Secretary HUMPHREY. I know of no reason why it should not be carried out, and if you will tell us when you want them, they will be forthcoming at that time.

Mr. GARY. We would like to have them 2 or 3 days in advance.

Secretary HUMPHREY. I do not know why that was not done earlier unless it was because when there is a pressure of things you take up first the things that appear to be most pressing. For example, I have six people waiting for me now and I put them off because I thought this was more important.

Mr. GARY. I am calling your attention to that provision so that in the future you will see to it that any witnesses from your Department having prepared statements will file them with the committee ahead of time.

Secretary HUMPHREY. We will follow that. I presume the trouble was that they could not get to me to get it finished up.

Mr. GARY. We did not get your statement until this morning, which gave us no opportunity to read it and to prepare our questions. Mr. CANFIELD. Off the record.

(Discussion off the record.)

RAIDING PARTIES OF ALCOHOL UNIT ACCOMPANIED BY NEWSPAPERMEN

Mr. GARY. One other thing. The committee was rather surprised to hear on the radio and to read in the press that a newspaper reporter and photographer had accompanied one of the raids of the Alcohol Unit of the Department. The committee felt that that is. liable to bring about very serious complications.

We had a matter up before our committee, I think it was last year, in which an appropriation was asked for someone who was seriously injured on one of these raids and they wanted the Government to compensate him. It is entirely possible that a bystander or a person accompanying a raiding party of that kind could be seriously injured and that it would present a question as to whether or not the Government should compensate that person for his injuries, and other questions might arise.

Is that not an unusual procedure?

Secretary HUMPHREY. You are telling me something I never heard of before. I think somebody in the Department may know something about it, but I do not.

Mr. GARY. I am just questioning the propriety of a raiding party going out to raid stills, which we all admit is a very hazardous undertaking, carrying along with them reporters and photographers.

Secretary HUMPHREY. I do not know, Mr. Chairman. I do know from watching the television that in some of the shows on the television newspaper reporters unearth a lot of facts. I do not know any more than you do about this, in fact I do not know as much as you do about it because you have read the article and I have not. I should think unless there was some good reason for it, there is no reason why they should acompany a raiding party.

Mr. GARY. If there is a good reason, I think we ought to know about it.

Secretary HUMPHREY. We will check into it and see what the reason was for it if it was done. I would kind of like to go myself.

Mr. CANFIELD. Mr. Secretary, insofar as your statement about reporters sometimes unearthing facts, I can testify as an old police reporter that that is often so.

Mr. GARY. Mr. Secretary, we thank you.

Secretary HUMPHREY. I thank you ever so much and appreciate it very much indeed. I just want to say once more how very appreciative we are of the relationship between this committee and the Treasury. I think it means a great deal for the benefit of the Government and the citizens of this country to have a group like you who are working with us to get results and for no other purpose. Thank you.

STATEMENT OF UNDER SECRETARY BURGESS

Mr. GARY. The committee will now be glad to hear from the Under Secretary, Mr. Burgess.

Mr. BURGESS. Mr. Chairman, budget estimates for the Treasury Department appear in two main categories-first, the estimates of appropriations for the regular annual operating requirements of the Department, and second, the estimates for permanent appropriations. As you know, it is only in connection with the first group that we exercise current administrative control. The permanent appropriations are determined by statute or by other types of fixed commitments. The estimates for permanent appropriations, other than trust accounts, amount to $11,901 million for the fiscal year 1957. The principal items are interest on the public debt, $7,000 million; refunding internal revenue collections and customs duties, $4,113 million. The transfers to Government trust funds are $8,951 million.

It will be observed from this table that the budget estimates for the regular annual operating requirements of the Department total $649.8 million for the fiscal year 1957-an increase of $37.9 million over the corresponding appropriations and authorizations for 1956. However, only $13 million of this increase is being requested for increasing program operations. The larger share of approximately $25 million, or 66 percent of the increase is necessary solely because of the pay raises authorized for Federal civilian employees by Public Law 94-84th Congress.

The $13 million increase requested for program operations is about evenly divided between our two largest bureaus-the Internal Revenue Service and the Coast Guard. The reasons for these increases as well as an explanation of the other relatively minor changes in requirements can perhaps best be presented by reviewing briefly the situation in each of the several bureaus.

INTERNAL REVENUE SERVICE

The budget estimate of $307,850,000 submitted for the Internal Revenue Service for 1957 represents an increase of about $2512 million over funds currently available for 1956. Of this amount, about $19 million is required to meet salary increases under pay legislation enacted during the last session of Congress. Provision is made for the normal year-to-year salary increments and promotions, so that the funds requested will permit continuation of the same complement of personnel as is available this year. Other increases include a request for a small number of additional personnel to augument the staff in legal,

tax rulings, and foreign-tax work; increased travel allowances authorized by Congress last year; and for an equipment replacement

program.

The Service has expanded its audit coverage during the past year, and has continued to increase revenue collections through its enforcement efforts. With the funds requested for 1957, it will continue its efforts to obtain maximum realization of taxes from the revenue laws, and to provide for an effective and equitable administration of those laws. The Commissioner of Internal Revenue will give you the details of the estimate when he appears before

you.

BUREAU OF CUSTOMS

The 1957 estimate for the Bureau of Customs is $44,500,000. Aside from pay increase costs of $2.9 million, the additional amount of $400,000 requested is necessary to meet the increased cost of personal services in 1957 so as to maintain the 1956 level of employment; to finance additional examination of foreign mail; and for greater Sunday and holiday coverage on the Canadian and Mexican borders. Estimated revenue increases totaling nearly $1 million, which are expected to result from the increased mail examination, will more than offset all of the additional expenses for which new funds are requested.

During the past year liquidation backlogs have been further reduced to near minimum levels, and additional steps have been taken to facilitate the processing of goods and passengers through customs. With importations and collections running more than 20 percent above the comparable period last year, Customs faces the probability that 1956 and 1957 will bring alltime record highs in merchandise, carriers, and persons to be cleared.

BUREAU OF ACCOUNTS

The 1957 appropriation estimates covering the administrative expenses of the Bureau of Accounts amounts to $19,190,000, which, when compared with the current year appropriation, reflects an increase of $930,000. This increase is to cover the cost of recently authorized salary increases amounting to about $500,000, and the balance is to provide for the cost of processing and cost of postage of 11.4 million additional check payments. This increase will also provide eight positions for improving operations relating to the central accounting and reporting functions of the Department, the Federal depositary system, and the Department's internal audit program.

BUREAU OF PUBLIC DEBT

The estimate for the Bureau of Public Debt is $45,500,000, including $5,124,700 for the United States Savings Bonds Division. The total requested is about $100,000 less than estimated requirements for 1956, excluding the cost of authorized salary increases.

The Bureau is processing during the current fiscal year a considerably larger volume of work than had been envisioned at the time the 1956 budget estimate was presented last February. In fiscal 1957 it

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is estimated that the sales of savings bonds will be up about 3 million pieces over the currently estimated 1956 volume, and the redemptions will be approximately 42 million fewer. The processing of the additional volume during 1956 over the volume originally presented to the Congress last year has been made possible in great part by the savings. resulting from improvements in management.

At present, the Bureau is exploring the possibility of the application of new developments in the field of electronics as they may be applied to the processing of savings bonds. Last July, preliminary discussions were held with interested companies in an effort to de-. termine whether all or certain phases of the Bureau's work relating to issuance and retirement of savings bonds might be performed more economically and expeditiously on electronic data-processing equipment which is now, or may in the near future become, available for use. Representatives of the Bureau of the Budget, the General Accounting Office, and staff members assigned to your committee, in addition to Treasury personnel, attended these discussions. Although studies in this field have not advanced to a stage where budgetary implications for fiscal 1957 can be taken into consideration, it is the intention of the Bureau to cover the matter in the least possible time consistent with doing a thorough job.

SAVINGS BONDS PROGRAM

The savings bonds program plays an important role in the Nation's economy and in Government financing. I am glad to be able to report that the holdings of our people in series E and series H bonds are at an alltime peak of $40 billion cash value.

Through the savings bonds program, many people have become systematic and substantial savers for the first time in their lives. It is a national thrift program which has paid impressive dividends in helping to keep our economy healthy and strong.

With the active support of the many thousands of patriotic, public spirited volunteers who give the Treasury their time, their energy, and their influence to sell savings bonds, we are setting a sales goal for 1956 about $250 million higher than sales in 1955.

We had a goal in 1955 of $51/2 billion, and we came within $150 million of the goal. We were just a little shy of it. The sales in the last 2 or 3 months fell off a little. I think it had something to do with the fact that retail sales were very high and house building was high, and people were using their money. They spent a little more than they were putting on the savings side.

Mr. GARY. For Santa Claus?

Mr. BURGESS. I think so.

OFFICE OF THE TREASURER OF THE UNITED STATES

The Office of the Treasurer of the United States is requesting for 1957 the sum of $15,125,000 which, after taking into consideration the indicated additional appropriation requirements for the pay in creases authorized by the last Congress, is $100,000 less than ap propriation requirements for the current fiscal year. Approximately 66 percent of the total amount of the estimate or $10 million is for the purchase and shipment of United States paper currency.

The funds provided for this purpose in 1956, together with those requested in the 1957 budget, assume a reduction in the reserve stock of paper currency. We are, however, providing better distribution through the country, and so we think the amount available for any emergency is just as good as it was. The reserve stock was largely held in Washington before, and we are reducing that. The balance of the funds requested represents requirements to process the millions of financial transactions involved in the day-to-day business life of the Federal Government and the public generally. The volume of these transactions is largely outside our administrative control.

Under present procedure, the Treasurer and the Federal Reserve banks acting as agents are paying approximately 350 million checks annually, all checks subsequent to payment being forwarded to the General Accounting Office for reconciliation with check issue data. After a 2-year study by the Treasury, General Accounting Office and the Bureau of the Budget, formal arrangements are now in process of completion to provide facilities in the Office of the Treasurer to accomplish both the payment and reconciliation of all checks drawn on the Treasurer by the use of high-speed electronic machines. It is estimated as already stated, that the adoption of this system will result in a direct savings of approximately $134 million as well as a possible decrease in expenditures by the Federal Reserve System, thus providing an increased return to the Treasury of $500,000 or more a year from Federal Reserve System earnings. This move represents an outstanding example of how agencies of the Government can work together in wholehearted cooperation to bring about savings in the cost of conducing the Government.

It was not possible to accomplish final approval and release formal notice of our agreement to adopt this change in procedure until subsequent to the hearings on the Treasurer's 1957 estimates before the Bureau of the Budget. As a consequence, the Treasurer's estimate for 1957 has not been prepared for presentation on this basis. However, it is hoped that the funds requested will be sufficient to make this change.

That is, the additional cost of instituting the change may be offset by the beginning of some return from the better efficiency of the change. Of course, in the long run, it is going to be of great benefit.

BUREAU OF ENGRAVING AND PRINTING

No appropriation is requested for the Bureau of Engraving and Printing for the fiscal year 1957, since the Bureau conducts all of its operations on a completely reimbursable basis, as authorized by Congress in 1950.

It is anticipated that the volume of work to be delivered during the fiscal year 1957 will be approximately the same as that estimated for 1956. However, since the fiscal year 1954, substantial decreases have taken place in the requirements of the Treasury and the Federal Reserve banks for currency which, from the standpoint of operating costs, is the largest single item manufactured by the Bureau. These reductions in program requirements together with the economies being effected in operations as a result of the modernization program continue to have considerable impact on employment in the Bureau.