SCHEDULE B.-Comparison of basic rate and latest available quotation for all foreign currencies, and percentage of reimbursable loss, if any—Continued

The distribution of United States Government personnel in foreign countries where currency appreciation losses are currently reimbursable, by countries and by departments and establishments, is shown in the following table:

SCHEDULE C.-Number of officers, enlisted men, and employees serving in areas where currency appreciation losses are reimbursable

The basic salaries and allowances of personnel shown on the foregoing statement are as follows:

SCHEDULE D.-Basic salaries and allowances of officers, enlisted men, and employees serving in areas where currency appreciation losses are reimbursable

Requirements for the 1943 fiscal year are estimated by applying the percentage of loss shown on schedule B to the basic salaries and allowances shown on schedule D, and by including nominal amounts for the several departments and establishments for losses accruing on the salaries of temporary employees and on per diems of personnel traveling on official business, and for such contingencies as fluctuations in rates of exchange and changes in the numbers of persons in given areas or in their rates of pay. The computation of estimated losses for 1943, by countries and by departments and establishments, is as follows:

SCHEDULE E.-Estimate 1943 anticipated currency appreciation losses

Remark. In order that there may be no misunderstanding in comparing amounts shown for the several departments and establishments for 1942 and 1943. as printed in the Budget, it is to be borne in mind that the 1942 column shows the allocation made to each office at the beginning of the fiscal year, and not the original estimate for each office on which the total appropriation is based. It has been the practice to set up a reserve at the beginning of each fiscal year, and for 1942 $66,500 is being held in reserve. Of course in the 1943 column no reserve is shown, and the total estimate for each department and establishment is listed directly. Mention is made of this point merely to avoid possible confusion as to the comparability of figures listed in the two columns.

Mr. FRANK. Mr. Chairman, there is not very much to add to what Mr. Shaw has already said, unless the committee has som e questions. relating to exchange relief. As you know, it is based on statute. The regulations are promulgated by Executive order, and the system is fully automatic, and is immediately sensitive to any change in

conditions.

Mr. WOODRUM. The funds that we have appropriated have ranged all the way from $7,500,000 down to $975,000 for the current year which is the lowest that we have appropriated.

Mr. FRANK. That is true.

Mr. STARNES. That is due to the fact, of course, that Germany has overrun a great part of Europe, and we do not have as many diplomatic and other employees of the United States there as we once had; is not that so?

Mr. FRANK. It is more particularly due to the fact that other countries have depreciated their currencies, because we are still paying a large portion of this exchange relief in Germany and in the countries which they have occupied where the control of the currency itself has been taken over by Germany. We have had to pay our employees this relief, which is the only way in which the people are assured an equitable relationship between their dollar salaries and the foreign currency in which they have to pay for their housing and maintenance, and other living expenses.

AMOUNT OF CURRENT APPROPRIATION AND EXPENDITURES

Mr. WIGGLESWORTH. You had an appropriation of $975,000 for the current year?

Mr. FRANK. Yes, sir.

Mr. WIGGLESWORTH. And you are asking $1,350,000 this year? Mr. FRANK. Yes, sir.

Mr. WIGGLESWORTH. And you spent $827,764 in 1941?

Mr. FRANK. Yes, sir.

Mr. WIGGLESWORTH. How much are you going to spend in 1942? Mr. FRANK. In 1942, sir; except for a new development since this estimate was prepared and presented to the Bureau of the Budget, we would have been able to reserve $66,000 of this amount, and not spend it. But by reason of the fact that an expeditionary force has gone to Surinam (Dutch Guiana), we are under the necessity now of approaching the Bureau of the Budget with a deficiency estimate for

1942.

Mr. WIGGLESWORTH. How much of a deficiency estimate do you have?

Mr. FRANK. The computation of the deficiency estimate I shall have to refer to Colonel Walsh.

Lieutenant Colonel WALSH. This estimate was computed more or less hurriedly, and is based on figures that were just given to me of the number of officers and enlisted men. We figure, though, that it will require $250,000 additional in 1942.

Mr. WOODRUM. Is there any reduction in the salaries of officers in the foreign service when there is a currency appreciation in their favor? Mr. FRANK. No, sir; there is not.

Mr. WOODRUM. That does not very frequently happen?

Mr. FRANK. It is more apparent than real when it does happen, because of the fact that almost immediately you have rises in costs of living which more than offset the difference. In other words, the basic rate is fundamental; it must be the floor under which the foreign currency return will not drop and thus guarantee the officer the receipt of a certain number of foreign units for each dollar he is entitled to receive. If he did not have that, he would have economic insecurity and by internal manipulation of currencies by the Government where he is stationed his income could be reduced overnight to a pittance.

Mr. WOODRUM. If there is nothing further, gentlemen, thank you.

FRIDAY, DECEMBER 5, 1941.

GENERAL ACCOUNTING OFFICE

STATEMENTS OF J. L. BAITY, ASSISTANT TO THE COMPTROLLER GENERAL (BUDGET OFFICER); D. W. BAGLEY, SECOND ASSISTANT TO THE COMPTROLLER GENERAL; J. P. McDONALD, BUDGET ANALYST; S. B. TULLOSS, CHIEF OF INVESTIGATIONS; D. NEUMANN, CHIEF, CLAIMS DIVISION; E. W. BELL, CHIEF, AUDIT DIVISION; AND V. R. DURST, CHIEF, RECONCILIATION AND CLEARANCE DIVISION

SALARIES

Mr. WOODRUM. We have before us the General Accounting Office and the first item is for salaries, as follows:

Salaries: For Comptroller General, Assistant Comptroller General, and other personal services in the District of Columbia and elsewhere, $16,326,490: Provided, That hereafter, notwithstanding the provisions of the Act of August 5, 1939 (53 Stat. 1219), the Comptroller General of the United States is hereby authorized, in his discretion, to destroy and dispose of stamps issued by the Surplus Marketing Administration of the Department of Agriculture after the said stamps have been paid by the Division of Disbursement of the Treasury Department and audited by the General Accounting Office, either in the field or at the seat of government.

JUSTIFICATION OF ESTIMATE FOR SALARIES

Mr. BAITY. Our justification of this item is as follows:

JUSTIFICATIONS OF ESTIMATES OF THE GENERAL ACCOUNTING OFFICE FOR THE FISCAL YEAR 1943

Our estimates for the fiscal year 1943 were submitted to the Bureau of the Budget for a total sum of $20,004,934.

That Bureau approved for the General Accounting Office a total sum of $16,936,490 and indicated that we would later be provided with an allocation from lend-lease appropriations in the sum of $2,450,000 to do that particular work, and they would also give favorable consideration to an estimate of $823,000 for handling emergency relief work on hand that will of necessity be carried over into 1943. This action by the Bureau of the Budget is acceptable to us. I will state, however, that since our estimates for 1943 were prepared appropriations have been made totaling billions which were unforeseen at the time of their preparation. Had these appropriations been foreseen our estimates for 1943 would have been submitted for a larger amount. However, we are content to accept the estimates as approved by the Bureau of the Budget and if additional funds are actually required during 1943 we will at that time submit to the Bureau of the Budget for its consideration a supplemental estimate.

It can truthfully be said that the estimates approved by the Bureau of the Budget and now here for consideration by this committee are very conservative for the accomplishment of the herculean task that must be performed by the General Accounting Office next year. Including the work that will be carried over from 1942 into 1943, and the vast volume that we shall receive in 1943, there will be placed before the office a duty that has never before been in any way equaled and which is almost overwhelming to contemplate.

The General Accounting Office occupies a vitally important position in the national defense program of our country and for this reason it must have sufficient funds to employ the people required to do its work, to meet its required contingent expenses, and to pay for such printing and binding as it will actually require.

This committee is fully informed of the unprecedented appropriations that have been made and of those that may follow, and fully realizes the tremendous task that will confront this office for the fiscal year 1943.

Items of increase in the 1943 estimate

Office of the Comptroller General, $223,339.-The Office of the Comptroller General includes the administrative staff, Office of the General Counsel, Division of personnel, and Office of the Chief Clerk.

There has been an enormous increase in the legal work of the office, and on June 30, 1941, there were over 1,500 cases awaiting action in the office and each month more cases are coming in than can be disposed of during the month, and in order not to delay the various activities of the Government it is most important, particularly with respect to defense items that we have a sufficient number of attorneys, clerks, stenographers and typists, so that requests presented here for decision may be answered promptly. An increase of $153,940 is requested for the Office of the General Counsel.

In the service functions, the Personnel Division, and Office of the Chief Clerk, an increase of $69,399 is made necessary by a great increase of employees in the operating divisions.

Office of Chief of Investigations, $113,231.-The increase is essential not only to bring current the special audits and field inspections and surveys, including the administrative accounting surveys and installations in the departments and establishments, but also to provide adequate personnel to carry the burden, which has already manifested itself by reason of the large amount that has been appropriated for national defense and other new legislation; also to furnish assistance and aid to congressional committees, by conducting investigations and preparing reports concerning the administrative and financial transactions of executive departments and other spending and collecting agencies of the Federal Government.

Claims Division, $204,238.-The anticipated increased load is occasioned by the prospective increase in claims during the fiscal year 1943 due to contemplated vast increases in military and naval personnel (military and naval pay and allowance claims), in civilian personnel (civilian pay and allowance claims), in transportation of military, naval, and civilian personnel (passenger transportation accounts, claims, etc.), in Government contracting, comprehending contracts for construction, equipment, supplies, and services (contract claims), and in transportation of Government property incident to or in connection with such Government contracting and in the arming, equipping, and training of such personnel (freighttransportation accounts, claims, etc.).

The increase in the number of freight accounts and claims will be occasioned by the rapidly expanding defense program which now involves, and will further involve, in increasing volume, a tremendous number of shipments. The larg