Mr. CANFIELD. That is right, and I am mindful of the fact that if we do not meet this challenge of narcotics addiction on the city and State level we will not meet it.

Secretary HUMPHREY. Yes.

REDUCTION OF BACKLOG IN BUREAU OF CUSTOMS

Mr. CANFIELD. In the Bureau of Customs you tell us that the big backlog of unliquidated entries that the Bureau of Customs had 3 years ago has been reduced by better than 60 percent.

Secretary HUMPHREY. The Bureau of Customs is another place where you could offer advantages in using more people, and where I am sure you could get people out of the Customs Bureau who would testify that they had to have more people. Again it is a relative matter, and again it is a question of a fair balance with respect to what you can tax the people and spend for their benefit.

Mr. CANFIELD. Of course, having in mind that it is a revenue-producing agency.

Secretary HUMPHREY. Yes, and so is the Internal Revenue Bureau, and they can show you that a man will collect a great deal more money than he costs, but I do not think that is the necessary criterion. It is a very important thing to keep in mind, but also it is important to keep in mind getting the maximum efficiency out of the people that you have.

NUMBER OF PERSONNEL IN THE INTERNAL REVENUE SERVICE

Mr. CANFIELD. Are you asking for more personnel for the Internal Revenue Service?

Secretary HUMPHREY. I cannot tell you; I really do not know. I think all of these things have small amounts requested.

We are running some tests in the Internal Revenue Service, tests of what people can do in certain directions, and if those tests prove out the amount of earnings per employee that they think might be obtained, why, eventually they may have more people, but again you see it is like a business. Until every man you have already working for you is doing the very best job he can do, you had better devote your time to getting that accomplished before you start adding new people. There are a lot of improvements in these bureaus which can be made with what we have, so that I want to see the maximum improvement with what we have before we just go out and add a lot of people. It is the easiest thing in the world to add a lot of people. Mr. GARY. Will the gentleman yield?

Mr. CANFIELD. Yes.

AIRCRAFT FOR THE UNITED STATES COAST GUARD

Mr. GARY. There is one thing that I am very much interested in to which I would like to call the Secretary's attention and that is a proper replacement program for Coast Guard aircraft.

Secretary HUMPHREY. Well, that is a subject that is only partly covered in this budget, and it is not resolved yet, because very frankly, Mr. Chairman, I just cannot believe that with all of the airplanes that are becoming rapidly obsolete for fighting purposes, we cannot

get proper planes for our purposes that will suit us without buying new

ones.

Mr. GARY. I think that is an excellent idea if you can do it.

Secretary HUMPHREY. It is a thing that must be reconciled, and we are going to reconcile it.

Mr. GARY. But this committee is interested in the safety of Coast Guard personnel.

Secretary HUMPHREY. That is right.

Mr. GARY. And we do not want them to fly in unsafe planes. Secretary HUMPHREY. I agree with you that we cannot do that, but what is unsafe, and what is not? An old plane can be very safe. safe. As a matter of fact the safest plane in the air today is still the old DC-3. When you get down to brass tacks and you get into trouble and want to get a job done, that is still the work horse. I am speaking from personal knowledge about this, having run an air lift, and it is most economical. They can be 10 or 15 years old and still do a good job. I have ridden in them hundreds of thousands of miles. So, it is not just a matter of safety. It is a matter of more efficiency and the matter of doing a better job. I am not arguing with you in any respect that this is not a thing that requires attention, as it does, and we must begin to make some progress in it, but it is not the only thing to be considered.

ques

Mr. GARY. I think that there should be a proper replacement program. What that replacement program should be is a technical tion which should be worked out by your Department. Secretary HUMPHREY. That is right.

Mr. GARY. We commend to you that program with the assurance that this committee is very desirous to see it worked out in a proper manner so that the lives of the personnel of the Coast Guard will be adequately safeguarded.

Senator HUMPHREY. I agree with you 100 percent, but I do not think that that is all that is involved in it, just the buying of new planes.

Mr. CANFIELD. I want to say that I agree with the chairman's statement, Mr. Secretary, and we have confidence that you and your staff will see that the right thing is done. We do not want disasters taking place and then have a lot of people pointing their fingers at you and the Congress of the United States.

Secretary HUMPHREY. That is right.

Mr. SIEMINSKI. Off the record.

(Discussion off the record.)

Mr. SIEMINSKI. Like the others, Mr. Secretary, like our chairman and Mr. Canfield, I deeply regret the separation of Mr. Rose from the Government service. He's a quick thinker under fire, such as I saw him at the Waldorf Astoria when a match head burned his finger, he put it right into a cup of raw hot tea and salved the hurt. I suppose that is the way he works in everything.

Secretary HUMPHREY. That is pretty good.

Mr. SIEMINSKI. I wish him the very best in the years to come. I hope that your side of this committee table will, regardless of party control in our Government, continue to manifest the same high type talent we see here today. I did not have an opportunity to see the kind of talent here before 1951, but if its level holds up to what it is

today, I surmise that the fiscal affairs of our Government will be managed with steady hands.

Mr. Secretary, I have about eight short questions.

CHANGEOVER FROM DEFENSE TO CIVILIAN ECONOMY

Mr. SIEMINSKI. First, Mr. Secretary, as to resources. Especially those that are now going into defense and security efforts not only in the United States, but in the other countries of the world. Do you feel that we can preserve our way of life and make the changeover from defense to civilian pursuits and that that slack can be taken up? Secretary HUMPHREY. You mean if we do not require the men and the services in the defense of the country that we now employ, can we employ them in useful work?

Mr. SIEMINSKI. Can we employ the resources that are now being put into defense efforts and convert them into productive civilian channels?

Secretary HUMPHREY. There is not any question about it. I think that transition must occur. We have had to go through it before; we have been through transitions, and we can go through another one. I think that there is no question but what the scale of living in the country would be higher if we did not have hundreds of thousands of men working in defense.

Mr. SIEMINSKI. Can we, in this defense effort, see some silver lining in terms of the research benefits that might accrue to mankind out of these defense efforts? For instance, in the field of atomic energy in 1950 it seems that we were about where man was when he invented the wheel, speaking in terms of electronics. Supposing all of this expense which we have put into the defense effort had been put into efforts for the betterment of mankind, would the standard of living have been improved? As it is in the past we have made great mechanical and scientific discoveries through the sheer necessity of having to defend ourselves.

Secretary HUMPHREY. Outside of the atom, and I am not even saying outside of the atom for any length of time, I think the development of the power of the atom was accentuated by reason of the huge sums of money that we spent so rapidly for defense. I do not think it was anything but expedited and whether you would actually make more progress in research with more people devoted to peaceful pursuits than you would make with them devoted to military pursuits I am not at all sure.

Mr. GARY. You could probably devote them to more useful pursuits.

Secretary HUMPHREY. Yes, I think they would probably be devoted to more useful pursuits for the good of the average citizen.

PAYMENT OF TAXES

Mr. SIEMINSKI. We notice in France and Italy and Germany and even to a degree in the United States a growing rebellion against taxes. In France we have the Poujadist movement and its rejection of taxes. Perhaps it is no bigger than a cloud the size of a man's hand. Here in the United States we have an important citizen attempting to direct a one-man rebellion against our tax system.

May I ask, Mr. Secretary, whether you think there is enough money in the pockets of our people to pay the taxes that are now being imposed in this sense, that one does not mind paying a tax if one has the money with which to pay it? Would you care to take a temperature reading on that?

Secretary HUMPHREY. Well, I think this, I think that the American people will gladly pay whatever they believe is legitimately required for their security as long as they have confidence in both the integrity and the plans of the men or the group who are determining that very delicate question of balance between economy and security. On the other hand we have seen in this country a number of times when the people have just risen up and demanded immediate and rapid reduction of military forces.

It has been to our detriment that that occurred, because at those times they have gone away overboard and demanded reductions far beyond sensible proportions, and the result has been that we have had expensive buildups following them again.

I think that we can go along, as I say, as long as people have confidence in the fact that what is being asked of them is right and fair and reasonable and necessary, but if they get the idea that it is not, and if they get the idea that it is more than is justified, we are going to be met with demands for reduction so great that they will have to be met. Personally that is one of the reasons why I think we ought to be extremely careful to be sure we are devoting only what we must devote to our security programs, so that we do not get a rebellion on the part of the people and do not get reductions which are entirely unjustified, and thereby weaken the protection of our way of life. Mr. SIEMINSKI. You feel that you are sensitive to that move? Secretary HUMPHREY. I think the people must be very sensitive to it.

Mr. SIEMINSKI. I like your statement when you say that we are on a money incentive. This stimulates individual effort and accomplishment in our way of life. It means, does it not, that in peace the money incentive can give us the moral equivalent of war during which time each of us pull together for a common gain?

Secretary HUMPHREY. That is right.

AFTERNOON SESSION

Mr. GARY. The committee will come to order.

When we adjourned Mr. Sieminski was examining Secretary Humphrey. Mr. Sieminski, you may proceed.

METHOD OF HANDLING FOOD SURPLUSES

Mr. SIEMINSKI. In relation to your activity, Mr. Secretary, covering many activities of Government, could you give us the Treasury view on the food surplus proposition moneywise in this sense: Can we apply to that the writeoff techniques that you apply to industrial situations? Do you write off its value as you do in industrial situations?

Do

Secretary HUMPHREY. I do not quite know what you mean. you mean the stocks of cotton and wheat and that sort of thing we have on hand?

Mr. SIEMINSKI. Yes.

Secretary HUMPHREY. Well, from the point of view of the cash budget they are written off and they are paid for. In other words, cash goes out. That does not mean they are not carried as an asset and we do not have hopes of recouping from them, but the cash has gone out when the title comes to us.

Mr. SIEMENSKI. Thank you.

Mr. BURGESS. I might add that once a year they make a revaluation to determine what losses the Commodity Credit Corporation has taken in the course of the year. I think you make an appropriation to cover that.

RELATIONSHIP OF ANTICIPATED INCREASED REVENUES TO GROSS
NATIONAL PRODUCT

Mr. SIEMINSKI. Could you say your anticipated increased revenues which make our future look brighter are because you foresee the growth of our gross national product?

Secretary HUMPHREY. I do not know that it corresponds too closely to the gross national product. We have tried to estimate as best we could what the conditions throughout this year and next year will be and we made estimates of the profits and the earnings that will be made during those periods. The great bulk, as you know, of all our money comes from profits and earnings, the net; but we estimate that if the earnings continue we will have the taxes we figure on.

ADEQUACY OF BUDGET REQUEST

Mr. SIEMINSKI. Mr. Canfield and you engaged in a discussion as to whether or not your budget request would provide enough money to carry on your activities, and you said "one rarely does," if I may paraphrase it. Do you have sufficient to give the public service required today?

Secretary HUMPHREY. I think we do. I think what we have requested in this budget will provide a first-class service to the public in each of the fields we are responsible for, and we are testing improvements in service here and there which we hope to improve on later, but I think we can render first-class service in every field.

Mr. SIEMINSKI. In closing, could we say that money spent in giving man 1 of 4 things would be sound: To lengthen his life; to lessen the pain he suffers in life; to make him feel he is more creative and less wasteful? If money spent by the Government or by the individual is spent in the achievement of any of those four goals, would we not go in the direction you have stated in your statement? Incidentally, I liked the presentation of your statement in that it seemed geared to an individual's life.

Senator HUMPHREY. If we can afford it, yes. Just so long as the amount you spend is within your means.

Mr. SIEMINSKI. And the men who regulate the flow of money today are doing it on the formula of the needs of life?

Secretary HUMPHREY. As nearly as we can.