Mr. JOHNSTON. No, sir; if the Fourth Assistant Postmaster General requests that it be sent out, we send it out.

Mr. JOHNSON. You do not go into the question of the merits of the petition before you send it to an inspector?

Mr. JOHNSTON. No, sir.

Mr. JOHNSON. That is done in the Post Office Department, is it not? It must be, because I have had them tell me that in view of the fact that the territory seemed to be pretty well supplied with rural service they did not deem it advisable to proceed with the matter, and they never did send an inspector. Who does that?

Mr. JOHNSTON. That, I think, would be done in Mr. McGraw's bureau.

Mr. JOHNSON. I know that somebody there does it. Now, coming back to the bill, there are several items relating to these clerks. What have you to say about them?

CLERICAL FORCE.

Mr. JOHNSTON. We have asked for an additional clerk at $1,800 and one at $1,600. We anticipate that we will have a good deal of work to do in connection with the parcel post. We feel quite sure of it.

Mr. JOHNSON. If you were permitted to have an additional clerk of class 4 and an additional clerk of class 3, would you promote somebody already in office or go outside for the additional help?

Mr. JOHNSTON. The chances are that we would promote some one in the office. That is one of the reasons we have in connection with asking for the increases, because we find it hard to keep clerks in the lower grades.

Mr. JOHNSON. You say it is hard to keep clerks. Where do they go? Everybody that comes before us talks about the difficulty of keeping clerks. Now, where do they go?

Mr. JOHNSTON. In the lower grade, that is, in the $900 gradeMr. JOHNSON (interposing). They do not quit the Government service, do they?

Mr. JOHNSTON. Quite a few leave our service for outside employment or they are transferred to other departments.

Mr. JOHNSON. Do not most of them go to other departments?
Mr. JOHNSTON. I think possibly a majority of them do.

Mr. JOHNSON. That is a bad situation for the Government. It is the employer of all these people, and it is a bad situation for the Government to be bidding against itself. The Government ought to have such a uniform method of treating its servants that they would not be trying to go from one place to another. Is there any other item in this bill you are interested in?

Mr. JOHNSTON. No, sir.

Mr. JOHNSON. When you do have an opportunity to promote, which you are asking for in this bill, do you promote on the basis of seniority or on the basis of efficiency?

Mr. JOHNSTON. On the basis of efficiency and efficiency records. Mr. JOHNSON. The new method of keeping the efficiency records of employees has not been transmitted to you, has it?

Mr. JOHNSTON. No, sir.

Mr. JOHNSON. Your present method attempts to give a correct and true statement of the efficiency of the employee, does it not?

Mr. JOHNSTON. It is prepared and filled out in accordance with the rules laid down by the office of the chief clerk of the department.

DIVISION OF THE PURCHASING AGENT.

STATEMENT OF MR. JOHN A. HOLMES, PURCHASING AGENT.

Mr. JOHNSON. You purchase quite a lot of supplies, do
Mr. HOLMES. Quite a lot.
Mr. JOHNSON. Who purchased the supplies for the
Department before you were provided for by law?

you not? Post Office

Mr. HOLMES. I am not the first incumbent of the office. mean before the office was established?

Mr. JOHNSON. Yes, sir.

Do you

Mr. HOLMES. The supplies were purchased by the bureaus upon contracts made by bureau officers.

CLERICAL FORCE.

Mr. HOLMES. We are asking for a reduction of $500; that is a net reduction in that appropriation. It is desired to drop one $1,000 clerk and to increase the salary of the chief clerk to $2,500. It is not believed that $2,000 is a sufficient salary for such a position. The title, I think, should be changed to assistant purchasing agent or chief clerk and assistant, and the incumbent should be required to give a bond. I have to give a bond as purchasing agent; and when I am away, which has been considerable lately, the chief clerk acts as purchasing agent. He does not give a bond, and I think he should be responsible for his own acts. The man who holds the position at present is very efficient. He was formerly for many years the assistant chief of the Division of Supplies. He is an allround good man. He went down to the Canal Zone and was in charge of the installation of the money-order system there and was commended by Gov. Magoon for his work. He is an expert accountant, and I think he is one of the best correspondence clerks in the department. I do not know of any better, or anyone who can do a greater amount of work. The duties of the position are very trying, and I think the person who holds this position in the purchasing department should certainly receive a fairer salary. Mr. JOHNSON. There are only six clerks in that office?

Mr. HOLMES. Yes, sir.

Mr. JOHNSON. You have seven now, and you propose to drop one of them?

Mr. HOLMES. Yes, sir. I think that in 1909 there was a recommendation for an increase. Since I have been there we have dropped out one clerk and one clerk on detail, making a net reduction of three clerks. We expect to have more work under this parcel-post law.

Mr. JOHNSON. How do the duties of the chief clerk in that office of purchasing agent correspond with the duties of chief clerk in the Division of Post Office Inspectors?

Mr. HOLMES. About the same, I should say; that is, he is the responsible head of the office when the chief is away. The duties, of course, are entirely different. We have a very small number of clerks, and I think that is very commendable in the way of administration. We have no duplication of work, and we do not keep any books. We do not have very much clerical work to do; it is, I may say, an office of review and action. We have dealings largely with the public-that is, contractors-and everyone of the clerks in the office has charge of a department, you might call it.

POSTAL SAVINGS SYSTEM.

STATEMENT OF MR. THEODORE L. WEED, DIRECTOR.

Mr. JOHNSON. You have charge of the Postal Savings System of the Post Office Department?

Mr. WEED. Yes, sir.

CLERICAL FORCE.

Mr. JOHNSON. You have been paying your people out of a lumpsum appropriation this year, have you not?

Mr. WEED. Yes, sir.

Mr. JOHNSON. We provided in the last bill that you should submit estimates in detail as to the force and salaries. Does the estimate you have submitted on page 252 cover what you now have under the Jump-sum appropriation? Does this estimate cover the same employees at the same salaries?

Mr. WEED. Substantially; yes, sir.

Mr. JOHNSON. You say "substantially." What are the differences? Mr. WEED. For instance, we estimate here for 170 clerks, and at the present time we have only about 155 clerks. We have been extending the postal savings depositories at the rate of about 1,000 per month, although there has been a lull recently, but it is the intention of the Postmaster General to continue the extension with the new year.

Mr. JOHNSON. How many postal savings banks are there? Mr. WEED. Twelve thousand eight hundred and twenty-three. Mr. JOHNSON. How many post offices are there to which the system must yet be extended?

Mr. WEED. It is the intention eventually to extend it to the 50,000 money-order post offices.

Mr. JOHNSON. To all the money-order post offices, which total, in the aggregate, about 50,000?

Mr. WEED. Yes, sir.

Mr. JOHNSON. In other words, about one-fourth of the post offices have been made postal savings banks?

Mr. WEED. Yes, sir.

DEPOSITS.

Mr. JOHNSON. How much money has been deposited?

Mr. WEED. Approximately $28,000,000 net; that is, exclusive of deposits that have been withdrawn for various purposes.

Mr. JOHNSON. Has the work gone far enough for you to know how much the expense exceeds the income?

Mr. WEED. Substantially.

Mr. JOHNSON. About how much is the expense in excess of the income?

Mr. WEED. At the present time, Mr. Chairman, we are operating under a lump-sum appropriation of $400,000, practically all of which will be spent this year; and, in addition, we also have at our command the unexpended balance of last year's appropriation amounting to about $245,000, making a total of $645,000. While the income from the system at the end of the last fiscal year approximated $250,000, the income for the current fiscal year is estimated at $700,000.

Mr. JOHNSON. That is the gross income, is it?

Mr. WEED. Yes, sir; that is the gross income, and it will approximate $700,000.

Mr. JOHNSON. The interest paid the depositors will approximate about what amount?

Mr. WEED. Interest payable to depositors for the fiscal year ended June 30, 1912, amounted to approximately $100,000. On the basis of the present monthly net increase of deposits it is estimated that the interest payable to depositors at the end of the present fiscal year will amount to $300,000. The cost of supplies and equipment and the salaries of clerks at the central office will doubtless aggregate about $425,000 annually, and to this sum should be added approximately $275,000, representing the time of clerks employed in post offices on postal savings work. Thus it will be seen that the estimated income of the system for the present fiscal year will about equal the estimated sum of interest payable as well as the total expenses of the central office, but will not be large enough to cover the value of the clerical work in post offices.

Mr. JOHNSON. You stated a moment ago that the amount of the deposits approximated $28,000,000, and the rate of interest is 2 per cent.

Mr. WEED. Yes, sir.

Mr. JOHNSON. And that would be $560,000 per annum, would it not?

Mr. WEED. Yes, sir; $560,000 if the $28,000,000 had been on deposit for one year. Under our system interest is paid only on the amount that remains on deposit with us for an entire year. Large amounts are withdrawn before the expiration of a year.

Mr. JOHNSON. So that until a year from now you can not tell, or you can not tell until you have had a series of years' experience, how it will be. You could not make an accurate calculation of it now?

Mr. WEED. It would be extremely difficult. We could only give the figures approximately.

Mr. JOHNSON. On page 252 you use the word "director." That, I presume, is the office you hold. Is that the designation fixed by law or is it one fixed by you?

Mr. WEED. It was fixed by the Postmaster General.

ASSISTANT DIRECTOR.

Mr. JOHNSON. Who is the chief clerk in that office?

Mr. WEED. There is no chief clerk. The assistant director, who is second in command, performs the duties of the chief clerk, but such

duties are only incidental to the larger administrative work for which he is responsible as assistant to the director. He also acts as director in the absence of the incumbent.

Mr. JOHNSON. In other words, the chief clerk in that bureau would be better paid than the chief clerk of the First Assistant Postmaster General or the chief clerk of the Second Assistant Postmaster General, of the Third Assistant Postmaster General, or of the Fourth Assistant Postmaster General?

Mr. WEED. He is actually more than a chief clerk.

Mr. JOHNSON. Is not the chief clerk in the office of the First Assistant Postmaster General more than a chief clerk at the times when the First Assistant Postmaster General is absent? Is he not then the head of that division?

Mr. WEED. Yes, sir; but, so far as that is concerned, the Postmaster General has recommended an increase of the salaries of those chief clerks.

Mr. JOHNSON. I know that he has recommended that these people be paid $3,000; but you have placed your chief clerk already, out of the lump-sum appropriation, ahead of the other chief clerks. You have placed him ahead of the chief clerks of the First, Second, Third, and Fourth Assistant Postmasters General.

Mr. WEED. But, as I say, it is not for the position of chief clerk; it is for the position of assistant director. There is that difference between the two.

Mr. JOHNSON. He performs the same duties in that office that he would perform if he were designated as chief clerk, does he not?

Mr. WEED. To a certain extent, he does. It is rather difficult to answer the questions, because in a number of Government bureaus there are assistants. For instance, there is an Assistant Commissioner of Corporations, there is an Assistant Commissioner of Labor, and assistants in quite a number of offices; and it might be said that, since they are second in command, they perform the duties of a chief clerk, which is undoubtedly true; but, nevertheless, I think there is a distinction between the assistant to the head of a bureau and a chief clerk.

CLERICAL FORCE.

Mr. JOHNSON. Do you believe that it will be necessary to employ all the clerical force you have provided for here? Can you not get along with less force after you get this system in operation?

Mr. WEED. I think, Mr. Chairman, that this is a wonderfully conservative estimate. If you will permit me to digress a moment, I might say that in England, where they use the old bookkeeping system which we discarded, over 3,000 clerks are employed at the central office. Only recently the Japanese director of communications was in my office and told me that 2,000 clerks, 800 of whom are bookkeepers, are employed in the central office of the postal savings system of his country.

Mr. JOHNSON. How many depositors did he say they had?

Mr. WEED. He said they had $100,000,000 on deposit, but he could not recall the number of depositors. In our central office less than 15 bookkeepers are employed. Postmaster General Hitchcock devised