Mr. MAXWELL. As a matter of fact, there will be other items which we will have absorbed, among which will be a part of the automatic promotions. Taking the people on the rolls at the present time, it will take $21,000 to pay the increased salary on account of automatic promotions, whereas we are requesting only $9,708. But we feel that during the period of the year there will be obtained benefits from the work-simplification programs-suggestions made by employees and others. There are small savings, but very often we cannot realize on the savings until it equals the full time of one employee. However, if we put many of the small savings together, we can often reduce our force. We figure that these small savings which we are finding from time to time can be given effect and realized upon to the extent that is probably equivalent to two employees. Mr. CANFIELD. In other words, would you say that in days to come you do not anticipate that you will be seeking additional men and that you may be able to effect some real savings? Mr. MAXWELL. That is correct. Mr. CANFIELD. That will be as a result of continuing this management-improvement program; is that correct? Mr. MAXWELL. That is right. I can give you a good example of that. It is just a small thing, but it shows how it works. One time we had one of our sections located in the Treasury Building. It was later moved to another building. Under the procedure previously followed, we had to route our work through the general counsel's office and back to the section. Under the proposed procedure it was sent directly to the general counsel's office and then to our office, so that we saved one trip a day. There was a small saving there, but those things are continuing. Mr. CANFIELD. I am mindful of the fact that your Bureau has been helpful, for instance, in the survey that has been made in another Bureau, the Bureau of Internal Revenue, with the purpose of making it more efficient and thereby developing savings. When the Secretary was here last week, he told us that the management-improvement program of the Bureau of Internal Revenue is resulting in current fiscal-year savings estimated to reach 1,000,000 man-hours. That is a tremendous saving. He also indicated that further results are to follow. Your Bureau has been helpful in that. Mr. MAXWELL. That is right. In that connection, I would like to point out, Mr. Canfield, that, as you know, we did not get all the money we asked for last year for the new employees to work on the joint program. So, if we have any savings, we have been trying to follow the recommendation of this committee and take the savings and hire a higher grade of employee who can be put on Mr. Cake's staff. That helps the other officers on their particular problems. Mr. CANFIELD. When the Secretary was here last week, I told him that this committee was proud of the way that he and the Treasury Department, and specifically the Bureau of Customs, had accepted the challenge of this committee two years ago to effect a savings in Customs. It was our belief that a really wholesome job could be done in that Bureau in the interest of the taxpayers of the United States. Most certainly such a job has been done. It reflects credit on all concerned. I read in your justifications that you have been helpful there. You tell us that during the fiscal year 1949 a completely new accounting and reporting procedure for customs collections was devised for installation on July 1, 1949. You refer to the survey conducted the previous year, which was a survey that was asked to be made by this subcommittee, the House Committee on Appropriations. Mr. MAXWELL. That is right. Mr. CANFIELD. We have a right to be proud of our joint handiwork. I know last year I emphasized that not only before the full committee but also before the House, and I tried to do so this year. It was a real undertaking and a splendid job on behalf of the taxpayers of our country. GOVERNMENT LOSSES IN SHIPMENT ACT Mr. CANFIELD. Mr. Maxwell, you referred to the fact that th Bureau also administers the Government Losses-in-Shipment Act and pays claims. You request appropriations of $150,000. Briefly, for the information of our colleagues who may ask questions about that item, small as it is, will you tell us just what it embraces? Mr. MAXWELL. Prior to 1938 the Government entered into insurance agreements with large surety companies or combinations of surety companies-syndicates, they called them-to insure the Government against losses in shipment of Government bonds, currency, coins, and other valuables, for which the Government agreed to pay premiums at various rates, depending on the type of security or valuables. On July 8, 1937, the act was passed which authorized establishment of a Government loss-in-shipment fund, a self-insurance fund, which would permit the Treasury to adjust for losses which occurred in connection with these shipments of valuables. From time to time, the Government has shipped, as I have indicated before, over 3 trillion dollars of securities, with a saving in premium of over 27 million dollars, based on the reported shipments of the various Government agencies. However, since 1937, there have been several amendments which have made the fund available for other purposes than losses in shipments. The act of August 10, 1939, authorized the fund to be available for adjustments for losses incurred by the Post Office Department, acting as agents for the Treasury Department, for the sales of stamps and sale of securities and other items. The same act also authorizes the Treasury to execute agreements of indemnity where any Government agencies have lost checks due the United States, so that we could get a duplicate from the individuals paying the money to the Treasury. In 1943 and 1945 it authorized the use of the fund to adjust losses in connection with redemption of savings bonds. At that time, commercial banks were authorized to redeem savings bonds, and the fund was made available to pay the banks in case there was erroneous redemption without fault or negligence on the part of the bank. This was also extended in 1946 to the armed forces' leave bonds. Right now the biggest portion of the losses is charged to these latter two items, the savings bonds being the largest item. Mr. Merritt advises me that about $125,000 will be required for the fiscal year 1951, and we have included $25,000 for the other losses which would cover shipment and losses in the Post Office. DAILY TREASURY STATEMENT Mr. CANFIELD. Mr. Maxwell, your Bureau has to do with the daily Treasury statement; is that correct? Mr. MAXWELL. Yes, sir. Mr. CANFIELD. Is that entirely your responsibility? Mr. MAXWELL. Mr. Canfield, we have the responsibility, you might say, for the technical supervision. The actual compilation of the figures printed in the daily report is performed by the Treasurer's office; but we advise them of the classifications, and the expenditures from appropriations to be included in each classification. Since July 1, 1948, the Bureau of Accounts has also compiled part of the figures for the daily report on the basis of checks issued by the Division of Disbursement, on the basis of teletype advices from each regional disbursing officer. We consolidate expenditures on the basis of classifications on page 2 and furnish a summary statement to the Treasurer's office. This office, in turn, combines it with the data they receive from other agencies disbursing Government funds, particularly the Military Establishment, which is the largest other agency. Mr. CANFIELD. There has been a great improvement in the preparation of that statement. However, I suppose the average layman is still confounded by it. Mr. MAXWELL. Well, we think it is an improvement. In fact, it brought the payments for the civilian establishments on a current basis. As it is now, payments made today by Mr. Banning's office-the Division of Disbursement-will be reported as of today, in the daily Treasury statement issued day after tomorrow. SUFFICIENCY OF APPROPRIATIONS FOR 1950 Mr. PASSMAN. Mr. Maxwell, Congress appropriated to the Bureau of Accounts in 1950 the sum of $1,550,000; that is, excluding the $175,000 that was appropriated for specific purposes. Do you think that is going to be sufficient funds to carry it through this fiscal year without having to ask for supplemental or deficiency appropriations? Mr. MAXWELL. Yes, sir. You said, "excluding the $175,000"; is that right? Mr. MAXWELL. With the $175,000 we will have sufficient funds, exclusive of $23,000 to cover pay increases under the Classification Act of 1949. Mr. PASSMAN. Taking the $1,550,000 appropriated for the regular services for the fiscal year 1950 and adding the $328,000 to be used in connection with the consolidated collection of withheld income and social security taxes, that would make a total of $1,878,000. You are now asking for $1,919,000 for the fiscal year 1951. That is a difference of $41,000. Mr. MAXWELL. There are pay increases and transfer of $5,000 for telephone services. The pay increase under the Reclassification Act of 1949 is $34,000, and $9,700 for within-grade promotions. Mr. PASSMAN. You have two figures to offset there, do you not? One is in the amount of $3,978 for reduction of one employee, and one in the amount of $3,730, representing a reduction of 1 day's pay for all employees in excess of 52 weeks. Mr. MAXWELL. That is right. We have added the $9,708 for within-grade promotions, $34,000 for the pay bill, and $5,000 for transfer of telephone services and miscellaneous expenses of the Treasury; against which will be deducted the $7,708 for the 1 day's pay and reduction of one employee. That should come out the same figure we have, I think. Mr. PASSMAN. Then there is no increase in there for personnel? Mr. MAXWELL. There is no increase for personnel. As a matter of fact, there is a reduction of one person. REIMBURSEMENT TO FEDERAL RESERVE BANK FOR COLLECTION OF SOCIAL SECURITY TAXES Mr. GARY. Mr. Maxwell, with reference to the social-security taxes, they go into a trust fund, do they not? Mr. MAXWELL. Yes, sir. Mr. GARY. Why should not the reimbursement that you pay the Federal Reserve bank for the collection of those funds be paid out of the trust fund rather than out of the General Treasury? Mr. MAXWELL. The way that works is that under the law the general fund is reimbursed from the trust fund quarterly. The Secretary of the Treasury and the Administrator of the Federal Security Agency estimate the amount of the cost each quarter-the cost of administering the old-age and survivors insurance trust account. Those amounts are compiled by our office. We issue a voucher and charge the old-age survivors insurance account for that amount and credit it back to the general fund. These estimates are later adjusted for actual figures. In other words, if the estimates at the beginning of the quarter are not exactly accurate, they are adjusted to actual figures at the end of the quarter. So that in the end, the general fund is reimbursed for the amount of the cost of handling the old-age and survivors insurance trust fund matters. Mr. GARY. So even though we appropriate the money here, the general fund is reimbursed for that amount; is that correct? Mr. MAXWELL. That is right. That is the present law. TOTAL APPROPRIATION FOR 1950 Mr. GARY. I understand, Mr. Maxwell, you estimated your appropriation for 1950 at $1,640,000. You now estimate that it will require a supplemental of $257,000, making a total of $1,897,000; is that correct? 60561-50-pt. 1- -7. Mr. JOHNSON. Mr. Chairman, if I might clarify that, I think you are reading from the committee print. Mr. GARY. Yes. Mr. JOHNSON. The $257,000 appropriation was the supplemental that we requested to take care of this insurance-contribution item which Mr. Maxwell discussed, against which the Congress appropriated $175,000 because we were not able to start the program as soon as we had hoped to. Mr. GARY. You requested in your original budget last year $1,640,000, did you not? Mr. MAXWELL. That is correct, sir. Mr. GARY. The Congress appropriated $1,550,000. Mr. MAXWELL. Yes, sir. That difference was $90,000, which we had included for a staff to work on the joint program which Mr. Cake mentioned. Mr. GARY. Then you requested $257,000 additional for the reimbursement program, and the Congress allowed you $175,000; is that correct? Mr. MAXWELL. Yes, sir. That is because initially, when we submitted the estimates, Mr. Chairman, we intended to start the new procudure on October 1. So there would have been three-quarters within this fiscal year for which we would need funds. But shortly after we had the hearing here, it was determined that the program would not start until January 1st because of certain difficulties, so our estimates were reduced by approximately one-third. Mr. GARY. Do you estimate that you will have to make any further supplemental request this year? Mr. MAXWELL. No, sir; not for this appropriation. Mr. GARY. Then your appropriation for 1950 will be $1,725,000; is that correct? Mr. MAXWELL. I might amend that to say that we will need funds which I presume will be included in one figure by the Bureau of the Budget for pay increases. The Bureau of the Budget generally includes such items in one over-all appropriation, of which we presumably will get our proportionate part for pay increases under the Classification Act of 1949. But aside from that we will have no further increases. Mr. GARY. Therefore, your appropriation will be $1,725,000; is that correct? Mr. MAXWELL. That is right. Mr. GARY. You are asking $1,919,000 for 1951, which is an increase of $194,000. Mr. MAXWELL. Yes, sir. That includes the $5,000 transfer for telephone services; $153,000 for the added 6 months for the socialsecurity withheld taxes, and the adjustment between the withingrade promotions and the pay act increases, reduced by a reduction of one employee and 1 day's pay. Mr. GARY. What is the cost of the pay act? Mr. MAXWELL. $34,000 is the cost of the pay act, and $9,708 for automatic promotions. Mr. GARY. You stated a few moments ago, Mr. Maxwell, that periodically the general account is reimbursed out of the trust account. When that is done, however, your bureau is not given credit for it? Mr. MAXWELL. No. Neither is the Bureau of Internal Revenue. As a matter of fact, there are several appropriations in which the Treasury Department is involved. There is the Bureau of Internal |