uniformly encouraged. I have been around to the bureaus and encouraged them in every way to buy machines to do work instead of clerks, and this new bureau will have to have some mechanical equipment next year. The chief of that bureau has estimated that all traveling expenses, expense for books, periodicals, stationery, equipment, and all other miscellaneous expenses, will run next year to $9,650; and if you add $9,650 to our present liabilities, leaving out the Children's Bureau, it will run about $65,000. I took that estimate up with her again this morning and she is anxious to increase it. I told her that I thought it would hardly do to increase that estimate now, because we had made the estimate based on her previous figures and she would have to worry along with it. She thought it was too little, and was anxious to know if she could make some statement before the committee about it. I told her I did not know about that. At the end of 1911 we turned back into the Treasury $7,000 out of that $60,000 appropriation. This year, according to our books at present, we have a balance of a little over $5,000, but there will be some accounts that will come in later. For the fiscal year 1910 there was an unexpended balance of $33.61 of that appropriation. On June 30, 1911, the unexpended balance was $7,000. On June 30, 1912, the unexpended balance was about $5,000. That shows that our expenses have not been increasing and that the appropriation has been carefully guarded. We may have gone too far in that, but we have done it because we realized that we would probably soon have a new building, and in anticipation of this we have simply denied ourselves really necessary floor coverings and other furnishings throughout the department. For next year, I think, to run the offices properly and economically, we ought to have $65.000. I do not think that is one cent too much, and I think we have demonstrated that we can take care of that money if it is appropriated.

TRAVELING EXPENSES FOR ATTENDANCE ON MEETINGS, ETC.

Mr. JOHNSON. On page 298 you ask for a proviso that would nullify a section in the District bill. I think that provision was put in last year.

Mr. PINDELL. The substance of that carries into effect the modification that was put in one of the other bills-I think in the sundry civil bill—which applies, I think, only to the fiscal year 1913. The section of the District appropriation bill absolutely forbade this sort of travel. Under the sundry civil bill this provision was modified. That provision deferred the operation of the act until after the fiscal year 1913, and made a proviso that we should report to Congress not later than January 1 all travel of that kind undertaken prior to December 1.

Mr. JOHNSON. I saw this first paragraph here, that no person shall travel unless authorized

Mr. PINDELL (interposing). Upon the written authorization of the Secretary.

Mr. JOHNSON. In the discharge of public duty or official duty.

I do not quite understand the second proviso here, "that no fees or dues in connection with membership in any society or association shall be paid except as especially authorized by law." Is there any

law that authorizes any Government employee to joint any society or to pay his dues out of any appropriation?

Mr. PINDELL. I do not know of any.

Mr. JOHANNES. We have in the Bureau of Labor a provision for subventions to the International Association for Labor Legislation. Mr. PINDELL. But that is not paid by the individual.

ADMINISTRATIVE AUDIT.

Mr. JOHNSON. I suppose in that connection I might as well inquire, as I see the disbursing officer present, as to whether you are living up to the provisions of the Dockery Act in the Department of Commerce and Labor.

Mr. JOHANNES. Yes, sir.

Mr. JOHNSON. How do you find that it operates?

Mr. JOHANNES. So far as my office is concerned it operates very nicely. We have obeyed that provision in the legislative act, and we make the legal audit which the act permits. The administrative examination required by the Dockery Act of accounts of special disbursing agents is not being made in my office as heretofore. That examination the department has ordered made in the administrative bureaus. The auditors have made some complaint because the accounts do not come to them in good shape.

Mr. JOHNSON. That is simply the necessary friction that arises because of the fact that the law has been for so short a time in operation.

Mr. JOHANNES. It is that exactly. The examination of these accounts is made under laws and regulations by accounting officers growing more complex through long years and it is quite a technical matter. There are many things connected with them that have to be watched, and it takes some time to learn it.

Mr. JOHNSON. Since we have relieved you of that burden of auditing accounts and you are simply disbursing money, how many people are you able to dispense with?

Mr. JOHANNES. Well, you have not relieved me very much, because you still permit me to make such examinations as are necessary to ascertain whether the claims are legal claims against the Government. The act provides that the disbursing officers shall make only such examination of vouchers as may be necessary to ascertain whether they represent legal claims against the United States.

Mr. JOHNSON. Taking that phase of the law you have just quoted, how much examination do you make?

Mr. JOHANNES. Mr. Chairman, I make a very through examina

tion.

Mr. JOHNSON. I want to get back to it. I want to know whether you are not practically auditing claims now. Suppose that the Director of the Census certifies that certain people on the pay roll are due a certain sum of money during the month, what examination would you make?

Mr. JOHANNES. I would examine that pay roll to ascertain whether the Director of the Census has an appropriation available for that service and whether it provides for the number of people on that pay roll. I would then examine to see whether any one of those

persons have heretofore been paid for the same service. Beyond that I would not go.

Mr. JOHNSON. What section of the bill applies to your office?

Mr. JOHANNES. The Secretary's office. There is one item yet on the bottom of page 298. You might want to ask me some questions about that.

Mr. JOHNSON. Before we come to that item you have called my attention to, let me ask you this: Suppose some bureau in the Department of Commerce and Labor were to buy an adding machine and the claim came down to you for audit, would you inquire into the question of whether it was a proper purchase or anything of that kind?

Mr. JOHANNES. No, sir; the only examination I would make of that would be this: I would see whether the bureau had an appropriation available for the purchase of that machine, whether it had been purchased under competition as required by law regulating the purchase of supplies, whether a contract had been entered into for the purchase of the adding machine by the General Supply Committee, and whether the price paid was the price fixed by that contract. Beyond that I would not go. I would have no other information in my office beyond the officer's certificate on the voucher that he had received the machine and that is was necessary.

Mr. PINDELL. You would accept my certificate on that?

Mr. JOHANNES. Yes, sir.

Mr. JOHNSON. I think the two items you refer to on pages 298 and 299 more properly belong on the deficiency bill than here. Mr. JOHANNES. We can add them to that bill.

Mr. JOHNSON. That is another matter growing out of the very thing we have been talking about the administrative audit-and Ï have never known the committee to hold anybody responsible where an honest mistake was made.

CONTRACT FOR BUILDING.

We authorized you in the last bill to enter into a contract for a number of years for a building. Has such a contract been made? Mr. PINDELL. A contract has not been made, but we have accepted the offer of some people in Washington to erect a building subject to certain conditions, and they are under a $10,000 bond to furnish us with plans and specifications for a building satisfactory to the department.

Mr. JOHNSON. You are not asking at this time for any additional floor space over what you have?

Mr. PINDELL. No, sir; we expect to get additional floor space in this building.

Mr. JOHNSON. When do you contemplate being in that building? Mr. PINDELL. We expect to go in by the 1st of September.

Mr. JOHNSON. We have limited you in the legislation to the amount you must pay. The provision is that the amount shall not exceed so much.

Mr. PINDELL. That is correct.

BUREAU OF CORPORATIONS.

STATEMENT OF MR. LUTHER CONANT, JR., COMMISSIONER.

Mr. JOHNSON. On page 271 you are asking for a slight increase in your clerical force, I believe.

Mr. CONANT. For a slight rearrangement.

Mr. JOHNSON. Do you desire to make any statement about this proposed promotion?

Mr. CONANT. The only explanation is that we find that we have hardly enough $1,400 positions to make our roll properly balanced. We have a large number of positions at $900 and $1,000, but not enough at $1,400 to provide for the promotions that should be made. Mr. JOHNSON. Do you propose to promote people already in the bureau?

Mr. CONANT. Yes, sir; that would be the intention.

Mr. GILLETT. You drop one person here and then propose to make some promotions?

Mr. CONANT. We really drop three. We ask two at $1,400, drop cne of class 1, one at $1,000, and one copyist, which makes a net reduction of $300.

Mr. JOHNSON. I see no change in the item on page 222. You are asking for $175,000. Can you get along with any less than that? Mr. CONANT. No, sir.

Mr. JOHNSON. Have you any unexpended balance of this $175,000 that was appropriated for the year 1912?

Mr. CONANT. Yes, sir; there was quite an unexpended balance last year.

Mr. JOHNSON. Can you give us the exact figures?

Mr. CONANT. Of the amount available for 1912, we used $135,015.59. I am speaking of the lump sum.

Mr. JOHNSON. Yes, sir; I am speaking of the lump sum.

Mr. CONANT. In other words, almost $40,000 of the appropriation was turned back into the Treasury.

Mr. JOHNSON. What are the prospects for this year's expenditures falling below the appropriation?

Mr. CONANT. It will run somewhat under this year. The expenditures may run heavier than last year, but they will run under the $175,000.

Mr. JOHNSON. Will you send us down a statement showing the unexpended balance for the last two years under that appropriation, and also what you have spent up to this time of the present fiscal year?

Mr. CONANT. Yes, sir. (See p. 258.)

Mr. GILLETT. Why do you think you will require $175,000 next year?

Mr. CONANT. We feel that we need a margin in our work. At any time Congress might bring in a resolution calling for an investigation that would require a great deal of field work, and we feel that we certainly ought to have that margin to work on. If Congress should ask us to undertake any extensive investigation, we would

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need quite a little surplus, and we feel that the fact that we do not spend it is a good reason why we should be allowed to have it.

We feel that we are prudent with it, and it would be a serious matter for the bureau if we should be called upon by a resolution to make an investigation of that sort and not have the necessary funds to work with. We might not be able to get the work done in due season. I do not know that I could make a stronger argument against cutting it down than to cite the fact that we have been prudent in its expenditure, and, as far as I am concerned, we will make every effort to be economical in the use of the money.

Mr. JOHNSON. We do not want to cripple the bureau, of course, but we think it is a bad practice to habitually appropriate more money than is expended.

Mr. CONANT. I appreciate that; but we can show that we have actually turned in a substantial surplus each year. I would certainly like to have that appropriation remain as it is. It is almost impossible to say when we may need $25,000 more in any year.

NOVEMBER 26, 1912.

DEAR SIR: Pursuant to your request of yesterday, you are advised that of the amount of $175,000 appropriated for the Bureau of Corporations in a lump-sum appropriation for salaries and expenses of special agents, examiners, and attorneys for the fiscal years ending June 30, 1911, and June 30, 1912, there was unexpended for the year ending June 30, 1911, $56,459.19, and for the year ending June 30, 1912, $39,984.11.

There has been expended from this lump-sum appropriation during the present fiscal year, from June 30, 1912, through October 31, 1912, $46,962.09. On this basis it would appear that there would be a considerable unexpended balance from the current year's appropriation. I desire to point out, however, that the expenditures during the past four months afford no real guide as to the amount of such unexpended balance for the entire year, for the reason that very recently the bureau has commenced some extensive work on the Pacific coast, and has already sent three agents there, while additional men will have to be sent on this investigation. Besides this, another investigation of the bureau will require sending at least two men to the Rocky Mountain and Pacific Coast States. It is expected, therefore, that the expenditures under 'the lump-sum appropriation during the remainder of the current fiscal year will be at a considerably heavier rate than they were during the first four months of this year, and this without considering the contingency that new work may be ordered by Congress or the Executive.

You will observe from the above statement that the unexpended balance in 1912 was considerably less than it was in 1911. It is practically impossible to forecast with any degree of exactness the amount of money that the bureau may require in a given fiscal year; and while it is true that there have been unexpended balances of considerable amount in recent years, it may easily happen in any year, owing to the undertaking of new work, that the entire lumpsum appropriation would be needed. To reduce this appropriation would, in my opinion, involve the possibility, if not the probability, that the bureau would find itself unable to comply with resolutions of Congress or instructions from the Executive directing new investigations. As I stated to the committee personally, the bureau feels that the fact that it has shown an unexpended balance in several years is an indication that it has been prudent in the handling of its funds and is a demonstration of the fact that it may fairly be intrusted with a somewhat larger appropriation than may be actually expended in any given year. I therefore earnestly hope that the subcommittee will see its way clear to let this appropriation stand at the same figure that has been allowed in recent years.

Very respectfully,

Hon. JOSEPH T. JOHNSON,

LUTHER CONANT, 'Jr.,

Commissioner.

Chairman Subcommittee in Charge of Legislative,
Executive, and Judicial Appropriation Bill,

House of Representatives, Washington, D. C.