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Mr. Rooney. If there are no questions with regard to this

, gentle men, the next item is "Expenses of referees," at page 157 of the justifcations. At this point we shall insert pages 157, 158, and the whole justification beginning at the lower þalf of 161 and continuing to the upper part of 162.

(The pages referred to are as follows:)

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Statement relating appropriation eslimate to current appropriation
1952 Appropriation in annual act.
Proposed supplemental 1952 due to pay increases.

Base for 1953.
Net difference, 1953 over 1952:

$1,090,000

16.750

1,106, 750

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Totals.

1, 106, 750

108, 550

1,216, 380

JUSTIFICATION ropriations totaling $1,106,750 from the referees' expense fund will be refor the fiscal year 1952, and an appropriation of $1,215,300 is requested for cal year 1953. The estimate is composed of the following items: es, of 248 full-time clerks..

$823, 496 t estimated lapses.--

15, 146 Net estimate for full-time clerks...

808, 350 es of 80 part-time and temporary clerks.

163, 770 ar pay in excess of 52-week base....

3, 260 ional pay for service abroad...

775

Total for personal services.. r objects.-

976, 155
239, 145

Total estimate.

1, 215, 300

PERSONNEL INCREASE

fr. ROONEY. The request is in the amount of $1,215,300, and the rted pages indicate it is $108,550 over the amount allowed for this pose in the current fiscal year. This is a request for increased sonnel, is it not, Mr. Chandler? Ar. CHANDLER. It is, sir. Mr. ROONEY. What are the details in regard to that? Mr. CHANDLER. I think if you will permit Mr. Covey, Chief of the nkruptcy Division, he will be in the best position to answer that

stion. Mr. Covey. The request is for 17 additional clerical positions--10 grade 2, which will cost $27,500; and 7 in grade 3, at a cost of 0,650, at the new rates. These are needed primarily to handle this increasing backlog of ses. You will remember that was discussed at some length a year 0. Our backlog is still going up.

CASE LOAD

Mr. ROONEY. As predicted by this committee a year ago, the numer of new bankruptcy cases has been going down?

Mr. Covey. Yes, sir, It started in May of this year as compared ith the preceding May the year before.

Mr. ROONEY. And would it be reasonable to expect that it would o down further? Mr. Covey. It has gone down, if I may make this statement.

The months of May and June last year showed a decline, but the ver-all result in 1951 was an increase of something over 5 percent. Chat decline has continued through the next 5 months, and the overill decline is 4.4 percent in actual filings in those 5 months. The lecrease of new cases in 5 months was 630, so that it is not very great.

It is not a question so much of increased volume or current volume. That seems to have leveled off and to be going down. I think it will. go down this year. But we still need people to close cases. At least through 1951 and through the first 3 months of this fiscal year, at the end of September, which is the last figure we have, the number of pending cases is still going up in spite of the fact that the referees closed more cases in 1951 than in any other year under the salary system.

In 1950 there were twenty-five-thousand-odd cases closed. In 1951, 32,000 cases closed. That was still some 2,500 cases short of the number of cases filed. And in the first 3 months of this year it went up another 1,300 cases to a high point of forty-two thousand and two-hundred-odd cases.

I have desired and I want to bring that case load down. It is too big. The income of the system is ample to support it, and I believe that with good administration this backlog of cases can be brought down, and that is important.

Mr. ROONEY. We are quite surprised to find, after the discussion of last year and previous years, that the large backlog still exists; instead of going down it is going up.

Mr. Covey. We closed 7,000 more cases last year than the year before.

RECLASSIFICATION Mr. Rooney. This is the item in which you said there was some increases by way of reclassifications?

Mr. CHANDLER. Yes.
Mr. Rooney. What are the facts with regard to that?

Mr. Covey. When we recruit new people, we recruit them in lower grades; it is a specialist type of work. It is not just stenographic work. They come in at grades 2 and 3 and stay with us 2 or 3 years; and, as they are assigned more complicated work and learn it and more service is required, they are in a position to do more things actually, more items, and take care of more of the work. We then fail to keep them when they come in at the lower grade. After 2 or 3 years we must raise that up. It is a necessary part of developing the kind of service and the kind of staff we have to have.

Mr. ROONEY. How much is involved?
Mr. Covey. $7,200 this year.

Mr. ROONEY. That concerns about how many employees and what grades?

Nr. Covey. It concerns only people who have reached the third step of grade 2 and the fourth or higher steps in grade 3 or 4. Now, in that group in grade 1 there will be, in 1953, 2 positions; in grade 2, 15 positions; grade 3, 19; and in grade 4, 25, a total of 61. The $7,200 we are asking for this purpose will be at an average cost, according to our experience, of $162.50 per position. That is the cost of reclassification on the average and will provide 44 reclassifications out of this whole group of 61.

SUPPLIES AND MATERIALS AND EQUIPMENT Mr. ROONEY. What are the facts in respect to the increase in supplies and materials and equipment?

Mr. Covey. We are asking for an increase of $2,950 for supplies. The amount allocated this year is $27,050, and we spent in the fiscal year 1951, $27,800. We believe that a total of $30,000 will be necessary this year. The increase is due primarily to the increased cost of supplies and materials and the fact that we were overspent in 1951. The same is true with the item of equipment. We overspent that in 1951 by $1,611. It was due primarily to the increased cost of equipment.

SAVINGS FROM PUBLICATION OF NOTICES

. ROONEY. Where does the cost of publishing notices of first ngs of creditors appear?

Cover. That is a separate item under "Contractual services." in the appropriation for this year. There was an allotment of 00 and you probably recall that the statute which makes the cation optional was passed on the 3d of July. 1. ROONEY. How much do you save, in 1952? You have an opriation of $30,000. r. Covey. Yes.' But in the estimate as originally planned it $90,000 and we reduced it to $30,000. r. Brown. We are going to apply the $60,000 difference toward cost of the recent pay increases.

You will note that as against tal cost in 1952 of $85,110, we are proposing a supplemental ropriation this year of only $16,750 because the major part of · difference or $60,000 will be financed by the expected savings n the publication of notices. Ir. ROONEY. I take it that the purpose of Congress in enacting blic Law.771, Eighty-second Congress, was to save some money? Ir. BROWN. That is right. We did save money. But we have lied it for another purpose that Congress also approved. Specifiy we are applying it toward the cost of pay increases under blic Law 201. Mr. ROONEY. Why didn't you use some of it for supplies and terials? Mr. BROWN. We could have done that. Mr. CHANDLER. But the pay increases went into effect in October, roactive to July. That caused a cost of $85,000, $60,000 of which is met out of savings on this publication item.

INCENTIVE TO REFEREES FOR CLOSING CASES

Mr. PRESTON. Mr. Covey, do you suspect that perhaps this backg may be caused by the fact that referees formerly made their oney out of closing cases--that they are now indifferent to when hey are closed because they now get å salary instead of a fixed sum?

Mr. Covey. I think that is an element. I think there was an centive under that other system. When they closed a case they ot a fee. There would, perhaps, be a stronger incentive to close these ases immediately. Primarily, we recognize that and we are working s we can to get these cases closed promptly.

Mr. PRESTON. What sort of workload do you lay down for these eople?

Mr. Covey. Well, we get from the referees what we call a semiannual report. It is under the direction of the Supreme Court and General Orders. It is a statement of the number of cases received and those terminated during the period. We get that twice a year and whenever it shows a number of cases not closed we write them a letter,

Mr. ROONEY. It might be observed for the record at this point that if they do not dispose of their cases the Congress might go back to the old system. Congress might demand that.

Mr. Covey. As I say, I think that the pending case load is too high and I think we must concentrate on bringing it down and I think that there are many offices--I think there are several that simply cannot bring it down unless they are given more help.

Judge Biggs. Mr. Chairman, at this time I want to express my own personal regret that the Honorable Karl Stefan is no longer here. In the years I knew him it was a great pleasure to appear before him in the work of this committee.

I would like to say one other thing about the attitude of the Con. ference. Everything that this committee says is very carefully considered by the Conference, on the matter of appropriations and the Conference considers whether it is fair or just and whether the committee will consider it to be fair and just. That is not merely a ques. tion of what the Conference can get away with. I want to make that perfectly clear. That was the proposal expressed here by Mr. Chandler. And action is considered in light of what this committee and the Senate subcommittees has said.

Mr. Chandler. I want at this time, our hearing being ended, to thank the committee for the consideration you have given to our various requests, and I say that sincerely for I have a sense that we are working together.

Mr; ROONEY. We thank you.

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