by the billions which we should not spend, our disease is going to be worsened as time goes on. That is basic economics. I do not think it can be successfully disputed.

Of course, I am not even a college graduate. I was just an old hardheaded businessman before I came to Congress 23 years ago. I know something about business economics. I have been in the manufacturing business to some degree. I think I know what "makes the old mare go," whether it be in business or government. But I am afraid you have too many bookworms in government today. I am not saying you are, Mr. Heller, nor your staff. You have a wonderful background. But there is one great need for anyone who is in government, and that is that he have some business experience before he comes to government because running the biggest business in the world certainly must employ good business principles, and we have not been doing it for the past three decades at least.

If you have any argument against the statement I just made, I would like to hear it, Mr. Heller.

Mr. HELLER. Mr. Jensen, from the standpoint of a group of economic advisers we would certainly be remiss if we were not concerned with the most efficient and economical use of resources. That is our job as economists.

Mr. JENSEN. But do you tell the President and every department of Government that they have to save, that they should not spend a dollar that is not absolutely necessary?

Mr. HELLER. Of course, this is not our function in the President's Office. That is a function of the Bureau of the Budget.

Mr. JENSEN. It most certainly is if you are economic advisers. Certainly, that is your first responsibility, Mr. Heller.

Mr. HELLER. If we were to see a program which was essentially a poor use of resources, then where it is our appropriate role to do so, we would not hesitate to point this out.

NEED FOR ADDITIONAL PERSONNEL

Mr. JENSEN. Getting down to this request you are making, you are asking for more people in your department. Do you know that the records will show that the department which is not overstaffed or which is possibly a little understaffed is doing the best job? Because you then do not delegate your responsibilities to understudies who do not know nearly as much about it as you do. I shall never forget when the Hard Fuel Industries for War Agency head came to our committee and asked for an increase in personnel during the war. I said, "My friend, you are doing a wonderful job with the personnel you have. I could not imagine how you could do a better job." Everybody was praising them. They were getting fuel to the people who needed it. They really were doing a job.

I said, “I am not going to be a party to giving you additional personnel and thus reducing your efficiency." They did not get a dime because the whole committee sided with me and they kept on doing that wonderful job. Never did you hear one complaint about the Hard Fuel Industries for War Agency, not one, because the top did not delegate too much authority to the understudies who knew little or nothing about it.

Without a doubt, you have a good staff today. If we were to permit you to add additional personnel to your staff, I know what you would do. It is a very natural thing for you to do. You would start delegating your authority to new people who know possibly exactly nothing about economics compared to what you know and your present staff. My friend, I am going to tell you right now on the record that as far as I am concerned, I would not vote to give you another person.

You will find, if you know me long enough, that I play them on top of the table and tell you exactly how I feel. Those are my sentiments today. Thank you, Mr. Chairman.

Mr. THOMAS. Let me build this record a moment, Doctor, and then you can reply. Let us get some figures into the record.

You now have 31 jobs and the supplemental of $177,000 calls for 13 additional jobs, which will give a total of 44. Of your 13 requested in the supplemental, 9 are professional.

You had in the regular bill an appropriation of $414,000 with a limitation of $345,000 for salaries only. That limitation has been removed. This additional $177,000 will give you $500,000 for salaries, $91,000 for "Other objects," bringing your total appropriation for fiscal 1962 to $591,000. Will you please break down your $91,000 for your "Other objects."

EMPLOYMENT OF CONSULTANTS

However, before you go into that, let me ask you: How many consultants do you have in addition to your regular staff? What is the top figure you can pay them under existing law?

Mr. HELLER. It is a little difficult to give you the number of consultants we have because we have some who serve without pay, some who come in just 1 or 2 days for a conference; and, finally, some we draw on more heavily. The general rate of pay for our consultants is $50, but we can pay as much as $75 and we have had one consultant to whom we paid $75 a day.

Mr. THOMAS. That is not excessive for the type of people you get. We have given some of the agencies a top limit of a hundred dollars for their consultants.

OTHER OBJECTS

How much travel money do you use, and generally what is your $91,000 for, for the "Other objects"? That is about 20 percent of your salary cost.

Mr. HELLER. We have it broken down. "Personnel benefits," $35,200; "Travel and transportation of persons," $10,000.

Mr. THOMAS. Your travel is very modest.

Mr. HELLER. "Rent, communications, utilities," $5,500. "Printing and reproduction," $12,000. That is almost entirely the cost of printing our annual report.

Mr. THOMAS. That is an item you cannot control. That is Government Printing Office. How many copies of your Economic Report do you sell and what is the revenue it brings in?

Mr. STOCKING. We print 30,000 and sell 22,000 through the Superintendent of Documents.

Mr. THOMAS. What does he get for them?

Mr. STOCKING. A dollar.

Mr. THOMAS. You more than pay the printing bill.

Mr. STOCKING. That is right, except we do not get it.

Mr. HELLER. The remainder of the $91,000 for "Other objects" is allocated as follows: Other services (mainly security investigations and payments to the Budget Bureau for administrative services), $19,300; supplies and materials, $4,000; equipment, $5,000.

Mr. THOMAS. You have some expanded duties. We are familiar with the activities of the Council. It is quite important. We know you do not want to get over into the field of the activities of the Director of the Bureau of the Budget, and I doubt if it is part of your function to try to tell any agency how to operate its business. If you stay with your own knitting-namely, making your reports and advising the administration of the financial condition of the country-that is no small job.

PERSONNEL FOR EVALUATION OF INTERNATIONAL MONETARY SITUATION

I am very much impressed with your new duties here of trying to evaluate the international monetary situation. How many people are you going to put to work in that activity?

Mr. TOBIN. We hope to have about 22 staff members on that. We have only one-half a man now and have had for this past few months. We have had to rely on consultants in addition. We have responsibilities in helping organize the U.S. representation and position in the Paris operations of the OECD, now called OEEC. We work with the National Advisory Council on Foreign Economic Policy where U.S. foreign economic policy in respect to the International Bank and the Monetary Fund is discussed and made.

We have been involved in the occasional talks held with other countries on international financial matters, the British in particular. Mr. BOLAND. Does the Treasury do this sort of thing, too?

Mr. TOBIN. These responsibilities are primarly those of the Treasury. We consult with the Treasury, and we take the overall view of the relationship of these international matters to the domestic economy.

EMPLOYMENT OF ECONOMISTS

Mr. THOMAS. I noticed in your green sheets you have 11 economists. What is their civil service classification, is it 15 or 16? Do you have any unclassified position?

Mr. HELLER. These are not in the regular classified service. They were excepted from the Classification Act of 1949.

Mr. THOMAS. Where do you get these people for $15,000 and $16,000 a year?

Mr. HELLER. I can give an average figure.

Mr. JONAS. The average is $14,000; is it not?

Mr. HELLER. Actually right now it has fallen below that. It is about $13,750.

Mr. THOMAS. All top people, experienced economists, who have been practicing their profession for a long time?

Mr. HELLER. We try to keep a balance between some of the top economists of the profession, who are, of course, at the upper end of the pay scale, and some of the younger ones.

Mr. THOMAS. Is it not rather difficult to get some of these professional people?

Mr. HELLER. Particularly at the upper end of the range. The trouble is that their incomes in academic life, combining their academic salaries and some outside income, are now higher than they get in Government. Our top six people all came here at a cut in pay.

Mr. THOMAS. I am surprised it was not more than that. Your staff through the years has not been abnormally large. That is my observation. We whittle on it sometimes after a crowd has been in 2 or 3 years, but certainly we will try to give you a little latitude. Mr. Boland?

Mr. BOLAND. No questions.

Mr. THOMAS. Mr. Jensen.

Mr. JENSEN. You study the foreign economic condition of the nations abroad, especially those who are on this side of the Iron Curtain ; do you not?

Mr. HELLER. Yes, sir.

IMPORTANCE OF COUNTRY LAND REFORM PROGRAMS

Mr. JENSEN. Have you noticed that every nation that has put into effect a land reform program since World War II, there is no such thing as a revolution or unrest? Have you noticed that? I will name a few: Formosa, India, Pakistan, Thailand, Italy, Spain, just to name a few. In those nations there is no revolution.

I have traveled around the world, and in every place where we saw unrest among the people it was in those nations where the great rich and the rulers and the great land barons owned most of the wealth, and about 98 percent of the people were eking out a bare existence.

Mr. THOMAS. Tell us something about Central and South America. You have been down there a good many times.

Mr. JENSEN. The same is true of Central and South America. However, they have not put land reform programs into more than one or two nations in South America. There is always a reason for unrest. The unrest that I think we were greatly responsible for in Chile and Peru was caused by the fact that our officials over there who handled Public Law 480 money were spending a greater share of that money to build beautiful highways while the farmers, if you can call them such, back in the valleys had no roads. Some of them did not even have a llama trail where they could put a llama to a cart and bring the produce to the market. They had to carry their produce on their backs to the main road. The Commies were telling them that when they got control of the country, they would build roads to them instead of building roads for the Cadillacs.

There is where you found Communist sympathizers all over the farm areas. I learned that quickly after I got to those countries. I said, "Why don't you get your bulldozers busy and bulldoze roads to those farmers?"

Mr. THOMAS. Then you are talking about farm-to-market roads.

Mr. JENSEN. That is right, so the farmers will not have to carry their produce on their backs.

You do not have to wonder why people go Communist. They do not know what communism is. They are merely told they will get a few extra loaves of bread.

I have stayed in front of grocery stores in many foreign lands, in those underdeveloped countries, and I have seen the women and children coming out of those grocery stores with groceries under their arms. What do you think it consisted of? A loaf of bread, a loaf of bread 2 feet long and 6 inches in diameter without even a bone. That was their grocery load for the day.

You do not have to wonder why people will accept any kind of an "ism" if they are promised an extra loaf of bread. That is where we have failed miserably in our foreign aid. CARE does more to make friends out of foreign people than all the billions we send abroad. What we should do is to send a few more millions of CARE packages, even if the Government had to furnish the money, and furnish a plow, a spade, and a hoe. That is the way to make friends abroad.

It breaks my heart to see us spending billions upon billions to those governments and then watching them reduce their budgets and reducing their military forces, and then sitting back and saying, "Well, if we get into war the doughboys will be over again and bail us out." That is how they feel.

Perhaps you folks do not agree with me on that, but you have to agree with me there is no cold war or revolutions in a country which has put into effect a land reform program.

Mr. Castro is doing that, but he is doing it wrong. He is chopping off heads of people who do not go along with him in his revolutionary and land reform programs.

If he had educated the people to the kind of land reform program that these other nations put into effect then he would have been as popular as the rulers of the other nations who have put into effect land reform programs.

Chiang Kai-shek never would have been driven out of China had he and his followers put a land reform program into effect in China as he did almost the moment he got to Formosa.

I hope you gentlemen will keep that in mind. And hope, also, that you will tell the President that you cannot discourage private industry in America as it has been discouraged for the past three decades, and I am not just blaming this administration for it. I am blaming the last three administrations, the heads of the last three administrations. They did the same thing. They are making it difficult for private industry to carry on their business because they are afraid every day that they will be taxed more and that labor will have control of their business.

Heavens, I believe in the right to strike and in collective bargaining, but I do not believe that any labor leader knows how to run a business successfully regardless of how smart he is or how big he is. Those are some of the things that we must be thinking about, gentlemen, if America is going to live and be the place that you and I have enjoyed under our private enterprise system and under our constitutional way of doing business.

73884-61-2