that the work of checking and correcting inventories is progressing very well indeed. The work is only of great value to the Commission as we are able to discharge the accumulation.

Another thing that we have effected is making short cuts to cut down the time and save money. One of the greatest troubles we have is that carriers themselves report in too much detail. We are calling them in and saying to them, "We do not want all of the details sent in to us." It is very difficult to get some of them to cut down on it, but we have been able to have it cut down in some instances. The Seaboard Air Line is a good example of it. They tell us that the simplification that we urged cut their reporting 45 percent. Others place the saving at 25, 35, or 40 percent; in some few instances 50 percent.

WORK PERFORMED BY BUREAU FOR INTERSTATE COMMERCE COMMISSION

On previous occasions I have explained in detail the uses to which our valuation records, data, studies, and reports are put. Here are a few instances of work performed by the Bureau of Valuation in connection with the Commission's current proceedings:

Preparation of an exhibit indicating the elements of value as of January 1, 1934, for each of the principal class I carriers and their lessors, operating in official classification and southwestern territories for use in a pending proceeding involving divisions of joint rates.

A similar study relating to all class I carriers in western, southwestern, and eastern territories.

Conducting hearings and drafting reports on accounting questions, such as accounting rules for telephone companies.

Assisting in cases where value and depreciation were involved, such as determination of compensation for use of terminals and facilities, rates, and depreciation charges on refrigeration facilities, etc.

Reports for use in connection with loans by the R. F. C., to railroad companies. These applications have to be passed on by the Commission.

Reports on value of property as a whole and by mortgage divisions involved in reorganization proceedings-for the Rock Island System, Frisco System, Missouri Pacific System, and Chicago & Eastern Illinois.

Valuation reports of carriers for consolidation purposes-the Southern Pacific lines east of El Paso and the Rock Island System.

STUDIES MADE FOR FEDERAL COORDINATOR OF RAILROADS

Under the law which places the facilities of the Interstate Commerce Commission at his disposal, the Federal Coordinator of Transportation can call on the Bureau of Valuation.

Commissioner Eastman has stated to you this morning the high value he places, as Federal Coordinator of Transportation, on our records and responses to his requests on us. He gave a few illustrations. I have listed some among the many calls that have been made by him, as Federal Coordinator, for reports of experts during the year. They include

Research data in connection with the financial situation of class I carriers. Research data, covering costs, etc., to be used in connection with the elimination of grade crossings.

Valuation data in railroad budget research. These related primarily to 50 selected roads, later amplified by 30 additional carriers.

Statistical data relating to values, mileage, depreciation, etc., useful in cost analyses, on the New York Central, Delaware, Lackawanna & Western, Chesapeake & Ohio, and Denver & Rio Grande Railroads, as typical of their respective territories.

Data, including tentative value as of December 31, 1932, of all railroads for use in study of consolidations.

Data on aids, gifts, grants, and donations for all railroads, including areas of grants patented, disposed of, and held, also proceeds from disposition of such lands, and value of concessions, and the extent of railroad occupation of streets, alleys, and highways for selected carriers, for use in studies of subsidies.

Detailed values of all railroad properties in and adjacent to Chicago.

Data with respect to important noncarrier lands and structures owned by selected carriers and held by them for considerable periods of time, although not in transportation service.

Assignment of our employees to assist in connection with investigation of motor bus operations conducted by railroads. Also, in an investigation dealing with railroad company unions.

Statistical study of the physical property of all railroads in the United States, showing the relationship of the various groups of property to total.

Valuations of freight station, express depots, etc., for use in the Coordinator's merchandise traffic report as a basis for comparisons of rents of quarters used by railroads in 1. c. 1. business with costs of similar service by express companies, forwarding companies, and motor-truck lines.

Depreciation rates on all fixed property located in Panama Canal Zone. Depreciation rates on all fixed property of the Inland Waterways, which is all the locks and dams owned by the Government, numbering 341 in the United States, and on all fixed property owned by the municipalities but used by the Inland Waterways Corporation..

There can be no doubt that such calls will continue to be made by whoever is placed in the difficult position of attempting to solve the transportation problem.

WORK PERFORMED BY RECONSTRUCTION FINANCE CORPORATION

Mr. Chairman, you asked about calls made on us by the Reconstruction Finance Corporation. Outstanding are the following:

Preparation of data and supplying expert witnesses with respect to the value of property located in Kansas City, Mo., and St. Louis, Mo., sold by Terminal Shares, Inc., to Missouri-Pacific Railroad for a consideration of $20,334,252. This was for use by the R. F. C. in the District Court of the United States, Eastern Division, Eastern Judicial District of Missouri, in which the reorganization proceeding of the Missouri-Pacific is pending. The R. F. C. contends that the contract should be repudiated by the trustees as it considers the purchase exorbitant.

Valuation data in connection with special report of R. F. C. on St. LouisSan Francisco Railway Co.

Valuation data concerning the Chicago & Eastern Illinois Railroad Co.

Valuation data relating to the Baltimore & Ohio for use in connection with refinancing operations.

Access and inspection of data in the Bureau's possession in which the R. F. C. is interested in behalf of the Government.

Much of the aid that the Bureau of Valuation can give in the matter of loans comes through the preliminary stages in which the Interstate Commerce Commission passes on the applications for loans. The Commission calls on us for reports on the properties.

I am in receipt this morning of a memorandum from the Director of Finance calling my attention to the fact that the East St. Louis, Columbus & Waterloo Railroad Co. had filed a petition in the United States District Court for the Eastern District of Illinois for reorganization under the bankruptcy law. He also listed other carriers

that are in distress. This is notice to us to get ready to respond to call. The list of distressed carriers is a long one, and we give special advance attention to them.

REQUESTS FROM GOVERNMENTAL ESTABLISHMENTS AND OTHER AGENCIES

We are having a great number of calls from other departments and activities of the Government. The requests for aid or access to and use of our records is greatly increasing. We make the records available.

It has

Take, for example, the Bureau of Internal Revenue. assigned a man to follow our records to aid in that Bureau's taxation work.

Whenever the Post Office Department enters into a contract for lease or rental of a building, it must be based upon the value of the property as determined by the Postmaster General. Requests for valuation reports on such properties are coming through all the time. It just happens that on my desk this morning I have two requests for such aid. They are typical. They relate to terminal properties in Jersey City leased by the Post Office Department for post-office purposes. One of those properties belongs to the Delaware, Lackawanna & Western; the other to the Central Railroad of New Jersey. Among such recent requests are those for leasing terminal post-office facilities at Memphis, Boston, Birmingham, Atlanta, Harrisburg, and Los Angeles.

The Public Works Administration is requiring for its use a check of appraisals in connection with construction projects. It requested data concerning additions on betterments to the property of the Seaboard Air Line, for instance, from 1908 to 1932.

The Department of Commerce wants a report on the railroad stockyard property at Cleveland, Ohio.

For the Communications Commission we are now engaged in completing a valuation of the Western Union. That work will be completed before the first of next July, but hearings which will follow will require expert witnesses. I have just had an estimate made of that expense, and it is something like $29,000.

The Geological Survey calls on us for the use of our railroad maps to aid in checking control lines.

From the War Department we have quite a series of calls for information. For instance, we have supplied the Chief of Engineers' office with certain railroad reports involving conservation projects, such as the Walhonding Branch of the Pennsylvania Railroad. The project calls for building a dam that will flood some land. There are several of those projects.

Calls come to us from States, particularly at the present time, in the matter of working out tax complications. More particularly, those calls are coming from the Far West, California and Wyoming, but some are coming from Eastern States, too.

Municipal agencies are asking us for aid.

The Federal Trade Commission and the Home Owners' Loan Corporation, the Tennessee Valley Authority, the United States Chamber of Commerce, and private individuals and railroad companies are also asking us for information.

In addition to that, Mr. Chairman, we have also responded to requests to assign attorneys to the Senate committee investigating airmail and ocean-mail contracts. We have also had men assigned to the Senate committee investigating the manufacture and sale of munitions.

We have also had the assignment of employees to assist Commissioner Splawn in connection with his investigation of holding companies, under House Resolution 59.

The carriers and shippers are calling on us for information and data. We have recently had conferences with representatives of the Public Works Administration, looking to the matter of our making a field check of their properties and the changes in them, which are financed by P. W. A. loans to the railroads, and to satisfy the requirements of the law in checking upon proper disbursement of funds.

I think, Mr. Chairman and your associates, that in general, covers the ground. I have eliminated a great deal of detail, but even at that I have taken probably too much time in reciting the calls made on our valuation forces and for our records and the practical uses to which the valuation work is now being put. The criticism that has been made in the past is that the valuations and our records were not current. These illustrations which I have given seem to me to be convincing that we have the work to such a stage now that day by day it is paying dividends on past expenditures by being used to meet present-day problems at a time when the situation is most critical. There can be no dispute that the work that we are performing now is vital and essential, nor is there any doubt, in my mind at all events, that the demands for the use of our valuation records will continue and increase. But if the public interest is to be served, we must be in a position to supply these data in a reasonable time, and to do this the records must be kept current. We have made great strides, but there is a great deal of work yet remaining to meet the intent of the law which, in a word, is that we shall keep our work current at all times. and be ready to respond to the call of the Commission.

INADEQUACY OF ESTIMATE

I repeat what I have stated here before, and also at the meeting at the Director of the Budget; the requested appropriation really is inadequate. It was asked to carry on the usual work. The order to value the pipe lines has been added. Seeking, however, to do our part, we shall try to the best of our ability to operate under it. We are not asking for any increase in it. We are going to try our level best to carry on with a decrease instead in a time of increasing demands on us.

During the coming year, aside from meeting the recent order of the Commission to value the properties of the carriers of petroleum and petroleum products by pipe lines, we shall primarily be engaged in complying with section 50 (f) of the law as amended last year. It requires that the Commission, having valued all the properties, shall keep itself informed of all new construction, extensions, improvements, retirements, or other changes in the condition, quantity, use, classification, and shall follow the cost of all additions and betterments and the changes in investment; all of this to the end that the

Commission may have available at all times the information deemed by it necessary to enable it to revise and correct its previous inventories, classifications, and values.

Bearing in mind that the railway properties comprise some 250,000 miles of roadway, approximately 400,000 miles of all tracks, and more than a quarter of a billion units of equipment, it is easily realized that this constitutes a very large order. It is this work that consumes the money. The placing of the results to the use of the Commission, the Coordinator, the R. F. C., and other agencies of the Government, is a minor part of the expenditure.

READJUSTMENT OF SALARIES

We have one complication in our salary set-up. Our five section heads were receiving $9,000 each. They were reduced last year to $7,500 that is, the head land appraiser, the head auditor of property changes, the head engineer, the head examiner, and the head attorney. In our reorganization last year two of the section heads dropped out. Their places were filled by their assistants. These two heads of sections the head auditor of property changes and the head attorney are receiving $7,000. The Commission could not, if it desired to do so, bring them to the level in salaries of the three other section heads. I am not in a position to say that the Commission is ready to act on that, but if it can be provided that the Commission can increase those salaries if it so desires to the $7,500, which is set up for section heads, it should be done.

Mr. Secretary, will you amplify that statement? You are more familiar with these salary matters than I am.

Mr. McGINTY. We are prohibited by the Reclassification Act from giving these two section heads the salary agreed upon by the Commission for all five of the section heads. In other words, two of the section heads cannot be paid more than $7,000, the salary they are now receiving, unless you put a provision in the bill similar to the one we carried for a number of years, providing that out of this appropriation not more than $7,500 may be paid for these five places. Mr. WOODRUM. Have you the money with which to do it, if you had the right to do it?

Mr. MCGINTY. Yes, we have the money, but we have not the right, and we will not have the right to do it under the ruling of the Comptroller General unless you insert a provision here permitting us to pay that amount of money to all five of the section heads. If you will permit that to be done I will endeavor to work out a permissive provision.

Mr. WOODRUM. You may work it out and the committee will

consider it.

Mr. LEWIS. Now, Mr. Chairman, in closing: We are going to try our level best to carry on, with a decrease instead in a time of increasing demands on us.

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