I have two other charts that I would like to submit for the record,

Mr. Chairman. One shows the workload and manpower trends in the disbursing operation over a 20-year period. The other shows two related performance indicators over the same 20-year period--unit cost and productivity. They tell a story we are all proud of in terms of steady improvement. But they are also waving a red flag. The manpower line in the top chart, which had a down slope for a long time, has flattened over the last few years. On the positive side that means we are handling the steady increase in workload without adding significantly to our workforce, and that is pretty good performance. But it also means that we have reached a mature stage in our computer usage program. We have captured the big initial savings that yielded dramatic productivity increases. We are now 98 percent computerized and cannot expect a resumption of the downtrend in manpower until we find another major technological breakthrough.

The unit cost line in the bottom chart highlights another factor that we have to cope with. Unit cost has been creeping up since 1969, again after a long decline. That is because even though our productivity has been increasing at a healthy rate, prices of our resources, primarily wage rates, have increased faster. These productivity and cost trends do not signal any relaxation on our part. On the contrary, we are scrambling harder than ever to offset these countervailing forces.

FEDERAL TAX DEPOSIT OPERATIONS

The next activity in order of magnitude is our Federal tax deposit operations, the system for handling deposits by taxpayers at their local banks for credit to a Treasury tax and loan account. This activity will require $3,878,000 for 1973, the same level as authorized for 1972. This is based on a forecast of 33. 5 million deposit items to be processed by the Federal Reserve Banks, the same volume at the same unit cost as our current 1972 estimate.

Mr. Chairman, I offer for the record two charts on this activity. The first chart portrays the trends of volume and cost per deposit over the years while the second one reflects the amount of taxes collected through the system in relation to the cost per thousand dollars collected. Unit costs of 11-1/2 cents per deposit and just over two cents per thousand dollars collected are expected for both 1972 and 1973.

These charts convey somewhat the same picture as the disbursing charts. However, these charts include postage in the unit cost total and, in this system, we have been able to cut something from the postage bill. The systems change made in 1968, which we discussed with this committee at that time, gave us a 3-year downtrend in postage cost per deposit and dampened the. effect of the recent postage increase. The postage portion of total unit cost, would be about making total cost a minimum of 15 cents per deposit

3-1/2 cents higher

-

deposit and total cost per thousand dollars collected are both less today than

they were in 1954 despite substantial rises in postage and salaries and most

other costs.