PUBLIC DEBT SERVICE

The appropriation allowed for current work of the service on old issues is $2,425,000, which sum is $35,000 under the current appropriations and $25,000 under the Budget estimates. The committee is of the opinion that the work of the service can be adequately performed with the amount granted.

The sum recommended for the purchase of distinctive paper for United States securities is $770,000, which is a decrease of $150,000 under present appropriations and $75,000 under the estimates. The Budget decrease of $75,000 was predicated both upon a decrease of 1 cent in price per pound and the purchase of 25,000 pounds less. The committee in years past has called attention to the situation of the Government with reference to this paper. The present contractor has had a virtual monopoly for many years and it still continues in spite of efforts to secure competition. The price per pound being paid for the paper during this fiscal year is 43 cents. The Treasury Department has based its estimate for the next fiscal year at 42 cents per pound, a reduction of 1 cent, and the quantity is estimated at 1,860,000 pounds. The estimated price is regarded by the committee as excessive considering the new prices which are being obtained for commercial papers. Under bids recently opened for paper for the Government Printing Office and other branches of the service there is noted a very substantial reduction in the prices for the coming year under those of the present contracts.

Attention is also invited to a table appearing on pages 140 and 141 of the hearing showing the kind of stock and the prices per pound paid for this paper from 1913 down to the present time. The composition of the present paper is three-fourths linen and one-fourth cotton. The price of linen and cotton rags has been considerably decreased as have other manufacturing costs. With a view to protecting the Government so far as possible in this purchase, the committee has inserted a limitation of not to exceed 38 cents per pound on the price, 5 cents under the current contract, and a further provision authorizing the Secretary of the Treasury, in his discretion, to split the award for such paper for the next fiscal year between the two bidders whose prices per pound are the lowest received after advertisement but not in excess of 38 cents.

The committee has also been informed that the cotton content of this paper, now one-fourth, can be safely increased gradually and still provide a paper suitable for the needs of our currency. The present paper money is not redeemed principally because it is worn out but mainly because of its dirty and greased condition. Experiments have been conducted by the Bureau of Standards with a view to increasing the content of cotton in the paper and very satisfactorily. The committee recommends that the Treasury Department take appropriate action looking to the advisability in connection with next year's supply of providing a larger percentage of cotton than has been used in recent years. The larger use of cotton will incidentally help domestic products as much of the linen rag used in the paper is imported.

DIVISION OF APPOINTMENTS

The amount recommended is $47,880 which is a decrease of $20,025 under present appropriations. Of this decrease $19,440 represents

the transfer of the section of surety bonds to the office of accounts and deposits where it more appropriately should be located.

BUREAU OF CUSTOMS

The appropriation for the Customs Service is carried in the sum of $22,700,000, which is $1,283,600 under the current year and $350,000 under the Budget estimates. The Budget recommended a decrease of $933,600, which was accounted for mainly by reduction in field personnel, decreased contingent expenses, subsistence expenses, equipment purchases and installations, and payment of awards. These decreases logically have followed the diminution of customs business due to the depression. Vacancies in the field forces are not being filled and will not be filled until there is need for them. The committee, in view of these conditions, has effected a further decrease of $350,000 in the estimate by the elimination of amounts for automatic increases in salary for field clerks, and in the belief that greater decreases should and can be made in the expenses for rents, repairs, fuel, and other items where decreasing prices affect the situation. Included in this committee decrease of $350,000 is the sum of $153,800 representing the abolition of 29 presidential offices which will be referred to later.

The allotment for personal services in the District of Columbia is increased by $17,600 to provide a wool administrator and an additional clerk and to cover the transfer of two employees from the field service.

A limitation of $1,700 is recommended as the maximum amount that may be allowed in accordance with law for living quarters, heat, fuel, and light to any person employed in foreign countries. This figure is in accord with the limitation placed in the pending appropriation bill for the persons employed abroad under the Departments of State and Commerce.

A paragraph is recommended abolishing the offices of comptrollers of customs, surveyors of customs, and appraisers of merchandise (except the appraiser of merchandise at the port of New York). These 29 offices have total annual salaries aggregating $153,800. The offices proposed to be abolished and the salaries of each are as follows:

The paragraph also proposes that the elimination of these offices. shall be complete and the annual saving of $153,800 shall be a net saving to the Government through the transfer of the duties of the offices to other positions already in the Customs Service and further

through the requirement that the Secretary of the Treasury shall so administer the legislation that the transfer of duties will not result in the establishment of any new positions.

All of these offices, with one exception, originated during the period between 1799 and 1889. Aside from the ports listed in the foregoing statement, the Customs Service in other places is headed by one presidential officer, the Collector of Customs, and the remainder of the force is under civil service. At each of the foregoing ports the number of presidential officers administering the customs is anywhere from two to four, each with a presidential commission and the prestige that accompanies it. Such a condition is not conducive to good management. Those familiar with the Customs Service are of the opinion that a more economical and efficient administration is had where there is one principal officer appointed by the President, namely, the Collector of Customs, and where all others are subordinate to him and appointed by the Secretary of the Treasury under civil service rules and regulations.

The abolition of these offices is recommended in the opinion that the duties performed by these presidential offices can be transferred to and imposed upon trained personnel now in the service not only without any injury to the service but with a distinct improvement in administration. The proposal is not new or radical. It is well known that at each of these ports there are assistants to these officers, appointed under civil service, well trained and with long experience in customs matters to whom these duties can be transferred and performed more effectively and satisfactorily under the direction. of the collector than they are now being carried on under the nominal head.

OFFICE OF THE TREASURER

The appropriation of $1,269,000 is $21,200 in excess of the amount for the present year. The first deficiency act granted $20,000 for 15 additional clerks for part of the present fiscal year on account of the increase of approximately 3,000,000 in the number of checks handled and an increase in the work of handling postal savings collateral due to a rise in postal savings from $204,000,000 to $575,000,000 in the past 18 months. The increase allowed is to carry this added personnel for a full year.

INTERNAL REVENUE SERVICE

The recommendation for the Bureau of Internal Revenue, aside. from tax refunds, is $33,650,000, a decrease of $312,560 under present appropriations and $110,000 under the Budget estimates. The decrease recommended by the Budget estimates was $202,560 through a reduction in field personnel, savings in subsistence expenses, and a decrease in rental through the occupancy of new public buildings. The committee has further decreased the estimates by $10,000 in the belief that there should be greater savings in rent and in other expenses of the service than those reflected by the estimates. The bureau will undoubtedly have a larger burden placed upon it by any new tax legislation which may be enacted at this session and for that reason the committee deemed it unwise to make any further changes. The amount allotted under the total appropriation for personal services in the District of Columbia is increased from $8,922,300 to

$9,122,560 on account of reallocations of positions by the Personnel Classification Board during the present fiscal year and a sum already a charge upon the bureau funds.

For the current fiscal year an appropriation of $26,000,000 was carried for the refund of taxes illegally or erroneously collected. No direct appropriation was included in the Budget estimates for 1933 but a reappropriation of unexpended balances was submitted. The bill carries the reappropriation. Expenditures for refunds during the fiscal year 1931 totaled approximately $70,000,000. For the first six months of the present fiscal year the expenditures for refunds have been $40,182,000, or at the monthly rate of $6,700,000. On this basis expenditures for 1932 will reach $80,364,000. The amount on hand. July 1, 1931, with which to pay 1932 refunds, was $111,861,000. Deducting from this figure the estimated expenditures during 1932 of $80,364,000 there will remain as an estimated balance to be reappropriated by this bill for the fiscal year 1933 of only $31,497,000. The bureau estimates that on the basis of the figures as to refunds compiled when the estimates for 1933 were submitted to the Bureau of the Budget the expenditures for the fiscal year 1933 would amount to $63,076,500. Comparing this anticipated expenditure with the amount of the reappropriation contemplated by the budget estimate of $31,497,000, there is an indicated deficiency at this time for the fiscal year 1933 in excess of $31,500,000. There is pending at this time a judgment against the United States for tax refunds rendered by a United States district court involving with the interest approximately $17,000,000. That case is being appealed. If the Government loses in the appellate court, the 1933 expenditures will be increased to approximately $80,000,000.

BUREAU OF INDUSTRIAL ALCOHOL

The total appropriation allowed for the bureau is $4,725,000, which is $83,528 less than the current year and $36,000 less than the estimates. The Budget decrease of $53,420 under the 1932 amount represents practically the saving in 1932 appropriations due to not filling 34 new positions which were provided for the current year. The committee has further reduced the Budget figure by $36,000 in the belief that there should be savings in rent and other expenses through lessened costs compared with the average prevailing in 1932.

BUREAU OF NARCOTICS

The Budget recommendation for the Bureau of Narcotics is $1,632,800, which is $75,728 less than the current law. This decrease is brought about by 26 vacant positions which are not being filled during the current year, and by a reduction in the per diem allowance for subsistence. The committee has further reduced the estimate by $7,800, leaving the amount recommended for next year at $1,625,000.

COAST GUARD

The Budget estimates for the Coast Guard indicated a net reduction for 1933 under 1932 of $3,193,862. Included in the 1932 appropriations, however, were items for construction of vessels, new stations, and the new academy buildings, all of a nonrecurring nature, aggre

gating $3,323,500, and deducting these there was left a net increase proposed for 1933 of $129,638 in all other expenses. The amount recommended in the bill is $28,882,220, which sum is $4,098,862 less than the 1932 appropriations including the decrease of $3,323,500 on nonrecurring items, and excluding such nonrecurring items the actual decrease under 1932 is $775,362. This latter reduction is found in the items for fuel, outfits for vessels and ship chandlery, miscellaneous reconstruction and repairs at stations, construction of communication lines, and vessel repairs, in many of which items lowered costs are factors. The amount for pay and allowances of officers and enlisted personnel remains at the figure for the current year.

The reduction in the Budget estimates of $905,000 is found almost entirely in the elimination of the increased amount proposed for pay and allowances, a decrease in the amounts for fuel, outfits, miscellaneous station reconstruction, renewal of certain cables, and in the amount for repairs of vessels. With the exception of pay, most of these other items are predicated upon present price and cost trends. In the item of pay and allowances a Budget increase of $410,000 was proposed over current appropriations. This increase contemplated 16 additional commissioned officers, 10 additional cadets, and 41 additional enlisted men, together with increases brought about by length of service of enlisted men through a heavier percentage of reenlistments. In denying this increase of $410,000 the committee feels that with readjustments and reassignments of the personnel and perhaps some curtailments, if necessary, the service can be performed within the total of the present appropriation of $20,640,000. The Coast Guard has grown very rapidly in the past few years. present appropriation contemplated 469 commissioned officers, 140 cadets, 945 warrant officers, 11,137 enlisted men, and 924 on the retired list. The committee is proposing that any changes in this personnel which may be necessary during the next fiscal year shall be found within the total of the $20,640,000 currently allowed.

BUREAU OF ENGRAVING AND PRINTING

The

The total recommended for the bureau is $6,535,000, a decrease of $165,000 under the current year and $100,000 under the Budget estimates. The estimates proposed a decrease of $65,000 based upon a lesser quantity of work and slightly decreased costs for materials and supplies. The committee has further increased this cut by $100,000 in the opinion that there should be a further reduction on account of costs of materials and supplies and other operating expenses, including the maintenance of passenger automobiles referred to elsewhere in this report.

SECRET SERVICE

The amount included in the bill for supressing counterfeiting and other crimes is $550,000, which is $14,140 less than the 1932 appropriations and $7,640 under the Budget estimate. Authority is included in the appropriation for its use in the performance of "other duties specifically authorized by law" to permit of carrying on any work resulting from the Reconstruction Finance Corporation act. The White House police force is continued at the figure for the current year, there having been deducted the amount of $1,401 on account of automatic promotions.