POST OFFICE DEPARTMENT PRINTING. The CHAIRMAN. A few days ago the Post Office Department was in here urging an appropriation of $150,000 for printing and binding for the Post Office Department, and I got the impression from what was said that although this appropriation is made for the Post Office Department it is placed to the credit of the Public Printer. and that from that appropriation the Public Printer performs the necessary work for the Post Office Department. The Post Office Department's representatives, if I remember what he said, left the impression with the committee that if the Public Printer, instead of charging up requisitions as goods delivered, would make his bills when the goods were delivered like any other business house would do they would not need this appropriation, and that the only reason why this appropriation was requested was that they now have requisitions for printing which may run six months in advance of their present needs; that at the present time they have on hand, or rather in the hands of the Public Printer, requisitions for probably $450,000 worth of printing, whereas their needs would not exceed $300,000that is to say, there would not be deliveries made of more than $300.000 worth and that only $131,000 worth of work already requisitioned has been billed, while work to the amount of $266,000 has not been billed, yet it is charged up against them. Now, the thing I have in mind is that the practice of the Public Printer is not the practice that would be indulged in by any business house in the country; that your practice is on the theory that the institution for which the printing is to be done has no credit, and that you insist upon having payment made in advance. It is as though the order were received from a man who is bankrupt, in which case you would not fill the order unless the money was paid when the order was given. Now, it seems to me that if you construe this law, as I would construe it-that is, that the Post Office Department owes you only for work you have done and delivered, instead of for requisitions filed, we would not be called upon to make this deficiency appropriation. Mr. CARTER. Our only working capital is in the appropriations you allot to the departments and to Congress. We have no operating fund whatever, such as has a business house. The CHAIRMAN. I understand, but if you were in any business in the world, you would not charge a concern up when it gave you an order with the amount of the order and demand payment in advance, but that is what you are doing here. Mr. CARTER. I do not quite construe it that way. The appropriation made to the Printing Office is allotted to the departments. We have no control over it, except as the departments may order against the credit that they have with the Government Printing Office. The CHAIRMAN. But you are charging them for printing that you have not done. You are charging them as soon as they file their order or requisition for the printing. Mr. CARTER. Section 90 of the printing act of 1895 requires that when a department wants printing done it shall obtain an estimate from the Public Printer of the cost, and that this amount shall be charged against the department. The CHAIRMAN. Against the appropriation, but not when the order is filed, or I would not take it to mean that. Mr. CARTER. Section 90 of the act of 1895 provides: When any department. the Supreme Court, the Court of Claims, or the Library of Congress shall require printing or binding to be done, it shall be on certificate that such work be necessary for the public service; whereupon the Public Printer shall furnish an estimate of the cost by the principal items for such printing or binding so called for, after which requisitions shall be made upon him therefor by the head of such department * * * and the Public Printer shall place the cost thereof to the debit of such department in its annual appropriation for printing and binding. The CHAIRMAN. That is what they claim makes it necessary for them to have this extra appropriation. This law was not intended to make it cost more, but it was intended to make it cost less, and I think if this appropriation is properly construed the deficiency will not be required. I will read the provision of law: Not more than an allotment of one-half of the sum hereby appropriated for the public printing and for the public binding shall be expended in the first two quarters of the fiscal year, and no more than one-fourth thereof may be expended in either of the last two quarters of the fiscal year, except that, in addition thereto, in either of said last quarters the unexpended balances of allotments for preceding quarters may be expended; and no department or Government establishment shall consume in any such period a greater percentage of its allotment than can lawfully be expended during the same period of the whole appropriation. Now, the Post Office Department has made an allotment, but you do not adhere to the allotment made. While the department made an allotment with a view to keeping within the law, they have also made requisitions which would cost $150.000 more if the work were all completed within the fiscal year, but they say that it will not be completed and that it will be after the end of the fiscal year before this work will be billed to them. Inasmuch as there is to be an appropriation in the regular annual bill, the consideration of which begins sometime next month, it would seem to the committee that if this law were construed as a business proposition or as any business concern would construe it, namely, that charges should be made for work done instead of for orders given, they would not need this money at all, because the payment would be provided for in the regular annual bill. Now, why should we provide for orders given instead of for work done? Mr. CARTER. The situation, as I understand it, then, is this: You contend that the printing office should accept orders from the Post Office Department for, say $500,000 worth of work, the only restriction being that we shall not complete or charge up against them more than $300,000 in the first six months. The CHAIRMAN. If you have not delivered more than $300,000 worth, you should not charge them with any more. The mere fact that you have the order ought not to justify you in making the charge against them. Mr. CARTER. If the department should place an order with us for $500,000 worth of work, it is a mechanical impossiblity for us to tell exactly how much of it may be completed at the end of six months. The CHAIRMAN. But you would know what you had done at the end of six months? Mr. CARTER. Suppose the office should accept orders for $500,000 worth of work and then find at the end of the first six months that 1 we had done $400,000 worth of work, notwithstanding the limitation for that period is $300,000, then we would have violated the law. The CHAIRMAN. Every time you make a delivery of work you bill it? Mr. CARTER. Yes, sir; just the same as any business house. The CHAIRMAN. If any business house took an order and billed it out every 30 days, they would know at the end of each 30-day period how much they had billed out, and they would know how much they could bill out under restrictions like these. It seems to me that it would be just as easy for you to know that as for any business house in the world to know it. It is not because you have not help enough. Mr. CARTER. We have some 85,000 jobs to handle every year. The CHAIRMAN. The more jobs you have the more assistance you have, and therefore the easier it should be to ascertain what you have been getting out. It is the man with one job who has difficulty, because he has not the help. Mr. CARTER. If you required that, we would have to increase our cost-accounting force fourfold. The CHAIRMAN. This would not increase your cost-accounting work, but this would simply be a matter of accounting. Mr. CARTER. We are charged by law to see that the bills rendered do not exceed the cost of the work done. The CHAIRMAN. This is not a matter of cost accounting, but it is simply a record of what is done. Mr. CARTER. The office keeps that every day. The CHAIRMAN. If you have, you ought not to have any difficulty in complying with this situation. Mr. CARTER. Here is the situation as to the Post Office Department: Up to November 10 the Public Printer had charged up against that department $152,576.77, and had outstanding estimates for $146,432.66, which would total $299,009.43. This leaves a balance available to the Post Office Department up to the 1st of January of only $999.57. The CHAIRMAN. But you have estimates or requisitions for $152,000 worth of work, where you have not finished the work? Mr. CARTER. The office has finished $152,000 of work, and that has been billed. We do not bill work until it is completed, but the estimates are charged against the allotments. It is just the same as though you had a bank deposit and checked against it. The check would be charged against your deposit. The CHAIRMAN. That is a different proposition. You ought to run this business on a business basis and charge for the stuff that goes out, and not for orders that come in. The orders should not be charged against the appropriation as they come in. Mr. KELLEY. I understood Mr. Carter to say that he has no funds except the funds which the Government appropriates to be used for the various departments. Mr. CARTER. Yes, sir. Mr. KELLEY. When you do a piece of work for any department, you have to pay the labor, of course, that actually goes into the work. Mr. CARTER. That expenditure, of course, is not made in advance of the requisition from a department for a certain job. Mr. KELLEY. Not for the labor, but I was wondering whether, or not, there might be a part of the expense, not for the labor, but for the material, that you would have to check up against this fund beyond what might be delivered at the end of a particular period. The CHAIRMAN. Of course, they must buy their paper. Mr. KELLEY. Where do they get the money to buy the paper unless they charge to each fund the proportionate cost? Of course, the labor it not paid for until the work is performed, but there are certain other items that must be provided in advance. They must go ahead and get the material and charge that against these funds. The CHAIRMAN. I do not understand that they buy materials for any special jobs. COST OF PAPER. Mr. ANTHONY. How do you buy paper-by contract? Mr. ANTHONY. When did you put in this contract? Mr. ANTHONY (interposing). At what periods of time do you make payments? Mr. CARTER. The office makes payments monthly or as ordered. The paper is not all ordered at one time. For instance, a contract is let for 20,000,000 pounds of book paper Mr. ANTHONY (interposing). To be paid for monthly upon delivery? Mr. CARTER. Yes, sir. Mr. ANTHONY. When did you make your last contract? Mr. ANTHONY. Of this year? Mr. CARTER. Yes, sir. Mr. ANTHONY. How does the price under that contract compare with the price in the preceding contract? Mr. CARTER. The prices are from 15 to 25 per cent lower, and in some cases more than that. Mr. ANTHONY. Have you made any investigation to find out whether the Government is getting as advantageous prices as other large consumers of print paper are? Mr. CARTER. Yes, sir; we are getting just as good, or even better, prices. Mr. ANTHONY. How much do you pay for print paper? Mr. CARTER. 4.34 cents, delivered. Mr. ANTHONY. For standard print paper? Mr. CARTER. Yes, sir; delivered at the Government Printing Office. Mr. ANTHONY. That is a higher price than other large consumers of print paper here in Washington pay, is it not? Mr. CARTER. No, sir; they are paying, I understand, at least 4 cents at the mill. Mr. ANTHONY. I did not think they were paying 4.34 cents. Mr. CARTER. The freight rate and drayage charge is about half a cent a pound from New York mills. Our price is delivered at the Government Printing Office, which includes freight and drayage. Mr. KELLEY. When you have a big job for one department, like the Post Office Department, do you put in an order for the delivery of all the paper that that contract calls for, or for just what you need for a certain length of time, say for 30 or 60 days? In Mr. CARTER. For a particular job we would put in an order for all of the paper required for that job so as to have a uniform grade. the case of the Official Postal Guide all the paper was ordered at one time. The CHAIRMAN. You have in all for the public printing and binding, including the salaries of the necessary force, for the payment of holidays, leaves of absence, etc., the sum of $7,318,700," and from the said sum printing and binding shall be done by the Public Printer to the amounts following, respectively, namely: For printing and binding for Congress," etc. Then the several departments are enumerated. Mr. CARTER. Yes, sir. The CHAIRMAN. You have this general fund out of which to make purchases? Mr. CARTER. Yes, sir. The CHAIRMAN. You do not make purchases for any given item of work, but you make purchases generally, do you not? Mr. CARTER. As a rule purchases are made generally. We buy a stock of paper that can be used by any department or by Congress. ALLOTMENT OF APPROPRIATIONS. The CHAIRMAN. Can you tell us how much of this appropriation of $7,318,700 you have already used up? Mr. CARTER. $2,377,697.83. The CHAIRMAN. Is that more than the monthly proportion? Mr. CARTER. That is less than the six months' proportion. I might say that some prior public printers disregarded the limitate which Congress placed on the printing allotments, that not more than half of the amount should be used in the first six months, and that not more than one-fourth in each of the last two quarters of the fiscal year. Heretofore the office has construed another statute to authorize the granting of waivers to suit the convenience of the departments. There is a provision in 34 Statutes, 49, that the appropriations shall be divided into twelfths and that not more than onetwelfth shall be used during any one month, and that no waivers shall be made except in case of extraordinary emergencies or unusual circumstances. This provision, it seems to me, applies to appropriations generally, and not to where Congress, as in the sundry civil bill, has made a specific direction as to how the allotments shall be used. The sundry civil provision, in my opinion, supersedes the general law as to the division of the appropriations into monthly parts and does away with the granting of waivers. Therefore I felt that it was obligatory upon the office for its own protection to apply the law as it seemed to us Congress intended it to be applied that is, that the departments could not expend more than half of their printing allotments in the first six months. Under the prior practice of granting waivers, a department in six or nine months could use all of its appropriation and then come to Congress with an actual deficiency. The CHAIRMAN. Do you regard this restriction as wise or otherwise? Mr. CARTER. I think it is wise; and if it is properly applied it will hold the departments within the amounts that Congress allotted to |