I believe that one of the most effective days to save money is to improve the quality of personnel. A smaller number of hard-working first-class people can carry the same workload as a larger number of mediocre or less energetic peopleand do a better job. When I returned to the State Department in 1961 after 10 years in private life, I made up my mind that I would not approve increases in personnel unless they were clearly necessary to meet new responsibilities or increased workloads. For 3 years I have pressed my colleagues to examine individual workloads, to eliminate unnecessary jobs wherever possible, and to do all within their power to improve the quality of our personnel. I believe that we now have, on the whole, a lean organization. I know at firsthand how dedicated and hard working my principal colleagues in the Department are. They and their staffs work long days and long weeks-normally 6 days and sometimes 7. I doubt that there is another organization anywhere in Government or in the business world which receives so much unpaid overtime work. Indeed, I am concerned about the numbers who are working at a pace which cannot be sustained over a protracted period. PAST YEAR ADMINISTRATIVE ACTIONS We Before discussing the budget in greater detail, I would like to review some of the administrative actions taken during the past year. We have continued to assess priorities, to eliminate the marginal and to achieve cost reductions. have held to our desire for economy, efficiency, and good management. At the same time we have tried to strengthen our leadership in foreign affairs. We have found many ways to economize in the conduct of the Department's business. These help us to do more at less cost-to get "a dollar's worth for a dollar spent," to use President Johnson's words. CLOSING OF POSTS Let me cite a few examples: Fifteen consular posts have been closed or changed in status, reducing costs by $500,000 a year. ECONOMY AIR TRAVEL The use of economy accommodations for air travel has been extended to all dights, worldwide. We hope to achieve costs reductions of $457,000 in international travel and we have trimmed the 1965 request accordingly. FREIGHT SHIPMENTS it possible to move the same volume for $50,000 less. Better methods of handling truck and ocean freight shipments have made PUBLICATIONS List were revised to cut publication costs by $30,000. The method of production of the Biographic Register and the Foreign Service help to keep our budget within reasonable limits, and to meet new needs or There were other economies, but these illustrate our efforts. Together they higher ests within the funds made available to us. INCREASED MANPOWER EFFICIENCIES 2 years the Department has conducted steadily increasing diplomatic and conWe have increased our efficiency in the use of manpower. During the past strength. To achieve this, we have streamlined procedures, reduced reporting sular activities throughout the world without increasing its total position requirements, closed The manpower reductions achieved have enabled us to assign additional perConsulates and embassies and to meet increased consular and other workloads. sonnel to the crisis areas of the world, to new or expanding activities, to new A few examples will illustrate what we have done : marginal consulates, and eliminated low priority functions. IMPROVED VISA OPERATIONS Visa work has been improved by reducing the number of mandatory visa Opinions referred to Washington, by having posts abroad submit directly to he field offices of the Immigration Service requests for routine waivers, by 31-834-64-pt. 1--15 merging the visa lookout books of the Department and the Immigration Ser using machine methods, and by reducing consular reports from posts ab by 30,000 documents annually. All these will result in more visas issued employee and will help to meet greater demands for visa services. REDUCTION IN POSITIONS The Bureau of Far Eastern Affairs abolished 24 lower priority position meet urgent new requirements at posts in the Far East. CURTAILED POLITICAL REPORTING The Bureau of European Affairs curtailed political reporting from pos Germany and abolished seven officer positions which were used for h priority needs at other posts. INCREASED PASSPORT PRODUCTION The Passport Office issued or renewed 1,018,000 passports in fiscal 1963 compared with 867,000 in 1962, and increased production per man-yeɛ about 10 percent. In the long run better utilization of personnel will result from better s vision. We are giving greater emphasis to good supervision. Specifi we are stepping up our training of first line and middle level superviso they will do a better job of managing those who report to them. These are indicative of our search to find ways of doing things better, our efforts to employ our personnel usefully on the work of highest pri The search will continue, so that we can hold the line on employment and meet new demands we know will come. We have taken a number of steps to improve the quality of the Departm personnel and facilities and to strengthen its capacity for leadership in for affairs. INTERAGENCY COUNCIL ON INTERNATIONAL, EDUCATIONAL, AND CULTURAL AFF In Interagency Council on International, Educational, and Cultural Af has been established under the chairmanship of the Department's Assi Secretary of Cultural Affairs. Its purpose is to strengthen the coordin of all Government programs of international exchanges. POLICY RESEARCH PROGRAM Our program to contract with persons of outstanding competence from colleges to produce policy research studies has continued to augment at mir expense the research and analysis which we must do within the Departme back up foreign policy formulation. OFFICE OF INTERNATIONAL AVIATION A new Office of International Aviation has been established in the B of Economic Affairs to give Government-wide leadership in making and car out U.S. international aviation policy. The whole international air tran picture has changed since World War II with the strong competition of fo carriers. Protection and promotion of U.S. interest requires special atte to the development of U.S. policy in this field and conveying it persua to other governments. HERTER RECOMMENDATIONS-FOREIGN AFFAIRS PERSONNEL We have taken action on recommendations of the Herter Committee or eign Affairs Personnel. We have made progress in establishing a joint ret ment program for junior officers for State, USIA, and AID, a lateral » program geared to our manpower requirements. and a stronger progre career management to develop the high quality specialists that today's diple requires. IMPROVED COMMUNICATION WITH PUBLIC Today, foreign policy is the concern of every American. We are mak particular effort to improve communication with the public through mo fective public information programs. We provide speakers and conduct foreign policy conferences throughout the country, we are improving the quality of our written and printed replies to request for information, and we are assisting the press and mass media in their efforts to ascertain the facts. Conversely, we are striving to improve channels through which we can obtain the views and desires of the general public on America's role in world affairs. We have endeavored to meet the demands upon State Department leadership in the area of foreign operations. STANDARD STATE, AID, AND USIA ADMINISTRATIVE REGULATIONS We are completing the laborious, but essential, job of writing standardized administrative regulations for the Department, AID, and USIA. This includes the drafting of revised rules and joint instructions on travel, pay allotment, titles and rank, rest and recuperation, local employee compensation, security, and related subjects. STUDY OF DEPARTMENT OF DEFENSE REPRESENTATION ABROAD In cooperation with the Defense Department and Budget Bureau, we have begun a study of Defense representation abroad. We will review military attaché, MAAG, and U.S. training missions in selected countries. I expect that this will result in reduction of the total number of such Defense personnel overseas. We are working with the Budget Bureau to establish guidelines for other Federal agencies in staffing oversea operations. COMPREHENSIVE COUNTRY PROGRAMING SYSTEM During the past year we have developed, tested, and installed in selected embassies a comprehensive country programing system. This system is designed to provide our Ambassadors and top management in Washington with an overFiew of the complex, multiagency programs which we are undertaking abroad in this era of operational diplomacy. It provides a means for planning and using total U.S. resources to achieve our objectives. We must attract and compensate the finest minds and the keenest talent for our foreign operations. We est acquire the staff mobility necessary to a tough and flexible worldwide service. I would like to turn now to a more detailed discussion of the budget estimates. BUDGET SUMMARY The revised fiscal year 1965. Amendments submitted by the President in March and conThe original request of the Department of State totaled $365.8 million for tained in House Document 240, reduced the total by $6.5 million. request is $359.3 million, and increase of $18.2 million above 1964 appropriations. The increase is composed of the following: SALARIES AND EXPENSES $129 million in salaries and expenses for fixed-cost increases, communications facilities, and improved support of existing personnel. FOREIGN BUILDINGS $7.5 million in the foreign buildings appropriations for construction or acquisifor projects as authorized by Public Law 88-94. Utilizing the remaining $3.4 million in CS-owned foreign currencies puts to tangible use excess moneys tion of real property; $4.1 million of this increase is in the regular appropriation owned by the Government. $2.4 million in appropriations for the International Boundary and Water Commission, primarily for construction of the Amistad Dam on the Rio Grande. INTERNATIONAL BOUNDARY AND WATER COMMISSION $5.1 million in mutual educational and cultural exchange activities. This increase in appropriated funds is largely to offset decreases in foreign currency MUTUAL EDUCATIONAL AND CULTURAL EXCHANGE ACTIVITIES carryover and other nonappropriated funds. The request will provide continu ance of the total program at approximately the current year level. ALL OTHER ACTIVITIES $3.8 million for all other activities. The largest items in this category ar $1.1 million for international tariff negotiations, $0.7 million for missions t international organizations, $0.8 million for international conferences and con tingencies, and $0.7 million for the Center for Cultural and Technical Inte change Between East and West in Hawaii. REDUCTIONS IN CONTRIBUTIONS In other appropriations there is a net reduction of $13.4 million, primar because of a nonrecurring contribution to the U.N. Congo Force. A complete summary by appropriation is shown in the following table: The budget reflects an increase of 112 positions above the number the gress has thus far approved for the current fiscal year. Except for the positions in the 1964 supplemental for communications personnel, however, 1965 request is for 19 fewer positions. SALARIES AND EXPENSES The salaries and expenses appropriation is the Department's principal op ing account. The budget request is $165.9 million, an increase of $12.9 m above the 1964 appropriation. The requested increase is in three main catego MANDATORY COSTS About $5 million in mandatory costs to continue operations at this year's This includes annualization of the pay increase effective January 5, 196 creases in wages of local employees and rising costs of supplies and se purchased overseas, and within-grade salary costs. COMMUNICATIONS About $4.5 million to continue the communications improvement pr initiated last fiscal year. IMPROVED SUPPORT About $5.4 million for improved support of existing personnel, providing? for additional travel, equipment replacement, security equipment, printing other nonsalary items. NONRECURRING COSTS The increases are offset in part by transfers and nonrecurring costs of $2 million. COMMUNICATIONS The Department's communications capabilities continue to be a matter of major concern. Through the assistance of the Congress, particularly in providing funds in the fiscal year 1963 supplemental, the Department was able to order a considerable amount of badly needed equipment, primarily cryptographic in character. A few items of this equipment have already been received. Because of uncertainties regarding the Department's role in communications when the regular fiscal year 1964 budget was submitted, items for major communications improvements were excluded. A 1964 supplemental request of $5 million is pending before the Congress. Funds for 131 positions and other communications requirements which are reflected in the 1965 budget as an increase are in fact a continuance of the program for which we are asking congressional approval in this current fiscal year. Approximately one-third of the $4.5 million increase is for continuing costs of the communications personnel requested in the supplemental. The Department was fortunately able to provide better communications support during the more recent crises than had been true in earlier years and particularly, during the latter part of calendar year 1962. By an interagency arrangement additional facilities were created during the last fiscal year. Much more remains to be done. During the balance of fiscal year 1964-65, the Department expects to replace throughout the world equipment which has become dangerously outmoded. The Department in today's fast-moving world, must have a modern worldwide communications capability. Your favorable action on our fiscal year 1964 supplemental request and the request contained in this budget for communications will enable us to achieve much needed improvements. IMPROVED SUPPORT There are several items in the category of improved support of which I would like to take special note. The budget requests of the various bureaus contain increased amounts for equipment totaling $1.7 million. Nearly $0.6 million is for security requirements, largely to provide security support to the worldwide communications system alent which I have already spoken. The remainder is for replacement of equipthent and furniture. I make a special appeal for these funds this year. $18 million is needed for home leave and transfer trips. Another major increase is $2.6 million for travel and transportation. About The remainder is for regional conferences of chiefs of mission and commercial attachés, rest and reenperation trips for personnel stationed at hardship posts, and consultation travel of offers located in Washington and at posts abroad. I would like to mention briefly a few other appropriation items: ACQUISITION, OPERATION, AND MAINTENANCE OF BUILDINGS ABROAD was passed by the Congress during the last session. The 1964 appropriation for the regular program was $18.1 million, leaving $31.7 million in the authorization. The appropriation request for 1965 is $22.3 million. Legislation authorizing appropriations of $49.8 million for a 2-year program owned site in Montevideo, ing costs to approximately the same figure as in 1964, despite the increased By reducing administrative expenses, it has been possible to hold total operatamounts needed for maintenance and operation of buildings. Regional offices have been further reduced from 10 to 3, and 18 positions have been eliminated. Funds are requested for construction of an office building on a Governmentoffice building site in Paris and for a number of the most urgently needed the acquisition and construction portion of this program to a virtual standstill and it is imperative that we move it forward now to provide the office space Lack of authorizing legislation for fiscal years 1961 through 1963, brought and living quarters essential to our operations abroad. In the special foreign currency program the request is $6.1 million, an increase an office building annex in Ankara, purchase of an projects in Africa. of $3.4 million. Projects United Arab Republic. Major ones are an office building at Madras, India, and an anner to the embassy building in Cairo. are planned in India, Israel, Pakistan, Nepal, and the As you know, this appropriation |