7. Treasury-Alleged Substitution of Silver Dollars.

(a) Summary of investigation.-Allegations were made by a writer in a coin dealer's publication that in March 1964, ordinary silver dollars had been substituted for Carson City silver dollars of high numismatic value in the vaults of the Treasury Department in Washington, D.C. Inquiry produced from the Secretary of the Treasury the findings of the Secret Service's investigation into the matter and the Secretary's assurance that the allegations were unfounded. The Secret Service investigation disclosed no improprieties. An audit of the bags of silver dollars undertaken by the Treasury in 1963 had been participated in by the General Accounting Office to the extent of having someone present while the bags were counted and the bags were sealed jointly by the Treasury and GAO after an inventory in September 1964.

(b) Estimated monetary and other benefits.-No computable monetary benefits. The investigation served to reestablish confidence in the agency by showing the rumors were unfounded.

8. Department of Justice-Complaint of Forcing Settlement of Litigation.

(a) Summary of investigation.-A complaint alleged that the Department of Justice was delaying trials of certain land condemnation cases with the object of forcing property holders to settle their cases. Inquiry disclosed that the delays were due to a lack of U.S. district court judges to try the cases and that the Department had requested assistance from the Administrative Office of the U.S. Courts and thesenior circuit judge for the fifth circuit to aid in bringing the cases to trial. No further subcommittee action required.

(b) Estimated monetary and other benefits.-No monetary benefits..

9. Federal Home Loan Bank Board-Federal Savings and Loan Insurance Corporation-Dividend Restriction Agreements.

(a) Summary of investigation.-A complaint alleged that unfair dividend restrictions were imposed on savings and loan associations which came under FHLBB and FSLIC supervision. Study was made of the nature of, and the legal basis for, dividend restrictions. Following subcommittee inquiry the Federal Home Loan Bank Board, after consulting the Department of Justice, changed its dividend limitations agreements with newly insured or newly chartered (Federal) savings and loan associations by restricting its limitations to the amounts of dividends paid by associations in clearly defined areas: and making provisions for the lifting of such restrictions where circumstances so warranted.

(b) Estimated monetary and other benefits.-Agency action removed the basis of industry complaints of unfairness and even illegality on the part of the agency. No monetary benefits are indicated, except possibly the savings in litigation costs had suits been instituted to test the legality of the restrictions which have been rescinded.

10. Federal Reserve System-Unfit Federal Reserve Notes.

(a) Summary of investigation.-The subcommittee's study of the procedures required for the sorting and destruction of unfit Federal Reserve notes disclosed them to be very costly and unwarranted. Each Federal Reserve bank which issued notes was required to sort and forward unfit notes to the Comptroller of the Currency in Washington for destruction. Following the subcommittee's interest in the matter arrangements were concluded between the Treasury and the Federal Reserve Board which resulted in the Treasury's recommending legislation to authorize (i) the elimination of sorting and (ii) the local destruction of unfit currency. Public Law 89-427, approved May 20, 1966, was passed to accomplish this purpose.

(b) Estimated monetary and other benefits.-It has been estimated that savings which would be accomplished by the changes which the legislation made would amount to some $800,000 per year.

11. Treasury Department-Internal Revenue Service-Failure To Properly File Returns of Self-Employed Persons for Social Security Credits.

(a) Summary of investigation.-This study disclosed that between 1951 and 1959 the IRS failed to report approximately $597 million of self-employment income and $17 million of self-employment taxes to the Social Security System for credit to the accounts of taxpayers. Expenditures of $534,487 administrative costs were required to be made by Social Security Administration to correct the error. Plans have since been developing between IRS and Social Security for more accurate transmission of the returns.

(b) Estimated monetary and other benefits.-Through the more efficient methods developed for handling the returns such costs as the half million dollars spent in rectifying errors will be eliminated, and self-employed taxpayers assured of proper credit for their social security taxes.

12. Federal Home Loan Bank Board-Authority To Regulate or Set Interest Rates Paid by Savings and Loan Associations.

(a) Summary of investigation. This study into the authority of the FHLBB to regulate dividend interest rates paid by federally chartered or insured savings and loan associations was prompted by denial by FHLBB of Federal home loan bank credit to associations which increased their dividend rates contrary to FHLBB policy, or restricted dividend rates where associations failed to meet reserve requirements of FSLIC regulations. The inquiry was terminated upon the passage of Public Law 89-597 which grants specific authority to the FHLBB to prescribe dividend rates.

(b) Estimated monetary and other benefits.-Actual monetary benefits are not calculable. The legislation which authorized the FHLBB to regulate dividend rates was intended to lower interest rates, and if successful should redound to the benefit of the Government and the public.

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13. Securities and Exchange Commission-Regulation of Stock Exchange Specialists.

(a) Summary of investigation.-This study was based on a published complaint that exchange specialists were not being properly regulated on the American Stock Exchange. Inquiry disclosed that no basis for the particular complaint existed; that the unfavorable price situation resulted from the lack of public interest in the stock, which was then newly listed, rather than from the specialists' manner of handling the trading function.

(b) Estimated monetary and other benefits.-There are no demonstrable monetary benefits. The inquiry served to focus attention on a difficult area of securities laws administration which requires further observation by the subcommittee.

14. U.S. Treasury-Office of Domestic Gold and Silver Operations. (a) Summary of investigation.-Inquiry to determine basis for permission to U.S. citizens to import gold coins of South Africa, whereas importation of gold coins of Canada and Israel are prohibited, developed that under the terms of Executive Order 11037, of July 1962, the Treasury makes a ruling in each case on whether particular issues of foreign gold coin have exceptional numismatic value. In the instance under inquiry the gold coins of Israel and Canada were not considered of exceptional numismatic value because they are produced for sale and not for circulation, whereas the coins of South Africa are produced for both circulation and sale.

(b) Estimated monetary and other benefits.-No monetary benefits.

15. Internal Revenue Service-Income Tax Forms.

(a) Summary of investigation.-Inquiry to determine the feasibility of revising Federal payroll tax forms to make them similar to State payroll tax forms, thus relieving taxpayers of the burden of filing two different forms. The study revealed that such is not now feasible. The Federal form is processed by TRS by a method of "optical scanning" which requires specific kinds of paper, ink, and form arrangement, and unless States accommodate their forms to meet the Federal requirements, separate filings will have to be made.

(b) Estimated monetary and other benefits.-No monetary benefits. The resolution of the problem could result in large savings to taxpayers. The inquiry served to point the need for working toward that purpose.

RESEARCH AND TECHNICAL PROGRAMS SUBCOMMITTEE

1. Pirating of Project Proposal.

Summary of investigation.-A member of the committee requested an investigation into a charge that a project proposal made to the National Institutes of Health for the investigation of protein synthesis was pirated by a member of the NIH panel which passed on the merits of the proposal. The subcommittee staff conducted an inquiry, including interviews with NIH officials, and found that the person charged with pirating the proposal was not a member of the NIH review panel on the proposal, nor was the grant application referred to him for consideration by NIH. These findings were communicated to the member for his information.

2. Efficiency in Procurement and Use of Scientific Research Equipment by Federal Laboratories.

Summary of investigation. The subcommittee staff investigated the procurement procedures for purchase of laboratory research equipment. In discussions with officials of the General Service Administration, the National Bureau of Standards, the National Institutes of Health, and the General Accounting Office, the staff found that there has been little effort to work toward economies in the use or acquisition of research equipment. The subcommittee has, therefore, requested a detailed investigation by the GAO of five Federal laboratories. These data will provide a basis for further subcommittee consideration of the problem.

3. Survey of Federal Laboratory Facilities.

Summary of investigation.-The subcommittee requested the Science Policy Research Division of the Library of Congress Legislative Reference Service to conduct a study of the management of Federal laboratories. The subcommittee staff worked closely with the Science Policy Research Division to select a manageable area of study and a methodology for the study. The completed study was issued as a Committee Print (see description under IV below) and will provide data for further consideration of policy and procedural questions relating to Federal research facilities.

4. The Effect Upon Teaching of the National Science Foundation's Revised Rules on Cost-Sharing in University Grants. Summary of investigation.-The subcommittee received a complaint from a dean of a university graduate school that new cost

sharing regulations issued by the National Science Foundation would require (1) an additional diversion of faculty time to research and away from undergraduate teaching, and (2) a further diversion of free university funds toward the already heavily supported natural science fields and away from the humanities and the social sciences. The subcommittee staff found upon investigation that the revised NSF regulations do not require additional diversion of faculty staff time to research, nor were they intended to result in a greater cost burden to universities. The primary objective was to establish a new method of calculating a university's share in total costs which would somewhat reduce the university's share on the average.