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ESTIMATED RECEIPTS FROM RENTAL OF STALLS, COLD-STORAGE PLANT, ETC.
The CHAIRMAN. In that connection, have you made any estimate of the amount you are likely to receive for the rental of space and from storage and from other sources, and what the revenue now is under private management.
Mr. KITCHEN. I have a short statement here I can read to you if you wish. We have a summary of receipts. Receipts from the market which means the renting of stalls, $76,518.
The CHAIRMAN. They are the receipts under the present management?
Mr. KITCHEN. Yes. Receipts from cold storage, that is, products placed in cold storage, $68,915.11; receipts from cold storage and refrigeration, that is, where they furnish refrigeration through pipe lines, $60,918.68; receipts, miscellaneous, $52,454.11. Now, that miscellaneous is rent for the restaurant, and the amusement company and things of that sort. Also in that item of miscellaneous receipts, they get a quantity rate from the power company on their electric current and they bill that out to these tenants, and make a profit on that; also they charge the tenants for any repairs they make for them. Of course, that will come out from this appropriation, you see.
Mr. ANTHONY. Does all of that income go direct into the Treasury? Mr. KITCHEN. It will go direct into the Treasury.
Mr. ANTHONY. So all the money you will receive from the operation of the market will go into the Treasury?
Mr. KITCHEN. The appropriation of this $140,000 does not mean that it will actually be a draft on the Treasury for that full amount.
Mr. ANTHONY. Why not?
Mr. KITCHEN. For instance, we hire a carpenter and a tinner and they make repairs for the tenants; we pay their salary out of the appropriation, but we charge the tenants for the repairs.
The CHAIRMAN. Have you made any estimate of what you will receive? You have given us what the other people do receive.
Mr. KITCHEN. We are hopeful of keeping the present income up.
The CHAIRMAN. You have not made up any system of charges for space?
Mr. KITCHEN. We expect to continue the present rates until we (an do otherwise.
Mr. Sisson. Is the present rate a reasonable rate!
Mr. KELLEY. When you take this plant over will all of your employees be civil-service employees?
Nr. KITCHEN. Yes.
Mr. KELLEY. And will be entitled to a month's vacation on pay; how much extra will that cost?
Mr. KITCHEN. We have taken that into consideration in our estimates,
Mr. KELLEY. Does that partly explain the discrepancy mentioned by Mr. Byrns?
Mr. KITCHEN. That will take care of some of it.
Mr. KITCHEN. We have asked you to allow us to take them over and carry them for six months without reference to the civil service.
Mr. ANTHCNY. Does the bill require them to be taken from the civil service or incorporated in the civil service?
Mr. Wood. The general law requires that.
Mr. ANTHONY. How does the general law apply to the present employees you have there? Unless those men can qualify under the civil service would they lose their jobs ?
Mr. KITCHEN, My understanding is that when the Government takes over anything outside they can be automatically blanketed into the civil service.
Mr. ANTHONY. By an Executive order?
Mr. FRANKLIN. That is, of course, provided they are efficient men and capable and physically able to carry on the work.
Mr. Byrns. I think the President can put anybody in the civil service under an Executive order.
Mr. FRANKLIX. Yes.
Mr. KITCHEN. Finishing my statement with reference to the receipts, I want to say that the total of those receipts amounts to $258,815, which under our present estimates shows a profit of $56.955.
The CHAIRMAN. That does not take into account any interest charges?
Mr. KITCHEN. No; it does not.
The CHAIRMAX. And no dividends or overhead charges for bonded debts or any taxes?
Mr. KITCHEX, No.
The CHAIRMAN. You are not charging up the various things these other people are required to pay?
Mr. KITCHEN. We are simply giving you the cost of operating the market.
The CHAIRMAX. That is, considering the property as of no value ? Mr. KITCHEN. That is the way these figures are made; yes.
The CHAIRMAX. Do you know what the policy of the administration is to be in connection with the operation as to charges for capital invested and taxes and all that sort of thing in the management of this institution, or has any policy been decided upon?
Mr. SHERMAX. The Secretary has laid down no policy, and I may say that the Center Market Co. have contended for years past that the property was not a money-making property. Of course, that has been energetically denied here in the House in the discussion of the matter, but the Center Market Co. have insisted for years past that it was not a profitable property, and I understand that they are very willing to unload it under the terms of this bill. They ceased to oppose this measure after it got into this form. We do not know what valuation the Government will be required to pay. It may be utterly impossible to show any sort of a profit if you charge up interest on the investment on the basis of what this valuation commission may require the Government to pay for the property. We are utterly at sea, and we do not know what we will have to pay for it.
The CHAIRMAX. But if we are going into a business, it ought to be entered upon just like any other business, and every expense should be taken into account and the business ought to be put on its merit and not simply say that you are making money because you only pay out so much in salaries and turning back so much into the Treasury of the United States, and therefore the institution is profitable.
Mr. SHERMAX. My impression is all we will ever be able to say is that the receipts are so much more than the expenditures, which constitutes whatever percentage it may be, whether it is 2 per cent or 10 per cent, on the value of the property.
Mr. Sisson. In the very nature of things that is practically what always occurs when the Government operates anything. I think you are right about it, and in the last analysis that is just what you are going to do.
Mr. SHERMAN. Mr. Chairman, may I make a statement and leave it to your judgment as to whether it remains in the record or not? There are some of us in the Department of Agriculture who have given our entire lives to that service. Speaking for myself, I have never had one dollar of my own which I was at liberty to spend without thinking twice as to whether it should go for the specific purpose for which it was spent, and there are some of us conscientious enough to spend the Government money in the same way. To-day in discussing the future-trading item the question has come up as to why the Secretary of Agriculture can not put somebody he already has on that work. Every man I have in my division is paid out of an appropriation which is made for a specific line of work, and I can not put a man on that fund that is not engaged on that specific work. The very nature of our organization and the very nature of the appropriations you give us from year to year make it absolutely necessary that when you unload a new duty upon us you appropriate for an additional organization; and three times since the armistice was signed the order has come from the Secretary's office and we have usually anticipated it-to go over our force in order to show what everybody was doing and show how much of the war expansion could be cut out. We have religiously cut it out, and when the same request was made under this present administration and under the Bureau of the Budget we were able to go right straight down the list and show that we have not a single man whom we could spare. We have reduced the force right straight along as war-emergency activities have been dropped off and there absolutely is not one spare man in the fruit and vegetable division, for which I am permanently responsible, that could be turned over to a new activity, and it could not be legally done and his salary continued where he is now.
The CHAIRMAX. Anyway, I presume they would not be qualified to enter upon the duties under this activity, because they are not familiar with management of this sort?
Mr. SHERMAN. Well, I venture to say we could furnish a superintendent for that market.
The ('HAIRMAX. Yes; probably so.
Mr. SHERMAN (continuing). Who is accustomed to handling large quantities of public money and seeing that the funds are judiciously expended, and he would handle it better than any man you could get from the outside. I will undertake to detail one of my subordinates to manage that Center Market, and incidentally I may say that I made my own living at the Center Market for many years before I entered the Government service, when I farmed over in Virginia and sold my products there. Some of us have a personal and a business interest in the department, and we know that there is no credit in merely spending Government money:
Mr. Sisson. The great trouble about that is that, while you may have that opinion, your life is an uncertainty, and the exceptions do not make the rule. I believe for the last 12 or 14 years we have had our friends from the departments before this committee, and I have not yet found a single department of the Government that had not cut to the bone; is not that the expression used!
Mr. Wood. Yes; they all state that and at the same time they all admit that we have too many people employed here, but state that the reduction ought to be in the other fellow's yard and not in theirs.
Mr. SHERMAN. We have one activity in our division which we have been asked to make as near self-supporting as possible through a system of fees, and that is the inspection service. Congress has limited us and put restrictions on the service which prevent it from being as nearly self-supporting as it might be, but, starting with nothing, last year with an appropriation of $141,700 we have turned back into the Treasury $98,928.29 of fees and every year we are approaching self-support under limitations which we have for three years asked you gentlemen to remove and for three years the matter has gotten lost in the shuffle.
The CHAIRMAN. I wish you would look at the language of this item on page 24 and see whether or not you have too much language in there. Why would it not be well to eliminate everything after the word “alterations” on the eleventh line, because if the law, as it does, authorizes all these things, there is no sense in carrying a lot of this language in the appropriation, first, because the question will be raised as to whether it is legislation or not, and next if they have the power to do all this under the act itself, there is no use in having this language.
Mr. FRANKLIN. Would you not have to have something in there to give us the authority to make charges?
The CHAIRMAN. Does not the law give you the right to do that? Mr. FRANKLIN. No; we do not think it does.
Mr. KITCHEN. All the authority we have under the law is in section 2.
The CHAIRMAN (reading). “The Secretary is hereby empowered to make and enforce such rules and regulations for the management and control of the said property which he may deem best for the enforcement of the provisions of the act.” That gives him the power to do it?
Mr. Sisson. But, Mr. Chairman, if you will notice a little further down there from the point you indicated a moment ago, beginning with the language, "to provide a fund for the payment of freight, express, drayage, and other charges,” that is clearly legislation. The balance of it might be squeezed in under some provision of this other act, but that could not be.
The CHAIRMAN. I do not think it is necessary to put it in, because I think the Secretary has all the necessary power under the language of the act.
Mr. Sisson (reading). “ To be reimbursed by any person for whose account any such expenditure may be made." I think that might be done under the act, although I would not say positively, but I do not think the next provision would be covered by the act.
Mr. SHERMAN. You understand it could be maintained that that is not necessary to the operation of the property, and yet since this property has to be operated in competition with other commercial cold storages we must do as they do.
The CHAIRMAN. It is necessary to the operation of the cold storage, and, of course, the cold-storage plant is a part of the building and is covered by the act, and my judgment is that the language here that the Secretary of Agriculture is hereby empowered and directed to make and enforce such rules and regulations for the management and control of the property as he may deem proper,” gives him all the authority he needs under the act.
Mr. Sisson. But that will not enable him to get any revolving fund out of the Treasury to pay the freight on this stuff that comes in,
The CHAIRMAN. Well, we will take that up when we reach it. I do not think we ought to put legislation into this act anyway, even if it involves a revolving fund.
I think the proviso on page 25 is clearly legislation over which we have no jurisdiction. That ought to be taken up by the Committee on Agriculture, if it is to be taken up at all.
Mr. FRANKLIN. The same sort of item was passed on an appropriation bill for the District in reference to the Haskell Market, and these rates are simply bringing them up and making them comparable with the rates in the Haskell Market.
The CHAIRMAN. When was that passed?
ACT FIXING BOUNDARIES OF MARKET SPACE.
The CHAIRMAN. The act of February 20, 1897, provides that the provisions of the ordinance of the city of Washington approved May 27, 1857, requiring the clerks of the several markets to lay off and mark in convenient spaces the several pavements adjoining and bordering on the market squares, which spaces may be used for the sale or exposure for sale of vegetables or other country produce, and extending the powers of the clerks to 15 feet of the streets, measuring from the curb line on which said squares front, shall apply to the south front of Center Market, and to a clerk' who may be designated by the Commissioners of the District of Columbia; that the law passed in 1871 by the District Legislative Assembly exempting from license persons bringing marketing to the District shall be and remain in full force; and that the said ordinance and law shall be applicable to farmers and truckmen raising produce, doing business on the north side of B Street, north along the south front of the Center Market in said city of Washington: Provided, That nothing in this resolution shall be construed as extending the boundaries of the grounds occupied by the Washington Market Co." and so forth.