of preparing recommendations for continuing the operations which should be carried on by a Government-owned corporation and for discontinuing and liquidat ing their ather activities.

Because this field of activity is wholly a new one, it is difficult to state what staff will be needed to comply adequately with the provisions of the act. We are requesting, therefore, a minimum staff of 25 at an annual cost of $125,505 together with a fund of $5,000 for the temporary employment of consultants or experts in the field of corporate finance and accounting. Six of this staff, at annual salaries totaling $32,315, will be assigned to the Fiscal Division, and the remaining 19, at an annual rate of $93,190, will be assigned to the Estimates Division to which Division the funds for consultants will also be assigned. A supplemental estimate is now pending in the Senate providing for the same staff on a 5-month basis dur. ing the current fiscal year.

FEDERAL BOARD OF HOSPITALIZATION

The Federal Board of Hospitalization was reorganized a little over 2 years ago (May 1943) to provide the Bureau of the Budget with an effective advisory group which would review and make recommendations on the annual hospital expansion programs of all Federal agencies and on all specific proposals for acquisition of hospital beds. The responsibility of this Board is to develop methods of integrating the total planning and use of Federal hospital facilities in order to insure well-conceived agency programs, bring about maximum use of our total hospital resources, avoid duplication, eliminate unnecessary or illadvised acquisitions, assure the selection of proper sites, and similar problems. Initially, the big job of the Board and its staff was to coordinate and control the huge wartime hospital expansion programs of the Army and Navy, including planning of some of this construction for postwar use by other Federal agencies. More recently considerable analytical research work has been done in projecting the immediate and near-future demands for expansion of hospital facilities for veterans. The urgent task immediately ahead is to bring about an orderly, effective, and economical planning of the greatest permanent peacetime hospital construction program in the history of the country to meet the hospital requirements of the Veterans' Administration and Public Health Service. This involves the formulation of a master plan which will insure that the kinds and numbers of hospital and domiciliary beds will be available when and where needed; a plan which will also bring about maximum and proper utilization of the extensive surplus hospital resources of the Army and Navy, of existing Federal hospitals, and such private hospital resources of the country as may be depended upon. It was recognized that the Board members could not formulate intelligent, well-informed conclusions solely on the basis of presentations made by the sponsoring agency. The Board was, therefore, provided with a small technical staff. The activities of this staff fall mainly into the following categories:

(1) Initiation of long-range planning of over-all Federal hospital requirements, including the great increase in hospital and domiciliary demands for veterans. (2) Review and development of recommendations on the annual agency hospital expansion programs.

(3) Development of over-all policies and plans for the postwar use of surplus Army and Navy hospitals and the utilization by the Veterans' Administration and other Federal agencies of the excess capacity of those Army and Navy hospitals to be permanently operated by the armed forces.

This staff was set up as a small independent unit under the Chairman of the Board, separate and apart from the Budget Bureau organization. The original appropriation for this purpose was granted to the Budget Bureau as a supplemental item for 1944. The following year, as a result of conference committee action, the appropriation was included in the Veterans' Administration appropriation for salaries and expenses. It was also carried in the latter appropriation for 1946. Since the Board itself acts in an advisory capacity to the Budget Bureau on all Federal hospital programs, it does not seem proper that the staff of the Board should be carried in the appropriation of one of the participating agencies. Because of the necessary close relationship of the Board's staff to that of the Bureau, it seems far more logical that the appropriation should be included in the general appropriation for the Bureau of the Budget.

For the present year the amount included in the veterans' appropriation for this staff is $44,940. For the fiscal year 1947 we are requesting that the sum of $40,000 be included in our appropriation.

GOVERNMENT INFORMATION SERVICE

The Government Information Service was transferred to the Bureau of the Budget from the Office of War Information on August 31 of this year. This agency is a continuation on a reduced basis of the centralized information office which has operated since 1933 to provide service to Members of Congress, Federal agencies, and the general public. Prior to the war, it was located in the Executive Office of the President.

The organization contemplated in the fiscal year 1947 comprises two divisions: the Division of Public Inquiries, which operates as a central source within the Government to provide information and answer inquiries concerning Government activities, and a Division of Press Intelligence to provide a daily clipping service covering press and radio comment on matters of national concern. Two of the units transferred to the Bureau of the Budget from the Office of War Information, namely the Research Division and the New York office, have been eliminated from the 1947 Budget. For this and other reasons, the total amount of funds requested therefore represents a reduction of 7 persons at $27,259 from the amount available in the current fiscal year.

Division of public inquiries

The Division of Public Inquiries, which before the war operated as the United States Information Service, is the central information agency for the Federal Government. It serves private individuals and organizations, Members of Congress, local, State and Federal agencies and foreign governments. It handles inquiries either by referring them to the proper Government agency or to the proper private or quasi-public organization for consideration and reply, or by direct reply. Agencies of the Federal Government receiving inquiries not falling within their jurisdiction usually send them to this division for appropriate referral or reply. Members of Congress frequently refer inquiries received from their constituents; the Washington post office sends all mail inadequately addressed in any such form as "Uncle Sam," or "United States Government."

Every effort is made and will be made to see that this division does not duplicate the information service maintained by other Government agencies. Inquiries are answered directly only when no other agency has jurisdiction, or when the question relates to a group of agencies or the Federal Government as a whole. The inquiries received vary from such simple questions as the location of a Government agency to requests for compilation of activities of the Federal Government with respect to banking or some other general subject in which a number of Federal agencies have some function or jurisdiction. Frequent requests for bibliographies or reference material are received from schools throughout the Nation. In the past year approximately 300,000 inquiries have been handled; about 50,000 were received by mail and the same number result from personal calls. For service purposes, index files are currently maintained containing information on the functions of the principal administrative units in each of the departments and agencies of the Government. This organization file is supplemented by a subject matter file and a record of the key personnel concerned with the particular organizational unit or subject matter. Another index, containing information concerning about 5,000 private and quasi-public organizations, is maintained so that inquiries falling within that field may be referred to the proper organization. In addition, a large number of catalogs, reference documents, files of Government pamphlets, press releases, and copies of legislative documents are maintained for reference purposes. Current information from press and radio on Government programs is supplemented by a news ticker service to meet the need for up-to-the-minute information, particularly required in the preparation and reply to questions arising from spot news.

This Division also publishes the Government Manual, which serves as a reference book of general applicability concerning all Government departments and agencies. Two editions a year are published, and money is included under the printing and binding appropriation for two editions in 1947. During the last fiscal year over 45,000 copies were sold by the Superintendent of Documents and approximately 15,000 were requested by Federal departments.

Another service of this Division is the distribution of information and material to 3,300 libraries in the United States which have requested this service. About 10 times a year packets of carefully selected documents are assembled and mailed to these libraries. This combined service is available to all Government agencies and thereby it eliminates a large number of duplicate mailings.

For this service, the request before you calls for maintaining the staff at its present level.

Division of Press Intelligence

The Division of Press Intelligence operates a centralized clipping service to supply Government officials and agencies with press coverage on governmental economic and related matters in accordance with specific requests. The press coverage consists of 225 daily newspapers and 10 weekly papers selected on the basis of geographic location, population, and circulation. All States and 162 cities are represented in the list. The Federal agencies receiving this clipping service have been required to establish a single receiving and distributing unit. This facilitates the distribution of press intelligence within the agency; through a screening of requests it also eliminates duplication.

During the last 12-month period slightly more than 3,500,000 clippings were furnished to the various Federal agencies and to Members of Congress. In addition to press coverage, daily summaries are made of broadcasts of radio commentators and selected programs discussing events of national importance.

The estimate before you contemplates the continuation of the services of the Division of Press Intelligence at about the present level.

ADMINISTRATIVE SERVICES

The increase in administrative services is, in general, closely related to the proposed expansion of Bureau staff. The task of providing library service, personnel service, and messenger service are all related to the number of employees in an organization. Certain phases of administrative work, on the other hand, can be absorbed. We are asking for no increase in personnel for the pay-roll, travel, or accounting sections, because recent improvements in pay-roll procedure will enable us to absorb the increased work load. The increase of 13 positions requested for service functions is a minimum if effective services are to be provided for the staff requested in the 1947 estimate.

OTHER OBLIGATIONS

Generally, the increases in the obligations for objects other than personal services are related directly to the increased personnel requested in this estimate and to the new functions assigned to the Bureau of the Budget. The one exception to this is a program for the replacement of typewriters.

Travel

The total increase for this purpose is $55,500. A major item of increase is $30,000 for the Estimates Division, approximately half of which will be needed for the Inspection Unit, another $4,000 for the corporation activities, and the remaining $11,000 for increased field examinations directly related to the additional personnel requested. The establishment of two new field offices and the addition of one staff member to each of the existing offices requires a $15,000 increase in the travel allotment for the Field Service. An increase of $4,000 is required for the Division of Statistical Standards, $3,500 of which is for travel of consultants. An increase of $2,000 is requested for the Fiscal Division, $1,000 in connection with the corporation budgets, and $1,000 due to increased staff. The additional staff requested for the Division of Administrative Management will require an additional $1,000 for travel.

Transportation of things

Of the increase of $600 the Field Service will need $500 because of the establishment of two new offices and $100 will be required for the Government Information Service.

Communications service

The increase of $19,700 under this head is due to the additional telephone service for the increased personnel requested and for payment of penalty mailings by the Government Information Service.

Rents and utilities services

The increase of $6,400 is entirely due to the establishment of two additional field offices and the assumption that Government-owned space will not be available during 1947.

Supplies and materials

The major item of the $38,100 increase under this head is due to the Government Information Service. Subscriptions to newspapers and periodicals amount

to about $25,000. Special supplies for the clipping service of the Press Intelligence Unit account for $5,000 of the increase. The remainder of the increase is directly related to the additional staff requested for the Bureau.

Equipment

The requirement of $40,000 for equipment is composed of $10,000 for normal replacements based upon our past experience, the replacement of one-third of the typewriters 5 years old or more at a cost of $5,000, and $25,000 for equipment for the additional employees requested in this estimate based upon an average per employee of $200.

PRINTING AND BINDING

The estimate for printing and binding for fiscal year 1947 is for the following.

purposes:

Printing of the Budget Document_

Printing of 2 editions of the Government Manual__

Printing revised edition, volumes I and II, of the Standard Com

modity Classification__

Miscellaneous printed forms

Binding.

$75,000

23,000

24, 000

2,000

1,000

125, 000

For the present fiscal year the Bureau has an appropriation of $60,000 for the printing of the Budget Document, miscellaneous forms and binding. The funds transferred from the Office of War Information were $11,000 for printing of the 1946 spring edition of the Government Manual. In the pending supplemental appropriation estimate, the amount of $5,000 is included for printing of the corporation budgets.

The recent estimate furnished by the Government Printing Office on the cost of the 1947 Budget Document is at the rate of approximately $60 per page. Present indications are that the 1946 appropriation will be insufficient for the printing of the Budget. Our estimate for 1947 is based on the approximate price per page and on an estimated 1,250 pages, which would include not only material which has been carried in the Budgets the past few years, but also the estimates which have been carried in the war supplement, and the new estimates which are now required from Government corporations. A slight increase in printed forms is due to the increased size of the Bureau staff.

The 1947 estimates for the printing of the Government Manual is based on the assumption that the cost will be approximately the same as for the current volume.

The Standard Commodity Classification, originally published in tentative form in 1943, has been revised and expanded at the request of the Surplus Property Administration in order to adapt it more closely to the needs of disposal and loaning agencies. The use of a single classification system tremendously simplifies operations and reduces costs. This classification is in wide use not only among Government agencies, but in private business as well. More than 10,000 copies of the last edition have been sold by the Superintendent of Documents, about one-half of which were purchased by private business. The estimate for 1947 will provide 1,000 copies of volume I, the numerical code, and volume II, an index of approximately 100,000 commodities. Additional copies will be procurable through the Superintendent of Documents.

The need for uniformity in classification became evident early in the war period, and the Bureau of the Budget was asked to assist in the development of commodity classification for the Office of Production Management, Office of LendLease Administration, and the Maritime Commission. We found at that time that there were 16 different commodity classifications being used by one or more Government agencies, but none of them was adequate to meet the needs of all agencies. Working with representatives of all interested departments and establishments, the revised classification was developed which is generally acceptable and meets the needs of the Government agencies. To achieve any value from the work which has been done in this field it is necessary, of course, that it be printed and distributed to the Federal agencies.

GENERAL STATEMENT

Mr. HENDRICKS. Mr. Smith, I know you are not feeling very well, so I am simply going to ask you to make as brief a statement as you

wish to, to clear up the high points, and then I have a few questions to ask you and we will try to get through with it as rapidly as possible. Mr. SMITH. Mr. Chairman, we have submitted for the record a rather lengthy, detailed statement about which I would be glad to answer any questions that any member of the committee may have. I thought, however, it might be useful for this committee to have a rather brief statement of a general character giving something of the perspective which is of concern to the committee as well as to the Director of the Budget.

If you add up the acts that have been passed which put additional and perhaps rather specific responsibilities upon the Bureau of the Budget, I think you will find in the last 3 years, particularly, the addition is pretty significant and pretty large.

Heretofore, we have had chiefly the Budget and Accounting Act, passed in 1921, giving a rather broad authority to the Bureau of the Budget as delegated to it by the President. In the last 3 year, particu larly, there have been several acts passed by the Congress, which place upon the Director of the Budget specific authority of a fairly unusual nature. Those accretions have been going on pretty much unnoticed and create a situation which I thinks needs notice.

There is the Federal Reports Act, which places upon the Director of the Budget and the Bureau of the Budget authority for the clearance of questionnaires. I think we have made a good deal of progress in that direction in clearing up a rather bad situation; but there is a great deal of fundamental work that needs to be done yet. Of course, during the war the problem of questionnaires was particularly difficult.

In addition there is the Pay Act, which extends the Director's authority over reserves. That authority has been questioned in the past to some extent but is now cleared up in legislation.

Then there is the more recent act which places under the Budget process the programing of Government corporations, and, as you know, there is in the offing at the moment the General Reorganization Act.

These and other provisions of law which have been enacted from time to time in special acts to prevent the operating agencies from doing certain things without the approval of the Director of the Budget, in my judgment, have added enormously to the responsibilities of that office. I am not sure it is necessarily a bad thing, but at least these developments are a variation of the original thesis of the Budget and Accounting Act, where the Director of the Budget had only the authority delegated to him over these matters by the President.

What concerns me is that you have these more specific authorities and the general authorities accumulating in the last several years. I should have added to those I have mentioned the requirement to fix personnel ceilings each quarter, which causes a pretty constant review of personnel.

I think in the main these specific authorities running along with the general authority of the Budget and Accounting Act have been, for the most part, in the right direction. The thing that bothers me and I have mentioned it to this committee before-is that there is always a mental hazard on the part of the Director of the Budget in asking for funds for his own shop. However, it seems to me that there is