from the Bureau of Accounts, Cost Finding and Valuation to the Bureau of Transport Economics and Statistics, commencing on June 17, 1957. All work of reviewing for completeness and tabulating these reports thus was placed in a single bureau, whereas it had been divided between the two bureaus.

The 3 valuation sections of the Bureau of Accounts, Cost Finding and Valuation were consolidated into a single new section of that Bureau, effective in August 1957. This consolidation achieves closer coordination of related work and provides for more effective use of personnel.

To expedite proceedings, a "central status system" was established in January 1957. Under it, certain information regarding the status of all formal cases is recorded and tabulated by means of punchcards. From the information thus made readily available, problem areas are identified and corrective action taken to reduce processing time. Data made available during the first 12 months of the system's operation indicate that the average age of all cases was reduced from 7.5 to 6.5 months.

A major improvement in field operations in connection with railroad safety and car service was effected by assigning all of the car service agents, safety appliance inspectors, and hours-of-service inspectors to a new position of safety and service agent. This arrangement provides for a wider coverage by inspectors than was possible when each program was handled separately. Zone supervisory_positions were established throughout the country to coordinate the Bureau of Safety and Service's work, while coordination of the work in the regional offices is exercised by field employees of the Bureau of Safety and Service, who serve also as assistant regional managers.

Further improvements also were made in field office administration, in the training program for field employees, as well as for supervisory personnel in the Washington office, and also in a long-range program to provide trained replacements for the large number of key employees who are eligible for retirement. A new promotion policy was established which, among other things, will provide an inventory of skills and potential among all employees. The health program was expanded principally in the area of preventive measures.

NATIONAL ADVISORY COMMITTEE FOR AERONAUTICS

The Director reported that during 1957 the Compressor and Turbine Research Division was abolished, and its staff dispersed among other research divisions of the Laboratory. Of the original 92 positions, 42 continued with Compressor and Turbine work in these other divisions, and 50 were reoriented into other fields of research including propulsion chemistry, propulsion aerodynamics, fluid systems, nuclear propulsion, and technical services.

The Flight Problems Research Division was reconstituted to embrace a much broader class of problems, as the Fluid Systems Division. The Fuels and Combustion Research Division was reorganized and retitled the Propulsion Chemistry Division to give emphasis and increased effort in the fields of high energy fuels, rockets, and aerothermochemical research. Two new branches were established to cover research in physical chemistry and rocket propulsion fuels.

The Engine Research Division was reorganized and reconstituted as the Propulsion Systems Division.

The Supersonic Propulsion Division was reorganized as the Propulsion Aerodynamics Division to give recognition and direction to a new set of problems arising from hypersonic flight such as aerodynamic heating and internal flow problems. Two new facilities were put into operation in this division, namely the rocket wind tunnel and the electric arc tunnel (in addition to the 10- by 10-foot supersonic wind tunnel in 1956), all without adding additional scientific manpower.

NATIONAL LABOR RELATIONS BOARD

The Chairman of the Board reported two organizational changes. In Washington, the Field Branch was abolished, and its functions, direction, and coordination of field office liaison, review, and advisory activities are performed by deputies under the Associate General Counsel. In the field, a new office, designated as the 22d Regional Office, Newark, N. J., began operations on September 3, 1957. This office was created to handle more expeditiously and at less expense cases arising in the heavily industrialized counties of New Jersey.

NATIONAL SCIENCE FOUNDATION

During the past year, the Director reported, there have been two relatively minor changes in organization. The social science research program has been created as a separate component reporting to the Office of the Director. Formerly the activities of this program were contained within the Division of Biological and Medical Sciences and the Division of Mathematical, Physical, and Engineering Sciences. Also, the Public Information Office has been withdrawn from the Office of Scientific Information, and established as a separate office responsible to the Office of the Director.

There has been a slight increase in the number of permanent personnel employment in the Division of Scientific Personnel and Education and the Office of Scientific Information, due to the increased emphasis on science education programs and the intensification of activities in the various programs dealing with scientific information needs, such as expanded support of publication of English translations of Russian scientific journals. A slight retrenchment in the number of persons engaged in surveying the Nation's research resources, within the Office of Special Studies, has come about because of a reorganization within that Office. The title of the National Committee for the Development of Scientists and Engineers has been changed to the President's Committee on Scientists and Engineers. Foundation personnel assigned to the President's Committee on Scientists and Engineers and the Interdepartmental Committee on Scientific Research and Development are shown separately on the chart, since they are not integral parts of the Foundation.

PANAMA CANAL COMPANY

The Panama Canal Company reported no major change in organization during calendar year 1957. Such actual or pending changes as occurred were within bureaus and divisions.

Panama Canal Company

Units abolished.-(a) Plant Evaluation and Transfer Staff integrated with the Plant Accounting Branch; (b) Commissary Division, Service Center Division, and Storehouse Division; (c) Aids to Navigation Section absorbed by the Dredging Division and the Navigation Division.

Units established.-(a) The Supply Division was created through the consolidation of the Commissary Division, Service Center Division, and Storehouse Division; (b) Supply Accounting Section created to handle general accounting functions of the abolished Commissary Division, Service Center Division, and Storehouse Division; (c) Sixty Cycle Design Branch established in the Engineering Division.

Pending changes.-Organizational changes within the Panama Canal Company are anticipated during the current calendar year which will result in a more efficient operation.

Canal Zone Government

Units abolished.-Land License Unit integrated with the License Section.

RENEGOTIATION BOARD

The Chairman of the Board reported a personnel reduction of 74 employees as a result of 2 major organizational changes in the Renegotiation Board after January 1, 1957. In headquarters, the Office of the Screening and Exemption Committee was abolished and in the field organization, the Chicago regional board was liquidated.

SAINT LAWRENCE SEAWAY DEVELOPMENT CORPORATION

The Administrator reported only one major organizational change during 1957 which was the creation of the Office of General Counsel. The office was created specifically to advise the Administrator, and his staff, on problems involving international, maritime, and admiralty law; assist in formulating policy and the issuance of regulations thereto; and is responsible, also, for proposed legislation, preparation of contractual documents, and conduct of litigation.

SECURITIES AND EXCHANGE COMMISSION

In the past year, the Commission has intensified its efforts to the end that its various law-enforcement activities achieve maximum investor protection. Among these were the following: (1) careful examination of registrations proposing close to $15 billion of securities for public sale (a new record), for accuracy and adequacy of the financial and other disclosures so that investors may make an informed investment analysis and evaluation of the worth of the securities; (2) a similar review of the annual and other reports filed by the 2,256 issuers of securities listed on our national securities exchanges, and of 1,991 statements to be used in the solicitation of proxies from the holders of such securities. The importance of reliable information concerning these securities may be seen from the $260 billion value of corporate stocks and bonds traded on exchanges; (3) the conduct of an inspection of the books and records of over 1,300 (a new high) broker-dealer firms for compliance with the SEC rules governing the maintenance of proper books and records and with the Commission's

net capital rule, which is designed to safeguard the financial responsibility of these firms; (4) the conduct of hundreds of investigations into complaints and other indications of possible securities violations, including the sale of securities in violation of the registration requirements and without disclosure of the facts which registration would require, as well as false and misleading representations with respect to the worth of securities; and (5) the general maintenance of a continuing surveillance over the securities markets to the end that they may be truly responsive to the composite judgment of the investing public as to the present worth of and future prospects for securities publicly traded. These activities have resulted in the imposition of statutory sanctions in a great many cases, including administrative proceedings (such as the suspension of the right to offer securities for public sale or revocation of the registration of a broker-dealer firm which operates to bar its continued conduct of a securities business), court actions to enjoin existing or threatened law violations, and criminal prosecutions for fraud.

Protection of investors

This program of investor protection serves not only the interests of the investing public; it also benefits industry as well, for it operates to maintain investor confidence in the basic integrity of the securities markets and thus opens up the vast reservoir of individuals' savings for industrial expansion and growth. It is also an important factor in channeling those savings away from unsound and fraudulent ventures into productive and profitable enterprise. No such program, of course, can or should protect against losses resulting from swings in the market which result from the natural operation of supply and demand factors unaffected by manipulative or other unlawful activities such losses are implicit in a free and open market ever sensitive to changes in economic conditions and reflecting the appraisal by investors of the effect of those changes and of national and international events upon economic values. While it may not be possible completely to eradicate losses due to fraud and other unlawful conduct, they can and should be kept to an absolute minimum so that they do not threaten investor confidence in the securities marketsa confidence so essential to our capitalistic society.

Review of rules and regulations

In 1957, the Commission continued its program of reviewing the rules, regulations, and forms under the various acts in order to keep abreast of constantly changing conditions in the securities industry. Apart from the periodic review conducted by certain staff members specifically assigned to this task, the need for changes is brought to the attention of the Commission in several different ways. In some instances, changes are requested or suggested by investors or by issuers, underwriters or their attorneys, accountants, or other representatives. Within the Commission, changes may be suggested by members of the staff as a result of reviews of the operation of the rules and regulations and the examination of material filed with the Commission. In accordance with the Administrative Procedure Act, most proposed new rules and forms are published prior to their adoption in order to obtain the views of all interested persons, including issuers and various industry groups.

For the fiscal years 1957 and 1958, the Congress appropriated funds for average employments of 794 and 886, respectively. In recognition of the Commission's minimum requirements properly to perform its statutory functions under the Federal securities laws, the President has recommended an increase of 63 positions for fiscal 1959.

Approximately 35 percent of the estimated cost for the fiscal year 1959 will in effect be offset under existing statutes by statutory fees and other revenues that are collected by the Commission. The fees and other revenues are deposited into the Treasury as miscellaneous receipts. Enactment of either S. 2520 or H. R. 7778 would increase fees so that 66 percent of the Commission's estimated costs for fiscal year 1959 would in effect be offset by the revenues thus produced.

SMALL BUSINESS ADMINISTRATION

The Administrator reported that there was only one organizational change made in the agency during 1957. Early in the year the office of program analysis was established in the Washington office. The major functions of the new office are to (1) analyze the program activities of the regional and branch offices to determine if the criteria, standards, policies, and procedures adopted by the Washington office are being followed and (2) review the emphasis placed on specific programs by the small business of the area, and recommend changes in program emphasis to provide more effective service to small business

concerns.

An increase in personnel occurred on July 1, 1957, when 50 employees were acquired by mass transfer from the Reconstruction Finance Corporation under Reorganization Plan No. 1 of 1957. Otherwise, personnel increase, mainly in the field, was directly due to increase in receipt of loan applications.

SMITHSONIAN INSTITUTION

The Secretary reported that as of January 1, 1958, the Smithsonian Institution and all its bureaus had 77 more employees than they had on January 1, 1957. The combined staffs of the several bureaus comprising the Smithsonian Institution are being substantially increased since July 1, 1956, because of additional funds appropriated by Congress to expand the following programs: (1) the renovation of exhibition halls, (2) the addition of wings to the Natural History Building, (3) astrophysical research, (4) preparations for the Museum of History and Technology including planning exhibits, and (5) archeological surveys in the great river basins.

SUBVERSIVE ACTIVITIES CONTROL BOARD

The Board has continued, notwithstanding increased workload, to operate with quite a small staff. An additional economy was effected during the past year by the elimination of a grade 13 position and combining the duties of that position with duties of other employees. Otherwise, there have been no significant changes in Board organization. The Board has continued to use the law library of another agency, rather than establishing its own library, thus affecting substantial savings. Further, the Board has followed a plan of cooperat