Mr. RALPH. By those charged with the administration of the bureau and the expenditure of money.

The CHAIRMAN. The law is specific that you can not use money appropriated for work in the Bureau of Engraving and Printing for work done outside of the Bureau of Engraving and Printing, and your own statement is that you made this contract because you assumed that authority would be given to you, not because of any understanding with reference to another appropriation.

Mr. RALPH. That is true; and I should not have stated it otherwise.

Mr. GILLETT. Do you mean that you have done this before?

Mr. RALPH. No, sir; we have not had it done on the outside before.

Mr. GILLETT. You say it is understood

Mr. RALPH (interposing). I said that the appropriation for miscellaneous expenses could be used for work outside of the bureau. The CHAIRMAN. You know that the statute prohibits the use of this money for any purposes except for the purposes for which it is specifically appropriated.

Mr. RALPH. What are miscellaneous expenses?

The CHAIRMAN. You were never permitted or attempted to make a contract to do work outside and pay for it out of the miscellaneous account?

Mr. RALPH. No; and I am sorry we have to do it outside.

The CHAIRMAN. It ought not to be done. I think it is something to be more than sorry about.

Mr. CANNON. Let me ask

The CHAIRMAN (interposing). And I want to say it is an indefensible outrage.

Mr. CANNON. I am not going to discuss that question. The question is the size of the baby and the conditions we are required to meet to feed it in these exceptional times. Now, then, I think I can say that in this matter, to some extent, and in other matters connected with the public service, this committee, in whole or in part, has suggested that the work be done, that the obligation should be incurred, and that the committee would recommend the appropriations. Now, if that is so, and that was proper, it seems to me that under these conditions a similar violation of the law can not be too severely criticized.

The CHAIRMAN. But this is entirely different and the conditions are not similar at all. This committee stated that the things imperatively necessary for the public defense would be taken care of, but this is simply for the printing of these stamps outside of the Government establishment.

Mr. GILLETT. Was this done under the direction of the Secretary? Mr. RALPH. By the approval of the Secretary; yes, sir. I assume full responsibility for it. After conference with the Commissioner of Internal Revenue, and everybody, it was deemed the best thing to do. There has not been any money spent yet.

Mr. GILLETT. You say that only about $10,000 worth is involved. so far?

Mr. RALPH. Yes.

Mr. GILLETT. How long would that cover?

Mr. RALPH. A little over two weeks.

Mr. GILLETT. That would be about $20,000 a month at that rate? Mr. RALPH. Yes, sir.

Mr. GILLETT. $20,000 a month will not accomplish a great deal. Mr. RALPH. Well, they are delivering about 50,000,000 stamps a day, which are being shipped out to the post offices.

Mr. CANNON. Ought you not in this statement to be explicit and explain all the circumstances; explain your incapacity, if there was incapacity, to do certain work and the necessity for its being done outside, and the capacity of this Buffalo concern, which I never heard of before and do not care anything about? In other words, make a clean statement, one that is succinct.

Mr. RALPH. I shall make a full statement. I thought as to the documentary stamps there would be embarrassments in the country if the work were not done———

The CHAIRMAN (interposing). The misfortune about it is that you are assuming too much responsibility. You are not responsible for those embarrassments. If there is a need there is a way to communicate the facts to Congress and have action taken in an orderly and legitimate manner. The thing to do is not to violate the law but to submit the information to Congress and let it take the responsibility. The head of a department of the Government is not justified, simply because he thinks it necessary, to spend thousands of dollars and do anything he pleases.

Mr. RALPH. I do not do anything I please, Mr. Chairman, and I am sorry you feel that way about it.

STATEMENT RELATIVE TO THE PRINTING OF STAMPS BY PRIVATE CONCERNS. Relative to the matter of having some of the work of the Bureau of Engraving and Printing executed by an outside printing establishment in Buffalo, N. Y., the facts are that when the revenue bill now pending in Congress was first drafted it provided that it should be effective the day after its approval, and later some modification of this was made, but in its present shape as now being considered by the Senate it provides that it should be effective 10 days after approval. This fact suggested to the officials of the Bureau of Internal Revenue that some measure should be taken to provide stamps called for under the act so that they might be in the hands of those required to use them at the time the law became effective, and the Commissioner of Internal Revenue accordingly placed orders approved by the Secretary of the Treasury with this bureau for these stamps, it being fully understood by the Commissioner of Internal Revenue and all the officials, including myself, that the work was anticipatory of legislation and that while unauthorized by actual law there was so great a certainty of the law being passed that there would be only a technical violation of law in preparing the stamps in advance.

This bureau, being under enormous pressure, due to the necessity of producing the Liberty bonds and interim certificates required in connection therewith, together with greatly increased demands for checks, drafts, commissions, transportation requests, Federal reserve notes, and all sorts of papers needed in connection with the war, it was unable to produce the stamps in question, and the matter of having them printed under the supervision of this bureau at an outside plant was taken up, and the best concern in the United States known to this bureau that could do printing of the kind and by the process required was requested to take the matter under consideration. They found that they could spare the presses and necessary labor, provided the bureau by its own employees participated in the work, and arrangements, with the approval of the department, was made with the Niagara Lithograph Co., of Buffalo, N. Y., to perform the work on the basis of actual cost plus 10 per cent, the proposition made by them being as follows:

"You are to furnish all copy and layouts, which are to be complete and accurate in every detail. You are also to furnish all paper and provide the necessary superintendence and inspection.

"We are to make original plates by the Niagara lithotone process for all certificates, stamps, etc., from copy supplied by you; transfer or steam-press plates are to be made photographically and are to conform to layouts and meas urements supplied by you.

you.

We are to print on stock furnished by you, and in quantities as instructed by

"We are to put up required partitions, screen windows, and provide suitable cupboards in which to store plates, these to be equipped with satisfactory locks. "All of the work we do is to be furnished at cost to us, plus 10 per cent. Our cost records are to be subject to your inspection and weekly statements covering cost incurred are to be rendered.

"We will operate two shifts of eight hours each."

With regard to the authority for payment for this work, I would state that the appropriation for this bureau for "materials and miscellaneous expenses" has always been construed to mean that under that part of the title of this appropriation reading "Miscellaneous expenses," if anything necessary to the work of this bureau which could not be foreseen so that it could be distinctly enumerated, could be paid for therefrom, and aside from this fact it was also assumed that the authority which would have been given when the warrevenue bill became a law to permit the Commissioner of Internal Revenue to have such stamps printed by outside concerns in case this bureau should be unable to produce them was an indication of the intention of Congress to permit such an arrangement if it could be properly done and paid for.

The fact that there was no specific authority to do this work outside of the Bureau of Engraving and Printing was not considered for the reason that there is not known to be any specific prohibition of having it done outside the bureau, and especially as the appropriation for “ Materials and miscellaneous expenses seems to include such work.

Due to the question raised, all work on these stamps has been stopped.

TREASURY DEPARTMENT,

OFFICE OF COMPTROLLER OF THE TREASURY,
Washington, July 11, 1917.

The SECRETARY OF THE TREASUEY.

SIR: I have your letter of the 9th instant, as follows: "I will appreciate it if you will kindly give me a memorandum of any statutes bearing on the rates of pay, particularly for overtime work, of per diem employees of the Bureau of Engraving and Printing, and also covering the hours of labor in that bureau, together with your decision on the construction you place on any such statutes.

"In addition, will you please be good enough to inform me if there are any statutes with respect to the execution in private concerns of work of the character performed at the Bureau of Engraving and Printing? I desire to know if there is any authority of law for having such work executed in private concerns if deemed necessary."

The only express authority of law for the employment of any payment of ompensation to per diem employees in the Bureau of Engraving and Printing is found in annual appropriation acts. The provisions for the fiscal year 1918 are as follows:

"For salaries of all necessary employees, other than employees required for the administrative work of the bureau of the class provided for and specified in the legislative, executive, and judicial appropriation act for the fiscal year 1918, and plate printers and plate printers' assistants, $1,470,000, to be expended under the direction of the Secretary of the Treasury. *

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"For wags of plate printers, at piece rates to be fixed by the Secretary of the Treasury, not to exceed the rates usually paid for such work, including the wages of printers' assistants, when employed, $1,815,000, to be expended under the direction of the Secretary of the Treasury." (Sundry civil appropriation act of June 12, 1917. Public No. 21, p. 14.)

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The provisions in the sundry civil appropriation act of June 23, 1913 (38 Stat., 19), were as follows:

66 * * * For salaries of all necessary employees, other than plate printers and plate printers' assistants, including increases of grade rate of operators to $1.75 per day, $1,237,780, to be expended under the direction of the Secretary of the Treasury:

For wages of plate printers, at piece rates to be fixed by the Secretary of the Treasury, not to exceed the rates usually paid for such work, including the wages of printers' assistants, when employed, including increase of grade rate of printers' assistants to $1.75 per day, $1,437,475, to be expended under the direction of the Secretary of the Treasury:

*

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"

It is understood that the grade rate of operators and printers' assistants has remained at $1.75 per day since July 1, 1913, although the reference to such rate in the provisions just quoted does not establish such rate as the permanent rate fixed by law to be paid to such employees thereafter, nor was such a reference necessary to authorize the Secretary of the Treasury to increase the rate of compensation to such amounts.

There is no specific provision of law fixing the hours of labor or rates of pay for overtime work of per diem employees of the Bureau of Engraving and Printing as such, but section 1 of the act of August 1, 1892, as amended by the act of March 3, 1913 (37 Stat., 726), provides:

"That the service and employment of all laborers and mechanics who are now, or may hereafter, be employed by the Government of the United States or the District of Columbia, or by any contractor or subcontractor, upon a public work of the United States or of the District of Columbia, is

hereby limited and restricted to eight hours in any one calendar day; and it shall be unlawful for any officer of the United States Government or of the District of Columbia, or any such contractor or subcontractor whose duty it shall be to employ, direct, or control the services of such laborers or mechanics ** to require or permit any such laborer or mechanic to work more than eight hours in any calendar day, except in case of extraordinary emergency:

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It has been held that the provisions of this law are applicable to certain employees of the bureau and that the Secretary of the Treasury is authorized to fix the rates to be paid to such employees for overtime when the same may be required in accordance with the provisions of said act (15 Comp. Dec., 703).

There are no statutes expressly authorizing the Secretary of the Treasury to have work of the character performed at the Bureau of Engraving and Printing executed by private concerns, and while there may be no law specifically requiring that such work be performed at the bureau, the appropriations made for such work-being for salaries, wages, materials, etc.-clearly indicate that the work is to be performed at the bureau, and I am of opinion that such appropriations are not available to pay for the execution of such work by private concerns.

Respectfully,

W. W. WARWICK, Comptroller.

WEDNESDAY, JULY 25, 1916.

NAVY DEPARTMENT.

STATEMENTS OF MR. FRANKLIN D. ROOSEVELT, ASSISTANT SECRETARY OF THE NAVY, REAR ADMIRAL FREDERIC R. HARRIS, CHIEF, BUREAU OF YARDS AND DOCKS, AND COL. WILLIAM W. HARTS, OFFICER IN CHARGE OF PUBLIC BUILDINGS AND GROUNDS.

RENTAL OF ADDITIONAL QUARTERS FOR NAVY DEPARTMENT (ARLINGTON BUILDING).

The CHAIRMAN. The next item is:

For rental of additional quarters for the Navy Department, fiscal year nineteen hundred and eighteen, $105,000. The Secretary of the Navy is authorized to enter into a contract for the rental of a suitable fireproof building for the

use of the Navy Department for a period of not exceeding five years from July first, nineteen hundred and eighteen, at an annual rental of not exceeding $210,000.

Will you explain this item, Mr. Secretary?

Mr. ROOSEVELT. The matter is fairly well covered in the Secretary's letter transmitting the estimate. The situation is an extremely serious one from the point of view of efficiency, of health, and of proper administration in carrying on the war. We are scattered all over town, and something has got to be done about it. This seemed to be the most practical suggestion. This will eliminate all of the outside buildings which are now rented and will put all of the offices under one roof except the Secretary's own office and the division of operations.

The CHAIRMAN. Why does the Secretary not go out, too?

Mr. ROOSEVELT. He wants to stay where he is.

The CHAIRMAN. Why? If you want efficient administration, why should he not go also?

Mr. ROOSEVELT. Then we would have to have a bigger building. The CHAIRMAN. How much larger?

Mr. ROOSEVELT. It would have to be bigger by the amount they now occupy, which is 67,000 square feet, or, in other words, about two and one-half stories more on that Arlington Building. They can not build any more under the District building laws. They are up as high now as they are allowed to go.

The CHAIRMAN. How much space do you occupy altogether now? Mr. ROOSEVELT. At the present time 200,000 square feet.

The CHAIRMAN. And this is to give you

Mr. ROOSEVELT (interposing). To that must be added another building whch we have just taken, containing 30,000 feet, making 230,000 feet now occupied, or to be occupied within the next week. The CHAIRMAN. Is that to be given up?

Mr. ROOSEVELT. Everything we have is to be given up except the 67.000 square feet in the State, War, and Navy Building.

The CHAIRMAN. That would give you 267,000 square feet additional. You now occupy 230,000 square feet?

Mr. ROOSEVELT. Yes, sir.

The CHAIRMAN. And this building would give you 257,000 square feet additional?

Mr. ROOSEVELT. No, sir; the total in this new building is 387,000 square feet.

The CHAIRMAN. It is 420,000 square feet, is it not?

Mr. ROOSEVELT. That is gross; it is 320,000 square feet net, and that plus the 67,000 square feet in the State, War, and Navy Building gives a total of 387,000 square feet.

The CHAIRMAN. At what rate?

Mr. ROOSEVELT. At 50 cents per square foot.

The CHAIRMAN. Is that net?

Admiral HARRIS. It is about 60 cents per square foot net.

Mr. ROOSEVELT. We will have an increase over what we have now of 157,000 square feet. We will have 157,000 square feet more than we have now.

The CHAIRMAN. Do you need it?

Mr. ROOSEVELT. Positively.

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