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been taking testimony, and they will come up this year, and for that reason we ought to have a little more in that fund. I stated last year we would be satisfied with $8,000, and if you will make it $8,000 now and fix the salary of one auditor at $3,000 and put the clerk who is now getting $1,600 at $1,800, I think that will be fair and just to those men.

STATIONARY CHEMICAL ENGINE.

Mr. JOHNSON. On page 308 you are asking for a stationary chemical engine.

Mr. PEELLE. Yes, sir; that was asked for last year. My attention has not been called to it especially this year, but I criticized it last year because they put in that particular kind of engine, and I stated that the court had been put in the attitude of asking for a particular kind of engine.

Mr. JOHNSON. You want $1,000 for the purpose of getting an engine for the building

Mr. PEELLE. Yes.
Mr. JOHNSON. Is the old engine wearing out?

Mr. PEELLE. I do not think we have had any at all, sir. We have had nothing but fire extinguishers on our walls, and the Treasury Department uses the basement of our building for their own files, and for that reason it ought to be better protected.

Mr. Johnson. Are you in a fireproof building?

Mr. PEELLE. It is the old Corcoran Art Gallery. It is a very substantial brick building, but has all this casing down below there. where the files of the Treasury Department are kept, and they keep a gentleman there to look after that work and who responds when they send down there for papers.

WEDNESDAY, NOVEMBER 27, 1912.

TREASURY DEPARTMENT.

STATEMENT OF HON. FRANKLIN MACVEAGH, SECRETARY OF

THE TREASURY, ACCOMPANIED BY MR. SHERMAN ALLEN, ASSISTANT SECRETARY, AND MR. JAMES L. WILMETH, CHIEF CLERK

GENERAL SUPPLY COMMITTEE.

Mr. Johnson. Mr. Secretary, we are anxious to find out something about the General Supply Committee. The Assistant Secretary told us last year that you were working on a comprehensive plan at the Treasury Department, and we are anxious to hear what you are doing.

Secretary MacVEAGH. The work is a very important one and ought to be continued. The committee ought to be continued, but its business should be elaborated, as it were, if it is going to be all that the Government needs it to be. Mr. Wilmeth or Mr. Allen will explain the details of the idea further. In general, they are that instead of the committee being constituted merely to take bids, they should be a purchasing agency, to a certain extent, so as to make

certain, in the first place, the amount of goods they are going to ask bids on, and in order that they should have a supply depot. At present there is a very great indefiniteness in the mind of any bidder as to whether he is going to get a chance to deliver any goods or not. Mr. JohNso N. As I understand it, the bidder simply binds himself to furnish articles of a certain character at a certain price, if called upon, and does not know how many will be called for, or whether any will be called for or not. Secretary MACVE.A.G.H. Yes. This would require a capital of a few hundred thousand dollars to be at their disposal, from which they could make payments. That feature of the case these gentlemen are quite familiar with: and I would like to speak of another matter, if you will permit me, because it will sooner or later come before you, whether it has been called to your attention already or not. This committee is impatient under its relation to the Treasury Department, and would be if any other department were substituted for the Treasury Department. Their objection, as I understand it, is not to the Treasury Department, but to any control by any department. They want to be independent, and they have wished this practically from the beginning. They are only about two years old, but they got the Philippine independence idea very early. They are mistaken about it entirely, in my judgment, but the idea has gotten into them and saturated them, and it must be either gotten out of them, in order to make them useful under this form of organization, or Congress must take their view and make them independent. It is not right it should go on as it is now. They are always unhappy and they are always kicking, and people in that condition of mind can not do their best work. In the first place, the Treasury Department did not ask for this burden at all. We did not want it, and I never knew about it until Congress had imposed the duty upon the Secretary of the Treasury of organizing and managing and being responsible for the operations of the Supply Committee; and, of course, now as I am going out of office, I certainly would have no personal interest in it. I believe, however, that it ought to be under a department beyond any doubt, and I think the Treasury Department is probably the most appropriate department for it to be under. Moreover, the Treasury Department has now acquired an experience which is of value and which goes on, because it resides not in Mr. Allen or in me, who go out, but resides in the permanent staff of the department, and that would be something to lose. I do not know what the incoming Secretary and Assistant Secretary will feel about it, or whether they will be particularly interested, but we have been very much interested in it. A large part of the idea of this organization originated in the Treasury Department out of our general experience, and I have been interested for several years in the establishment of an organization of this sort, because it was perfectly clear that such large purchasing interests as these should be consolidated, and that the ho of articles common to all the departments should undoubtedly be made through one organization. So I speak entirely without consideration for the department itself. The Treasury Department does not care whether it has this work or not. It seems to me absurd that this body should be independent of any department. If this tendency toward independent bureaus and departments goes on Congress would have to deal with thousands of little organizations, and the country would have to suffer from that sort of independence, because the same rules that would apply to the supply committee would apply equally to 40 operations in the Treasury Department alone, and you might just as well make them independent as to make the supply committee independent. This committee is especially not constituted for independence. In the first place, there is no permanence in its personnel, and its personnel is not even wholly occupied with it. Mr. GILLETT. Of course you would have to make its personnel permanent if you made it independent. Secretary MACVEAGII, Yes; but they are not considering that. They are considering themselves as they are now. They have wanted to be independent all along and have claimed they should be independent as at present constituted. They come there and perform their functions and are allied chiefly to their own departments, where they are chiefs of divisions and men of importance in their departments, and men who have, therefore, important obligations to the departments. Mr. GILLETT. Do you not think it would be better that they should be permanent, Mr. so Secretary MACVEAGH. I am not quite sure of that. I was talking about that coming down with Mr. Wilmeth. I think Mr. Wilmeth thinks they should be permanent. I am not entirely clear that they would not lose a certain representative character that they have now and a certain continuous touch with the needs of their departments which they have now. They would get away entirely from the departments then, and get away from the idea upon which Congress acted—that there should be departmental representation. You have to abandon that, Mr. Gillett, if you adopt the other plan, and I am not clear about it. The subject never came to my mind until this morning as we were driving down here, and I should like to reserve judgment on that, so far as I am concerned. But you would lose a great deal. You would lose the idea of having departmental representation, and, in the next place, they are not business men, and they have to recognize that. They have to be trained into merchants. It is largely the work of merchants, and I have been surprised that these men learned so much and so readily a business like this that they had no relation to before. No place is more remote from real business than Washington, and then if you get into a department of the classified service you get about as far away from practical business as you can get; and those are the people we have had to draw from, and yet they have done extremely well. I want to speak very highly of the work of the committee. I want to say in general they have been a very good committee indeed. They have made mistakes, and all that, but they are in no sense a body that could go it alone. Of course they would have to be entirely reconstituted, and no body needs more oversight, more patient oversight, than they. Now, I have been entirely patient with them. They go and complain more or less to the heads of their departments, and I have heard more or less about it in the Cabinet and otherwise, and I have just let them alone. I realized that they were a wild team that I had to break in, and I have never even explained to the Cabi

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net or to the President anything at all on the subject, but I think I will have to. I have had it in my mind lately that the heads of the departments ought to understand more about the supply committee than they do, but we have been very patient with them. I was patient even when they came in a body and took the position that even if they were under the Treasury Department they were only under the Secretary personally; and I smiled and laughed with them and said: “This is the only obligation imposed upon the Secretary that he can not have assistance in; that he can not have an Assistant Secretary and chief clerk of his department help him with.” But they were just as unreasonable and unbusinesslike as that, and yet they are good men, and the thing itself has worked out very well in the main; as well as it can under the restricted system that so far has been established, which, as I have explained, relegates these men merely to making up schedules and .. for bids on parcels and making awards on the bids. They have recently made a report to us in which they recommend again their independent establishment. The report was due to our suggestion that they should make a general report to us, and in that report they bring up this question again. I have not read the report in full, because it has only been in a day or two, but they have elaborated again upon this idea of their independence, and I understand this morning ". they passed a resolution yesterday suggesting that they be given a hearing by your committee, and I inferred perhaps that some of you already knew about it one way or another. The |...". has come up, and that is the main reason for my coming own this morning. I wanted to present my views on that particular question. I will now leave to the gentlemen with me to go into any details such as you spoke of, Mr. Johnson, at the beginning. Mr. JohnsoN. Mr. Allen, tell us what plans you have worked out as to a permanent organization of this purchasing or supply committee. Mr. ALLEN. The Secretary has covered the general subject of the General Supply Committee so fully and completely that I only need to say that his view is my view entirely as to its being a part of some department. We are asking you to appropriate this year, money which will enable the General Supply Committee to have its own clerks. It now has a superintendent at $2,000 and two clerks at $1,400 each; the other clerical service comes from the departments on detail. That is not a satisfactory kind of clerical service, and we are asking this year that an appropriation be made that will cover the clerical force which they need to do their work; a part of it is only for three months in the year. Mr. Johnson. Mr. Allen, the matter that was discussed by the Secretary of the Treasury goes beyond the mere clerical organization of the force; the Secretary was discussing the formation of a supply committee with a law back of it which would cover the details. What have you to say in regard to that subject? What have you worked out to suggest to the committee as to the powers that should be conferred upon them? Mr. ALLEN. You mean what change should be made in the law Ż Mr. JoHNSON. Yes; and how . this supply committee be constituted? As I understand it now, the supply committee is constituted of one man from each department.

Mr. ALLEN. One man from each department and a superintendent of supplies designated by the Treasury Department. Mr. BURLESON. And then you get such details from the departments in addition to those as you may need? Mr. ALLEN. As to the clerical force; yes, sir. Mr. JoHNSON. The man who is the member of the supply committee from any particular department is a man in the classified service who, probably because of his efficiency as a clerk, is designated on this important committee to purchase the supplies for the Government and, as the Secretary says, without any previous mercantile experience or training. Mr. ALLEN. That is true. Some of the men have had experience in purchasing supplies for their departments, but not all of them. Mr. BURLESON. Mr. Allen, have the men detailed from the other departments always been in sympathy with the general purpose behind this supply committee? I do not speak with reference particularly to the men from the Treasury Department. Mr. ALLEN. I think they are, Mr. Burleson, in sympathy with the general purpose of it. I do not think they are always in sympathy with the supervision over them, and that is shown by their desire. to become an independent body. Mr. GILLETT. Supervision by whom ; by the Secretary of the Treasury? Mr. ALLEN. By the Secretary of the Treasury; yes. Mr. JoHNSON. Each man on that committee feels he ought to be about as independent as any other man at the head of a department, and that the other heads of departments should have as much control over them as the head of the Treasury Department? Mr. ALLEN. Yes, sir. Secretary MACVEAGH. I would say there is a superintendent who is really the head man. He is appointed by the Secretary of the Treasury. There have been two of them. I made a change just the other day. Neither has been selected from the Treasury Department. We looked all over the ground, and it happens both of these men came out of the Post Office Department. The new man who has just gone in is a Post Office Department man. Mr. Johnson. And I understand is a very competent man. Secretary MACVEAGH. Yes, sir; supposed to be. We hope he is. We looked him up thoroughly. Mr. ALLEN. He has had experience in the purchase of supplies. Mr. BURLESON. Can you hope to make this supply committee really effective unless there is an independent head to it, one official upon whom the responsibility will rest for action, and who can determine what shall be done without reference to any of the others? In other words, can you make it effective without having one head to it? Secretary MACVEAGH. It has a head. It has a superintendent. Mr. BURLESON. But is he not hampered by the other men who are associated with him? For instance, if an effort is made to standardize paper, can he say this shall be the standard for all the departments, or do the others have a voice in the matter? Mr. ALLEN. The others have a voice in the matter, and the question finally goes to the Secretary of the Treasury for decision. Mr. BURLEsoN. But the Secretary can not give attention to the details of this work?

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