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SECOND HEARING

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Messrs. JAMES W. GOOD (CHAIRMAN), JOSEPH G. CANNON,
C. BASCOM SLEMP, JAMES F. BYRNES (S. C.),

AND JOHN M. EVANS

IN CHARGE OF

DEFICIENCY APPROPRIATIONS FOR THE FISCAL

YEAR 1919 AND PRIOR FISCAL YEARS

SIXTY-SIXTH CONGRESS.

FIRST SESSION

WASHINGTON
GOVERNMENT PRINTING OFFICE

1919

380, IX

SECOND HEARING.

THIRD DEFICIENCY APPROPRIATION BILL, 1919.

HEARINGS CONDUCTED BY THE SUBCOMMITTEE, MESSRS. JAMES

W. GOOD (CHAIRMAN), JOSEPH G. CANNON, C. BASCOM SLEMP, JAMES F. BYRNES, AND JOHN M. EVANS, OF THE COMMITTEE ON APPROPRIATIONS, HOUSE OF REPRESENTATIVES, IN CHARGE OF DEFICIENCIES FOR THE FISCAL YEAR 1919 AND FOR PRIOR YEARS.

OFFICE OF THE ALIEN PROPERTY CUSTODIAN.

STATEMENT OF MR. NORMAN B. DREHER, DIRECTOR OF THE

BUREAU OF ADMINISTRATION.

EXPENSES, INCLUDING RENIAL OF QUARTERS, ETC.

The CHAIRMAN. Mr. Dreher, you have an estimate for a deficiency of $125,000 for expenses of the Alien Property Custodian.

Mr. DREHER. That was the amount of the original estimate.
The CHAIRMAN. Has it been reduced ?

Mr. DREHER. It was reduced by the committee at the last hearing to $110,000. I might say at this time that the Alien Property Custodian will be able to reduce that, and will be satisfied with an estimate of $90,000.

The CHAIRMAN. Have you received any allotment from the President's fund since you appeared before the committee before?

Mr. DREHER. We have not.

The CHAIRMAN. Have you received any allotment from any other appropriation! Mr. DREHER. None whatever. The CHAIRMAN. Have you transferred any funds to this fund? Mr. DREHER. We have transferred no funds.

The CHAIRMAN. As I recall, you appeared before the committee on February 22 and stated that you had about $90,500 balance at that time, and that your monthly expenses amounted to $85,000, which would mean that your fund would be totally exhausted, approximately, by the 20th of March or the 1st of April.

Mr. DREHER. That statement was correct at that time, and since that time we have reduced the personnel of the office from, I think, 550 to 473, as it exists now.

The CHAIRMAN. Have you anything to your credit out of this appropriation ?

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Mr. DREHER. We have a balance on hand of $64,240, which is the balance on hand May 16,

The CHAIRMAN. What were your obligations on May 16!

Mr. DREHER. On May 16 we owed approximately $32,750, covering unpaid bills.

The CHAIRMAN. That left you an unpledged balance of about $32,000 at that time.

Mr. DREHER. That is right.

The CHAIRMAN. Your activities are not what they were before the armistice was signed !

Mr. DREHER. I would consider that our office is as busy, if not busier, than it was before the armistice was signed.

The CHAIRMAN. You are not taking over additional properties, are you?

Mr. DREHER. Indeed, we are.
The CHAIRMAN. How long will that continue ?
Mr. DREHER. Until we are told to stop.

The CHAIRMAN. Your authority does not extend, so far as taking over alien property is concerned, after peace is declared ? Mr. DREHER. After the peace treaty has been signed I imagine that

I will take care of our future activities.

The CHAIRMAN. As I recall, there was appropriated for this service about $900,000?

Mr. DREHER. $900,000 was the amount.

The CHAIRMAN. Your estimates were about $100,000 in excess of that amount.

Mr. DREHER. That is correct.

The CHAIRMAN. Have you had this force of 550 men from the beginning of the fiscal year until about the time you appeared before the committee before?

Mr. DREHER. Yes. Our force has been of a larger number. It has been as high as about 590.

APPORTIONMENT OF APPROPRIATION.

The CHAIRMAN. What did the Alien Property Custodian do when this appropriation became available with regard to apportioning the amount over the entire year, and employing his force in a manner so he would not have a deficiency?

Mr. DREHER. Well, we took every precaution to do that which would admit of the appropriation covering our activities; but our business expanded so much that we were compelled to do things we did not know of in the earlier days. For instance, the establishment of an office in New York where the greater part of our work was carried on, compelled us to secure additional office space and increased our expenses in that direction.

The CHAIRMAN. The law provides that the appropriation shall be so apportioned by monthly or other allotments as to prevent expenditures in one portion of the year which may necessitate a deficiency, or an additional appropriation to complete the service in the fiscal year for which the appropriation is made. What did you do in compliance with that provision of law?

Mr. DREHER. We endeavored to carry on our work in such fashion that our allotment would be sufficient, and if our request for 1919

5 the appropriation in the sum of $1,017,000 had been favored it would

have been sufficient to have covered all our expenses.

The CHAIRMAN. Did you apportion that appropriation by monthly erin or quarterly allotments?

Mr. DREHER. I can not say that that was done. bo

The CHAIRMAN. The hearings before this committee before convinced me that it was not done, but that on the contrary you organ

ized your force from the beginning of the fiscal year not on the e the basis of the appropriation but on the basis of the estimate which

you had made for the appropriation, which was about $100,000 in En excess of the appropriation, and that you commenced right at the

beginning of the fiscal year your plan' which would create a dertis ficiency.

Mr. DREHER. Well, we conducted our work as we believed it had to be done.

The CHAIRMAN. You paid no attention to the act of Congress with regard to how you should apportion your appropriation or to the king appropriation which had been made for your service.

Mr. DREHER. Well, all I can answer to that is, we built up our tha' organization and commenced our work, and with no precedent to

follow it was necessary, possibly, that we should not apportion our fund in the way you have mentioned.

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NUMBER OF EMPLOYEES.

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The CHAIRMAN. You have 473 employees now!
Mr. DREHER. That is the present personnel ; yes.

The CHAIRMAN. What plan have you for making a further reduction in the personnel ?

Mr. DREHER. I am of the opinion that that personnel will not be sufficient for possibly six months of the next fiscal year.

The CHAIRMAN. Can you inform the committee what the expenses would be for the whole year based on a personnel of 473 employees?

Mr. DREHER. In my estimation about $850,000. That is not covThering personnel only, but expenses incident to the work of that number of employees.

The CHAIRMAN. Then, if you should receive a deficiency of

$90,000 you would have, after you had discharged all your obligaitions outstanding on May 16, about $122,000 to carry on your de

partment from May 16 to June 30.

Mr. DREHER. As my figures show, our expenses for pay roll to the end of the present fiscal year will be approximately $93,000; our bills payable $32,000; our liability for rent, $6,000; for telephone, telegraph, and light, $6,500; supplies and equipment, $5,000; and expenses in connection with our operations in the Philippines, which we can not definitely determine until the return of our representative, in the neighborhood of $10,000. That amount, less the amount available on May 16 of $64,240, shows that we will require for our purposes 90,000 and some odd dollars.

The CHAIRMAN. Have you been paying any large attorney fees or special fees for services?

Mr. DREHER. No.

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