ink and the typewriter. Also on the addressograph we draw all checks in payment of interest on the public debt. We have a very efficient young man in there who is now carried as a machine operator at $840; we need another operator right now. Because of his civil service status he can not be promoted to a clerkship but we would like very much to give him $1,200 because he is worth that and more, and then permit us to give him an understudy at $840 in the place now provided by law. A year ago last July the Secretary took over the custody of the reserve stock of Federal reserve notes; they are kept over in the bureau, and when a Federal reserve bank requires Federal reserve notes they are issued from this stock on order of the Comptroller of the Currency and then shipped direct from the bureau. The custody of that stock is in charge of this so-called subcustodian; he is the Secretary's representative over there and has charge of the vault; he is a $1,400 clerk in Loans and Currency and it is necessary to take him off his regular work. Now, it is Federal reserve business and we are asking for this reimbursable position so as to relieve our roll of the charge, the money to be recovered from the Federal reserve banks. If we made a charge against the banks we could get this money now but it would not help our roll because it would have to go into miscellaneous receipts. We need that place for our regular work.

Mr. BYRNS. Are there any details to your office from any other bureau?

Mr. BROUGHTON. We have a cross detail. One of our money counters is detailed to the Bureau of Internal Revenue and there is one detailed from the Bureau of Internal Revenue to our office, so that makes it even.

Mr. BYRNS. Is there any particular reason for those details?

Mr. BROUGHTON. Yes, sir: there is a reason. It is because the counters in the Internal Revenue Bureau were abolished last year,

and one of those counters did not have a clerical status, and she was transferred to the Division of Loans and Currency. There was a counter in the Bureau of Internal Revenue that we took, but she was deaf and had difficulty in getting any clerical work.

Mr. BYRNS. She is able to do efficient work?

Mr. BROUGHTON. Yes, sir; absolutely. She is one of the good

counters.

Mr. BYRNS. That represents one of the details?

Mr. BROUGHTON. Yes, sir. Then, one of our clerks is detailed at the Government paper mill, and one of the clerks is assigned as chairman of the destruction committee. Then, of course, one of them is subcustodian of the vaults at the bureau. Those three clerks are assigned to regular work, and the office has carried two of them for a great many years. They do not do any clerical work in the office. We are asking for a skilled laborer at $1,000 in lieu of one laborer at $660.

Mr. BYRNS. What is the occasion for that increase?

Mr. BROUGHTON. All the paper used in the printing of securities for the United States is handled by the Division of Loans and Currency, and it is through the issue of that paper to the bureau that the Secretary maintains his check on the bureau. It is all charged up and accounted for whenever any security is printed. The custodian of paper, at $2,250, has charge of that paper and of its movement in and out, and his first assistant foreman of laborers is an assistant messenger at $720. It is in order to give him $1,000 that we are asking for that skilled laborer. He is worth it, and his position ought to pay more. Corresponding positions in the bureau do pay more. We have a sufficient laborer force there, and we are asking to drop one at $660 in lieu of this one at $1,000. We would like to retain the assistant messenger's place at $720, so as to permit the promotion of one of the laborers from $660. We have only two grades on the laborer force, one at $660 and one at $720, and this man is really the assistant custodian. He now gets $720, and we wish to promote him to $1,000.

Mr. BYRNS. How is the work of your division-is it current? Mr. BROUGHTON. Yes, sir; I would say that the transactions are current, except the money counting. The money counting has been in arrears, and it is in arrears now. It is not so much in arrears now as it was during the summer. It was seriously in arrears during the

summer.

Mr. BYRNS. This estimate involves an increase in the number of expert counter clerks.

Mr. BROUGHTON. Yes, sir; we have at the present time 36 counter clerks who count all of the currency redeemed by the Treasurer and the Assistant Treasurers, amounting to something like 300,000,000 notes a year. The number of pieces handled during the fiscal year 1916 increased 4 per cent over those handled in the fiscal year 1915, while the number of pieces handled in the first three months of this year shows an increase of 24 per cent over the number handled during the corresponding period last year. The only count given of that currency in the Treasury is given in the Division of Loans and Currency. Formerly those notes were counted in the Treasurer's Office, in the Register's Office, and in the Secretary's Office; but the

first two counts have been discontinued, and this is the only check afforded. Now, it is a part of the plan to occasionally recount the currency and check the work of the counters, but it has been absolutely impossible to do that during the last year. That work has been from 2 to 14 days behind. In order to keep the work current so that the Treasury accounts may be adjusted just as soon as they redeem the currency, and in order that we may occasionally make a recount, we are asking for an increase of 4 counters. That is an increase from 36 places to 40 places. The force at the present time is divided into three grades with 15 in the $720 grade, 2 in the $800 grade, and 19 in the $900 grade. We are asking for a readjustment of this force so as to make the number in these grades approximately uniform, and to bring the average salary up to $900 a year. This will cost in increased appropriations $3,620 for the 4 new clerks at that average salary, and $3,080 in order to readjust the force.

The grade of $900 was established away back in war times, and it continued to be the same until 1899. Eighteen hundred and ninetynine was a year of ordinary prices, and the average salary since 1899 has been reduced to a little over $800. Prices, according to the figures of the Department of Labor, have increased so that the equivalent of a $900 salary in 1899 would be $1,440 to-day, or, to turn it around the other way, a $900 salary on the 1898 basis, is worth only $560 now. This is only to give these people a living wage. We are not attempting to bring them up in proportion with the increased cost of living. Everybody knows what that has been. We are not attempting to do that, but we are attempting to put them on the basis they used to have. This average salary of $900 is considerably less than that which was paid to the counters in the Treasurer's Office. We want the $720 people to be able to be decent in their living. There is not a counter in the office but what is self-supporting, and I am confident that over 50 per cent of them have dependents. How they are existing, I do not know.

Mr. BYRNS. Are they men or women?

Mr. BROUGHTON. All of them are women.

Mr. BYRNS. You say that you are from 3 to 14 days behind in adjusting the accounts of the Treasurer?

Mr. BROUGHTON. Yes, sir.

Mr. BYRNS. Would the allowance of this extra number of counter clerks put you in a position to be current?

Mr. BROUGHTON. Yes, sir; and we will be able to examine and to recount a day's work for each counter each month.

Mr. BYRNS. Is there anything else?

Mr. BROUGHTON. If you are interested in statistics I can furnish you with any amount of them.

Mr. GOOD. You have been at work refunding some of the United States bonds last year?

Mr. BROUGHTON. Yes, sir.

Mr. GOOD. Will you refund any more during the next year than you will during the current year?

Mr. BROUGHTON. We would like to refund thirty million next year, the same as this year.

Mr. GOOD. As I understand it, your work is practically current?