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The CHAIRMAN. You say that you are putting in some more employees?
Nr. KITCHEN. They have 48 on their pay roll and we are asking for 50.
The CHAIRMAN. Why do you ask for 50?
The CHAIRMAN. Are you proposing to increase the pay of the men ?
Mr. KITCHEN. No, sir; the pay is less. For example, their general manager and president gets $7,500, and we are asking $4,500 for a superintendent who will fill a comparable position. They have a treasurer at $2,400, which position we are abolishing. They have a superintendent at $3,600, and we have an assistant superintendent at $3,000. They have a consulting engineer at $4,800, and we are abolishing that position. We are proposing to put in engineers, auditors, and bookkeepers at the same salaries.
Mr. BYRNS. Who is the president of this company?
Mr. BYRNs. Does he give his entire time to the market business, or is he engaged in other business?
Mr. KITCHEN. His office is in the market building, but I think they are interested in other property. He is there at the office every day.
Mr. BYRNs. Does he give his constant attention to this market business here, or is he interested in other private affairs?
Mr. KITCHEN. I would say that this is his principal business.
Mr. BYRNS. I was wondering whether the superintendent they have down there now at $3,600 does not perform all of the duties of the superintendent that you are going to have there.
Mr. KITCHEN. No, sir; he does not have the responsibility of the financial end of the business, but Mr. Wilkins looks after that, and signs the negotiable receipts, ete.
The CHAIRMAN. How do the salaries you suggest compare with the salaries paid by the Government to persons occupying like positions in the Government service?
Mr. KITCHEN. The auditors, accountants, bookkeepers, and stenographers are listed at practically the same salaries as those paid in the Department of Agriculture. The superintendent at $4,500 would compare with a division leader in a bureau getting that same salary.
REVENUES AND OPERATING EXPENSES.
The CHAIRMAN. What is the revenue derived from this plant under the present management !
Mr. KITCHEN. Under the present management the total revenue will amount to about $258,000 a year.
The CHAIRMAN. Is it a profitable institution, or do they pay dividends?
Mr. ANTHONY. Do you know the gross figures for a year's operations?
Mr. KITCHEN. The gross income amounts to about $258,000, and their operating expenses will total about $136,000.
The CHAIRMAN. What does that include?
Mr. KITCHEN. That includes the pay roll, the cost of fuel and electricity, and the whole expense of operating.
The CHAIRMAN. Including taxes?
Mr. FRANKLIN. They pay taxes in lieu of rent. There is a tax on the land.
Mr. KITCHEN. That can not exceed $13,000 a year.
The CHAIRMAN. Is the interest on their bond issues a part of the $136,000 you have mentioned as the expense?
Mr. KITCHEN. No, sir.
The CHAIRMAN. Why do you not have a complete statement to submit to us, showing the income and outgo of this business? It should have been easily arrived at.
Mr. FRANKLIN. We would not feel like asking that of the market company, because they might not want to give anything of that kind to us in advance of submitting it to the commission.
The CHAIRMAN. They must submit that to the commission.
Mr. BYRNS. Do I understand that the $13,000 is a part of the $136,000?
Mr. KITCHEN. No, sir; I do not understand it that way. That represents the actual operating expenses.
The CHAIRMAN. Do the operating expenses include any interest on the capital invested ?
Mr. Woon. Or anything for repairs?
The CHAIRMAN. You have no idea how much that would amount to ?
Mr. KITCHEN. I would not be prepared to make a statement of that now.
Washington Market Co., statement of operations for year 1920.
Salaries and wages, general and office.
$39, 008. 00
136. 74 1, 534, 64 1, 939. 93
40. 40 2, 243. 66 1, 841.74
654. 02 8, 414. 47
684. 47 2,500.00 2, 000.00 2, 860.00 33, 080.00
177, 151. 00
Vet income from operations.-
14, 000. O
Net earnings for year..
Surplus for year.
10, 849. O
Mr. ANTHONY. You have put in figures here for a seven months' budget from December 1, 1921, to June 30, 1922, of $141,000, and yet you say that the cost of operation for last year was $136,000 ?
Mr. KITCHEN. True, but we are asking for $30,000 to make some improvements.
Mr. ANTHONY. $30,000 of this $141,000 for repairs ?
Mr. ANTHONY. That makes the figures even worse, because you say that the Washington Market Co. operated it for $136,000 for an entire year, including repairs, and deducting the $30,000 you are asking for repairs you would be requesting $111,000 to run it for seven months.
Mr. KITCHEN. You may deduct $15,000 there also for the advancement of freight, which is not an actual expense, but you see we have to have that because if we pay out freight it goes against our appropriation, although it would not be actually an expense to the Government.
ESTIMATED COST OF OPERATION OF MARKET.
Mr. ANTHONY. What do you figure it is going to cost the Government to operate the market for one full year?
Mr. KITCHEN. If we did not make any improvements, I would say we could operate it for the same amount that they do.
Mr. ANTHONY. $136,000 ?
Mr. KITCHEN. Yes; but we propose to make some improvements and repairs down there, and I think any of you gentlemen who have been there will see the necessity for them.
The CHAIRMAN. Is it contemplated on the part of the Secretary of Agriculture when this institution is taken over to pay any attention to the amount of money invested by the Government in the calculation of the expenses or is it simply proposed to be run as Government institutions are generally run, paying the bills out of the Treasury and taking no account of the cost or of interest on investment or repairs or depreciation ?
Mr. KITCHEN. I can not speak for the Secretary, because his policy has not been announced, but I should say, personally, if the Government did not plan to make a reasonable return on the amount of they award they will be running the business at a loss.
Nr. FRANKLIN. And not only running it at a loss, but it is our personal opinion that it would be unfair to any competitive business in other cities near by.
The CHAIRMAN. Your idea is that the Government is not going to undertake to put this going concern on a business basis, is that it?
Mr. FRANKLIX. Our idea is that they should. If they can not, we had better not try it.
The CHAIRMAN. Do you know whether that is the plan or not?
Mr. FRANKLIX. There has been no policy laid down by the Secretary.
Mr. Sisson. The practical side of this matter as a Government institution is that nobody connected with it is interested in making a dollar of profit, and the Federal Treasury is open to them, and !! is a continuous complaint on the part of the renters that th
too high, and they are backed up by the public who want cheap products. There is every inducement to levy upon the Federal Treasury whatever loss there may be, and there is no incentive to make a dollar, just so you get your salary. That has been universally true so far as my observation is concerned of every Government-managed institution. Now, this is a difficulty that some one ought to answer, and I do not know whom we will get unless we get the Secretary of Agriculture here-suppose you do a general market business, and there is a consignment of perishable stuít, which we will say leaves Florida destined for some other point, but in transit the shipper finds he has a better market at Washington and in transit he orders it stopped here at Washington. How much money will this committee have to appropriate to take care of that! If this money goes into the Treasury and we make the appropriation, we will at once see a flock of difficulties that will come in the way of managing this institution unless you have a revolving fund, and a revolving fund, of course, means opportunity for fraud and all sorts of scandal connected with it. Therefore, I do not believe the Government, and I am now simply speaking for myself--I would not permit a revolving fund at all. You might have a small fund down there just for this purpose, but there is a perfect flock of difficulties that crowd themselves in here, and I want also to show you another difficulty which I want somebody to explain before I vote to appropriate the money. A controversy arises between a shipper and this market concern. The Government can not be sued, and therefore you have to have a commission of some kind created down there to hear complaints and have the Government do the just and fair thing. Now, this committee before we make the appropriation ought to have a bird's-eye view of how this money is going to be used. We may not be able to get that now, but the Secretary of Agriculture, along with the information you gentlemen give, ought to be here to give some information as to where we are going, or to use Tom Watson's expression, "Where we are at."
Mr. KITCHEN. I think I can answer your inquiry about the shipment from Florida. We realize that if we advance freight it is impossible to anticipate what that will amount to. So we have asked you here to set up $15,000 from which we can make such payments, to be reexpendable, and turnover in that small amount each year. We do not see how it can be handled in
way. Mr. BYRNS. When you take that $15,000 that you asked for the purpose indicated, and you also take the $30,000 that you ask for repairs, that leaves $96,000 that you are asking for seven months which at the rate of $13,700 a month or for the entire year $164.400, notwithstanding the fact that you say the market is now being operated for $136,000, which includes repairs, under private management.
Mr. KITCHEN. Of course, the repairs they are making now are very minor.
Mr. Byrns. Then eliminate the repairs entirely, you are asking for an appropriation at the rate of $161,400 for the entire year.
Mr. KITCHEN. There is also additional money–I cannot give you the exact figure-- which we returned to the Government from this estimate.