we divide it at this time. Of course conditions are abnormal and we do not know positively that deliveries will be required exactly that way. If silver certificates continue to be retired to any extent, there won't be as much delivered to the Treasurer and there will be an increase in the Federal reserve bank notes delivered.

Mr. BYRNES. Now, you have made a reduction from $889,560 to $669,440?

Mr. BROUGHTON. Yes, sir.

Mr. BYRNES. That reduction is possible because of the reduction of the number of sheets you have indicated above?

Mr. BROUGHTON. Yes, sir; which was based upon maximum war conditions.

SKILLED LABORERS.

Mr. BYRNES. You estimate also for two skilled laborers at $900 each?

Mr. BROUGHTON. We had a skilled laborer at the mill at $840. Last year your committee, or rather Congress, gave a slight increase in salaries to the mill employees, but for some reason or other-I think probably through inadvertence-the skilled laborer which the department asked be increased to $900 was actually cut down to $800. Mr. BYRNES. What did he receive before?

Mr. BROUGHTON. $840, and it was cut to $800. And we have asked for an additional skilled laborer. The present force is not sufficient to handle the work, and we are obliged to borrow a man from the contractor all the time, and we would like to cover that with an employee of our own.

Mr. BYRNES. That man is detailed to the contractor?

Mr. BROUGHTON. The contractor loans us a laborer.

Mr. BYRNES. Does he act as a guard?

Mr. BROUGHTON. As an unskilled laborer, to help pack the paper and handle it for shipment.

Mr. BYRNES. You say the contractor lends you a laborer now? Mr. BROUGHTON. Yes, sir.

Mr. BYRNES. You have two men employed, one paid by the Government and one paid by the contractor?

Mr. BROUGHTON. Yes, sir.

Mr. BYRNES. One is paid $800 this year?

Mr. BROUGHTON. Yes, sir.

Mr. BYRNES. By the department?

Mr. BROUGHTON. Yes, sir.

Mr. BYRNES. You are asking that he be paid $900?

Mr. BROUGHTON. Yes, sir; the same as the guards.

Mr. BYRNES. Is it absolutely necessary that you have two men to do that work?

Mr. BROUGHTON. Oh, yes. We are manufacturing normally twice the paper that we did when this force was established.

Mr. BYRNES. How does it happen the contractor is furnishing that man?

Mr. BROUGHTON. He loans him to us to help handle the boxing of the paper and other labor work involved.

Mr. BYRNES. Has he objected to continuing that philanthropic

act?

Mr. BROUGHTON. I have not heard that he has; but we consider it bad policy after the paper is delivered to us.

Mr. BYRNES. The result of the reductions you have indicated will make the reduction of this estimate to what amount-the $905,500 to what amount?

Mr. BROUGHTON. Take off

Mr. MONDELL. $204,120 from that first item.
Mr. BROUGHTON. $701,380 will be the total.

Mr. BYRNES. Is there any other item?

Mr. BROUGHTON. That is all. Then starting with the 136,000,000 as the basis for the bureau work, then you go right into the bureau. That is what we estimate the work will require for the next year136,000,000 and such amount, plus 5 per cent allowance for spoilage, gives the total 142,800,000 sheets. And I have given you what the paper will cost based upon existing cost.

Mr. BYRNES. Let me ask you this one question: The Federal Reserve Board estimates the number of Federal reserve bank notes that they say will be necessary for their use during the next fiscal year?

Mr. BROUGHTON. It is based upon an agreement between the Secretary and the board. Under the Pittman Act the Secretary retires the silver certificates and Federal reserve banks may be required under the law to take out the bank notes.

Mr. BYRNES. The figures are arrived at by whom-the Federal Reserve Board?

Mr. BROUGHTON. No; the amount to be issued is determined through consultation between the Secretary and the Federal Reserve Board and the Comptroller of the Currency.

EMPLOYEES OTHER THAN PLATE PRINTERS.

Mr. BYRNES. For salaries of all necessary employees, other than plate printers and plate printer's assistants, you have had for this fiscal year $1,800,000, and for 1920 you estimate $2,919,700. Will you tell us, Mr. Director, the reason for the increased estimate?

Mr. WILMETH. The first reason is the difference in the number of sheets that we will be called upon to deliver, as shown by the Treasury estimate. There has been an increase from 123,000,000 to 136,000,000, or 13,000,000 sheets. Our estimate is based upon the cost per sheet or per note. Knowing the number of sheets that the Treasury will expect the bureau to execute, we apply to that the costs as they have been developed and it gives the amount that we should ask.

Mr. BYRNES. What is the cost per note and per sheet? First, let me ask you how many notes do you make from the sheet?

Mr. WILMETH. The standard is four notes to the sheet. Sheets come from the mill double size; in other words, two sheets of four notes each. We are printing some eight subject sheets on power presses.

Mr. BYRNES. By doing that, do you effect an economy?
Mr. WILMETH. Yes. There is some slight economy.

INCREASE IN COST OF NOTES.

(See p. 42.)

Mr. BYRNES. What is the cost per note to-day?

Mr. WILMETH. The cost of Federal reserve notes, which is just about the same to execute as other classes of notes, is slightly in excess of a cent per note, including paper.

Mr. BYRNES. Has there been any considerable increase in the cost per note?

Mr. WILMETH. Yes; there has been an appreciable increase since the war began, approximately 30 per cent.

Mr. BYRNES. What did it cost you prior to the war?

Mr. WILMETH. I do not know. I would have to supply that. I should say it is a little less than a cent per note.

Mr. BYRNES. A little less than a cent per sheet?

Mr. WILMETH. Yes; I will give that. A little less than a cent per

note.

Mr. BYRNES. The increase being due to an increased wage?

Mr. WILMETH. Partly, and also to the large increase in materials that enter into every phase of the manufacture of notes.

Mr. BYRNES. Do you hope for any decrease in the price of those materials after normal conditions return?

Mr. WILMETH. I think so. But I do not believe we will get it in the competition which we are getting ready to take between now and June for the fiscal year 1920. I think that will be too close to the closing of the war to affect prices materially. I am particularly interested in the prices of colors, which are very nearly prohibitive at this time. I think those ought to drop. I have reason to believe they will drop, but not immediately.

Mr. BYRNES. At a little more than 1 cent per note, you estimate you will need how much for the next fiscal year to print the work that is required of you by the Treasury Department, to which you have referred heretofore?

Mr. WILMETH. We think for compensation we should have

$2,429,515.

Mr. BYRNES. That does not represent the total salary list of the bureau?

Mr. WILMETH. Not by any manner of means; no, sir.

REPAY WORK.

Mr. BYRNES. You take your total salary list and deduct from it the amount you estimate for repay work, and in that way arrive at the amount you ask us to appropriate for salaries?

We

Mr. WILMETH. Yes, sir. In other words, according to this schedule. we have set out for wages in the estimates as printed $5,300.928. estimate our repayments for the next fiscal year to be $2,381,228. Mr. BYRNES. Your repay work for the previous year was $1.834,647? Mr. WILMETH. Yes, sir.

Mr. BYRNES. This increase, is it due to additional repay work or to the additional cost for the repay work?

Mr. WILMETH. It is due to both. There are some adjustments in our costs that we are obliged to make when materials advance or

when wages are increased. And we estimate that our repay work for the next fiscal year will be slightly in excess of what it was last fiscal year.

Mr. MONDELL. Mr. Director, your reduced estimate from $2,919,700 to $2,429,515, is that based to any extent on increased salaries and wages, and, if so, to what extent and what class of employees?

Mr. WILMETH. There has been an actual estimated increase of $94.600. This pertains to no particular class, but to general increases. Mr. MONDELL. It pertains to the increases already made or increases contemplated in the new fiscal year?

Mr. WILMETH. To increases already made.

Mr. MONDELL. Then, the estimate does not necessarily contemplate increases other than those you have already made?

Mr. WILMETH. Not in this appropriation.

Mr. MONDELL. You gave as the estimated sum of repayments $2.381.228.72, for the coming fiscal year?

Mr. WILMETH. Yes; on compensation.

Mr. MONDELL. On compensation?

Mr. WILMETH. Yes, sir.

Mr. MONDELL. What will the repayments under this head amount to for the present fiscal year? That will be an estimate, so far as the remainder of the year is concerned, but you can give it definitely as to the period up to December 1?

Mr. WILMETH. Yes, sir. It is $1,417,282.35 in the period up to December 31, and for the whole year up to June 30, 1919, it is estimated to be $2,600,000.

Mr. MONDELL. This sum which you have just given covers the repayments under this particular item of appropriation?

Mr. WILMETH. Yes, under compensation of employees.

Mr. MONDELL. What is the total of repayments under all your items of expenditure and all classes of work up to December 31?

Mr. WILMETH. It will take two or three days to work that out. We are working on our financial statements now, and I can have it here with the return of my testimony. The amount of reimbursements is not constant or continuing. At one period there will be larger reimbursements for bonds; at another it will be for Philippine notes; at another for Federal reserve notes. But the estimate that is given is based upon the actual reimbursements for work done from July 1 to December 31 and estimated from January 1, 1919, to June 30, 1919, as follows:

Mr. MONDELL. You stated a moment ago that notes were costing now approximately a cent apiece. This, as I recollect it, is a considerable increase above the cost of work prior to the beginning of the war. You understand me, I am going back to the prewar times. What was approximately the cost of notes, say, in 1914, and to what extent is it due to increased cost of material?

Mr. WILMETH. The cost now of making United States notes and certificates, including paper, is 1.127 cents per note, and immediately prior to the entry of the United States into the war it was 0.865 of a cent per note. The costs by appropriations are as follows:

Mr. MONDELL. You are asking under this item the sum of $12,300 for custodian of dies, rolls, and plates. What is the condition necessitating that increased expenditure?

Mr. WILMETH. The appropriation item for the pay of the custodian of dies, rolls, and plates and his force has been carried in the bill as a separate item. These employees are under the administrative direction of the Director of the Bureau of Engraving and Printing. There have been, until recently, two custodians at $2,000 each. This divided responsibility has not resulted in efficient administration and I have just changed and put one custodian in charge.

Mr. MONDELL. Your understanding is that the appropriation for the custodian of dies, rolls, and plates has been carried in the legislative bill?

Mr. WILMETH. No; carried in the sundry civil bill, but not estimated for in that bill as a separate item this year.

Mr. MONDELL. Is this approximately the expenditure in the past for this same work?

Mr. WILMETH. It is a slight increase. It has been heretofore, as I recall, $8,400.

Mr. MONDELL. Why the necessity of the increase?

Mr. WILMETH. Additional force necessary to keep the additional dies, rolls, and plates. I have to detail people in order to do the work. It is costing more to run the vault than Congress appropriated.

INCREASE IN SALARY OF CUSTODIAN.

Mr. MONDELL. Is it a matter of increases of salaries?

Mr. WILMETH. For one employee, the custodian, from $2,000 to $2,500. The responsibility I consider amply worth that salary. I want to make one more statement, with your permission. There is an item of $73,710 that has been taken into account in this reduction, which is explained as follows:

This sum represents the present salary of the laborers of the Bureau of Engraving and Printing, which has heretofore been carried in the legislative bill, the amount of their compensation being $540 per