men in the main block and about 200 men, as I recall it, in that basement dormitory. All of those men were under the supervision of only two officers to maintain order. It just is not possible to reduce when you are down at rock bottom. The same situation is true elsewhere.

EFFECT OF ECONOMIZING ON FOOD

Senator KILGORE. If you started economizing on the food question, for instance, you would invite rioting.

Mr. BENNETT. Yes. I do not see that there is any chance of reducing our personnel. As a matter of fact, Senator, we requested, when we came to the House, an increase of 63 positions. That is all we requested to take care of nearly a thousand additional prisoners anticipated by this estimate. So, what do we do? Incur a deficiency? Let leave accumulate?

INCREASED UTILITY COSTS

There is one other point. I do not see any possibility that the cost of our utilities is going to decrease. On the contrary, it is going to increase. We cannot look forward to any decrease in the price of electric current, or fuel, or those other items. As a matter of fact, it has and probably will continue to increase.

Senator KILGORE. As a matter of fact, the price of your natural gas which you are now using at Leavenworth is going to increase.

Mr. BENNETT. It has already increased. In the last 2 years at Atlanta, for instance-it has increased from 16 cents per thousand cubic feet to 19 cents, an increase of nearly 15 percent over last year, and there is no hope that that is going to go down. Let us be realistic about it. If this cut comes along, what do we have to do? We have to take it off of our building maintenance.

Senator KILGORE. I was just getting around to that. I notice that you applied it to "Equipment replacements" and "Special repairs and improvements."

Mr. BENNETT. Yes. That is the only place we have. That is the only controllable item I have in my appropriation.

Senator KILGORE. However, actually, when you do not keep that up, does not that add to the actual cost?

REPAIRS NEEDED AT ALDERSON, W. Va.

Mr. BENNETT. Ultimately it certainly does. For example, Senator, down here at Alderson, W. Va., that institution has been in operation now since 1925, nearly 30 years, and we have not replaced the boilers, and they are operating at a very low efficiency. We can haywire them up enough to keep them going for another year or so, but they are still going to be very inefficient, and we have to replace them sooner or later. I think it would be good economy to give us the money now. We would save it over the course of time. Just consider, Senator, that the value of our physical plant runs from $150 million to $200 million. That is its present value. If you said, as commercial concerns do, that those buildings are depreciating at the rate of about 2 percent a year, we would be entitled, if these figures were applied,

to about $3 million a year for upkeep and maintenance of plant to take care of normal depreciation.

Senator KILGORE. In other words, if we treated you as we treat a private corporation in computing their income tax.

ESTIMATE FOR REPAIRS AND IMPROVEMENTS

Mr. BENNETT. We would be entitled to make repairs to our buildings to the extent of $3 million a year. We asked for only one-sixth of this amount.

There was submitted to the committee, as a matter of fact, estimates for special repairs and improvements of only $441,000. So, we think that it is not good economy to reduce this further. Of course, we can accomplish a repair to our institution cheaper than a private concern because we use inmate labor. But not to the extent contemplated by these allowances. We do all our own planning. We do all our own work. For example, there were a couple of tornadoes, and there was windstorm damage around some of our institutions. We can repair a roof for about 30 or 35 percent of what it would cost to do it elsewhere. But we must have money for materials.

LEAVENWORTH TUNNEL

Senator KILGORE. I checked that tunnel question at Leavenworth, and you could not even look at that tunnel on the figures that the warden has with regard to the cost to build. All you have to do is buy some cement and some reinforcing steel, and that is about all.

Mr. BENNETT. Yes. Therfore, it is good economy to give us this. little amount of money we are asking for these purchases of materials so that we can keep our building maintenance up to date.

ESTIMATE FOR EQUIPMENT AND REPLACEMENT

Likewise, Senator, another item that we are going to have to cut, because it is the only one controllable, is the amount of money we can spend for new equipment and replacing our old tractors, trucks, laundry equipment and various other things of that kind. We value the equipment in our institutions at between $10 million and $12 million, and as a conservative amount for replacement of equipment, we asked for $500,000; but if this cut goes through, we will have to apply $150,000 of that to this replacement of equipment.

Mind you, Senator, there are a lot of things in there that we very badly need that we have not included. For instance, you remember we went into the auditorium at Leavenworth, and you know what condition those seats were in in that auditorium. That is a low-priority item in our category. We want to get some money to take care of the telephone systems and the alarm systems that we have around the institutions and many other items of equipment.

Senator KILGORE. I was thinking about that last night. Down in Atlanta at your big farm there you are troubled with floods and also with some drought. A relatively small amount down there in the way of material might enable you to put a dam or two in there that would make a very valuable farm out of it and enable you to raise a whole lot

more, for instance, raise feed, which you cannot do now. I noticed also that your equipment is mostly just Army surplus.

Mr. BENNETT. Yes. Some of it looks pretty good at a distance.

USE OF ARMY SURPLUSES

Your appro

Senator KILGORE. I know, but what I mean is this. priations have been held down by reason of the fact you have been able to pick up this Army surplus which is now getting scarce.

Mr. BENNETT. That is true. It is very scarce, and the things we have are wearing out. What we ought to have, Senator, is an orderly program each year allowed for by our appropriation to take care of depreciation on our equipment and on our buildings. It is not going to get, less, and if we could have a reasonable amount, each year then we could be held responsible for maintenance standards. That would be realistic budgeting. Unfortunately, however, we have struggled along on what we could get, and so we have a good deal of deferred maintenance. I urge this committee not to require that we defer some of these needed repairs and new construction until later.

OPENING OF TERMINAL ISLAND

Senator KILGORE. Will there be any offsetting savings of travel and so forth by the opening of Terminal Island?

Mr. BENNETT. Yes; there will be some, but it would not necessarily come out of our appropriation. The cost of transporting the prisoners to the institution is paid for out of the fees and expenses of marshals. There may be some small offsetting expense on this transportation item that is included in our appropriation.

Senator KILGORE. The only time you pay the expenses is when you transfer a person from one place to another?

Mr. BENNETT. Yes; or when sending him home. Most of that transferring we do by bus. We have a number of buses that move about, among the various institutions.

Senator KILGORE. Even they cost money.

Mr. BENNETT. I will say they cost money; yes, sir. They cost money for personnel and operating, although far less than the railroad, of course. We figure it costs us about 0.016 cent per passengermile for actual operation of our own buses.

PRISON INDUSTRIES EARNINGS

Senator KILGORE. I took up with the Attorney General, when he was here, the question of the earnings of the Federal Prison Industries. That was just being turned into the general funds of the Government. I do not know whether Congress ever looked at it before or not. No consideration is given now to the operating cost of the penitentiaries; in other words, no incentive. He stated he was going to go into that thing right away, because possibly that ought to be set up as special funds from which we could authorize money to be spent on such things as buildings, maintenance, and things of that kind. I wonder if you could file for the record, at this point, how much has been turned in by Federal Prison Industries?

Mr. BENNETT. All told, since we have been a corporation?
Senator KILGORE. Yes.

NET PROFIT OF INDUSTRIES THROUGH 1954

Mr. BENNETT. Up to fiscal June 30, 1954, $27,250,000. I suppose at the end of the fiscal year 1955 that will be about $30 million.

Senator KILGORE. That is over and above the cost of management and everything else?

Mr. BENNETT. Yes, sir. That is the net profit.

Senator KILGORE. Material and everything else that you buy?

Mr. BENNETT. Yes, sir; that is the net profit.

Senator KILGORE. And so far, to all intents and purposes, that has not been taken into consideration?

SITUATION ON BOARDING DISTRICT OF COLUMBIA PRISONERS

Mr. BENNETT. Senator, there is more than one item of that kind that is not taken into consideration in connection with our operations. For example, we are boarding now for the District of Columbia in the neighborhood of 800 prisoners. They reimburse us their actual cost, but that goes to miscellaneous receipts in the Treasury. It does not come to us at all. My recollection is that that is a substantial sum. I will put it in the record also.

Senator KILGORE. I wish you would.
(The information referred to follows:)

Bills for the support of District of Columbia prisoners, adult and juvenile, housed in the various penal and correctional institutions of the Federal Prison System

Mr. BENNETT. Also, of course, we receive no reimbursements from military forces for boarding nearly 1,500 prisoners they have in our institutions.

Senator KILGORE. Would you take the last figure you have, for instance, on the military personnel in your prisons and put that in, how many they have for the last period which you can compute, which would probably be the end of the quarter or something of that kind? Mr. BENNETT. We make up a statement of that kind which goes into the back of the budget book.

(The information referred to follows:)

1950 1951. 1952__.

Military prisoners in Bureau of Prisons institutions as of June 30

Mr. BENNETT. I wanted to point out this, Senator, that the Atlanta penitentiary for a number of years was completely self-supporting. It did not cost the taxpayers of the country a dime. This year it is going to cost them a small amount. Our Federal Prison Industries earnings there this year will probably be $1,250,000, and the cost of operating the institution will be about $1,750,000.

Senator KILGORE. However, that $1,250,000 that you turn in will not be credited to that institution?

Mr. BENNETT. That is right.

Senator KILGORE. The institution will show itself as a dead loss. In the meantime the Treasury will be enriched by the $1,250,000? Mr. BENNETT. That is right.

Senator KILGORE. In other words, it is part of the income of the United States. We, of course, have to check the outlook.

Mr. BENNETT. That question of policy was considered at various times by various people, and they arrived at the conclusion that we should not use those funds except and unless they were appropriated specifically, in specific amounts. As a matter of fact, Senator, you do appropriate out of our Prison Industries funds specific amounts. For example, there will be, when we get to that item, an amount in there which you will authorize us to use for administrative expenses and for vocational training expenses, so it does come before the Congress in

any event.

Senator KILGORE. However, I do not think it has ever been fully clarified.

Mr. BENNETT. I agree with you; that is right.

REASON FOR DECREASE IN ATLANTA PRISON INDUSTRIES PROFIT

Senator KILGORE. Why did you have this dropoff in profit at Atlanta?

Mr. BENNETT. Last year, Senator, the sales to the military services took quite a cut due to the fact that they had a reduction in their procurement policy. For instance, they had a large stockpile of blankets, and they decided not to buy any blankets, so we were shut down in our blanket mill completely for nearly 6 months. We had to cut down at Atlanta on

Senator KILGORE. Your tarpaulins and tents?

Mr. BENNETT. We are out of that business completely so far as the War Department is concerned, but we had to cut back on some of the other more profitable items as well. The big profit items in our shop, Senator, are the heavy canvas, heavy duck, and we had to take on instead some of the lighter fabrics for which our mill is not properly equipped and does not operate at highest efficiency. That is the main