MESSAGE.

To the Senate and House of Representatives:

On the 17th of January last I sent a message to the Congress describing the work of the commission appointed by me under authority of the acts of June 25, 1910, and March 3, 1911, granting appropriations to enable me to inquire into the methods of transacting the public business of the various executive departments and other governmental establishments, and to make report as to improved efficiency and greater economy to be obtained in the expenditure of money for the maintenance of the Government. By way of illustrating the utility of the commission and the work which they were engaged upon, I referred to a number of reports which they had filed recommending changes in organization of the departments and bureaus of the Government, the avoidance of duplication of functions. and services, and the installation of labor-saving devices and improved office methods. All of the recommendations looked to savings of considerable amounts. With the message of February 5, 1912, I transmitted to the Congress the reports on the centralization of distribution of Government documents, on the use of window envelopes, and on the use of a photographic process for copying records.

A number of the reports of the commission had not then been commented on by the heads of the departments that would be affected by the changes recommended, and therefore I did not feel justified at that time in recommending to the Congress the statutory amendments necessary to carry out the recommendations of the commission. Since then, however, I have received the recommendations of the heads of departments, and I transmit this message for the purpose of expressing my approval of the changes recommended by the commission and of laying before the Congress the reports prepared by the commission.

LOCAL OFFICERS SHOULD BE IN THE CLASSIFIED SERVICE.

POST OFFICES.

I have several times called attention to the advantages to be derived from placing in the classified service the local officers under the departments of the Treasury, of the Post Office, of Justice, of the Interior, and of Commerce and Labor. In my message submitted to the Congress on January 17 I referred to the loss occasioned to the Government because of the fact that in many cases

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two persons are paid for doing work that could easily be done by one. In the meantime I have caused an inquiry to be made as to the amount in money of this loss. The results of this inquiry are that the loss amounts to at least $10,000,000 annually. For example, it appears that a very substantial economy would result from putting experienced and trained officers in charge of the first and second class post offices instead of selecting the postmasters in accordance with the present practice. As the annual operating expenses of the first and second class offices aggregate the enormous sum of more than $80,000,000, undoubtedly if the postmasters of these offices were embraced in the classified service, and required to devote all their time to the public service, the annual savings would eventually represent many millions of dollars. The saving in salaries alone, not taking into account any saving due to increased efficiency of operation, would amount to about $4,500,000. At the present time the salaries of postmasters of the first and second class amount to $6,076,900, while the salaries of assistant postmasters of the same classes amount to $2,820,000. If the position of postmaster were placed in the classified service and those officers were given salaries equal to 20 per cent more than the salaries now given to the assistant postmasters, the latter position being no longer required, there would be a saving in salaries to the Government of $4,512,900. In the case of postmasters at offices of the third class a large annual saving could be made.

PENSION AGENCIES.

An annual saving of nearly $62,000 could be made if the position of pension agent were placed in the classified service, since the work now done by a pension agent at a salary of $4,000 and a chief clerk at a salary ranging between $1,400 and $2,250 could easily be done by one person in the permanent classified service at a salary varying from $2,100 to $3,000. Greater economy and efficiency would result from the abolition of the pension agencies and from the adoption of a plan in accordance with which pensions would be paid by the Pension Office in Washington.

DISTRICT LAND OFFICES.

What is true in the matter of payment of pensions is also true in the service under the General Land Office. The field service of this office could be more efficiently and economically operated if it were provided by law that the office of receiver of district land offices be abolished and the duties transferred to the register, assisted by a bonded clerk, and the register placed in the classified service. It has several times been estimated that more than $200,000 would be saved annually and the efficiency of the service greatly increased by the adoption of such a plan.

INTERNAL-REVENUE AND CUSTOMS OFFICES.

Large expenditures are made for salaries of political appointees in the internal-revenue and customs services. In both services a direct saving in salaries, and an indirect economy through increased efficiency, would follow a transfer of such offices to the classified service.

OTHER LOCAL OFFICES.

In the other field services the saving which would result from the classification of the local officers under the departments is not as marked or probably capable of as exact estimation as in those mentioned, but there is no doubt that substantial savings would follow. It is not to be doubted that where no saving would result the classification of the local officers would increase the efficiency of the service. It would be desirable also to place all marshals, deputy marshals, and assistant attorneys in the classified service, although but little direct economy would result. Supervising inspectors in the SteamboatInspection Service and the members of the field service in the Bureau of Fisheries should be placed in the classified service.

COMMISSION'S REPORT ON LOCAL OFFICES.

The report on methods of appointment submitted to me by the commission, which covers fully the subject of appointments by the President by and with the advice and consent of the Senate, and recommends that various local officers, such as postmasters, collectors of internal revenue, etc., and heads of bureaus in the departmental service, be included in the classified service, is transmitted herewith (Appendix No. 1). The report and recommendations are approved by me.

LEGISLATION NEEDED TO ESTABLISH THE MERIT SYSTEM.

In the interest of an efficient and economical administration of the vast business of the Government, I urge the necessity for the inauguration of this important reform, and recommend that the necessary amendments be made to the laws governing appointments, such amendments to take effect not later than July 1, 1913, so that there may be secured to the people the benefits to be derived from a conduct of their affairs by officers selected on a merit basis and devoting their time and talents solely to the duties of their offices.

CONSOLIDATION OF LIGHTHOUSE AND LIFE-SAVING SERVICES.

The commission's report (Appendix No. 2) recommends that the Life-Saving Service of the Department of the Treasury be discontinued as a separate organization and that the maintenance and operation of the life-saving stations of the country be made one of

the duties of the Bureau of Lighthouses of the Department of Commerce and Labor. I concur in this recommendation and urge that the necessary legislation for carrying it into effect be enacted.

Both of these services are organized and maintained for the same general purpose-the protection of life and property endangered along the coasts and other navigable waters. Both maintain stations along the coast, which are located for the most part in close proximity. Both have substantially the same business problems to meet in locating, constructing, and maintaining these stations; in recruiting the personnel; in manufacturing or purchasing equipment; in purchasing, housing in depots, and distributing supplies; in operating a field-inspection service; in maintaining telephonic and other means of communication; in disbursing funds; in keeping proper books of accounts; and in rendering reports showing financial and other transactions. The maintenance of two separate services, as at present, means a duplication of organization in respect to all of these operations. The recommendation of the commission does not contemplate any essential change in the work of the life-saving stations; it is for the transfer of the business management of these institutions to the Bureau of Lighthouses. That bureau being fully organized for the administration of stations of this character will be able to direct and manage these stations with comparatively little addition to its present force and equipment. The commission estimates that, in addition to the advantage that will be obtained through having these two services operated by the same organization, a direct economy will be secured of at least $100,000 annually, and that the saving will greatly exceed this sum after the first year.

REVENUE-CUTTER SERVICE.

The report of the commission on the Revenue-Cutter Service (Appendix No. 3) represents a detailed investigation of the history, organization, and activities of this branch of the Government service and its relations to other services. The conclusion is reached that all of the duties now being performed by this service can be performed with equal efficiency by other services and that a great economy will result by having these duties so performed. The commission accordingly recommends that the service be abolished as a distinct organization; that its equipment be distributed among other services requiring the use of marine craft; and that provision be made for the performance of the work now being done by it by such other services. With these fundamental recommendations of the commission I am in full accord, and I recommend that the necessary legislation be enacted to put them into effect.

At the present time the Revenue-Cutter Service is organized as a naval establishment. The country is, in effect, maintaining two

navies, and is using one of these navies for the performance of duties of a civil character. The maintenance of two separate naval establishments entails unnecessary expense and is not in the interest of either efficiency or economy. In so far as the duties of the RevenueCutter Service are of a naval character, or are such as can readily be performed by the regular Naval Establishment, they should be performed by such establishment; in so far as they are of a purely civil character, use should be made of services organized and conducted upon a civil basis.

In respect to the distribution of the equipment and duties of the Revenue-Cutter Service among other branches of the Government, the recommendation of the commission looks to the transfer to the Navy Department of the vessels which are adapted to deep-sea cruising and the discharge by the. Naval Establishment of most of the duties now performed by the Revenue-Cutter Service upon the high seas. In memoranda submitted on the report of the commission, copies of which are submitted with such report, on the one hand the Secretary of the Navy raises the question as to whether these duties can be performed by the regular Naval Establishment without detracting from its military efficiency, while on the other hand the Secretary of Commerce and Labor raises the question whether certain of these duties can not be performed by the Lighthouse Service if that service is provided with vessels suitable for the purpose.

In view of these suggestions I recommend that, in the enactment of legislation providing for the abolition of the Revenue-Cutter Service, provision be made for the transfer of all the vessels and equipment of the Revenue-Cutter Service from the Treasury Department to the Department of Commerce and Labor; that the Secretary of Commerce and Labor be directed to assign such vessels and equipment to the Lighthouse Establishment, Bureau of Fisheries, and other services under his jurisdiction requiring the use of vessels, as, in his judgment, is for the best interest of the public service, and that authority be given to him to turn over to the Navy such vessels as he may find, upon investigation, not to be required by his department and which by their character are fitted to serve as useful auxiliaries to the Naval Establishment.

In thus recommending that the Revenue-Cutter Service as a separate establishment be abolished, I desire to make plain that such action does not carry with it the discontinuance of the rendering of any valuable and proper service now being rendered by that organization. On the contrary, I am persuaded that all such services will continue to be performed under the system recommended by me with equal or greater efficiency.

It should be noted that the adoption of the recommendation here made will result in bringing under one general administra