for the following operating expenses of the departmental headquarters and staff offices of the Secretary: Travel, communications, printing, contractual services, supplies and materials, and equipment. The estimated requirements for the current year, including the cost of salary increases authorized by Public Law 94, 84th Congress, are in the amount of $667,400. The net increase of $4,350 in the 1957 estimate will provide funds for 2 clerical positions to enable this activity to maintain its level of employment. 4. Operation and maintenance of Treasury buildings. This activity is responsible for the operation and maintenance of the main Treasury Building and Annex. It also maintains the grounds and parking areas adjacent to these two buildings. The estimated requirements of this activity in 1957 are $678,900. This will provide $552,500 for 142.5 average positions and $126,400 for the following miscellaneous operating expenses: Rents and utility services, contractural services, such as repairs to machines; steam, supplies and materials, and equipment required for the upkeep of the buildings. The estimated requirements for the current year, including the cost of salary increases authorized by Public Law 94, 84th Congress, are in the amount of $624,400. The net increase of $54,500 will provide for the cost of steam furnished to the main Treasury Building and Annex by General Services Administration and for the increase in rates for electric current. 5. Employee health program: This activity covers the operation of four health units which furnish emergency first-aid services to employees located in Washington, D. C. The Department enters into a contract each year with the Public Health Service for the operation of these units. The amount requested for 1957 is $59,800, and is the same as the estimated requirements for the current year. This program will provide emergency first-aid services for approximately 7,500 employees at an average cost of $7.97 an employee. MANAGEMENT IMPROVEMENT PROGRAM I would like to report some of the activities of the Department's management improvement program during the past year. The objectives and general plan of this program are outlined in a booklet entitled "Machinery for Management Improvement." This booklet was issued by Secretary Humphrey in December of 1954, and copies were furnished to the members of this committee at the time of our hearing last year. It is being used by the bureau officials and their staffs in appraising the framework within which their management improvement programs operate and as an informational and training document at lower levels. During the past year training programs were conducted at the bureau level throughout the Department, at the larger field offices, and at special training institutions. These programs include supervisory development and training conferences, on-the-job training, orientation classes for new employees, correspondence courses, classroom instruction, distribution of special-purpose training pamphlets and handbooks, and the training program for internal revenue agents at the advanced training center at the University of Michigan. These efforts contribute to management improvement by providing improved supervision, leadership, and technical abilities. The Treasury Department Fire and Safety Council developed two safety awards: The Secretary's citation for unusual accomplishment in the field of accident prevention and the Secretary's safety award for outstanding achievement. The Coast Guard yard received the Secretary's first citation for its excellent safety record in recent years. Representatives of the Department of Labor presented an office safety training course for over 125 Treasury supervisors in Washington, D. C., and plans have been made to extend this training to the field. The records management program resulted in the disposal of 168,000 cubic feet of records and the transfer to records centers and archives of 186,000 cubic feet of records. This resulted in a reduction by the Department of 14 percent in the total volume of records since July 1, 1954. The United States Coast Guard made a thorough review of real property buildings in relation to the needs of the service. Thirtyseven properties were declared excess and reported to the General Services Administration for disposal. The fair market value of this property is estimated to be in excess of $900,000. Estimated annual recurring savings of $7,200,000 were reported for improvements adopted throughout the Department during the past year. I will give you some examples of the more significant projects in which savings were identifiable. Numerous other projects were completed during the year from which benefits were less tangible, but which enabled the Department to operate more efficiently and to provide better services to the general public. The following are examples of the types of improvements whihc produced monetary savings: 1. The Bureau of Customs took action which authorized many additional types of imports to be examined by sample rather than having entire shipments carted to customs appraisers stores for examination. This avoided an increase of $100,000 in cartage costs which would have resulted if the action had not been taken. 2. Printing of $50 and $100 United States savings bonds by the offset printing process instead of the more costly intaglio process resulted in savings of $150,000 annually. 3. Various procedural changes and minor organizational realinements in the Bureau of the Public Debt permitted better utilization of manpower, resulting in savings of $390,000. 4. Marketable public debt securities which are taken in for denominational exchange or for transfer from one Federal Reserve bank to another are now reused instead of being canceled, resulting in savings of $125,000 annually. 5. Safekeeping facilities for United States savings bonds were discontinued, except for members of the Armed Forces, resulting in sav ings of $133,000. 6. Further conversion of disbursing accounts, involving the issu ance of 8.5 million checks, from paper to card form resulted in a reduc tion of $185,000, in check-payment operating costs in the Office of the Treasurer of the United States. 7. The closing of four regional accounting and disbursing offices and organization changes in the Washington Regional Office, Division of Disbursement, resulted in annual recurring savings of over $235,000. 8. The Internal Revenue Service installed a system for corresponlence control which included the use of form letters, reduction of the number of reviews, and installation of appropriate mechanical devices. This will result in savings of $640,000 annually. 9. Reducing the supervision exercised by internal revenue storekeeper-gagers over the production and warehousing of distilled spirits will result in savings of $393,000. 10. Coinage operations were discontinued at the San Francisco Mint and the Seattle Assay Office was closed. The functions will be performed by other offices at a much lower cost, and savings will ipproximate $415,000. 11. Three Coast Guard supply depots were moved into space provided by the Navy Department, thereby realizing annual savings of $86,000 in rental costs and $120,000 in Coast Guard personnel costs. INCENTIVE AWARDS PROGRAM We have been very pleased with the participation by employees of the Department in the Treasury awards program. During the iscal year 1955, participation increased by about 50 percent over 1954, making the fourth successive year of increased participation. There were 4,608 suggestions received, and 825 adopted, which resulted in the payment of cash awards amounting to $26,260. Estinated annual savings resulting from the adopted suggestions totaled $875,765. Awards for superior performance were also granted to 9 employees. In addition, one meritorious civilian service honor award was granted to a clerk in one of the field offices. We expect further progFess through continued encouragement of employees at all levels to trive for better ways to do our job. Some outstanding suggestions for which awards were granted during 1955 are the following: 1. An internal revenue employee saved the Government $118,000 n proposing that alcohol to be denatured be deposited directly in anks in the denaturing plant without being deposited first in receivng tanks in the industrial alcohol plant, and adequate supervision be fforded by assignment of storekeeper-gagers during daytime hours nly. The award granted for this suggestion was $740. 2. The suggestion of an internal-revenue employee, proposing that ne set of Commerce Clearinghouse Liquor Control Report be given o the head gager of each plant instead of distributing sets to each ager, will result in an annual savings of $23,000. The savings reulted from the canceling of a large number of subscriptions to the Service. The award was $340. 3. Another Internal Revenue Service employee made a suggestion which will save the Government $20,000 a year. He suggested that ertain forms and orders for opium be revised so that they can be mprinted with addressograph plates. He received an award of $325 or this suggestion. 4. An employee of the Coast Guard yard was granted a $600 award or efficiency. His unusual initiative in suggesting, developing, and compiling a ship's work list manual is credited with saving an estimated $50,000 a year. Use of the manual makes possible large time savings in getting underway the overhaul of ships coming into the yard. 5. Three employees of the Coast Guard shared an award of $275 as the result of their suggestion proposing a jig for assembly of 2 engine beds at one time before installation in a boat, which will save more than $10,000 annually. Before adoption of the jig it took 5 men 4 days to make the installation. It now takes 1 man 4 hours. An additional award established by Secretary Humphrey recently is the Alexander Hamilton award, which gives recognition for outstanding leadership in the work of the Treasury Department. It is awarded to those whose leadership in the Treasury is such as to bring outstanding and unusual service and benefit to the Government, and, in turn, to the people of our Nation. The award consists of a gold medal and a certificate signed by the Secretary. The first Alexander Hamilton award was presented to Mr. Edward F. Bartelt, former Fiscal Assistant Secretary, in recognition of his long and distinguished career in the Fiscal Service of the Treasury Department. Since then, Mr. T. Coleman Andrews, former Commissioner of Internal Revenue, and Mr. Earl O. Shreve, former National Director of the United States Savings Bonds Division, have received these awards for the outstanding service they rendered the Treasury Department and for the exceptional quality of their leadership. The foregoing are significant examples of the types of suggestions and management improvements which are producing savings. The heads of the bureaus who will appear before you will be able to furnish information regarding the major accomplishments in their or ganizations, and I will be glad to submit any additional information you may need regarding these programs and the results we are getting Mr. GARY. Thank you, Mr. Parsons. SALARIES AND EXPENSES SUMMARY JUSTIFICATION DATA We will insert pages 2, 3, and the top of page 4 of the justifications at this point in the record. (The justifications referred to are as follows:) Activity 1: Executive direction_ Activity 2: Administration and coordination of legal services__ Activity 4: Operation and maintenance of Treasury buildings__ 4, 400 1, 200 2,000 1, 900 Additions: 9,500 Activity 1: Executive direction_. Activity 4: Operation and maintenance of Treasury buildings.. Activity 2: Administration and coordination of legal services__ 75, 200 20, 700 33, 900 43, 400 4,400 1 Does not include anticipated supplemental for 1956 to cover cost of authorized pay The Office of the Secretary is responsible for the overall direction and adminisation of the Treasury Department. This responsibility includes the following: 1) Formulation of tax and fiscal policies, (2) management of the public debt, 3) collection of revenue, (4) printing of currency, (5) manufacture of coins, 3) lending functions under section 302 of the Defense Production Act of 1950 d under section 409 of the Federal Civil Defense Act of 1950, (7) liquidation the Reconstruction Finance Corporation, (8) supervision of the Federal Fa |