CORNELL 
 
 UNIVERSITY 
 
 LIBRARY 
 
REPORT TO THE PRESIDENT OF THE 
 UNITED STATES BY THE DIRECTOR 
 OF THE BUREAU OF THE BUDGET 
 
 TRANSMITTING 
 
 REPORTS OF THE CHIEF COORDINATOR,; 
 GENERAL SUPPLY, AND THE CHAIRMEN 
 OF THE COORDINATING BOARDS ES- 
 TABLISHED BY EXECUTIVE ORDER FOR 
 THE COORDINATION OF THE ROUTINE- 
 BUSINESS OF THE GOVERNMENT 
 
 ,,. ^ Cornell University Library 
 
 HJ2051 .A5973 1922 
 
 ''*P|?iHiii!i?i,ite.,,ii'.''**'*'^"' °* ••16 United St 
 
 olin 
 
 3 1924 032 504 189 
 
 WASHINGTON 
 
 GOVERNMENT PRINTING OVTlCi, 
 
 1922 
 
The original of tiiis book is in 
 tine Cornell University Library. 
 
 There are no known copyright restrictions in 
 the United States on the use of the text. 
 
 http://www.archive.org/details/cu31924032504189 
 
REPORT TG THE PRESIDENT OF THE 
 ^NITED STATES BY THE DIRECTOR 
 OF THE BUREAU OF THE BUDGET 
 
 TRANSMITTING 
 
 REPORTS OF THE CHIEF COORDINATOR, 
 GENERAL SUPPLY, AND THE CHAIRMEN 
 OF THE COORDINATING BOARDS ES- 
 TABLISHED BY EXECUTIVE ORDER FOR 
 THE COORDINATION OF THE ROUTINE 
 BUSINESS OF THE GOVERNMENT 
 
 WASHINGTON 
 
 GOVERNMENT PRINTING OFFICE 
 
 1922 
 
CONTENTS. 
 
 Page. 
 Report of the Director of the Bureau of the Budget to the President of the 
 
 United States 5 
 
 Report of the Chief Coordinator for General Supply to the Director of the 
 
 Bureau of the Budget 11 
 
 Report of the Chief Coordinator of the Federal Board of Hospitaliza- 
 tion 25 
 
 Report of the Aide for Liquidation ^ 33 
 
 Report on Public Printing and Binding 71 
 
 Report of the Chairman of the Federal Traffic Board 7T 
 
 Report of the Aide for Purchase 117 
 
 Report on Real Estate, Survey of Telephones, Motor Transport Out- 
 side the District of Columbia, Standardization of Specifications, Corps 
 
 Area Coordinators 123 
 
 Report of the Surveyor General of Real Estate 133 
 
 Report of Coordinator, for Motor Transport, District of Columbia 141 
 
 Reports on Activities of Federal Specifications Board and Survey of Gov- 
 
 ^ ernment Telephone Systems 149 
 
 Extracts from report to the President of the United States by the Director 
 of the Bureau of the Budget, dated December 5, 1921, covering the sub- 
 ject of the coordinating agencies established by Executive order for the 
 
 coordination and improvement of the routine business of Government 159 
 
 (3) 
 
REPORT OF THE DIRECTOR OF THE BUREAU OF THE BUDGET 
 TO THE PRESIDENT OF THE UNITED STATES. 
 
 To the President or the United States : 
 
 I transmit herewith the reports of the Chief Coordinator, Gen- 
 eral Supply, and reports from the chairmen of the coordinating 
 agencies established by Executive order for the supervision of the 
 routine business of Government. A general summary of the accom- 
 plishments of the boards will be found in the report of the Chief Co- 
 ordinator, General Supply, which precedes the reports of the chair- 
 men of the different Federal boards. 
 
 I desire to commend to you the Chief Coordinator, General Sup- 
 ply, the chairmen of the Federal boards of coordination, and their 
 general staff. This organization has been the agency through which 
 the routine business of the Government has been reorganized in 
 principle and method. 
 
 The large direct savings in money, as indicated by the following 
 reports, are such that the necessity for the continued existence of 
 these organizations for all time may be considered indisputable,-. 
 And yet the current indirect economies incident to the transaction 
 of routine business under Executive supervision and control and in 
 accordance with proper business principles, as distinguished from 
 the disorganization which existed in the past, are perhaps greater 
 than the large actual savings outlined in the attached reports. 
 
 In no way can the loyalty, ability, and competency of these organi- 
 zations be better emphasized than by reference to the lack of pub- 
 Jieity which has attended the institution and continuaTioii^oTThis 
 great work. In the ordinary business organization nothing is more~ 
 disruptive and disorganizing in its effect than an undue seeking 
 after publicity in connection with business functioning. Had these 
 organizations in their work been subjected to that distracting in- 
 fluence which is always incident to any business which seeks a public 
 attention not based upon actual accomplishment, it is doubtful 
 whether the record of achievement herewith presented would exist. 
 It is all the more incumbent upon the Director of the Budget, there- 
 fore, now that the Chief Coordinator, General Supply, and his or- 
 ganizations have effected material results, to call your attention, as 
 the head of the business organization, to their remarkable work, per- 
 formed under great difficulties, and correcting a demoralized status 
 
 (5) 
 
6 
 
 quo in the routine business of Government which has existed for a 
 century. 
 
 The fact that these great savings have been accomplished and 
 the routine business of Government reorganized without unneces- 
 sary friction, in itself constitutes a tribute to the executive ability, 
 tact, and patience of Col. H. C. Smither, the Chief Coordinator, 
 General Supply, and the other chairmen of the coordinating boards. 
 
 Col. Smither was selected for this work because of his wide ex- 
 perience in a similar coordinating work with the American Expedi- 
 tionary Forces. His brilliant service in business coordination of the 
 Army has been equaled in this service for the civil organization of 
 Government. Whenever those misunderstandings occurred which 
 are inevitable at the inception of changed methods involving the 
 transmission of central authority over decentralized services, Col. 
 Smither pursued the sensible course of securing immediate personal 
 contact with the chief of the affected service, where his explanation 
 of the reason and necessities for coordinating action in the interests 
 of the Government as a whole in all cases brought loyal cooperation 
 from the department heads. As a result of this, it may be said that 
 a proper settlement of practically all issues has been made without 
 appeal to the President of any differences between the independent 
 department heads and the Director of the Budget, representing the 
 coordinating agencies. 
 
 Col. Smither has been ably assisted by his personal agents and by 
 deputies in the field, all of whom were selected because of unusual 
 experience and qualifications as carefully determined by a survey of 
 the entire available field. In the office of the Chief Coordinator, 
 General Supply, Col. J. W. fright, of the Army, executive assistant 
 to the Chief Coordinator; Col. J. R. McAndrews, of the Army, 
 charged in general with matters pertaining to m^tor transportation, 
 real estate, and dealings with the field deputies ; Col. J. P. McAdams, 
 of the Army, charged with matters of liquidation, and the active 
 chairman of the Federal Liquidation Board; Maj. M. R. Wainer, of 
 thel Army, charged with the matter of interdepartmental transfers; 
 Lieut. Commander E. D. Stanley, of the Navy, aide for purchase and 
 executive chairman of the Federal Purchasing Board, have all done 
 invaluable work. 
 
 These gentlemen have been assisted by Lieut. Commander C. W. 
 Cairnes, of the Coast Guard, assistant in matters of liquidation; 
 Lieut. Col. L. S. Morey, of the Army, central finance officer, under 
 whose direction the special fund for financing the processes of liqui- 
 dation are disbursed ; and Mr. B. L. Amlrus, of the Post Office De- 
 partment, charged in general with the coordination of motor trans- 
 portation. 
 
While the results of the work of these boards as set forth in the 
 accompanying reports are a complete demonstration of their efficiency 
 and justification for their existence, it is well to point out that their 
 work is but in its inception. Particularly is this true of the work of 
 the Federal Traffic Board, presided over by Commander Chester G. 
 Mayo, and in which, as his report will indicate, a vast field must be 
 covered. The systematization of the freight and traffic of the Gov- 
 ernment of the United States, involving probably a sum of about 
 $200,000,000 per year and great potential savings, requires in the 
 officer charged with the work the broadest perspective, and at the 
 same time most careful attention to detail. The progress which is 
 being made, and its importance as related to the field to be occupied, 
 is well set forth in Commander Mayo's report. 
 
 Another great field which is just being entered is in the standardi- 
 zation and coordination of contract letting by the Government, which 
 is in the hands of a board headed by Mr. Gordon A. Eamsay. 
 
 The Federal Purchasing Board, headed by Lieut. Commander 
 Stanley, and the Federal Liquidation Board, headed by Col. J. P. 
 McAdams, are the two organizations which have most largely con- 
 tributed to the present accomplishments of the coordinating agencies. 
 Too much can not be said in praise' of the efforts of these two officers, 
 and the large savings which have resulted therefrom. In addition 
 to his work in connection with the Federal Purchasing Board and 
 the general coordination of governmental purchases. Commander 
 Stanley, in cooperation with the heads of departments, is engaged 
 in an advisory capacity in the effort to secure a better coordination 
 of purchasing within the departments themselves. He immediately 
 recognized the fact, from his contact with his board, that unless a 
 department was represented on the Federal Purchasing Board by 
 an officer under whom the purchasing activities of the department, 
 in themselves, were coordinated, such a thing as the successful coor- 
 dination of the purchasing of that particular department with the 
 purchasing of other departments and establishments of the Govern- 
 ment was impossible. This has involved, and will continue to in- 
 volve. Commander Stanley in much additional work, and the Direc- 
 tor of the Budget desires to commend the high ability with which it 
 is being done. 
 
 Likewise, in the case of Col. McAdams, he has done much outside 
 work in an advisory capacity in connection with the general liquida- 
 tion of stocks of the Government. 
 
 The surveyor general of real estate, Mr. James A. Wetmore, is 
 entitled to great credit for his intelligence and activity in preventing 
 the unnecessary leasing of private property for the Government 
 where unoccupied Government space is available. 
 
Attention is directed also to the fine work of Col. Sherrill in motor 
 transport, as outlined in his report, and to that of Dr. Stratton, the 
 chairman of the Federal Specifications Board. 
 
 The most important board of coordination in breadth of its field 
 and enormous expenditure involved, the wide dispersion of its facili- 
 ties and the great importance of its proper functioning, is the 
 jFederal Board of Hospitalization, whose chairman is Gen. Charles 
 E. Sawyer., The activities of this board, while in their inception, are 
 already productive of marked improvement in the hospitalization 
 situation. The ability and energy displayed by Gen. Sawyer in this 
 work deserves special commendation. Nothing is more important 
 to the proper functioning of the immense hospitalization projects 
 of the Government and to the fiscal health of the Government, con- 
 sidering the enormous sums involved, than the work of this board, 
 the preliminary report of which is made by the chairman herein. 
 
 The position held by the Chief Coordinator, General Supply, and 
 the chairmen of the different boards, and their constant contact with 
 the common situation in governmental business, brings to their at- 
 tention defects in departmental organization which would be over- 
 looked unless the coordinating agencies were in existence. The de- 
 partments and establishments all recognize this, and there is gen- 
 eral cooperation in the effort to improve the Government service, 
 with a view to economy and efficiency by the free interchange of 
 views and discussion of common situations with the chairmen of the 
 coordinating boards. 
 
 This appreciation of the work of the coordinating agencies would 
 be incomplete without reference to the invaluable cooperation of 
 "the organization of corps area coordinators. The business of the 
 Government is so vast, and so widely scattered, that its proper coordi- 
 nation would be absolutely impossible through boards situated alone 
 at Washington. In each of the nine corps areas of the United 
 States a coordinator representing executive authority has been ap- 
 pointed, who not only suggests corrections in routine methods to 
 ofiicers in the field and to the coordinating boards at Washington 
 I but becomes the agent for the transmission of coordinating policy 
 as determined by the boards at Washington. The relation of the 
 coordinators in the corps areas to the separate governmental activi- 
 ties of those sections is analogous to the relation of the coordinating 
 boards at Washington to the general body of the business organiza- 
 tion. They are at once suggesters and supervisors of coordinating 
 methods in routine bsiness, and upon their tact, patience, and activity 
 in large degree depends the successful operation throughout the 
 country of the reorganized system of governmental routine business. 
 
In order that with the reports of the accomplishments of the 
 coordinating agencies established by you there may be convenient 
 access to the Executive orders constituting the boards, and to the 
 general principles underlying their creation there is herein printed 
 certain Executive orders and a portion of the report of the Director 
 of the Budget to you, as transmitted to Congress December 5, 1921. 
 
 Charles G. Da^ves, 
 Director of the Bureau of the Budget. 
 February 1, 1922. 
 
REPORT OF THE 
 CHIEF COORDINATOR FOR GENERAL SUPPLY 
 
 Submitted by 
 Col. H. C. SMITHER, U. S. A. 
 
 (11) 
 
REPORT OF THE CHIEF COORDINATOR FOR GENERAL 
 SUPPLY TO THE DIRECTOR OF THE BUREAU OF THE 
 BUDGET. 
 
 December 31, 1921. 
 From : Chief Coordinator, General Supply. 
 To : Director of the Bureau of the Budget. 
 Subject: Report for the period August 1 to December 31, 1921. 
 
 GENERAL STATEMENT. 
 
 1. I am pleased to be able to say to you that the coordination of 
 routine business in pursuance of economic policies enunciated through 
 the Bureau of the Budget is in effective operation and will continue 
 steadily to improve in efficiency. Built upon a foundation of proved 
 soundness and moving in conformity with the basic principles of co- 
 ordination laid down in the report transmitting the Budget for 1923 
 to the President of the United States, increased efficiency becomes 
 but a matter of improved methods made clear by experience. 
 
 2. The potential economies resulting from new economic policies 
 are now become apparent in actual savings; some of these are defi- 
 nitely measurable in terms of dollars and cents, while others consist 
 of the elimination of indefinite wastage that without the service of 
 coordination the separate agencies of government are of themselves 
 powerless to remove. 
 
 3. Not the least vexing of all the problems contained in the large 
 volume of routine business that from the very outset began to flow 
 into the office of the Chief Coordmator was that of bringing about 
 cooperation in the disposal of surplus stocks accumulated out of the 
 war. With the creation of the Federal Liquidation Board there was 
 formed the nucleus of a clearing house for the transaction of the 
 common business of liquidation. The net results of this process of 
 clearance are indicated by the rise in the average monthly rate of 
 the volume of material disposed of. Since July 1, measured in the 
 only terms by which the relative volume of business handled can be 
 compared with the total, namely, that of original cost to the Grovern- 
 ment, the average monthly rate of disposal has been increased by 
 approximately $40,000,000, or a matter of more than $1,000,000 per 
 day, above the average quantity for the preceding 31 months. 
 
 Of the surplus stocks on hand as of July 1, there has been dis- 
 posed of by transfers between departments or sale to outside con- 
 CIS) 
 
14 
 
 ceriis a quantity represented by $532,000,000, measured in terms of 
 original cost. Of this amount, $115,000,000 represents transfers 
 between departments; $417,000,000 represents the original cost to 
 the Government of property disposed of by sale. 
 
 It is estimated that out of this large volume of turnover there has 
 been effected in actual savings to the Government a sum of at least 
 $100,000,000 in the form of eliminated overhead, cash return from 
 sales, purchases avoided, the continuation of effective operations made 
 possible by the use of available equipment that would otherwise 
 have deteriorated through obsolescence and ordinary depreciation, 
 and, in general, the elimination of great and minor wastage through 
 closer cooperation between departments. 
 
 The net return in the form of cash revenue in the Treasury result- 
 ing from the sale of this property varies widely according to the 
 character of the property disposed of. Some property, such as 
 cantonments, depreciated in value to practically nothing and of 
 necessity brought a very low return, while stocks of raw wool brought 
 the highly satisfactory return of approximately 84 per cent of 
 their original high war-time cost. Between these two limits there 
 is a wide range of net return. In general, recovery since July 1 
 has been in close approximation to a fair appraisal value of the 
 property under sale. 
 
 Of the total of $115,000,000 representing the original cost value 
 of property transferred, $32,000,000 represents the cost value of 
 materials transferred to the Department of Agriculture for distri- 
 bution under the law to the several States of the Union as a contri- 
 bution of the Federal Government toward the improvement of 
 national highways. The remainder, or $83,000,000, represents the 
 cost value of materials transferred between departments, either with 
 or without funds, and as such constitutes either a cash revenue to 
 the Treasury or a reduction of funds that would otherwise have been 
 withdrawn for the purchase of similar property, the resultant saving 
 approximating $32,000,000. 
 
 During one-third of the period covered by these transactions, all 
 sales and transfers were suspended by Executive order to permit of 
 the taking of inventories and the making of proper preparations for 
 liquidation in accordance with business principles. The actual in- 
 crease in rate was, therefore, actually higher than stated, and it is 
 fair to assume that the increased rate of liquidation will be at least 
 maintained, if not materially increased. 
 
 4. Transfers of ships and boats were effected to the extent of an 
 aggregate of $67,000,000. The splendid cooperation of the Shipping 
 Board given through the Emergency Fleet Corporation has con- 
 tributed to this large figure transfers actually consummated or in 
 process of being consummated to the extent of approximately 
 
15 
 
 $68,000,000. To this the War and Navy Departments have con- 
 tributed by transferring either boats or ships to departments in need 
 of them to the extent of approximately $9,000,000. 
 
 5. Detailed statements covering this and other lines of coordinated 
 activities are contained in reports of the several aides to the Chief 
 Coordinator and of the chairmen of the several coordinating boards 
 coming under the general supervision and control of his office. 
 These reports constitute appendices to my report^ and I shall confine 
 
 'my statements here to a general summary of their outstanding accom- 
 plishments, both actual and potential, as affording an index of the 
 general scope of the work in which this office is engaged. 
 
 MACHINERY OF COORDINATION. 
 
 6. Narrative. — Without precedent in the history of the Federal Gov- 
 ernment to serve as a guide, it was evident from the beginning that 
 the first essential step toward success was to gain the confidence and 
 support of the separate agencies of Government that this office was 
 designed to serve. From the first I have received from the heads of 
 departments and establishments a sympathetic recognition of the 
 difficulties of my task and every evidence of their confidence and 
 support in the whole-hearted cooperation I have received. Without 
 this support, even a small degree of success would have been impos- 
 sible. That success has attended our common efforts is attested by 
 many voluntary letters of appreciation of services rendered and 
 acknowledgments made of economies long desired and now effected 
 through the assistance of this office. 
 
 The several coordinating boards set up from time to time by 
 Executive order demand more than a passing notice in order that 
 the principles involved in their organization and procedure may be- 
 made clear. The general principle of organization is the same for 
 all. In each case the board proper formulates the unified policies 
 that serve to guide the departments concerned. The plans under 
 which these policies are carried into execution are the work of tech- 
 nical subcommittees composed of the individuals who draw up plans 
 of like character in their respective departments. Working as a 
 body, they are enabled to view every situation as a whole and to so 
 divide and distribute their several duties as to avoid interior compe- 
 tition and interference and to concentrate their efforts. By this 
 procedure the plan of each department is made a coordinate part 
 of a Federal plan by which the separate agencies are enabled to 
 cooperate while acting independently. I wish to lay particular stress- 
 upon this feature of cooperation, which is. the very essence of co- 
 ordinated control by association as contrasted with the highly cen- 
 tralized control of amalgamation. The technical subcommittees are 
 
16 
 
 parts of a highly flexible machine quite the antithesis of a rigid 
 centralized machine, and the individuals composing these committees 
 remain, as heretofore, the active agents of their respective depart- 
 ments, now placed in a position to plan more intelligently because 
 possessed of a common knowledge of all the facts affecting the Fed- 
 eral problem. 
 
 7. Liquidation Board. — The most important single achievement in 
 connection with liquidation was placing it upon the basis of a self- 
 sustained business, financed from the proceeds of sales. The War, 
 Department in particular, as the holding department of the vast 
 bulk of material accumulated out of the war, had been greatly 
 impeded in its efforts to dispose of its surplus stocks. Current 
 operating expenses and those incident to liquidation were too closely 
 connected to be easily separable, and while it was possible under 
 many previous and special enactments to defray costs from the pro- 
 ceeds of sales, such funds could be applied only to the particular 
 sale from which they were derived. Once the net proceeds of sales 
 were covered into miscellaneous receipts of the Treasury, there was 
 no way by which unforeseen expenses, such, for example, as claims, 
 could be met. In an endeavor to reduce current operating expenses, 
 pressure was steadily being brought to reduce the number of em- 
 ployed personnel to a minimum. At the same time equal pressure 
 was being exerted to speed up liquidation. As matters stood, the 
 two things were incompatible; shortage of personnel interfered with 
 expeditious liquidation. The matter was taken up by this office, 
 representing the liquidating departments of Government, with the 
 Comptroller General of the United States, in an endeavor to ascertain 
 whether relief from this intolerable condition could legally be ob- 
 tained. The country is fortunate indeed in having in that position 
 of final audit a man of broad vision and understanding. He not 
 only understood the difficulty being encountered, but with great will- 
 ingness gave his own time and that of his office in an endeavor to 
 assist in solving the problem in conformity with law. Congress had 
 apparently clearly indicated its intent that the expenses of sales 
 should be defrayed from the proceeds thereof; it remained to be 
 ascertained whether there was any legal obstruction to the setting 
 up within the Treasury of a trust fund under regulations properly 
 safeguarding the same, from which the expenses of preparation of 
 sales might be defrayed in advance and the fund reimbursed from 
 actual proceeds derived from the sale when consummated. After a 
 considerable period of search and study, the Comptroller General 
 rendered an affirmative opinion, and such a fund is now set up under 
 the control of the Chief Coordinator and disbursed through the 
 financial machinery of the War Department. 
 
17 
 
 To my mind, this matter was of such fundamental and far-reach- 
 ing importance that I desire to express a keen appreciation of the 
 services rendered by Comptroller General McCarl in performing a 
 service that could not otherwise have been performed ; to Gen. H. M. 
 Lord, Chief of Finance of the War Department, in the assistance he 
 lent in drafting regulations and offering the services of his financial 
 machinery in the safeguarding and disbursing of this fund ; and to 
 Undersecretary of the Treasury Gilbert for the keen personal interest 
 that he displayed in revising the regulations and adapting them to 
 the needs of the Treasury and the expeditious manner in which the 
 funds were made available. 
 
 Other outstanding features of liquidation are stimulation of the 
 transfer from holding departments to requiring departments of 
 stocks that would otherwise have been purchased; the steady im- 
 provement in the matter of forecasts of supplies as opposed to 
 emergency requirements in time to enable holding services to ascer- 
 tain availability of surplus material; the following up of require- 
 ments for supplies from the time of requisition until completion of 
 the transaction; the facilitating of transfers with funds by the 
 announcement of a policy as to price on a ba^s of 15 per cent less 
 than market quotation of similar articles at point of requirement. 
 The large increase in transfers under this procedure, which has 
 been previously referred to, includes such items as foodstuffs to 
 hospitals, canvas to the Post Office Department, blankets to Immi- 
 gration Service and Federal prisons, all of which represent a trans- 
 fer of funds on the books of the Treasury ; and representing trans- 
 fers without funds, ships to the Coast Guard Service, and boats, 
 lighters, and barges to the Lighthouse Service and the Engineer 
 Corps of the Army in connection with its river and harbor activities. 
 
 8. Federal Purchasing Board. — Of all the separate activities of 
 Government that of purchase has grown up under conditions least 
 favorable to interdepartmental coordination. For the most part, 
 purchases within the departments themselves were without central 
 direction or supervision — a condition that requires departmental 
 correction before any department can reach a position from which 
 to coordinate with other departments. There is one notable excep- 
 tion so efficient in its purchase machinery that I may, without seem- 
 ing to cast reflection, make mention of the Bureau of Supplies and 
 Accounts of the Navy Department. Others have of themselves taken 
 steps to bring about interior improvement, and the Federal Pur- 
 chasing Board, making use of its experienced members, has com- 
 pleted studies of the purchase organization of two departments and 
 has made suitable recommendation to the department chiefs. 
 86484°— 22 2 
 
175" 
 
 In conjunction with the Federal Liquidation Board, the pur- 
 chasing board has perfected the routine of checking the requirements 
 of one department against the surplus of other departments so as to 
 eliminate a large portion of the paper work without prejudice to 
 the object sought by the statutes. In addition, it is at present en- 
 gaged in studying the conditions surrounding the procurement, 
 delivery, and use of 10 items of basic, raw, and strategic materials 
 with a view to determining whether pooling of interests in these 
 items will result in material advantage. Some preliminary work 
 has been done in the matter of standardization of contracts and 
 procurement routine. This subject will be turned over to the Board 
 of Contracts and Adjustments when the latter is ready to receive it. 
 9. Real estate. — During the period covered by this report there 
 were approved 259 leases, aggregating in annual rental approxi- 
 mately $1,300,000. While the Federal problem of real estate cen- 
 tralizes in the office of the Surveyor General of Eeal Estate, its solu- 
 tion is largely local, being confined to the larger cities throughout 
 the United States. The area coordinators in cooperation with the 
 field representatives of the Surveyor General of Eeal Estate and of 
 the various departmemts of Government have made the studies and 
 submitted the recommendations upon which the Surveyor General 
 of Eeal Estate has properly in the main based his opinions. Ar- 
 rangements have been practically completed for the storage of seized 
 intoxicating liquors in vacant Government-owned buildings, prin- 
 cipally pertaining to the Army and the Shipping Board, which when 
 coippleted will effect an annual saving of approximately $170,000. 
 
 In the city of Chicago plans have been completed for the consoli- 
 dation of a number of separate Government activities in the general 
 intermediate depot of the War Department and in buildings rented 
 at a lower rate than now obtains, which plans are now receiving 
 consideration by the various department heads in Washington. 
 These plans have received the full approval of the local representa- 
 tives of the various departments concerned and contemplate a saving 
 of approximately $260,000 per year. 
 
 Upon the recommendation of the Post Office Department several 
 leases have been approved that have resulted in large incidental 
 savings. Amongst these are Binghamton, N. Y. $107,000 per year; 
 Camden, N. J., $28,000 per year. While in the main the matter of 
 leases for the Post Office Department show a large aggregate in- 
 crease due to the natural growth of the postal business, such examples 
 as the above indicate the efforts that are being made by the Post 
 Office Department to effect economies while at the same time improv- 
 ing the efficiency of the postal service. 
 
 10. Motor transport. — The largest single example of what has 
 been effected in the way of the cooperative use of Government-owned 
 
19 
 
 auto vehicles is evidenced in the assistance received by the Post 
 Office Department during the rush preceding and following the 
 Christmas holidays, when the War and Navy Departments, the De- 
 partment of Agriculture, and the Shipping Board united to assist 
 in carrying the peak load by furnishing trucks that "would otherwise 
 have remained idle. The net saving to the Post Office Department 
 is estimated at in the neighborhood of $50,000 for this short period. 
 This cooperation was made possible through the efforts of the area 
 coordinators. 
 
 Within the District of Columbia the coordination of motor trans- 
 portation, under the direction of Col. C. O. Sherrill, has resulted 
 between September 15 and December 15 in a saving to the Govern- 
 ment of $35,000. This includes the taxi service furnished by the 
 War Department for the Conference on Limitation of Armaments, 
 which alone effects an estimated saving of $20,000 as compared with 
 the cost of the same service from outside sources. The estimated 
 saving within the District of Columbia alone is progressing at a rate 
 of $100,000 per year. 
 
 11. Federal specifications 'board. — The work of this board, being 
 carried on under the direction of Dr. S. W. Stratton, possesses pros- 
 pects of the greatest benefit to the commercial world as well as to 
 the Federal Government. The board itself is in the closest contact 
 with similar boards representing the industrial and scientific societies 
 of the country. The advisory boards for the technical committees 
 already formed represent members of the following associations of 
 national importance: American Engineering Standards Committee, 
 American Society for Testing Materials, Independent Oil Men's As- 
 sociation, Society of Automatic Engineers, West Petroleum Ee- 
 finers Association, National Petroleum Association, American Petro- 
 leum Institute. 
 
 As the Federal Specifications Board extends its activities it will in- 
 clude in its advisory boards all technical associations and commer- 
 cial interests familiar with the particular subject that is being con- 
 sidered. 
 
 12. Survey of Government telephone systems. — At the present 
 time under the general direction of the Bureau of Standards there is 
 being conducted a survey having for its objective the provision of 
 effective telephone service at a minimum cost. Within the District of 
 Columbia this survey has progressed to a considerable degree and it 
 is estimated that without in any way curtailing service and by a sci- 
 entific rearrangment of trunk lines, switchboard service and other 
 technical factors within the telephone system, savings ranging from 
 $200 to several thousand dollars per annum may be effected in each of 
 the systems where modification is found to be advisable. When the 
 number of activities within the District of Columbia is given con- 
 
20 
 
 sideration, the saving that may be made as a result of the work of the 
 experts of the Bureau of Standards will prove to be a considerable 
 item. 
 
 The same character of study is being carried on in other large 
 cities where Government telephone service is of suiRcient volume to 
 warrant. 
 
 13. Federal TraffiG Board.— li has been estimated by traffic experts 
 qualified to express a technical opinion of value that no single source 
 of wastage in the Government business offers so great an opportunity 
 for the saving of Government moneys as does that of traffic. Under 
 the chairmanship of (Jommander C. G. Mayo the efforts of the traffic 
 board were early productive of effective results. Incidents of flagrant 
 wastage as they appear in the records of the rate board of the Comp- 
 troller General's office could be cited page upon page. The causes 
 which led to these wastages have been the subject of consideration by 
 the traffic board since its inception. In the brief period of two months 
 during which it has been in existence it has brought about the estab- 
 lishment of traffic departments in three of the principal departments 
 of Government, has adopted policies and initiated the necessary steps 
 for carrying them out that when fully effectuated will be the means 
 of saving to the Government many hundreds of thousands of dollars 
 annually. Expert analysis of traffic costs of the past fiscal year, 
 aggregating over $200,000,000, indicate unnecessary losses to the Gov- 
 ernment, due to faulty classification and other causes, variously esti- 
 mated at from ten to fifty million dollars. It is this wastage the 
 traffic board aims to eliminate. It has effected a renewal of the 
 equalization agreements of the railroads of the southeastern territory 
 of the United States, and has brought into a closer relationship and 
 greater harmony all the traffic personnel of the various governmental 
 departments. It has already accomplished direct savings in the sum 
 of $73,000 and indeterminate savings estimated in excess of this 
 amount. 
 
 14. Corps Area Coordinators. — In each of the nine corps areas of 
 the United States and in the District of Columbia the Chief Co- 
 ordinator is represented by a deputy who bears the title of Area 
 Coordinator. The activities of these deputies are carried on in con- 
 formity with a policy of complete decentralization. The policies of 
 
 the President of the United States with reference to the routine busi- 
 ness of Government, as conveyed to the Chief Coordinator through 
 the Bureau of the Budget, are conveyed to the Area Coordinators and 
 by them executed in accordance with the requirements of local con- 
 ditions and the operating policies of the Chief Coordinator. The 
 success of this plan is indicated by the fact that no untoward inci- 
 dent has occurred attributable to faulty understanding or lack of 
 judgment during the period that it has been in effective operation. 
 
21 
 
 The outstanding features of the results accomplished by the Area] 
 Coordinators center about their power to call local representatives 
 into conference for purposes of discussing departmental problems in 
 the light of the Federal interest. 
 
 Due to differences of conditions obtaining in the different areas, 
 the opportunities for coordination presented are not altogether uni- 
 form. Certain outstanding achievements in one area are unlike those 
 in other areas. This diversity has opened up numerous avenues of 
 accomplishment and set many wheels in motion in the solution of 
 the problem of economy which is common to all. 
 
 Because of these differences it is diiEcult to summarize their accom- 
 plishments. In general, they have maintained themselves in a posi- 
 tion to view the general situation within their respective areas with 
 respect to the distribution of office and storage space, the possibility 
 for cooperative interdepartmental service, the location of stocks or 
 supplies that appear to be in excess of any apparent need. 
 
 Exemplary of the accomplishments with respect to the distribution 
 of leased space is that of Chicago. Through the efforts of the Area 
 Coordinator in calling all departments concerned into conference, 
 plans have been prepared which when approved by the departmental 
 chiefs concerned will effect a saving, already referred to, of approxi- 
 mately $250,000 annually. 
 
 Typical of interdepartmental service is that, already cited, of pro- 
 viding the Post Office Department with the additional trucks nec- 
 essary to carry its Christmas peak load. 
 
 The results achieved along these lines have been peculiarly grati- 
 fying to me. The several Corps Area Coordinators were sent to their 
 respective areas without the funds necessary to provide themselves 
 with office space and clerical assistance. They were dependent upon 
 such assistance as they might be able to obtain from the local repre- 
 sentatives, principally of the Army and Navy. That they have been 
 able to function with the effect they have is sufficient evidence of 
 itself that they have received this needed assistance and support. 
 
 It is also evidence to me that their method of approach has been 
 characterized with that tact and judgment, as well as initiative, that 
 I paa^;icularly desire. 
 
 CONCLUSIONS. 
 
 15. The coordination of routine business can be made effective 
 only in so far as the authority delegated to the Chief Coordinator is 
 full and complete, subject only to the right of appeal to the Chief 
 Executive through the Director of the Budget, as provided by Execu- 
 tive regulation. Good will and cooperation are of no avail unless he 
 possesses the power to make effective those matters of routine which 
 are obviously in the interests of economy and efficiency. The neces- 
 
22 
 
 sary authority to carry out his functions was delegated to him by 
 Executive order of November 8, 1921. Should errors of judgment 
 upon.his part repeatedly make necessary a reversal of his decisions, 
 corrective measures should be sought in his relief from office rather 
 than in the curtailment of the powers of his office. , 
 
 There is no form of waste so great as that which results in the 
 ineffectual expenditure of funds. A successful coordinator may in 
 general neither duplicate, parallel, nor assume responsibilities re- 
 posed by law or higher authority in another agent of Government. 
 His objective must be to increase the flexibility of the Federal or- 
 ganization and to avoid unnecessarily impeding their free and inde- 
 pendent operation. 
 
 When the business of routine Government shall have reached the 
 limit of a reasonable degree of efficiency it will become more and 
 more difficult to point out where further savings may be effected. 
 None the less, it will be the continued existence of coordinating ma- 
 chinery continually making possible conditions under which the 
 separate agencies of Government may operate at the highest degree 
 of efficiency and economy possible to them that Avill be responsible 
 for the continuation of this desirable condition. 
 
 16. Summary. — In summarizing what has preceded, I shall not 
 repeat figures further than to draw attention to the fact that since 
 the beginning of coordination, surplus property in the original 
 value of $532,000,000 has been disposed of. Liquidation has been 
 speeded; transfers have been effected, relieving a surplus on one 
 hand and meeting a demand on the other ; detailed studies of require- 
 ments and organization have been made as a groundwork for eco- 
 nomic purchase ; disposals of surplus real estate have kept pace with 
 the discontinuance of Government requirements, and the leases of 
 private buildings have been checked with a view to basic economy; 
 Federal motor transportation throughout the United States is being 
 coordinated, and one department is no longer going into the market 
 for transportation while another department is able to furnish same ; 
 the great question of Federal rail transportation is being studied 
 and economies have been effected by means of proper routing and 
 classification ; specifications for articles used by the Government are 
 being standardized. In general, sound business principles are being 
 applied in the transaction of the routine business of Government 
 wherever there exists an opportunity for effecting economies thereby. 
 The personnel of the office of Chief Coordinator is contributed en- 
 tirely by the several participating departments. The operating cost. 
 $109,000, which includes the pay of officers of the Army, NaA^y, and 
 Coast Guard, and all clerical assistants, is thus borne upon the appro- 
 priations of the various departments of Government. 
 
23 
 
 17. In closing I desire to make public acknowledgment of the debt 
 of gratitude I owe to my coworkers and assistants. 
 
 To my local assistants— Lieut. Col. J. W. Wright, United States 
 Army; Lieut. Col. J. R. McAndrews, United States Army; Lieut. 
 Col. J. P. McAdams, United States Army; Maj. M. E. Wainer, 
 United States Army; Lieut. Comdr. E. D. Stanley, United States 
 Navy; Lieut. Comdr. C. W. Cairnes, United States Coast Guard; 
 Mr. B. L. Andrus, United States Postal Service ; Mr. E. J. W. Proffitt ; 
 Mr. Howard' Baker. 
 
 To the Central Finance Officer Lieut. Col. L. S. Morey, United 
 States Army. 
 
 To my deputies in the field, the area coordinators : First Corps Area, 
 Capt. F. T. Arms, United States Navy; Second Corps Area, Capt. 
 E. W. Bonnaffon, United States Navy; Third Corps Area, Comdr. 
 W. R. Bowne, United States Navy; Fourth Corps Area, Maj. Talbot 
 Smith, United States Araiy; Fifth Corps Area, Col. J. C. Rhea, 
 United States Army; Sixth Corps Area, Maj. Sidney G. Brown, 
 United States Army; Seventh Corps Area, Col. H. C. Whitehead, 
 United States Army; Eighth Corps Area, Maj. D. A. Robinson, 
 United States Army; Ninth Corps Area, Capt. Ray Spear, United 
 States Navy ; District of Columbia, Col. C. O. Sherrill, United States 
 Army. 
 
 To the chairmen of the several coordinating boards, Surveyor 
 General of Real Estate, Mr. James A. Wetmore ; chairman of Fed- 
 eral Traffic Board, Comdr. C. G. Mayo, United States Navy ; chair- 
 man of Federal Specifications Board, Dr. S. W. Stratton, Bureau of 
 Standards. 
 
 To my immediate superior and personal friend, the Director of 
 the Budget, Charles G. Dawes, upon whose advice and assistance I 
 have steadily leaned, and to the members of the President's Cabinet, 
 whose counsel and support have made possible the success of this 
 
 new undertaking. 
 
 H. C. Smithee, 
 
 Chief Coordinator, General Supply. 
 
REPORT OF THE 
 
 CHIEF COORDINATOR OF THE FEDERAL 
 
 BOARD OF HOSPITALIZATION 
 
 Submitted by 
 Brig. Gen. CHARLES E. SAWYER 
 
 (25) 
 
REPORT OF THE CHIEF COORDINATOR OF THE FEDERAL 
 BOARD OF HOSPITALIZATION. 
 
 War Department, 
 Washington, February 1, 19^2. 
 To the Director or the BtJREAtT of the Budget : 
 
 Attached please find report of the actions and proceedings of the 
 Federal Board of Hospitalization up to and including January 21. 
 1922. 
 
 You will understand that necessarily much of the time of the 
 board has been devoted to the establishment of policies affecting the 
 operation and administration of the hospitals, as well as studying in 
 a general way the actual needs as they pertain to the subject of hos- 
 pitalization, both for the present and the future. 
 
 Therefore, for this reason am not able to report extensive and de- 
 tailed savings, but am assured by all departments that out of this 
 coordination there will result very material economic savings. 
 
 Pboceedings of Fedeeal Boabd of Hospitalization. 
 
 The following is a summary of matters determined upon by the Federal Board 
 of Hospitalization : 
 
 1. The Veterans' Bureau will determine the location and kind of hospitals 
 to be built and (derated for the care of the World War veteran. 
 
 2. Departments now operating hospitals — Army, Navy, Public Health Service, 
 Interior, National Home for Disabled Volunteer Soldiers — shall operate all 
 Federal Government hospitals serving World War veterans. 
 
 3. The maximum number of patients to be hospitalized is 35,000. 
 
 4. Class: 
 
 (o) Tubercular — 
 
 Present number 11,837 
 
 Expected 3, 500 
 
 Total 15, 337 
 
 (6) Neuropsychiatric — 
 
 Present number 8,033 
 
 Expected 1. 500 
 
 Total 9, 533 
 
 (c) General medical — 
 
 Present number (including surgical) 9,084 
 
 (27) 
 
28 
 
 5. List of institutions now under governmental control : 
 
 
 Name and location. 
 
 Type. 
 
 Beds. 
 
 No 
 
 Occu- 
 pied. 
 
 Un- 
 occu- 
 pied. 
 
 Total 
 avail- 
 able. 
 
 2 
 
 (a) UNITED STATES PUBLIC HEALTH SERVICE. 
 
 Boston, Mass 
 
 General medicsd 
 
 do 
 
 103 
 52 
 84 
 54 
 78 
 48 
 266 
 25 
 38 
 56 
 70 
 52 
 298 
 104 
 46 
 32 
 96 
 72 
 246 
 70 
 195 
 11 
 472 
 726 
 545 
 489 
 220 
 485 
 172 
 135 
 572 
 358 
 200 
 208 
 * 458 
 291 
 384 
 233 
 318 
 69 
 417 
 665 
 263 
 173 
 78 
 137 
 1,082 
 648 
 172 
 64 
 250 
 936 
 740 
 210 
 99 
 272 
 244 
 109 
 116 
 278 
 75 
 11 
 36 
 139 
 46 
 120 
 85 
 760 
 21 
 
 44 
 9 
 26 
 32 
 2 
 
 i 
 
 20 
 22 
 29 
 9 
 2 
 47 
 96 
 14 
 8 
 4 
 - 2 
 29 
 41 
 50 
 13 
 98 
 289 
 205 
 111 
 80 
 65 
 37 
 95 
 78 
 125 
 10 
 62 
 42 
 137 
 266 
 4 
 35 
 36 
 . 3 
 100 
 27 
 42 
 153 
 23 
 38 
 403 
 
 7 
 
 18 
 164 
 541 
 
 40 
 
 31 
 278 
 
 13 
 
 11 
 9 
 
 35 
 
 45 
 
 13 
 
 17 
 7 
 
 54 
 
 30 
 
 15 
 241 
 104 
 
 147 
 
 3 
 
 Bull'alo NY 
 
 61 
 
 5 
 
 
 do 
 
 110 
 
 6 
 
 
 .. .do ■- 
 
 86 
 
 7 
 
 Detroit Mlrh 
 
 do 
 
 80 
 
 8 
 
 Evansville Ind 
 
 Tubercular 
 
 48 
 
 9 
 
 
 do 
 
 225 
 
 10 
 
 Kev West Fla 
 
 General medical 
 
 do 
 
 45 
 
 11 
 
 Louisville Kv 
 
 60 
 
 1? 
 
 
 do 
 
 85 
 
 13 
 
 
 . do 
 
 79 
 
 
 
 . . do 
 
 54 
 
 14 
 
 
 . . .do 
 
 345 
 
 
 
 . ...do 
 
 200 
 
 15 
 
 PlttsbuTffh Pa 
 
 do 
 
 60 
 
 16 
 
 Portland Me 
 
 do 
 
 40 
 
 17 
 
 
 do 
 
 100 
 
 18 
 
 
 
 70 
 
 19 
 
 San Francisco, Calif 
 
 General medical 
 
 . ...do 
 
 275 
 
 SO 
 
 Savannah Ga . . . 
 
 111 
 
 21 
 
 
 do 
 
 235 
 
 22 
 
 
 do 
 
 
 24 
 
 
 Tubercular 
 
 570 
 
 25 
 
 
 General medical 
 
 Tu'bercular 
 
 1,015 
 750 
 
 9fi 
 
 
 27 
 
 Alexandria, La . - . 
 
 .... do 
 
 600 
 
 29 
 
 
 General medical 
 
 do 
 
 300 
 
 30 
 
 Chicago, 111.. 
 
 550 
 
 32 
 
 
 do 
 
 
 34 
 
 East Norfolk, Mass 
 
 Neuropsychiatric 
 
 General medical 
 
 do 
 
 230 
 
 35 
 
 
 650 
 
 3fi 
 
 Boston, Mass 
 
 483 
 
 37 
 
 Waukesha, Wis 
 
 Neuropsychiatric 
 
 General medical 
 
 Tubercular 
 
 210 
 
 38 
 
 
 270 
 
 41 
 
 
 500 
 
 42 
 
 
 Neuropsychiatric 
 
 General medical 
 
 Neuropsychiatric 
 
 General medical 
 
 ... do ... 
 
 428 
 
 4.3 
 
 
 650 
 
 44 
 
 
 237 
 
 45 
 
 
 353 
 
 48 
 
 Atlanta, Ga\ . 
 
 105 
 
 49 
 
 PhlladGlphla, Pa 
 
 Neuropsychiatric 
 
 Tubercular 
 
 420 
 
 m 
 
 Prescott, Ariz.. 
 
 765 
 
 •il 
 
 Tucson, Ariz . 
 
 do 
 
 290 
 
 W 
 
 Boise, Idaho 
 
 General medical 
 
 do 
 
 215 
 
 53 
 
 Dwight, 111 
 
 231 
 
 54 
 
 
 do 
 
 160 
 
 55 
 
 Fort Bayard, N. Mex 
 
 
 1,120 
 1 051 
 
 5fi 
 
 
 General medical 
 
 Neuropsychiatric 
 
 . .. -do. .. 
 
 •17 
 
 
 'l72 
 
 58 
 
 
 71 
 
 59 
 
 
 
 268 
 
 60 
 
 Oteen.N. C 
 
 ....do 
 
 1,100 
 
 1,281 
 
 250 
 
 fil 
 
 Staten Island, N. Y 
 
 General medical 
 
 Neuropsychiatric 
 
 General medical 
 
 Tubercular 
 
 fi? 
 
 
 M 
 
 
 130 
 
 64 
 
 Camp Kearny, Calif 
 
 550 
 
 65 
 
 St. Paul, Minn 
 
 General medical 
 
 257 
 
 66 
 
 Carville, La 
 
 120 
 
 67 
 
 
 General medical 
 
 ....do 
 
 125 
 
 m 
 
 Minneapolis, Minn 
 
 313 
 
 69 
 
 
 . do . 
 
 120 
 
 70 
 
 NewYork.N.Y 
 
 do 
 
 24 
 
 71 
 
 Sterling Junction, Mass 
 
 ....do ... 
 
 53 
 
 72 
 
 Helena, Mont 
 
 .do 
 
 146 
 
 73 
 
 
 Neuropsychiatric. ...".! 
 .. .do 
 
 100 
 
 74 
 
 Gulfport , Miss. 
 
 150 
 
 75 
 
 
 General medical 
 
 100 
 
 76 
 
 May wood, 111 
 
 1,001 
 
 125 
 
 77 
 
 
 do 
 
 
 
 
 
 
 
 16,637 
 
 4,721 
 
 21,358 
 
 
 
 = 
 
29 
 
 Name and location. 
 
 (b) AEMT (6 HOSPITALS). 
 
 Walter Reed, Washington, D. Cf. 
 
 Fitisimons, Denver, Colo 
 
 Letterman General, San Francisco, Caiit . 
 Beaumont General: 
 
 EI Paso, Tex 
 
 Fort Sam Houston, Tex 
 
 Hot Springs, Ark 
 
 Total., 
 
 (C) NAVY (U HOSPITALS). 
 
 Chelsea, Mass 
 
 Portsmouth, N. H. 
 
 Newport, R.I 
 
 New York, N.Y... 
 League Island, Pa. . 
 Wa&inpton, D. C. . 
 
 Norfolk, Va 
 
 Charleston, S.C 
 
 Key West, Fla 
 
 Pensacola, Fla 
 
 Great Lakes, 111 
 
 Fort Lyon, Colo 
 
 San Diego, Calrf 
 
 Hot Spnngs, Ark. . . 
 
 Type. 
 
 Occu- 
 pied. 
 
 381 
 
 605 
 
 57 
 
 50 
 192 
 
 1,383 
 
 Beds. 
 
 Un- 
 occu- 
 pied. 
 
 103 
 253 
 
 150 
 58 
 81 
 
 Total. 
 
 ((/) SOLDIERS' HOMES (9). 
 
 Togus, Me 
 
 Johnson City. 
 Dayton 
 
 Marion, Ind. 
 Danville 
 
 Milwaukee 
 
 Leavenworth. 
 Hot Springs.. 
 
 Los Angeles.. 
 
 TotaJ. 
 
 (e) INTEKIOE DEPARTMENT (1 HOSPITAL). 
 
 St. EUzabeths, Washington, D . C 
 
 Total number of beds 
 
 All cases 
 
 Tubercular 
 
 General medical and 
 tubercular. 
 
 Tubercular and neuro- 
 psychiatric. 
 
 Tubercular and gen- 
 eral medicaL 
 
 -do. 
 
 ....do 
 
 Tubercular.. 
 
 .do. 
 
 312 
 13 
 5 
 
 SO 
 
 112 
 
 15 
 
 7 
 
 1 
 
 9 
 
 172 
 
 314 
 
 11 
 
 1,105 
 
 495 
 
 656 
 11 
 
 129 
 224 
 
 225 
 
 2,652 
 
 227 
 204 
 266 
 46 
 70 
 135 
 33 
 210 
 39 
 16 
 455 
 
 173 
 
 25 
 
 53 
 
 1250 
 
 297 
 
 150 
 
 25 
 1.500 
 90 
 25 
 25 
 
 1,595 4,247 
 
 30,011 
 
 1 Tubercular. 
 
 6. The following is a list of new and enlarged hospitals allocated by the 
 
 White committee now under consideration : 
 
 Number 
 
 United States Public Health Service: of beds. 
 
 No. 27, Alexandria, La C) 
 
 No. 63, Lalie City, Fla 100 
 
 No. 62, Augusta, Ga 300 
 
 No. 55, Fort Bayard, N. Mex 250 
 
 No. 60, Oteen, N. C 200 
 
 No. 42, Perryville, Md 300 
 
 National Home for Disabled Volunteer Soldiers : 
 
 Milwaukee, Wis 500 
 
 Dayton, Ohio 250 
 
 Marion, Ind : 50 
 
 'Number of beds not given. 
 
30 
 
 Number 
 
 Provisional Hospital: """il^' 
 
 No. 1, Fort Walla Walla, Wash J9x 
 
 No. 2, Fort Logan H. Boots, Little Rock Ark ^"0 
 
 No. 4, Central New England Sanatorium, Rutland, Mass dOO 
 
 Fort McKenzie, Wyo ^^ 
 
 Roman Catholic Orphanage,. New York <"it}' 1 1,000 
 
 Dawson City, Ky ^^ 
 
 Total 4,442 
 
 7. The following are hospital projects for which money has been allocated, 
 
 construction not commenced : Number 
 
 of beds. 
 
 Palo Alto 500 
 
 Alabama (for colored), Tusbegee 1,000 
 
 New York (for district No. 2) 250 
 
 Western Pennsylvania 250 
 
 St. Louis 250 
 
 Total 2,250 
 
 This shows a total of Governinent hospital beds available, after additions 
 and enlargements have been completed, of 36,693. 
 
 From these should be subtracted these leased hospitals, whose contract should 
 be terminated : 
 
 Number 
 of beds. 
 
 No. 34, East Norfolk, Mass 280 
 
 No. 35, St. Louis, Mo 650 
 
 No. 36, Boston, Mass 483 
 
 No. 38, New York, N. T 270 
 
 No. 45, Biltmore, N. C 353 
 
 No. 53, Dwight, 111 231 
 
 Number 
 of beds. 
 
 No. 54, Arrowhead Springs, 
 Calif 145 
 
 No. 61, Staten Island, N. Y 1, 281 
 
 No. 75, Colfax, Iowa 100 
 
 Total- 
 
 3,713 
 
 This will leave under Government control 32,980 beds which will have been 
 paid for out of the $18,000,000 already appropriated. 
 Leased hospitals which it is desirable to release: 
 
 Number 
 of beds. 
 
 No. 69, Fort Thomas, Ky 120 
 
 No. 71, Sterling Junction, Mass 53 
 
 No. 73, Chicago, 111 100 
 
 No. 74, Gulfport, Miss -' 150 
 
 No. 77, Portland, Oreg 125 
 
 No. — , Excelsior Springs, Mo C) 
 
 Number 
 of beds. 
 
 No. 41, New Haven, Conn 500 
 
 No. 44, West Roxbury, Mass 237 
 
 No. 51, Tucson, Ariz 290 
 
 No. 64, Camp Kearney, Calif 550 
 
 No. 65, St. Paul, Minn 243 
 
 No. 67, Kansas City, Mo 125 
 
 No. 68, Minneapolis, Minn 313 
 
 Other hospitals deemed necessary by the Veterans' Bureau : 
 
 (1) A 500-bed hospital for tuberculosis patients in southern California. 
 Note. — It is understood that the Arrowhead Springs project is no longer fea- 
 sible nor desirable. 
 
 (2) Five hundred beds to be added to the hospital at Palo Alto, Calif., for 
 neuro-psychiatric cases (added to the 500 provided for under the funds allocated 
 by the White committee), which will make this a 1,000-bed hospital. 
 
 (3) Funds to convert the United States Public Health Service Hospital No. 
 76 (Speedway), Maywood, 111., into a hospital for the care of neuro-psychiatric 
 cases only. 
 
 (4) A 200-bed enlargement to United States Public Health Service Hospital 
 No. 35, Chicago, 111. 
 
 (5) Two hundred and fifty beds for tuberculosis patients to be provided in the 
 Metropolitan area to raise the capacit.v of the hospital of 250 beds, for which 
 funds from the first Langley bill have been already allocated, up to 500 beds. 
 
31 
 
 (6) To provide 500 beds for general cases in the Metropolitan area in the 
 following way : 
 
 (a) Purchase, if practicable, of the New Cumberland Hospital, Brooklyn, 
 N. Y. (or other suitable building), with a capacity of 350 beds. 
 
 (6) The addition of 150 beds to the marine hospital at Stapleton, Staten 
 Island, N. Y. 
 
 (7) A 150 to 200 bed general hospital at Memphis, Tenn. 
 Note. — A suitable hospital has been found at that city. 
 
 (8) Enlargement of the Walter Reed General Hospital, United States Army, 
 by permanent construction to enable the hospital at Fort McHenry, Md., to be 
 abandoned. The facilities of the marine hospital at Baltimore are being uti- 
 lized for emergency cases occurring in Baltimore and its immediate vicinity. 
 
 PERSONNEL. 
 
 The personnel determined upon is based upon a 200-bed hospital and consists of : 
 
 1. Professicvnal (1 doctor for each 20 patients) 10 
 
 2. Nurses (20 nurses for 200 patients) ■._ 20 
 
 3. Occupational aids (1 to 50 patients) , 4 
 
 4. Social service workers (1 to 50 patients) 4 
 
 5. Other personnel (130 general for 200 patients) 130 
 
 6. Occupational trainers and vocational instructors 14 
 
 Total 182 
 
 Occupational and prevocational aids to be under the direction of the com- 
 mander of the hospital according to the following understanding : 
 
 In view of the consolidation of all three agencies for the care of the World 
 War veterans in the United States Veterans' Bureau, the following relation is 
 recommended between the Public Health Service and the United States Vet- 
 erans' Bureau : 
 
 Physiotherapy aids and reconstruction aids used in occupational therapy 
 will be furnished by the United States Public Health Service, and will be paid 
 by them from allotments apportioned by the United States Veterans' Bureau. 
 
 The workers and teachers utilized in prevocational training in Public Health 
 Service hospitals will be furnished and paid by the. United States Veterans' 
 Bureau. 
 
 The physiotherapy aids will work directly under the medical officers in 
 direct contact with the patients under the general supervision of the medical 
 officer in charge of the hospital. 
 
 The occupational therapy or reconstruction aids and the teachers and workers 
 in prevocational training will operate directly under the educational director 
 of the hospital, who in turn will be directly responsible to the commanding 
 officer or medical officer in charge of the hospital. 
 
 It is further understood that physical reconstruction is to include : 
 
 (ft) Occupational therapy and prevocational training. 
 
 (6) Physiotherapy, which includes physical exercise, massage, electrotherapy, 
 and hydrotherapy. 
 
32 
 
 MISCELLANEOUS ACCOMPLISHMENTS. 
 
 Material decrease in personnel in various departments affecting 
 hospitalization. 
 
 Possibility of quick transfer of materials between departments. 
 
 Overcoming of much duplication in requisitions for supplies. 
 
 Transmission to departments necessary from the War Department 
 of stores which should and will make possible much less expenditure 
 of cash and buying on the open market of material representing 
 investments estimated at several millions of dollars. 
 
 Valuable assistance afforded the Army in disposing of materials 
 at camps being evacuated, where supplies were being endangered by 
 various losses incident to evacuation. 
 
 In this connection we are already assured that we have brought 
 about a great saving both to the Army and to the hospitalization de- 
 partments to which their materials have been forwarded. 
 
 Chaeues E. Sawyer, 
 Chief Coordinator of tJie Federal Board of Hospitdl/izaiion. 
 
REPORT OF 
 THE AID FOR LIQUIDATION 
 
 FOR PERIOD ENDING 
 DECEMBER 31, 1921 
 
 Submitted by 
 Lieut. Col. J. P. McADAMS, U. S. A. 
 
 86484°— 22 3 . (33) 
 
REPORT OF THE AIDE FOR LIQUIDATION. 
 
 Januaey 1, 1922. 
 From : The Aid for Liquidation. 
 To : The Chief Coordinator, General Supply. 
 Subject: Report of activities of the liquidation section, office Chief 
 
 Coordinator, Generaly Supply, for period ending December 31^ 
 
 1921. 
 
 1. In this first report the following preliminarj' resume of the 
 various Executive orders which have been issued on the subject of 
 liquidation since the establishment of the Bureau of the Budget is 
 believed necessary, in order that a clear understanding may be had 
 of the functions and duties of the Chief Coordinator and the Fed- 
 eral Liquidation Board and the relation of these agencies to the 
 heads of departments and to departmental liquidating machinery. 
 
 2. Bureau of the Budget Circular No. 12, dated July 21, 1921, de- 
 scribes the conditions which then existed with respect to the failure 
 of the Government to equalize shortages and surpluses in the va- 
 rious departments, as follows : 
 
 A large and currently accruing loss to the United States is resulting from un- 
 coordinated control over the surplus of the different departments. Building 
 material, steel, cement, lumber, furniture, ships, automobiles, textiles, food sup- 
 plies, building, etc., are owned by the United States and available for its cur- 
 rent use. 
 
 In the face of a large supply on hand, because of a lack of a coordinated con- 
 trol and system of survey, with facilities for bringing to the knowledge of all 
 departments the requirements of each, the different departments of the Govern- 
 ment have been buying different classes of material in the open market with 
 little recourse to stocks on hand. The cause of this situation, while it is pri- 
 marily due to the lack of coordinating machinery of supervision and control, is 
 aggravated by delay on the part of the different departments in declaring as 
 surplus certain property unnecessary to their purposes. It is also aggravated 
 by delay in the preparation of inventories, which are now incomplete. 
 
 This office will announce shortly the institution of the coordinating machinery 
 by Executive order, which will deal with this subject. 
 
 3. The coordinating machinery referred to in the preceding para- 
 graph was announced six days later, July 27, in Circular 16, which 
 established the office of Chief Coordinator, General Supply, and an 
 area coordinator for each Army corps whose duties were, in substance, 
 as follows: 
 
 The duties of the Chief Coordinator, General Supply, were to 
 supervise and coordinate the work of the area coordinators and to 
 
 (35) 
 
36 
 
 bring any matters to the attention of the department heads which, 
 in his judgment, will be of assistance to them in contributing to effi- 
 ciency and economy ; to advise as to the methods of expediting the 
 inventories of surplus stocks in the possession of the various depart- 
 ments ; and to advise the department heads upon policy governing the 
 sales of commodities held surplus in more than one department, which 
 policy shall aim to insure uniformity in prices received and tend to 
 protect the state of the market in the Government's interests. 
 
 The duties of each area coordinator were, by means of correspond- 
 ence and personal inspection, to promptly locate and inspect surpluses 
 and accumulations of Government stocks, with particular reference 
 to accumulated stocks which appear to be in excess of reasonable 
 reserves or current needs ; to keep in general touch with all Govern- 
 ment projects in his area involving the procurement, transfer, or dis- 
 posal of Government supplies and equipment; to see that Govern- 
 ment policies are carried out in regard to purchases; to determine 
 prices in case of interdepartmental transfers. 
 
 4. Circular 15 also provided that, in each executive department and 
 establishments of the Government having surpluses, there shall be a 
 director of sales, and that these directors of sales shall be subject to 
 call by the Chief Coordinator for conference in all matters involving 
 the coordination of sales in the various departments. The attempt to 
 coordinate sales by this method was found to be unsatisfactory, as 
 each director naturally regarded the problem solely from the view- 
 point of his own department. 
 
 5. In order to enable the Chief Coordinator, General Supply, to 
 perform the duties of coordinating sales as prescribed in Circular 15, 
 the Federal Liquidation Board was organized pursuant to Circular 
 26, Bureau of the Budget, dated August 25, 1921. The Chief Co- 
 ordinator was designated as chairman, and one representative from 
 each department and establishment having sales activities as members 
 of the board. The board was charged with the following duties : 
 
 To formulate policies and plans designed to knit the sales activities 
 of the several departments and establishments concerned in the liqui- 
 dation of stocks into a Federal business association, and to bring 
 about business methods calculated to effectively safeguard the inter- 
 ests of the Government, and at the same time to promote the confi- 
 dence of private business interests and industrial communities doing 
 business with the Government. 
 
 The Chief Coordinator was made responsible for the efficiency of 
 the board and for developing it along practical lines. It was pro- 
 vided that, after a full discussion of any question by the board, the 
 Chief Coordinator's decision would be final as to the action to be 
 taken or the policy to be pursued, but that any member may appeal 
 therefrom to the head of his department. 
 
37 
 
 6. The final step in the development of the powers and duties of 
 the Chief Coordinator, with respect to the coordination of the various 
 departments in the liquidation of their surplus stocks, is contained in 
 the general authority delegated to him by the President, in the fol- 
 lowing .paragraphs of the Executive order of November 8, 1921 : 
 
 5. The coordinating agencies established by the Executive are for the pur- 
 pose of enabling the President, in matters of Toutlne business, to so coordinate 
 the activities of the difCerent departments and establishments as will insure 
 the most economical and efficient expenditure of moneys appropriated by Con- 
 gress. They provide the machinery through vyhich, with the minimum of 
 obstruction and delay, the Executive may impose a unified plan of governmental 
 routine business. The Director of the Bureau of the Budget shall have general 
 supervision over the work of the coordinating agencies heretofore created by 
 Executive order, subject to such instructions as may hereafter be issued by 
 the President. 
 
 6. The Chief Coordinator, General Supply, appointed under the provisions 
 of Executive order of July 27, 1921, shall exercise general supervision, subject 
 to the Director of the Budget, over the coordination of the routine business 
 activities of the governmental organization,' with particular attention to 
 methods of purchasing, liquidation of supplies, specification of materials, ad- 
 vertising, warehousing, employment, manufacturing, disbursing, and other 
 ordinary business activities of the Government. 
 
 7. The decision of the Chief Coordinator, in all matters of coordination, shall 
 be transmitted to the heads of departments or independent establishments con- 
 cerned and shall be final, except that such heads may appeal to the Director of 
 the Budget within four days after the receipt notice of the coordinating order, 
 and if not sustained by the Director of the Budget, may appeal to the Presi- 
 dent of the United States within six days after the decision of the Director 
 of the Budget. If such appeal is not taken or is not sustained the decision in 
 question shall stand, and shall be published to those affected by the heads of 
 the departments concerned. 
 
 8. The heads of departments and subordinate ofBcials will retain all present 
 responsibility with respect to individual business transactions, subject to such 
 policies as may be imposed in the manner indicated above. 
 
 7. In establishing the office of Chief Coordinator, including the 
 area coordinators and the Federal Liquidation Board, provision 
 was made for the assignment of suitable personnel from the War, 
 Navy, and other Departments of the Government, as there existed 
 no legislative authority for the employment of persons to perform 
 such duties, and, further, it was not intended that the Government 
 should be burdened with such expense. It was found, however, that 
 the efficient performance of the duties imposed on these agencies in- 
 volved certain necessarj^ expenses. 
 
 On September 9, 1921, a letter was addressed to the Secretary of 
 the Treasury, in which attention was called to the enormous quan- 
 tities of surplus war materials remaining on hand, and the vital im- 
 portance of the coordinating machinery which had been established 
 by Executive order in directing disposition of same to the best advan- 
 tage, and requesting decision whether certain necessary expenses 
 
38 
 
 enumerated therein were properly chargeable against the proceeds 
 of sale. 
 
 This resulted in the decision of the Comptroller General, dated 
 October 4, 1921, which suggested the creation of a special fund in the 
 Treasury. Pursuant to this decision, on October 27, 1921, .the sum 
 of $100,000, from proceeds of sales on special deposit account, was 
 set aside in the Treasury for- use by the Chief Coordinator, General 
 Supply, and his agents, in the liquidation of surplus property. The 
 regulations covering the expenditure and accounting of this fund are 
 published in Bulletin 5, Office Chief Coordinator, General Supply. 
 (Exhibit 1.) 
 
 A material increase has been made in the disposal of surplus war 
 materials during the four months' activity of the Federal Liquida- 
 tion Board. During the two months in which the fund above re- 
 ferred to has been available only $1,800 has been actually expended. 
 Increased expenditures from this fund will be necessary, however, 
 during the remainder of the fiscal year for the purpose of rendering 
 necessary financial assistance to the War Department in preparing 
 for sale materials, plants, depots, and cantonments which have been 
 designated for abandonment. 
 
 THE LIQUIDATION SECTION. 
 
 8. The liquidation section of the office of the Chief Coordinator, 
 General Supply, comprises three subdivisions, namely : 
 
 (1) The Federal Liquidation Board, which is primarily concerned 
 with the disposal of surplus property by sale to the public ; (2) the In- 
 terdepartmental Transfer Division, which handles all matters pertain- 
 ing to the disposal of surplus property by transfer to other depart- 
 ments and governmental agencies; and (3) the General Supply Com- 
 mittee, which maintains a consolidated record of surplus property 
 for the purpose of checking current requirements against surpluses 
 as required by statute and Bureau of the Budget circulars. In the 
 following report the activities of each subdivision will be separately 
 covered in the order stated. 
 
 THE FEDERAL LIQUIDATION BOARD. 
 
 9. Orgcmisation. — The board was organized on September 6, 1921, 
 with the following officers and members: 
 
 Chairman, Chief Coordinator, General Supply. 
 
 Executive chairman, aid for liquidation (office Chief Coordinator, General 
 Supply). 
 
 MEMBERS. 
 
 1. The director of sales, War Department. 
 
 2. The senior member, Board of Survey, Appraisal, and Sale, Navy Depart- 
 ment. 
 
39 
 
 3. The manager, Material and Sales Division, United States Sliipping Board. 
 
 4. The quartermaster, United States Marine Corps. 
 
 5. The general purchasing agent, Panama Canal Zone. 
 
 6. The superintendent, General Supply Committee (representing all other 
 departments having^ sales activities). 
 
 The organization of the board includes the following subcom- 
 mittees, known as technical committees, which assist the board in an 
 advisory capacity. Each committee is composed of a member of the 
 Chief Coordinator's staff (chairman) and a technically qualified rep- 
 resentative from each interested department or selling agency. The 
 Department of Commerce is also represented on the commodity com- 
 mittees : 
 
 (1) COMMITTEE ON ADVERTISING. 
 
 Duties. — To make a study of the advertising methods of the various 
 departments in connection with the sale of their surplus stocks; to 
 recommend such changes in the existing system as it may consider 
 necessary in the interest of economy and increased efficiency; to sit 
 with each of the commodity committees for the purpose of assisting 
 in the preparation of selling plans. 
 
 (2) COMMITTEE ON CEEDITS. 
 
 Duties. — To investigate the credit system of the several depart- 
 ments for the purpose of effecting uniformity in the terms and condi- 
 tions of sale, and the form of security required. The several mem- 
 bers of this committee to act as the representative of their depart- 
 ment in matters pertaining to accounting and statistics. 
 
 ( 3 ) COMMODITY COMMITTEES. 
 
 1. Duties. — The following is an outline of the duties assigned to the 
 committee on each of the nine major classification of materials (see" 
 par. (2), subpar. A, p. 9) : 
 
 1. Statement of situation with respect to important items : 
 
 (a) Total quantity on hand by each holding department? Aggregate? 
 (6) Where located, and in what quantities? 
 
 (c) Hovr much has been designated for retention? 
 
 (d) How much is now surplus? 
 
 (e) How much will be declared surplus under present plan? 
 
 (f) Analysis and recommendations. 
 
 2. General plan for disposal to include : 
 (a) Method of sale. 
 
 (6) In case the commodity is held by two or more departments, whether the 
 combined holdings should be sold by one department. 
 
 (c) Advertising plan. 
 
 (d) Estimate of funds required, if any, for preparation of sale. 
 
 The Federal Liquidation Board either approves, amends, or re- 
 jects the plans or recommendations of its technical committees, where- 
 
40 
 
 upon the departments charged with the disposal of the commodities 
 proceed in accordance with the directions of the board. 
 
 The foregoing description of the set-up of the Federal Liquidation 
 Board would not be complete without adding thereto the following 
 duties of area coordinators with respect to liquidation : 
 
 Stooh on nana.— (a) To inspect all accumulations of material on hand; (6) 
 ascertain if it lias been inventoried; if Inventories were accurate when taken; 
 if they have been kept up to date ; if a stock record is kept ; if they have been 
 reported to an office whose duty it is to declare all or part of them surplus ; if 
 such declarations have been made ; if the descriptions on inventories are suffi- 
 cient for identiflcation for sales purposes; If sales or transfers to other 
 departments have been made ; If physical deliveries are being made ; if proper 
 facilities exist for the same; if the stocks are properly cared for to prevent 
 deterioration or loss; If new stock is being issued when serviceable used 
 material is available; (c) to report any stocks found which have not been 
 inventoried and reported; and any which, although reported and not declared 
 excess, are, in the opinion of the coordinator, In excess of local requirements 
 and available for transfer or sale. 
 
 Reserves. — Ascertain if any items of such reserves consist of articles which 
 will deteriorate rapidly or become obsolete if not made use of within a reason- 
 able time or for which spare parts will be no longer obtainable ; if any articles 
 are being maintained in the reserve, suitable substitutes for which are in daily 
 commercial use for general consumption, and which could, in the event of an 
 emergency, be obtained without delay or without crippling industry or interfer- 
 ing with the normal life of the community from which drawn. This is an im- 
 portant consideration and facts should be obtained to bear out any conclu- 
 sions reached. 
 
 Note. — As, soon as it Is practicable to do so it is contemplated furnishing each 
 corps area coordinator with the location of reserves within each corps area, 
 together with maps showing location of activities of all departments of the 
 Government. 
 
 Property in use. — (a.) To inspect all real and personal property in use or 
 installed for use, including grounds,- buildings, machinery, equipment, furni- 
 ture, etc. ; ( 6 ) ascertain if it is in actual or prospective use in whole or in part, 
 ■If it has been reported as available for transfer or sale, if it is required to be 
 retailed by law or departmental order, if it is being properly used or preserved ; 
 (c) to recommend any discontinuance or disposition. 
 
 Sales. — (a) To Inspect all activities in connection with the sale of surplus 
 material; (6) to see that sound practice and Government policies are followed; 
 (c) that the expenses of the sale are reasonable; (d) that improper charges 
 are not made against proceeds; (e) to report any deficiencies in the above 
 respect; (f) to postpone any sale when it appears that it is not to the financial 
 Interest of the General Government for It to continue, making immediate report 
 In such cases to .the Chief Coordinator. 
 
 2. Prooedure.-^To enable the board to efficiently perform its duties 
 the following procedure was prescribed : 
 
 (0) The adoption of the following system of major classifications of mate- 
 rials by all departments having surpluses: 
 
 (1) Building and construction materials and real property. 
 
 (2) Chemicals, acids, explosives, paints, and oils. 
 
 (8) Metals, metal products, machinery, tools, and supplies. 
 
41 
 
 (4) Medicines, drugs, and hospital supplies, surgical instruments. 
 
 (5) FoodstufEs. 
 
 (6) Technical equipment and supplies. 
 
 (7) Textiles, wearing apparel, dry goods, and household supplies. 
 
 (8) Transportation, vehicular, motor, rail, air and water, and supplies, 
 harness, leather, and leather goods. 
 
 (9) Miscellaneous. 
 
 (6) Inventories. — The preparation bs each department of complete and accu- 
 rate inventories of their surplus materials, and maintenance in the General 
 Supply Committee of a consolidated record of such surpluses, kept continuously 
 up to date. 
 
 (c) Statistics. — The rendition by each department of such periodical reports 
 as may be required for the purpose of showing the amount of surplus property 
 on hand, progress of liquidation, percentage of recovery, savings effected by 
 inter-departmental transfers, etc. 
 
 (d) Sales. — The actual disposal of surplus stocks is a responsibility imposed 
 by law upon the heads of departments". The board Is a coordinating and not an 
 operating sales agency. It views the problems of liquidation from the stand- 
 point of the Government as a whole, and it exercises such supervision and 
 control over departmental sales operations as is necessary for purposes of 
 coordination "and the safeguarding the Government's interests. 
 
 (e) Clearances. — For the purpose of coordinating the sales operations of the 
 departments, all proposed sales not covered by approved policies, or plans, shall 
 be presented to the board, or to the Chief Coordinator, when the board is not 
 in session, for clearance. In clearing materials for sale the board shall indicate 
 the method of sale ; that is, whether by advertisement and bids, by auction, by 
 negotiation, etc. Departments other than the holding department shall be given 
 an opportunity to request the transfer of materials before same are cleared for 
 sale. 
 
 if) Technical advisory committees. — In the performance of its functions the 
 board shall be assisted by certain committees, appointed by the chairman, com- 
 posed of representatives of the departments nominated by the heads thereof. 
 
 (g) Plans.— The directors of sales of the War and Navy Departments and the 
 United States Shipping Board shall submit to the board, as soon as practicable, 
 their plan of liquidation covering the remainder of the fiscal year. The plan 
 shall show with respect to each of the major classifications of materials and the 
 principal commodities thereunder (including estimate of future declarations of 
 surplus), the approximate cost value, the expected return, and the basis upon 
 which return value is estimated. Careful consideration, including recommenda- 
 tions as to the method of disposal, shall be given materials which represent 
 large money value and are difficult of disposal at any price. ,, 
 
 (h) Expenses of ZigMJdaiiow.— Expenditures from the fund provided by the 
 decision of the Comptroller General, dateS October 4, 1921, shall be made only 
 on the order of the Chief Cogrdinator, General Supply. When, in the opinion of 
 a member of the board, the authorized use of this fund will result in materially 
 increasing the recovery from sales, a full statement of the case will be sub- 
 mitted to the board for the decision of the Chief Coordinator. If the expendi- 
 ture is authorized, the work will be performed under the supervision of, and 
 the disbursements made by, the area coordinator. 
 
 (i) Records.— A. stenographic record shall be made of the proceedings of the 
 board. Important decisions and policies shall be communicated to the heads of 
 the departments concerned by the Chief Coordinator. Extracts from th<5 
 minutes shall be furnished a member of the board upon request. 
 
42 
 
 3. PoZi^es.— Following the adoption of the foregoing procedure 
 the board enunciated the following general policies : 
 
 (1) Liquidation.— The underlying policy of liquidation is to decrease to a 
 minimum drafts upon tlie Treasury for the procurement of supplies by the 
 utilization of surpluses, and at the same time to increase to a maximum the 
 revenues accruing to the Treasury from the liquidation of surplus materials. 
 To this end, surplus stocljs shall be disposed of to the best possible advantage 
 within the shortest possible space of time. 
 
 (2) Methods of sale.— The general policy is that publicity shall be given in 
 the disposal of Government property. Whether a particular sale shall be by 
 sealed or informal bids, public auction, fixed prices, or by private negotiation, 
 will depend on the class of materials, quantity, number of possible purchases, 
 and other factors. In general, negotiation will not be resorted to, except — 
 
 (o) When the materials have been advertised and bids rejected, or no bids 
 received. 
 
 (6) When the possible purchasers are few in number, and 
 
 (c) When the price offered equals, or exceeds, the price obtained by previous 
 sales by advertisement, or auction. 
 
 Sealed bids will not bring highest prices unless they are used as the basis 
 for negotiations. 
 
 Public auction is a desirable method of disposal of miscellaneous lots of 
 materials suitable for general consumption. This method should not be re- 
 sorted to when the number of possible purchasers is limited and when the 
 materials are held in such large quantities that only a few people can be 
 found who are in a position to handle them. 
 
 (3) Raw materials, such as chemicals, acids, oils, greases, ferrous and non- 
 ferrous metals, etc., can generally be disposed of to consumers, i. e., manufac- 
 turers. Negotiations with dealers will not generally yield prices equal to that 
 obtained from manufacturers, to whom dealers must eventually sell. How- 
 ever, as dealers will often speculate on a rising market, it is always well to be 
 informed as to their interest in any raw material. 
 
 (4) When the same class of materials is surplus in two or more depart- 
 ments, it is the policy of the board to allocate the entire surplus to the 
 principal holder for purposes of sale. 
 
 The following policy is of sufficient importance to be included in 
 this report. It is extracted from the minutes of the meeting held 
 on December 22, 1921, and serves to show the procedure usually fol- 
 lowed by the board in enunciating policies : 
 
 Tha report and recommendations of the committee on credits having been 
 submitted to the board at its meeting, held on November 24, 1921, and full con- 
 sideration having been given to the same, the board directed that the following 
 resolution be entered of record : 
 
 1. Resolved, That surety bonds be not accepted as security in submitting 
 proposals nor as security for the fulfillment of a contract of sale of surplus 
 war materials. 
 
 2. That security in the amount of 10 per cent of the bid be required in sub- 
 mitting proposals! Departures from this policy to be authorized in exceptional 
 cases upon the approval of the director of sales, War Department; the senior 
 member, board of survey, appraisal and sale, Navy Department; the manager, 
 jnaterial and sales division, United States Shipping Board; the Quartermaster, 
 
43 
 
 United States Marine Corps ; the general purchasing agent, the Panama Canal ; 
 or the head of the department concerned. 
 
 3. That not to exceed 10 per cent of the purchase price shall be required as 
 cash payment upon executing the contract, the remainder to be secured by 
 bankers' acceptances or irrevocable letter of credit on Federal Reserve Bank. 
 Departures from this policy in exceptional cases to be made only as provided 
 in paragraph 2 above. 
 
 4. Operations. — The preceding paragraphs indicate the method of 
 operation. During the first two months of its existence the board 
 held regular meetings on Tuesday and Friday of each week. There- 
 after weekly meetings were held on Wednesday. 
 
 The liquidating machinery of the Government comprised selling 
 agencies in the various departments having surpluses, which were, 
 however, independent and vmrelated, competing with each other in 
 the disposal of similar materials, and pursuing diilerent methods and 
 prescribing, diverse conditions of sale, to the confusion of buyers. 
 As the board is composed oi the head of the sales organization in 
 each department, its task of directing and coordinating the efforts 
 of the various selling agencies, of harmonizing their activities, avoid- 
 ing duplication and lost motion, was not a difficult one. This has 
 been accomplished, too, without conflicting, or interfering, with the 
 responsibilities imposed by law upon the heads of departments. 
 
 10. It is impracticable, as well as unnecessary, to describe in this 
 report the many problems presented to the Federal Liquidation 
 Board for solution, nor is it practicable to state, in terms of dollars 
 and cents, the saving to the Government resulting from its activities. 
 It is obvious, however, that a considerable indirect'saving has resulted 
 from the coordination of the selling operations of the various depart- 
 ments, and the establishment of uniform methods and policies. 
 
 11. Without minimizing the importance of the work of coordi- 
 nating the activities of the selling agencies, it is believed that the 
 service performed by the liquidation section of your office in connec- 
 tion with the following has been of even greater value to the Gov- 
 ernment : 
 
 (1) The uncovering of accumulations, based on reports of area coordinators 
 and information obtained from other sources ; presenting the facts to the heads 
 of departments and pressing each case to the point of decision. 
 
 (2) Constant pressure on the holding departments as to the necessity of ex- 
 pediting the computation of requirements and the determination of surpluses ; 
 the prompt release of surpluses for disposal. 
 
 (3) In urging the vital necessity of prompt and effective action in dis- 
 posing of plants, depots, and other war time activities no longer required, in 
 order to eliminate enormous overhead and maintenance charges. 
 
 The effect of the work done in connection with the above-mentioned 
 phase of liquidation is evidenced by the greatly increased activity 
 
44 
 
 which now exists on the part of all departments in liquidating their 
 surpluses, including the elimination of overhead and maintenance 
 charges incident to the retention of war-time installations. 
 
 The following typical cases illustrate the procedure followed and 
 results accomplished: 
 
 (1) The War Department's attention was called to the large quantity of 
 nitrate in its reserve stocks, and particularly to the fact that a portion of this 
 reserve occupied leased storage. Through the splendid cooperation of the 
 War Department all nitrate in leased storage, amounting to 81,000 tons, was 
 promptly released for sale. This resulted in a net return to the Treasury of 
 approximately $2,750,000, besides eliminating $88,459 per year storage charges. 
 
 (2) It was found that the War Department had a large quantity of leather 
 jerkins in its reserve stocks. Request was made that consideration be given 
 to the release of a considerable portion in view of the deteriorating effect of 
 long storage. The War Department, as usual, cooperated by promptly releas- 
 ing for sale approximately one and one-quarter million jerkins, resulting in 
 a return to the Treasury of approximately $1,740,650. 
 
 (3) The procedure followed in the case of the closing out of the Atlanta 
 General Intermediate Depot is typical of the problems handled by the Federal 
 Liquidation Board and method of operation. For this reason, and on account 
 of the importance of this project, a copy of the plan is attached to this report 
 (Exhibit 2.) ^ 
 
 12. The following table shows the result of the activities of the 
 several departments in the liquidation of surplus war materials from 
 the date of the establishment of the coordinating machinery to 
 December 31, 1921 : 
 
 lAquidatlon operations from date of coordination to Dec. 31, 1921. 
 
 War Depart- 
 ment cost 
 value. 
 
 United States 
 
 Navy book 
 
 value. 
 
 United States 
 Marine Corps 
 book value. 
 
 United States 
 Sliipping 
 
 Board 
 
 appraised 
 
 value. 
 
 Total. 
 
 1. Surplus on hand at date of co- 
 
 ordination 
 
 2. Additional declarations of sur- 
 
 plus during period 
 
 3. Total surplus disposed of dur- 
 
 ing period 
 
 3a. Total transfers to other de- 
 partments 
 
 3h. Total sales (cost value) 
 
 Recovery 
 
 4. Surplus on hand onDee. 31, 1921 
 
 5248,665,984 
 377,195,655 
 464,593,048 
 
 66, 514, 145 
 408,078,903 
 
 30, 87S, 659 
 161,268,591 
 
 »26. 479, 292 
 
 6, 660, 573 
 
 7,175,866 
 
 1, 019, 064 
 
 6,156,801 
 
 1,350,933 
 
 25,904,000 
 
 $1,501,400 
 
 162, 964 
 
 1,605,044 
 
 276, 510 
 
 1,329,131 
 
 348,034 
 
 aS,720 
 
 SIS, 248,740 
 
 57, 825, 659 
 
 58,660,320 
 
 58,048,849 
 
 I 611,471 
 
 398.070 
 
 > 42,413,985 
 
 ■ $319,S95,422 
 
 441,844,751 
 
 ,532,034,877 
 
 116,858,568 
 416,176,309 
 32,975,596 
 229,705,396 
 
 1 Exclusive of surplus Shipping Board ships. 
 
 It will be noted that the percentage of recovery on War Depart- 
 ment sales is '\'ery much less than that of the other departments. 
 This is due to two principal causes: (1) The "cost value" used by 
 tlie War Department is the actual cost of the materials, while the 
 "book value" used by the Navy and Marine Corps is a valuation 
 based on present market value, and the " appraisal value " used by 
 the Shipping Board is based on the present fair value ; (2) the War 
 
45 
 
 Department surplus comprises a much larger proportion of used 
 materials, of purely military equipment for which there is no com- 
 mercial use and is disposed of as scrap; of temporary buildings 
 which have a very small salvage value as compared to original cost 
 of construction. 
 
 From the above statement it will be seen that the Navy, Marine 
 Corps, and Shipping Board made an average recovery of 26 per cent. 
 If the value of the materials sold by the War Department were re- 
 duced to a similar basis it would probably show a percentage of 
 recovery about equal to that of the other departments. The Navy 
 Department is now engaged in making final declaration of surplus. 
 It is estimated that its additional declarations will amount to ap- 
 proximately $50,000,000. The Shipping Board surplus has been 
 finally completed. The War Department is now making its final 
 computations of surplus. This work will probably be completed by 
 March 1. It will result in additional declarations of surplus mate- 
 rials, amounting to at least one billion dollars, cost value. 
 
 It is believed that the bulk of the surplus materials in all depart- 
 ments will be disposed of, except certain classes which are extremely 
 difficult to dispose of at any price, by the end of the present fiscal 
 year. 
 
 Cost accounting. —Under date of November 28, 1921, all Govern- 
 ment departments which were making sales of surplus Government 
 property were requested to submit, beginning with November 26, 
 the following data covering each sale: 1. Appraisal sale value. 
 2, Gross receipts from sale. 3. Expenses of sale. 4. Net return to 
 Government. 
 
 This effort to obtain accurate data as to the expense connected with 
 the disposal of surplus materials was not successful as the system of 
 accounting in all Government departments is designed to see that 
 appropriations are not exceeded and that particular expenditures are 
 within the law, and such a system does not lend itself to an account- 
 ing which will match expenses against receipts and will also localize 
 expenses against the agencies creating them. This important matter 
 is receiving careful consideration and it is hoped that a uniform 
 system of accounting for the proceeds of sales will be effective at 
 an early date. 
 
 (2) THE INTERDEPARTMENTAL TRANSFER DIVISION. 
 
 12. The act of July 11, 1919 (41 Stats., 67-68, sec. 5), provides, in 
 part, as follows: 
 
 That the heads of the several executive departments and other responsible 
 officials, in expending appropriations contained in this or any other act, so 
 far as possible shall purchase material, supplies, and equipment, when needed 
 and funds are available, from other senices of the Government possessing 
 
46 
 
 juatei-ial, supplies, and equipment no longer required because' of tlie cessation 
 of war activities. It shall be the duty of the heads of the several executive 
 departments and other officials, before purchasing any of the articles described 
 herein, to ascertain from the other services of the Government whether they 
 have articles of the character described that are, serviceable. And articles 
 purchased by one service from another, if the same have not been used, shall 
 be paid for at a reasonable price not to exceed actual cost, and if the same 
 have been used, at a reasonable price based upon length of usage. The various 
 services of the Government are authorized to sell such articles under the con- 
 ditions specified, and the proceeds of such sales shall be covered into the 
 Treasury as miscellaneous receipts. 
 
 13. This act was followed by many others, some of which directed 
 the transfer of certain materials between designated departments, 
 either with or without funds, and others merely authorized the 
 transfer. A digest of these laws has been prepared, for the con- 
 venience of this office, in which the order of priority is indicated, 
 concerning which no mention is made in the law and which it is 
 assumed follows as to the date of the act, except as to transfers to 
 the Agricultural Department, referred to later on. Attached to this 
 Digest are Schedules A and B which contain the following data : 
 
 Schedule A lists the material that is authorized to be transferred between 
 the departments designated, requiring payment therefor by transfer of funds 
 on the boolss of the Treasury. 
 
 Schedule B lists the material that is authorized to be transferred between 
 the departments designated, without charge, in the order of priority . 
 
 14. Schedule B contains the list of all transfers authorized by law 
 to be made without funds. In the absence of legislative authority 
 such transfers can only be made by Executive order, or, when the 
 amount involved is not of sufficient importance to demand the Presi- 
 dent's personal attention, by the Chief Coordinator, who acts in such 
 cases under the authority delegated to him in the Executive order 
 of November 8, 1921. (See par. 6.) 
 
 It is well, perhaps, to here state that the Executive authority dele- 
 gated to the Chief Coordinator with respect to interdepartmental 
 transfers has been exercised only when it is shown that the transfer is 
 clearly in the interest of the Government, that the property is in ex- 
 cess of the needs of the holding department, and that the need thereof 
 by the requiring department is imperative, as well as its inability to 
 pay for same. In the usual case the effect of such utilization of sur- 
 plus materials operates to relieve the requiring department of the 
 necessity of requesting an appropriation to cover purchase, or of ob- 
 taining legislative authority for transfer without funds. 
 
 In establishing the priority of the several departments entitled to 
 transfers from the War Department without charge the requisitions 
 of the Agriculture Department for materials suitable for road work 
 are given last priority. This is based on the theory that the require- 
 
47 
 
 ments^ of the Federal departments should be filled before making 
 materials available for issue to the States. This arrangement is sat- 
 isfactory to the Agriciilture Department, as it does not materially 
 affect the filling of its requirements. 
 
 15. The conditions resulting from the inability of the several de- 
 partments to efficiently carry out the provisions of the laws relating 
 to interdepartmental transfers due to the lack of coordinating ma- 
 chinery is described in paragraph 2 of this report. After the estab- 
 lishment of this machinery it was found that the work of equalizing 
 shortages and surpluses in the various departments was considerably 
 handicapped by the delay of the holding departments in declaring 
 surplus materials held by them in excess of their needs. This neces- 
 sitated the publication of Circular 23, Bureau of the Budget August 
 18, 1921, as follows: 
 
 1. In connection with the disposal of surplus stocks, especially in the inter- 
 departmental sale of these stocks, instances arise where one department is in 
 need of supplies, equipment, or material which are held in overabundance in 
 another department, but which have not been declared surplus under the present 
 policy governing the particular department. 
 
 2. It is manifestly to the best interest of the general Government, in the pres- 
 ent business emergency, to supply one department, as far as possible, from an- 
 other department of the Government, even though the articles so furnished have 
 not been declared surplus and are maintained in keeping with the policy gov- 
 erning that particular department, especially since some of these policies are 
 still abnormal and have not yet been adjusted to present conditions. 
 
 3. It is theirefore requested that, irrespective of any apparent situation as to 
 declared surpluses, requests be made to the General Supply Committee, and steps 
 will be taken by that committee, through the Chief Coordinator, General Sup- 
 ply, with a view of having the articles desired made available. 
 
 -Numerous examples may be cited of savings accomplished through 
 the searching out of materials held in excess by one department, but 
 not declared surplus, and making same available to' meet the needs 
 of another department. The following two examples are typical : 
 
 1. The arrangements for the transfer from excess stocks of 6,000,000 yards of 
 canvas, required by the Post Office Department for the manufacture of mail 
 bags was accomplished through the cooperative action of the War Department 
 and Post Office Department. 
 
 2. The purchase by the Marine Corps of 100,000 cotton undershirts for use 
 in the Tropics was avoided through the cooperation of the War Department in 
 its efforts to fill this, requirement from its excess stocks, and the cooperation of 
 the Marine Corps in accepting an article which was not altogether suitable to 
 its needs, in order to avoid the expenditure of approximately $24,000. 
 
 16. In order to prevent duplication of appropriations resulting 
 from the transfer of materials without funds under a law of general 
 application, the following procedure is prescribed in Circular 20, 
 Bureau of the Budget, August 16, 1921 : 
 
 1. Whenever any department or establishment of the Government, under the 
 operation ^of a law of general application, received from another department or 
 
48 
 
 establishment material, equipment, supplies, or land which the law permits to 
 be transferred without funds, the department or establishment furnishing such 
 material, equipment, supplies, or land, shall notify the receiving department or 
 establishment the value of the same, and the receiving department or establish- 
 ment shiill set aside, in its "General Reserve" (referred to in Bulletin No. 4, 
 Bureau of the Budget, July 1, 1921), the amount thus designated. 
 
 In the event of disagreement as to the value, the matter will be referred to 
 the Chief Coordinator, General Supply, whose decision shall be final. 
 
 The provisions of the circular apply to those transfers authorized 
 by Congress without transfer of funds, wherein the department so 
 benefiting has had authorized an appropriation for the purchase of 
 similar property. In this connection attention is invited to the fact 
 that this circular does not prescribe any means of insuring compli- 
 ance with its provisions. It is recommended that all departments and 
 independent establishments be required to submit a periodical report 
 covering all materials transferred and received which fall under the 
 provisions of this circular. 
 
 17. The duties of area coordinators with respect to the equalization 
 of surpluses and shortages in the field were outlined in the following . 
 paragraph of their original instructions (Bulletin No. 1, Office Chief 
 Coordinator, August 26, 1921) : 
 
 TRANSFEES. 
 
 (a) To inspect all activities in connection with the transfer of material 
 between different branches of the Government; (6) to verify the actual neces- 
 sity for the material on part of the receiving branch; (c) to ascertain that 
 the physical transfers of material are economically made; (d) to report any 
 deficiencies in the above respects to the Chief Coordinator; (e) to determine 
 the price at which transfers shall be made in case of disagreement between the 
 branches concerned, which price shall be current market price, with proper 
 differentials for carrying charges (not Government storage), charges not to 
 exceed cost, and with reasonable depreciation for used or deteriorated material. 
 
 It will be noted that the above instructions do not specifically 
 delegate authority to area coordinators to direct inter-departmental 
 transfers. This authority was withheld for two reasons, namely : 
 
 First. The President had not delegated this authority to the Chief Coordi- 
 nator, with respect to routine transfers not especially authorized or directed 
 by law. 
 
 Second. Such transfers should properly be taken up with the heads of the 
 departments concerned by the Chief Coordinator. 
 
 The President has since delegated this authority to the Chief 
 Coordinator (par. 6, above). The heads of departments, however, 
 must necessarily hold officers in the field responsible and accountable 
 for property entrusted to their custody. In view of these considera- 
 tions, the following instructions were issued to area coordinators on 
 the subject of their authority to direct transfers : 
 
49 
 
 SURPLUS PROPERTY. 
 
 (a) Transfers with funds.~The area coordinator has full authority to direct 
 such transfers, and it is his duty to see that surplus stocks are utilized in lieu 
 of purchase in the open market. 
 
 (6) Transfers without funds.— Area coordinators are not authorized to direct 
 transfers without funds without first obtaining the approval of the Chief 
 Coordinator. 
 
 (c) Withdrawals from auction sale. — The withdrawal of material, after 
 advertisement, for the purpose of transfer is not considered good policy and 
 should be resorted to only to avoid an unquestionable loss to the Government. 
 The necessity for such action should be obviated by ascertaining the require- 
 ments of other departments prior to advertisement. 
 
 EXCESS OR CURRENT STOCKS. 
 
 (a) Transfers with funds. — The area coordinator should endeavor to arrange 
 the transfer with the approval of the local supply officer of the holding depart- 
 ment. If the latter's instructions do not permit him to make the transfer, the 
 area coordinator will make full report to the Chief Coordinator, in the meantime 
 suspending the proposed purchase except in cases of emergency. 
 
 (6) Transfers without funds. — The area coordinator Is not authorized to 
 direct such transfers. 
 
 The area coordinators have been able to effect many economics, 
 however, without the necessity of reference to this office, through the 
 cooperation of the local heads of departments. All matters which 
 must be referred to this office for reference to the head of a depart- 
 ment are handled expeditiously, and the area coordinator promptly 
 informed of the action taken on his recommendations. 
 
 The following transactions are typical of the many economics 
 effected through the activities of area coordinators : 
 
 1. The coordinator, first corps area, discovered that it was costing the Army 
 an average of $20 per ton for coal delivered at Fort Adams for use of its vessels 
 operating In this vicinity, and that coal could be supplied Fort Adams from the 
 Navy fuel station at Melville, R. I., at a cost of about $9.50 per ton. Through 
 the cooperation of the Navy this arrangement was put into efEect, thereby saving 
 the Government about $10.50 per ton. 
 
 2. The area coordinator, second corps area, learned that the Shipping Board 
 was in urgent need of 1,000 tons of pig iron ballast at New York, for which 
 It would have to pay $24 per ton. Upon making inquiry he found that the Army 
 <!ould furnish this ballast from its supply at the Brooklyn base. He called up 
 this office by telephone. The matter was taken up with the War Department by 
 telephone. Authority to make the transfer was Immediately given (by tele- 
 phone) based on the estimated sale value of $15 per ton, thereby saving the 
 Oovernment $9,000. 
 
 3. The area coordinator, sixth corps area, reported to this office that 3,000 
 tons of coal was on hand at Fort Sheridan, in excess of requirements, stored in 
 the open and subject to rapid deterioration. This resulted in the coal being 
 declared surplus. He then arranged with the postmaster, Chicago, to take the 
 coal, thereby making a saving to the Government of $8,160. 
 
 86484°— 22 4 
 
50 
 
 18. While the importance of coordination and supervision of inter- 
 departmental transfers, and the difficulties involved, was fully real- 
 ized from the first, it was not practicable until October 1, 1921, due to 
 lack of personnel, to organize a separate division to handle all mat- 
 ters pertaining to this importance phase of liquidation. Thfe prin- 
 cipal duties performed by the interdepartmental transfer division 
 are as follows: 
 
 1. To stimulate tlie utilization of surplus stocks by bringing constant pressure 
 on requiring departments to forecast their requirements to enable holding 
 departments to effect deliveries of supplies when needed. 
 
 2. To make prompt adjustment of price in order that the requiring depart- 
 ment may be informed of the cost of the materials prior to submission of its 
 requisition. 
 
 3. To keep in personal touch with the purchasing agencies of the various 
 departments and with the officers of the holding departments who handle the 
 requisitions and direct shipments. 
 
 4. To see that deliveries are promptly effected ; to investigate all complaints 
 of delays, etc., and to institute the necessary corrective measures. 
 
 5. To prevent the utilization of surplus when, owing to cost of transporta- 
 tion from location to point of use, or for any other reason, it would be more 
 economical to purchase. 
 
 6. To handle all correspondence with area coordinators relating to interdepart- 
 mental transfers in the field. 
 
 All departments and establishments were promptly informed of 
 the establishment of the interdepartmental transfer division in this 
 office, and they were requested to make full use of its services. 
 
 A meeting of the Federal Purchasing Agents Association was 
 called on October 10, 1921, and the scope of the work, problems in- 
 volved, policies of liquidation, etc., pertaining to interdepartmental 
 transfers were carefully explained to approximately 80 members 
 present, and they were requested to bring to the next meeting, to 
 be attended by representatives of the various surplus property divi- 
 sions, all complaints of every description. 
 
 The bringing together of the purchasing officers and representa- 
 cives of the surplus property divisions in a series of conferences, In 
 which each purchasing officer stated his difficulties in obtaining sur- 
 plus materials and the representatives of the holding departments 
 explained their difficulties, has had a most beneficial effect in bring- 
 ing about mutual understanding and cooperative action. (See Ex- 
 hibit 3.) 
 
 In this connection, your attention is invited to the plan recently 
 adopted by the various departments entitled by law to obtain certain 
 surplus materials from the War Department without charge, whereby 
 the field force of the Agricultural Department is utilized to make 
 shipments for all departments, at camps and depots to be abandoned, 
 the expense being prorated on the basis of cost value of the materials 
 
51 
 
 handled for each department. This plan has the following advan- 
 tages: (1) It will result in considerable saving by reason of having 
 a single overhead expense; (2) it will facilitate the turning over 
 of the materials requisitioned in that the local supply officer will 
 have only one agency to deal with ; and (3) it will expedite the clean- 
 ing up of the camps and depots. (Exhibit 5.) 
 
 The following is quoted from a recent letter received from the 
 Bureau of Public Eoads, addressed to the Chief Coordinator : 
 
 The Bureau of Public Roads, , Department of Agriculture, wishes me to ex- 
 press to you not only the appreciation of the bureau itself, but also that of the 
 State Highway Departments throughout the United States, for the work which 
 has been accomplished by your ofhee in facilitating the transfers of War De- 
 partment surplus road-building equipment to the Department of Agriculture 
 for distribution to the States in accordance with the provisions of the various 
 acts of Congress. 
 
 19. Since the organization of the interdepartmental transfer divi- 
 sion, there has been a material increase in the amount of transfers 
 effected to meet current requirements, and great improvement in the 
 time required to effect" deliveries. The absolute necessity for the 
 existence of such a coordinating and supervising agency has been 
 clearly established. The actual savings accomplished from date of 
 coordination to December 31 have been estimated from the reports of 
 the various departments showing value of materials transferred dur- 
 ing this period, as follows : 
 
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53 
 
 la estimating the saving to the Government in utilizing surplus 
 materials it is assumed that the property which is transferred from 
 one foranch to another is as valuable to the receiving department as 
 though purchased in the open market ; hence, 
 
 Smumg equals market value of the material less what the Govern- 
 ment could obtain for the property if sold (based on average price 
 obtained for property of similar character). 
 
 Ho saving to the Federal Government is estimated on road- work- 
 ing materials transferred to the Agricultural Department as the sav- 
 ing accrues to the States. There is, however, an actual saving to the 
 Federal Government on approximately 5 per cent of this material 
 which is used on national highways. 
 
 The following are examples of savings effected by the transfer of 
 dhips: 
 
 1. Mfiteen Mghters, scows, mine planters, etc., were transferred from the 
 Quartermaster's Department to the Engineer Department for use in dredging 
 operations, tberel3y effecting a saving of $349,500. 
 
 2. Ten mine planters were transferred from the War Department to the 
 Lighthonse Service for use as lighthouse tenders, thereby saving an appro- 
 prlffiHion of $1,SOO,000 that would have been required to meet this need. 
 
 3. Twenty-nine cargo steamers, tankers, etc., were transferred from the Ship- 
 ping Board to the Navy for use as supply boats, oil tankers, and refrigerator 
 boats, replacing worn-out vessels, thereby effecting a saving of $17,341,278. 
 
 4. One cargo steamer was transferred from the Shipping Board to the War De- 
 Ifflrtment to be used as cable ship in Alaskan waters, replacing the worn-out 
 cable ship Burnside and effecting a saving of $614,200. 
 
 5. Five tugs were transferred from the Shipping Board to the Coast Guard 
 Service, to be used for regular Coast Guard duty, avoiding a special appropria- 
 tion and effecting a saving of $650,000. 
 
 6. Two steamers were transferred from the Navy Department to the Coast 
 and Geodetic Survey Service for use as survey ships, avoiding special appro- 
 priation and effecting a saving of $700,000. 
 
 The replacement value of the ships transferred has been estimated 
 from the best data obtainable at $37,728,256. The net saving is 
 arrived at by deducting from the replacement value the estimated 
 sale recovery plus cost of putting the ships in condition to be used 
 for the purpose intended. In estimating the sale value of these 
 ships no account was taken of the length of time required to dis- 
 pose of the ships in a world-glutted market, the deterioration, expense 
 of maintenance of ships lying idle, advertising, and cost of sale, 
 nor has any allowance been made for the saving effected in the 
 upkeep of the ships transferred as compared with the upkeep of the 
 old ships which they replace. To illustrate, the Navy reports that 
 the difference in upkeep charges on the 29 vessels transferred from 
 the Shipping Board and the upkeep on the vessels replaced has 
 been carefully computed to be $252,000 per year. The War De- 
 partment has been spending $160,000 per year for repairs on the 
 
54 
 
 old cable ship Burnside. It is estimated that the upkeep charges on 
 the Dellwood, which was transferred to take the place of the 
 Burnside, will not exceed $30,000 a year for the ensuing 10 years, or 
 a saving of $120,000 per year. 
 
 In view of these indirect and potential savings it is therefore be- 
 lieved that the actual saving to the Government will equal approxi- 
 mately the replacement value of the ships transferred — $37,728,256— 
 instead of the estimated net saving of $21,157,078, as shown in the 
 above statement. 
 
 A detailed description of the number, types, and values of the 
 ships transferred, the necessity therefor in each case, and the saving 
 effected, is in the tabulated statement attached to this report (Ex- 
 hibit 4). 
 
 20.. A number of important transfers have been effected during the 
 period covered by this report which are not included in the estimated 
 savings for the period covered by this report, as the materials have 
 not been actually invoiced and delivered to the receiving depart- 
 ments. These transfers include the following : 
 
 1. The transfer with funds of approximately 6,000,000 yards of canvas duck 
 from War Department to the Post Offlce Department, for use In manufacture of 
 mall bags. 
 
 2. Arrangements made with the Post Offlce Department and Federal prison, 
 Atlanta, whereby the former utilizes the output of the Atlanta Penitentiary 
 Cotton Mill during the remainder of the present fiscal year (about 500,000 
 yards ) . 
 
 3. Arrangements made to transfer to other departments large stocks of food 
 and other supplies, which will shortly become surplus by reason of the closing 
 out of the Army general intermediate depot at Atlanta. 
 
 4. Arrangements made for the transfer of large quantities of materials to 
 other departments incident to the closing out of Camp Funston, Camp Pike, 
 Camp Grant, and the Hawthorne warehouses (leased) at Chicago. 
 
 5. The transfer of large quantities of medical and hospital supplies, and ma- 
 terials from the AVar and Navy departments to the Veterans' Bureau, Public 
 Health Service, soldiers' homes, St. Elizabeths, aiid other Federal hospitals. 
 
 (3) THE GENERAL SUPPLY COMMITTEE. 
 
 21. The General Supply Committee is an agency of the Secretary 
 of the Treasury. It was established pursuant to act of June 17, 1910 
 (sec. 4, act 36 Stat., 531), to enable the Secretary of the Treasury to 
 perform certain duties prescribed in said act. The original functions 
 of the General Supply Committee were added to by the Executive 
 order of December 3, 1918, which required all departments and gov- 
 ernmental establishments in the District of Columbia to transfer to it 
 all surplus office materials, supplies, and equipment, and which pro- 
 hibited the future purchase of such equipment by said agencies un- 
 less the Secretary of the Treasury has certified that the articles de- 
 sired are not available for transfer from surplus stocks on hand. 
 
55 
 
 22. In order to carry out the provisions of section 5, act of July 11, 
 1919 (see par. 12 above), the General Supply Committee was, by 
 Executive order of August 27, 1919, designated as the central 
 agency to gather the information relative to all classes of available 
 surplus supplies in the possession of the various departments and 
 establishments of the Government, and was required to make such 
 information available upon inquiry to any department or establish- 
 ment desiring to purchase such supplies. This procedure did not 
 work satisfactorily, as the inventories furnished the General Supply 
 Committee were incomplete and inaccurate, and there was lacking 
 the necessary supervising agency charged with the duty of insuring 
 that all purchase proposals were sent to the General Supply Com- 
 mittee for clearance and that no purchases were made of any mate- 
 rials which could be supplied from surplus, or excess, stocks. The 
 requiring departments, particularly the departments entitled, under 
 the law, to transfers without charge, maintained dii'ect liaison with 
 the holding departments, which retained surplus declarations for a 
 period of three weeks to permit examination by requiring depart- 
 ments. 
 
 23. The first order issued by the Bureau of the Budget on this 
 subject was published in Circular No. 7, dated July 8, 1921. It 
 directed — 
 
 that whenever advertisements for bids are contemplated, before such adver- 
 tisements are made public, copies of the same in the exact form in which 
 it is intended they shall be published shall be sent to the Surplus Property 
 Division, or corresponding agency, of each of the executive departments; and 
 that each department advertising material for sale shall in like manner inform 
 every other department prior to the advertisement of the exact nature of the 
 advertisement which it is proposed to publish. 
 
 This procedure, while it conformed to the provisions of the .act 
 of July 11, 1919, involved needless administrative work, and caused 
 great delay both in the procurement of supplies and in the sale of 
 surplus materials. 
 
 An effort was made two weeks later (Circular 13, July 21, 1921) 
 to relieve this situation by requiring proposed advertisements, and 
 inquiries, to be addressed to the three principal holding departments 
 (Army, Navy, and Shipping Board) and to the General Supply Com- 
 mittee. 
 
 The final solution of this difficult problem is published m Circular 
 18, Bureau of the Budget, August 17, 1921, which amended Circulars 
 7 and 13, as follows : 
 
 Copies of proposed advertisements for bids shall be sent to the General Supply 
 Committee only. 
 
 This responsibility having been imposed on the General Supply 
 Committee, it became an imperative necessity that its records of 
 
56 
 
 surplus property be made as complete and accurate as possible, in 
 order to reduce to the minimum the inconvenience and delay, im- 
 possible to entirely eliminate, in meeting current requirements, and 
 to increase to the maximum the utilization of surplus materials by 
 other than the holding departments. 
 
 24. The action taken by the Federal Liquidation Board with re- 
 spect to surplus property records and declarations of surpluses is 
 shown by the following extract from its minutes : 
 
 1. SUEPLtJS PEOPEBTY BECORDS. 
 
 The War, Navy, United States Shipping Board, and other departments liav- 
 ing surplus war materials to be disposed of shall maintain an accurate record 
 thereof, classified in accordance with the Table of Classifications of the Fed- 
 eral Liquidation Board. Each department shall furnish the General Supply 
 Committee with a copy of its surplus property records, and shall immediately 
 report to the General Supply Committee all changes therein caused by declara- 
 tion of surplus, withdrawals, sales, transfers, or other causes, and the General 
 Supply Committee shall maintain a consolidated record thereof. 
 
 2. DECLABATION OF SURPLUS. 
 
 (a) Inventories received from departments, containing new declarations of 
 surplus shall be filed by the General Supply Committee in its consolidated 
 record of surplus stocks. 
 
 The General Supply Committee will furnish information to all departments 
 relative to the availability of surplus materials. Upon obtaining information 
 that the materials desired are available in another department, the requiring 
 department shall make requisition covering the transfer direct on the holding 
 department. 
 
 (6) Exception is made in the above procedure with respect to departments 
 which are authorized by law to obtain certain classes of materials from the 
 War Department without funds. The inspection of new declarations of surplus 
 shall be made by representatives of these departments in the office of the 
 Director of Sales. Each representative shall make a daily inspection of all 
 inventories which contain materials in which his department is interested, for 
 the purpose of effecting the transfer of materials required by his department. 
 
 25. The consolidated record of surpluses of the General Supply 
 Committee is believed to be as complete and accurate as the records 
 maintained in the surplus property divisions 'of the three holding 
 departments. The Shipping Board filed inventories of its surpluses 
 in September, 1921, and withdrawals due to sales and transfers are 
 reported. The Navy is now engaged in making final computations 
 of surpluses, and revised lists are filed as soon as completed. The 
 large and constantly shifting surplus of the War Department pre- 
 sents a most difficult problem. In spite of constant effort to main- 
 tain accurate and up-to-date records, a large percentage of errors 
 undoubtedly exist, due to the fact that the flow of new declarations 
 is about equal in volume to withdrawals by sale and transfer. 
 
57 
 
 26. It is believed, however, that the procedure now followed is 
 the best that could be devised. There has been constant improve- 
 ment evidenced by decreasing number of complaints and smoother 
 functioning of the machinery. In checking proposals against sur- 
 pluses the following cases are referred to the Interdepartmental 
 Transfer Division for investigation and necessary action: 
 
 First. Proposals for materials which are not shown to be surplus but which 
 may be supplied from the excess stocks of another department. 
 
 Second. Proposals for materials which are surplus, but which on account of 
 distance from location to point of use, or for any other reason, a clearance 
 for purchase appears to be more economical than a transfer. 
 
 Third. Emergency proposals in which the requiring department claims that 
 it is impracticable to use surplus on account of the length of time required to 
 effect delivery. 
 
 Fourth. All transfers involving the adjustment of price. 
 
 Fifth. All important questions arising in connection with the disposal of sur-. 
 plus materials not covered by approved policies of the Chief Coordinator, 
 General Supply. 
 
 27. The following statement of inquiries received by the General 
 Supply Committee, and the number of items reported available in 
 surplus, during the period covered by this report, indicated the vol- 
 ume of business transacted : 
 
 1. Items covered in inquiries as to surplus property 177, 598 
 
 2. Items reported available in surplus 53, 546 
 
 The following are a few examples of the savings effected by the 
 General Supply Committee in promoting the utilization of surplus 
 stocks : 
 
 1. The Marine Corps requested clearance for sale of 162,500 pounds of pine- 
 apples and 93,750 pounds of cherries, which were in excess of its needs. The 
 General Supply Committee disposed of this fruit to the Public Health Service 
 and St. Elizabeths Hospital, to meet their current requirements. This resulted 
 in a transfer on the books of the Treasury of $11,010.30, and a saving to the 
 Public Health Service and St. Elizabeths Hospital of $22,412.45. 
 
 2. The Department of Justice required six boilers for the Federal peniten- 
 tiary at Leavenworth, Kans. The general supply committee found that the 
 Shipping Board could supply suitable boilers from its surplus. A transfer was 
 arranged whereby the Shipping Board obtained $31,800.60 for the six boilers 
 and the Department of Justice saved $7,950.15, difference in cost if boilers had 
 been purchased commercially. 
 
 3. The Department of Labor required 10,625 blankets. The General Supply 
 Committee arranged with the War Department to meet this requirement. The 
 blankets were furnished at a cost of $20,914.19 to the Department of Labor 
 (transfer on books of Treasury). The same grade of blanket would have cost 
 $26,142.73. This resulted in a saving to the Department of Labor of $5,228.54. 
 
 28. The following shows the business transacted by the General 
 Supply Committee in handling surplus office materials, supplies, and 
 
58 
 
 equipment under the Executive order of December 3, 1918, and Bu- 
 reau of the Budget Circular No. 5, July 6, 1921 : 
 
 1. Ortlers received by the General Supply Committee for property to be 
 
 issued from its stock 2,341 
 
 2. Invoices covering material transferred to the General Supply Com- 
 
 mittee 764 
 
 3. Truck loads of material received during this period 1,692 
 
 4. Typewriters overhauled and reissued 2,073 
 
 5. Adding, numbering, duplicating, and other machines 162 
 
 The estimated value of material transferred to the General Supply Com- 
 mittee from other Government departments during this period will probably 
 exceed $600,000, of which property to the value of approximately $800,000 has 
 been issued. 
 
 Through receipts from auction sales of unserviceable material the General 
 Supply Committee has deposited to the credit of "Miscellaneous receipts" 
 $23,067.68. 
 
 During this period the committee issued from the stock of available articles 
 all furniture and equipment required by the Conference on the Limitation of 
 Armaments. Indicative of the volumes there are set forth below several prin- 
 cipal items : 
 
 Desks 663 
 
 Chairs 1, 655 
 
 Typewriters 81 
 
 Tables 208 
 
 Desk trays . 
 Costumers __ 
 
 Stands 
 
 Safes 
 
 892 
 
 284 
 
 74 
 
 10 
 
 29. The following examples serve to illustrate the savings effected 
 by the General Supply Committee in the handling of surplus ma- 
 terials physically transferred to it for issue to departments and 
 establishments in the District of Columbia : 
 
 1. The War Department transferred to the General Supply Committee 401,700 
 rolls of toilet paper at cost price of 8J cents per roll (2,000 sheets). This paper 
 was selling commercially at 18 cents per roll. In issuing this paper to depart- 
 ments a net saving was effected of $37,831 on the total quantity. 
 
 2. The War Department turned over to the committee 3,709 Pyrene fire ex- 
 tinguishers at cost, $4.75 each. These extinguishers were selling for $10.50 
 each. This resulted in a saving to the departments on the total quantity of 
 $21,324.75. 
 
 3. The War Department turned over to the committee 17,000 scrub brushes 
 at cost price, 12J cents each. These brushes would have cost the departments 
 20 cents each if obtained commercially. This resulted in a saving to the de- 
 partments of $1,275. 
 
 J. P. McAdams, 
 Aid for Liquidation. 
 
59 
 
 Exhibit 1. 
 
 Office of the Chief Coordinatob, General Supply, 
 
 Washington, D. C, Octoher 21, 1921. 
 
 [Bulletin No. 5.] 
 
 1. Instructions for the procurement of and payment for supplies and services 
 by area coordinators in carrying out the provisions of Circular No. 15, Bureau 
 of the Budget, July 27, 1921. 
 
 2. These instructions are based on a decision by the Comptroller General of 
 the United States, under date of October 4, 1921, an extract of which follows : 
 
 "The expenses listed in Bulletin No. 3 (see note below), September 12, 1921, 
 of the Chief Coordinator, in connection with the work of the Chief Coordinator 
 and the area coordinators, which it is proposed to pay from funds derived from 
 the sale of surplus property, are grouped by the Chief Coordinator into four 
 classes, as follows : 
 
 " '(o) Hire of clerks, stenographers, and messengers outside of the District of 
 Columbia, and expert aids for service outside of the District of Columbia. 
 
 " '(6) Traveling expenses of civilian employees, including per diem in lieu of 
 actual expenses, not to exceed the rates authorized by law. 
 
 "'(c) Mileage of commissioned officers at the rates authorized by law, in- 
 cluding the cost of transportation, which may be furnished on Government trans- 
 portation requests. 
 
 " '(d) Postage, car fare, telephone, telegraph, advertising, printing, stationery, 
 and other miscellaneous expenses, including personal and nonpersonal services, 
 which may be necessary to effect the inventorying and classifying of surplus 
 property.' 
 
 " The clear question for the decision of the Comptroller General is the use of 
 the proceeds of sale for the four general purposes stated in the letter to the 
 Secretary of the Treasury by the Chief Coordinator, General Supply, and let- 
 tered (o), (6), (c), {d). The general proposition of consolidating surplus 
 property and proceeding to make sales thereof has seemingly already been put 
 into effect by the issue of bulletins and circulars prior to the submission of the 
 question of the use of the proceeds of the sales. 
 
 " There can be no responsibility on the General Accounting Office for the pro- 
 cedure of sale. It is represented as a means to accomplish the disposition of 
 surplus property which practically, if not adopted, would mean that its sale 
 can not be accomplished within a reasonable time, if at all, and it is with re- 
 spect to this condition that whatever may be given approval toward the use of 
 the proceeds must be directed. 
 
 " It is also to be understood that there can not be superseded the authority in 
 the departments of actually making purchases in the sense of one acting for all 
 hranches of the Government and practically bringing under a general purchas- 
 ing agent all such purchases. There would be no authority to use in connection 
 with purchase matters the services which are being paid for as an expense of 
 -sale of property. Such expenses as are chargeable to proceeds of sales must 
 be absolutely confined to the work of sales and must not in the remotest degree 
 i)e availed of upon any other work. 
 " Kespectfully, 
 
 . "J. E. McCael, 
 
 " Comptroller General." 
 
 .(Note. — Original Bulletin No. 3 issued as Bulletin No. 5, October 21, 1921.) 
 
60 
 
 3. Procurement authorities (War Department standard Form No. 41, " Pro- 
 curement Autliority," wltli the words "Office of the Chief Coordinator" 
 stamped over the words "War Department" at the top of tlie form), will be 
 issued by the Chief Coordinator, upon request by letter from the area coordina- 
 tor. In order that the Chief Coordinator may act intelligently on such re- 
 quests, such explanation of the work to be performed will be stated in these 
 requests, as the area coordinator may deem helpful. This letter of request 
 Will list the amounts desired under the proper purpose number, as outlined 
 in paragraph 5 below. 
 
 4. Based on approved procurement authorities, area coordinators will issue 
 the travel orders and other instructions which will result in creating obligations 
 to be met under the provisions of this bulletin. No procurement of supplies, 
 engagement of services, or other obligations will be created by the coordinators 
 or their subordinates without prior authority from the office of the Chief 
 Coordinator. 
 
 5. To facilitate the issue of procurement authorities and cost accounting 
 thereunder, the various purposes for which it may be necessary to issue 
 authorities to create obligations are assigned identifying symbol numbers, 
 preceded by the letter P, as follows : 
 
 P-5000. This number to be used only by the Chief Coordinator as hereinafter 
 indicated. 
 
 P-5001. Hire of clerks, stenographers, and messengers outside of the District 
 of Columbia, and expert aids for service outside of the District of Columbia. 
 
 P-5002. Traveling expenses of civilian employees, including per diem in lieu 
 of actual expenses not to exceed the rates authorized by law. 
 
 P-5003. Mileage of commissioned officers at the rates authorized by law, 
 including the cost of transportation which may be furnished on Government 
 transportation requests. 
 
 P-5004. Postage, carfare, telephone, telegraph, advertising, printing, station- 
 ery, and other miscellaneous expenses, including personal and nonpersonal 
 services, which may be necessary to effect the inventorying and classifying of 
 surplus property. 
 
 P-5000 is an indefinite purpose symbol number and is to be used only by the 
 Chief Coordinator in event he finds it desirable at any time to issue a procure- 
 ment authority in a specific amount for general purposes without fixing definite 
 amounts for specific purposes. When a coordinator, who has received a pro- 
 curement authority indicating this symbol number, creates obligations there- 
 under, he will substitute for P-5000 the proper symbol applicable to each such 
 obligation, in order that correct cost accounting records may be maintained 
 in the office of the Chief Coordinator. 
 
 6. Each procurement authority issued by the Chief Coordinator will be 
 given an authority number. This number will consist of two parts : 
 
 (a) The serial number of the authority preceded by the letters CC ; and, (6) 
 the purpose symbol number preceded by the letter P. Example : Assuming the 
 twenty-fifth authority issued by the Chief Coordinator covers .$500 for the hire 
 of civilian employees for a given period and $300 for mileage to officers, the 
 procurement authority would issue under one serial number but would specify 
 two complete authority numbers as follows: " CC-25 P-6001 " (for employees) ; 
 " CO-25 P-5002 " (for mileage) ; followed by the proper amount for each in the 
 amount column. 
 
 7. I'rocurement authority by letter or telegram will give the authority num- 
 lier and will be folio-wed as soon as practicable by a formal procurement author- 
 ity which will have stamped acros.s its face, " Confirming telegram (letter) 
 dated " 
 
61 
 
 8. Changes in procurement authorities, involving a cancellation, increase, or 
 decrease, will be issued by the Chief Coordinator on War Department standard 
 yorm No. ila. Column 1 will show the complete authority number in which 
 change is desired ; in column 2 will be typed the word " cancel," " increase," or 
 "decrease" to effect the change desired, and in column 3 will be entered the 
 ■amount of the change. 
 
 9. Forms 41 and 4] a will state "Expenses, sale of surplus Government prop- 
 erty, special fund," in the appropriation title column. 
 
 10. Forms 41 and 41« will be prepared in triplicate. The ribbon copy, signed 
 by the Chief Coordinator or by an officer designated by him, will be mailed to 
 the area coordinator to whom addressed, the duplicate will be sent to the finance 
 officer in the office of the Chief Coordinator, and the triplicate will be retained. 
 
 11. When a procurement authority fixes a definite amount for a specific pur- 
 pose, or group of purposes, obligation.? in excess of this aiiiount nmst not be 
 created for the purpose or graup specified, nor any part of the amount be di- 
 verted to any other purpose. 
 
 12. Area coordinators will be held strictly responsible that obligations in- 
 curred under their direction do not exceed the amounts authorized in a procure- 
 ment authority and that such obligations are for no purpose other than that 
 indicated thereon. 
 
 13. All obligating papers, including travel orders, transportation requests, 
 pay rolls, etc., must show the complete authority number covering the obligation, 
 and all vouchers must show similar information with the amount pertaining to 
 
 •each authority number where more than one is involved. " Expenses, sale of 
 surplus Government property special fund" will be stated on vouchers and pay 
 
 Tolls in spaces provided for appropriation titles. 
 
 14. Area coordinators will instruct their subordinates and dealers to render, 
 direct to their offices, all bills for obligations incurred under their direction. 
 The area coordinator will cause all pay rolls and vouchers to be prepared in his 
 office, certify thereto, attach necessary subvouchers and supporting papers, and 
 refer the completed voucher to the area agent for payment. 
 
 Note. — ^^Var Department, Navy Department, or Treasury Department fomis 
 with certain changes to meet the facts will be used for rolls and vouchers. 
 
 1.'5. All authorized expenses, incident to carrying out the provisions of Cir- 
 cular No. 15, Bureau of the Budget, or instructions amendatory thereto, includ- 
 ing mileage to, but not pay of commissioned officers, will be chargeable against 
 ^' Expenses, sale of surplus Government property special fund." All payments, 
 however, will be made only from funds furnished as herein indicated. 
 
 16. The Treasurer of the United States, upon a request of the Secretary of 
 War, made for the Chief Coordinator for General Supply, will place to the 
 credit of the central finance officer, office of the Chief Coordinator, such funds as 
 may be proper for all disbursements herein contemplated. 
 
 17. The central finance officer, iii the office of the Chief Coordinator, will be 
 -accountable for all funds made available to carry out the provisions of these 
 instructions and will render quarterly accounts, current therefor, through the 
 chief of finance to the General Accounting Office, War Department Division. 
 
 18. The finance officer in the office of the Chief Coordinator will maintain the 
 following current records, each by purpose symbol numbers : (a) Of all procure- 
 ment authorities issued; (&) of all disbursements thereunder; and (o) a con- 
 solidated record of all disbursements made. 
 
 19. Payment of obligations incurred in the office of the Chief Coordinator and 
 for all transportation furnished by transportation companies on Government 
 request will be made by the central finance officer in the office of the Chief 
 Coordinator. 
 
6^ 
 
 20. Payment of obligations, other than transportation above referred to, 
 incurred by the area coordinators and their subordinates will be made by the 
 disbursing officers, located in the following offices, as agents of the central 
 finance officer : 
 
 Fir.st area Finance officer. United States Army, Army base, Boston, Mass. 
 
 Second area Finance officer. United States Army, Army supply base, Brooklyn, 
 
 N. Y. 
 Thrid Area Finance officer. United States Army, general intermediate depot, 
 
 Norfolk, Va. 
 Fourth area__Finance officer. United States Army, Atlanta, 6a. 
 
 Fifth area Finance officer. Fort Benjamin Harrison, Ind. 
 
 Sixth area Finance officer. United States Army, Chicago, 111. 
 
 Seventh area_Finance officer. United States Army, Omaha, Nebr. 
 
 Eighth area-_Finance officer. Fort Sam Houston, Tex. 
 
 Ninth area Finance officer. United States Army, San Francisco, Calif. 
 
 21. Funds required to pay the obligations of area coordinators will be turned 
 over by the central finance officer on War Department finance Form No. 9 to 
 the area agent officers upon request of the latter. This will be accomplished 
 as provided in paragraph 7c, General Orders, No. 13, War Department, 1921. 
 
 22. All transactions between the central finance officer and his area agents 
 win be governed by the provisions of General Orders, No. 13, W. D. 1921. 
 
 23. The central finance officer, as well as the area agents to whom he intrusts 
 those moneys, shall be held pecuniarily responsible therefor to the United 
 States. Area agents will not render accounts current but accountability for 
 funds turned over to them as agent officers will be included in the account 
 current of the Central Finance Officer. 
 
 24. Area coordinators will furnish the disbursing agent officer, who pays 
 their bills on the 20th of each month, an estimate of the amount required to 
 settle the obligations in their areas during the succeeding month. 
 
 25. With the " Return of funds and statement of balance," submitted by 
 agents to the accountable officer on the 25th of each month, under the provisions 
 of paragraph ig, G. O. No. 13, W. D., 1921, the area agent officer will submit 
 request for the additional funds required by him in the succeeding month. 
 
 26. Treasury Department Form 1 (of which Form 2 is memorandum copy 
 and Form 4 is the cover of the book) will be exclusively used for all trans- 
 portation requests for travel of commissioned officers and civilian employees. 
 These forms will specify " Treasury Department," " General Supply Division," 
 and that charges are to be billed against Chief Coordinator, G. S., 14th and B 
 Streets, S.W., Washington, D. C." The memorandum copy of the request will 
 be immediately mailed by the issuing officer to the Chief Coordinator, attention 
 central finance officer. 
 
 27. Officers of the Army and Navy, traveling under orders to carry out the 
 provisions of Circular No. 15, Bureau of the Budget, July 27, 1921, are entitled 
 to mileage at the rates provided by law. 
 
 H. C. Smithes, 
 Chief Coordinator, General Supply. 
 
 EXHIKIT 2. 
 
 Oi'FioE OP Chief Coordinator for General Supply, 
 
 Washingtoti, December 8, 1921. 
 Memorandum for the Director of Sales, War Department : 
 Subject: Plan for tlie complete closing out of the Atlanta general interme- 
 diate depot by June 30, 1!)22. 
 
63 
 
 Reference: (a) Letter Adjutant General of the Army, approving recommen- 
 dation Quartermaster General, relative to abandonment of Atlanta depot. 
 (6) Verbal approval Supply Division, General Staff, of essential features of 
 proposed plan, and method of preparing the details thereof, (c) Confer- 
 ence between the Director of Sales; the depot quartermaster, Atlanta; the 
 area coordinator; representatives of the Chief Coordinator, General Supply; 
 the Quartermaster General, and other interested services, (d) Conference 
 with the Finance Department, (e) Conference with representatives of other 
 departments interested in the transfer of surplus material. 
 
 1. STATEMENT OF SITUATION. 
 
 (1) The leased property occupied by this depot costs the Government ap- 
 proximately $300,000 per sear ; the operating expenses are approximately 
 $450,000 per year. 
 
 (2) The cost value of the supplies stored in the depot is approximately as 
 follows : Quartermaster, $50,000,000 ; Medical, $2,500,000 ; Signal, $500,000 ; Engi- 
 neer, $250,000; total, $53,250,000. 
 
 (Note.— The Air Service has some paint and oils which will be removed 
 immediately ; the Ordnance and Chemical Warfare Service have no supplies 
 at this depot. ) 
 
 (3) Sufficient transportation funds, $16,000, are available to ship to other 
 stations in the fourth corps area Quartermaster Corps supplies for 12 months' 
 maintenance, and $35,000 to ship supplies to other depots which the Engineer, 
 Signal, and Medical Corps jiesire to retain. In addition, there is available at 
 Camp Jessup 75,000 square feet of storage space for inactive quartermaster 
 corps stocks, which can be removed by motor transportation. The remaining 
 stocks, comprising the great "bulk of the supplies at this depot, must be dis- 
 posed of by sale, and transferred to other Government departments. 
 
 (4) The experience of the past two years shows conclusively — 
 
 First. That if the normal procedure is followed with respect to the prepara- 
 tion of Surplus Property Division cards and clearance for sale, it will be utterly 
 impossible to dispose of the enormous stocks at this depot by the end of the 
 present fiscal year, or even for some time thereafter. 
 
 Second. If aU clerical and administrative delays are eliminated, as contem- 
 plated in the following plan, the task can not be accomplished with the operat- 
 ing personnel of the depot. 
 
 Third. That even with simplified procedure and adequate personnel the depot 
 can not be closed out within the time required, without the active and concen- 
 trated effort of every office which exercises control over any phase of the 
 operation. 
 
 (5) Finally, it is desired to stress the importance of considering the time re- 
 quired to move the enormous stocks at this depot, the mere physical handling, 
 the crating .and loading on cars. If the depot quartermaster had shipping in- 
 structions to-day covering his entire stock it would require several months to 
 make shipments. In view of this fact it is essential to the success of the plan 
 that the following preliminary work be accomplished at the earliest possible 
 moment : 
 
 (o) The completion of inventories by the Quartermaster Corps, medical, sig- 
 nal, and engineer sections. 
 
 (6) The determination of supplies to be shipped to other stations, supplies 
 (Quartermaster Corps) to be stored at Camp Jessup, supplies to be transferred 
 to other departments, and the preparation of the remaining supplies for sale. 
 
 (c) The preparation of a sales plan, covering the disposal of the entire sur- 
 plus stocks at the depot. 
 
2. OUTLINE OF PLAN. 
 
 The following plan is the result of the conference indicated in the references 
 and is based on the decision of the War Department to close out the Atlanta 
 general intermediate depot and to declare surplus all supplies stored thereat 
 which can not be stored at Camp Jessup or removed to other stations. 
 
 1. DISPOSITION OF STOCKS. 
 
 (0) Quartermaster section.— Stocks amount to approximately $50,000,000 cost 
 value. Shipment of 12 months' supply of Quartermaster Corps supplies to be 
 made to stations in fourth corps area. It is estimated that $16,000 will be re- 
 quired for this purpose, and this sum is available. Reserve equipment for Na- 
 tional Guard and Reserve Corps to be stored at Camp Jessup, that is, such items 
 as are in stock in the depot. Remainder of stocks to be declared surplus. 
 
 ( 6 ) Medical section. — Comprises proportionate amounts of all classes of sup- 
 plies of approximate cost value of $2,500,000, of which $400,000 has been declared 
 surplus. To ship to other depots such quantity of standard supplies which it 
 is desired to retain as available transportation funds permit, the remainder of 
 stocks to be declared surplus. 
 
 (c) Signal section. — Comprises cable, telephone equipment, and miscellaneous 
 supplies, of the approximate value of $500,000, about 50 carloads. The sur- 
 plus is about 5 per cent. Remainder required for current needs. Believed 
 that suitable storage in sheds can be found at Jessup for cable. Careful 
 examination to be made of lists of material on hand for purpose of determining 
 what should be retained. These materials to be removed to other depots as 
 far as practicable. Remainder to be declared surplus. 
 
 {d) Engineer section. — Have about 200 tons of unit equipment and small 
 amount of rail equipment. The latter to be declared surplus, also as much of 
 the unit equipment as can not be shipped to Columbus depot. 
 
 (Note. — There is available $35,000 transportation funds for removal of Medi- 
 cal, Signal, and Engineer materials.) 
 
 (e) Air Service section. — Have only some paint and oil received from Quar- 
 termaster Department, and arrangements being made to remove same. 
 
 if) Ordnance section. — No supplies on hand. 
 
 (j7) Chemical Warfare section. — No supplies on hand. 
 
 2. LISTS IN LIEU OF SUEPLUS PROPERTY DIVISION CARDS. 
 
 (1) Lists to be prepared in lieu of Surplus Property Division cards in 
 accordance with memorandum. Director of Sales, dated November 26, 1921. The 
 depot quartermaster to submit 5 copies of inventory of November 30 to Director 
 of Sales for examination by other departments entitled to transfers. This 
 inventory to be given a single Surplus Property Division number. The depot 
 quartermaster will then prepare lists of surplus property for sale by deducting 
 from the November 30 inventory the supplies shipped to other stations, sup- 
 plies to be stored at Camp Jessup, and supplies transferred to other depart- 
 ments. This surplus-property list will also contain such other data as is 
 required for purposes of sale, and when completed copies will be furnished 
 the Director of Sales, and the Surplus Property Office, Quartermaster Corps. 
 
 (2) Similar action to be taken iu the case of Medical, Signal, and Engineer 
 property. 
 
 (3) No additional declarations of surplus should be made between now and 
 the final declaration covering the entire surplus stocks. This is essential for 
 purposes of simplification. 
 
65 
 
 S. STORAGE SPACE AT CAMP JESSXJP. 
 
 The only storage available at Camp Jessup is a building with concrete floor 
 containing 75,000 square feet of floor space. This storage to be utilized by the 
 quartermaster corps for storage of reserve equipment for National Guard and 
 Reserve Corps of the fourth corps area. The Quartermaster's Department will 
 use available motor transportation to transport supplies to Camp Jessup. 
 
 4. MATERIALS TRANSFERRED TO OTHER DEPARTMENTS. 
 
 (1) The quartermaster inventories of November 30, to be forwarded 5 copies 
 to Director of Sales as soon as completed in order that the department entitled 
 to transfers may complete their examination of same at the earliest possible 
 moment. 
 
 (2) Inventories, or lists of surpluses, of Medical, Signal, and Engineer mate- 
 rials, should also be promptly filed for the same purpose. As a large part of 
 the medical supplies will probably be required by the Veterans' Bureau, it is 
 important that the transfer of such material be arranged as soon as practicable. 
 
 (3) The departments to be required to remove the materials transferred to 
 them as soon as possible. To facilitate this, it is essential that the depot quar- 
 termaster assign suitable space to each department so that their material can be 
 segregated and prepared for shipment without interfering with the operation of 
 the depot. 
 
 5. FUNDS REQUIRED FOR PREPARATION OF SALE. 
 
 (1) It is estimated that the sum of $162,624 will be required for listing, 
 checking, classifying, segregating, packing, crating, handling, and loading quar- 
 termaster supplies preparatory to sale and in making shipments to purchasers. 
 (See inclosure (o) , for detailed estimate.) It is believed that the personnel 
 called for in this estimate will also be sufficient to prepare the Medical, Signal, 
 and Engineer supplies for sale. 
 
 (2) It was originally intended to supply funds of the Chief Coordinator, Gen- 
 eral Supply, for this project. As Col. Zalinski, the depot commander, has funds 
 derived from proceeds of sales, which may be used on this project, such funds 
 should be drawn upon, thereby making use of the set-up which he now has. 
 if it is found that similar funds are not available for preparing for sale Medi- 
 cal, Signal, or Engineer property, the officer in charge of sales should call upon 
 the area coordinator for the necessary assistance. 
 
 6. METHODS OF SALE. 
 
 (1) It is essential that a special sales project be prepared as soon as prac- 
 ticable covering the disposal of the entire stocks at this depot. The sale of 
 large stocks of certain commodities, which can not be disposed of in the local 
 market, should begin as soon as practicable. The final clean-up sale should 
 take place not later than the middle of May. 
 
 (2) An auction sale should be held at an early date covering all materials 
 now declared surplus pertaining to all supply branches, except those articles of 
 which there are large stocks to be disposed of. This sale to be a clean up of 
 surplus property which will not be included in the final declaration of surplus. 
 
 (3) No more declarations of surplus to be made of materials at this depot, 
 pending final declaration of surplus. 
 
 I H. C. Smithes, 
 
 Chief Coordinator, General Supvly. 
 
 86484°— 22 5 
 
66 
 
 The following shows the procedure followed in the preparation 
 of the sales project, referred to in subparagraph 6, paragraph 2, of 
 the foregoing plan : ^^^ 
 
 JLF. 
 
 Wae Depabtment, 
 Office of the Quartebmastee General of the Aemy, 
 
 Washington, January IS, 1922. 
 In reply refer to ASW. 400.703. 
 
 Memorandum to Assistant Secretary of War, attention of Director of Sales. 
 Subject : Tentative sales plan, Atlanta depot. 
 Reference: Atlanta inventory, Nov. 30, 1921. 
 
 In the liquidation of War Department surplus at Atlanta, the following gen- 
 eral plan is proposed : 
 
 METHODS OF SALE. 
 
 Two general methods of sale will be used, (1) auction, (2) sealed bids. 
 Auctions. — Auctions will be held as follows : 
 
 Mar. 2. Component parts of equipage. 
 
 Textiles. 
 
 Clothing. 
 
 Equipage. 
 Mar. 23. Hardware and building material. 
 
 Fuel, oil, paints, and chemicals. 
 
 Utilities supplies. 
 
 Supplies, equipment, and machinery for clothing-repair 
 shops. 
 
 Supplies, equipment, and machinery for hat-repair 
 shop. 
 
 Supplies, equipment, and machinery for shoe-repair 
 shop. 
 
 Animal and hand drawn vehicles and parts. 
 Apr. 13. Subsistence. 
 
 Mess furniture and equipment. 
 
 China, glass, and table ware. 
 
 Kitchen utensils. 
 
 Educational and recreational supplies. \ If necessary. 
 
 Stationery, office supplies, furniture, and equipment. 
 
 Heating and laundry stoves and parts. 
 May 4. Clean-up sale. 
 May 25. Clean-up sale. 
 
 Sealed-hid sales. — It is proposed to dispose of all neiv materials held in large 
 quantities (true surplus) included in the inventory, which have a particular 
 commercial value, by sealed-bid sales, to begin as soon as withdrawals by 
 other executive departments and bureaus are completed and clearance effected. 
 In determining the items to be sold by sealed bid due consideration will be 
 given to the necessity of including a sufficient variety of commodities in auction 
 sales to make them attractive. All sealed-bid sales to be completed by May 1 
 in order to permit materials then remaining unsold to be included in the May 
 clean-up sales. 
 
 Remarks. — Withdrawals by other departments from the Inventory now in the 
 hand of the Director of Sales should be expedited in order that all concerned 
 
 Except as noted 
 under sealed- 
 bid sales. 
 
may be fully informed as to the true surplus remaining and plan accordingly. 
 Advertising should be general in scope and cover the country. Publicity should 
 be handled by the Sales Promotion Section, Office of the Director of Sales. 
 The plan proposed is based on the surplus holdings of the Quartermaster Corps, 
 and plans of other services having surplus at Atlanta undoubtedly will be 
 coordinated by the Director of Sales to conform. 
 By authority of the Acting Quartermaster General: 
 
 Charles N. Neal, 
 Captain, Quartermaster Corps, 
 Acting Chief, Surplus Property Division, 
 [Copy.] , 
 
 ASW 400.703. 
 
 JEF-arb 
 [1st Indorsement.] 
 
 Office of the Dieectoe of Sales, 
 Washington, D. C, January 16, 1922. 
 To the Assistant Secketaet of Wae : 
 1. Forwarded, recommending approval with the following modifications : 
 (o) That the principal method of disposal of articles in which only a limited 
 number of buyers are interested will be by sealed bids, e. g., machinery and 
 supplies for hat shops, shoe-repair shops, laundries, etc. 
 
 (6) That the ofEerings by sealed bid be limited, except in cases falling under 
 (a) above, to commodities available in relatively large quantities. (This is 
 Indicated by interlineation on the second page.) 
 
 (c) That in every case where sealed bids are used, all items must have an 
 upset price approved by this office prior to the award. 
 
 Glen E. Edgeeton, 
 Major, Corps of Engineers (D. 0. L.), 
 
 Director of Sales. 
 [2d Indorsement.] 
 
 Office of Assistant Seceetaet of Wae, 
 
 January 18, 1922. 
 To the Dieectoe of Sales : 
 Approved as modified by the 1st indorsement above. 
 By order of the Assistant Secretary of War : 
 
 J. S. Faie, 
 Lt. Col-.O. S. 
 
 3731 
 
 GEE. 
 Wae Depaetment, 
 Office of the Dieectoe of Sales, 
 
 Washington, January 21, 1922. 
 In reply refer to ASW 400.703. 
 
 Memorandum for the Chief Coordinator, General Supply. 
 Subject : Sales plan for the Atlanta depot. 
 
 1. I am forwarding herewith the general sales plan tentatively adopted for 
 the disposal of surplus stocks at the Atlanta depot. The original plan was 
 prepared by the Surplus Property Division, office of the Quartermaster General. 
 Slight modifications are proposed in the first indorsement by thjs office, and 
 the plan, as modified thereby, has been approved by the office of the Assistant 
 Secretary of War. 
 
68 
 
 2. The list of the. surplus property pertaining to the Quartermaster Corps, 
 which comprises the bulk of the stpcks for disposition, has been cleared through 
 this office. Instructions have been issued for the shipment of the supplies 
 requisitioned by other departments of the Government, and the work of selecting 
 the articles and commodities to be offered by sealed bids and of classifying the 
 remainder for the several auction sales indicated in the plan is being undertaken. 
 
 3. It is requested that any suggestions that your office can make as to possible 
 improvements in this plan be furnished as soon as your study can be completed. 
 
 Glen E. Edgebton, 
 Major, Corps of Engvneers (D. 0. L.), Director of Sales. 
 [Incls. Memo 1/13/22 from S. P. D. mtr 1st and 2d Ind. thereon.] 
 
 3731 
 
 [1st indorsement.] 
 
 Office Chief Cookdinator, Genekal >Supply, 
 
 Washington, D. C, January 26, 19S2. 
 To Director of Sales, 
 
 War Department, Washington, D. C. 
 
 1. Returned. 
 
 2. The foregoing plan was submitted to the Federal Liquidation Board at, 
 its regular meeting held on January 25, 1922. The plan was approved by the 
 board with the modiflcations contained in first indorsement addressed to the 
 Assistant Secretary of War, dated January 16, 1922. 
 
 3. Prior to its submission to the board the plan was given careful study in 
 this office in conjunction with representatives of the Department of Commerce. 
 
 H. C. Smitheb, 
 Cliief Coordinator, Getieral Supply. 
 [Enc. 2.] 
 
 Exhibit 3. 
 
 governjtent purchasing aoents' association, 
 
 Washington, D. C, December 5, 19B1. 
 
 Another meeting of the Government Purchasing Agents' Association will be 
 held on December 5, 1921, In the offices of the General Supply Committee, Four- 
 teenth and B Streets S^^^, in order that the officials of the War Department who 
 are responsible for the transfer of surplus property may discuss the situation 
 with the members of this association. 
 
 Maj! H. M. Raynor, Chief Transfer and Inventory Section, and his assistants, 
 Capt. G. L. Kraft and Lieut. Wm. H. S. Callahan, will be present and at that 
 time outline the method adopted by the ^\'ar Department of answering inquiries 
 and effecting transfers. It is hoped that the members of the association will 
 e.xpress their views as to the difficulties experienced with the War Department, 
 in order that the work of the purchasing agents may be expedited through closer 
 cooperation. 
 
 This will be the second meeting at which the purchasing officers as a whole 
 will have an opportunity of meeting the officials of a large holding service. The 
 first meeting of this kind was held on November 21, at which time Mr. Jacobs, 
 In charge of interdeimrtraental tnuisfers in the Shipping Board, with Messrs. 
 Rock and Dugan outlined the method in vogue in that board in effecting trans- 
 fers of surplus property and answered the inquiries of the members present. 
 
 It is hoped that all members will make an effort to be present, as it is believed 
 that the time taken will be well spent. 
 
 A. G. Drane, President. 
 K. T). McUae, Secretar-j/. 
 
69 
 
 
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70 
 
 Exhibit 5. 
 
 intekdbpartmentai, agreement for the handi.ino of surplus war materials 
 at camp funston, camp grant, camp pike, atlanta depot, and the haw- 
 thorne warehouses. 
 
 1. It is desired to expedite the abandonment of and, therefore, 
 
 necessary to dispose of at once all Government materials, equipment and sup- 
 plies now stored at said camp by transfer to other Government departments 
 and by sale. 
 
 2. Since the Department of Agriculture has received to date the largest 
 quantity of surplus war materials and since it has a field force organized and 
 available at and also has funds available for paying the expenses con- 
 nected with the sorting, handling, loading, and shipment of such surplus 
 materials, it is hereby agreed by the undersigned, an authorized representa- 
 tive of the that the Department of Agriculture is authorized to re- 
 ceive and ship all war materials now stored at '■ — that have been requisi- 
 tioned, or may be requisitioned, for transfer to said Department of . 
 
 The Depa'rtment of Agriculture agrees to make the necessary inventories, to sort, 
 pack, and ship all such surplus war materials and pay all expenses connected 
 
 therewith. It is agreed on the part of the — \ that it wiU reimburse the 
 
 Department of Agriculture by a suitable transfer of funds for its pro rata 
 share of such expense, which shall bear the same ratio to the total expense 
 as the value of the surplus materials shipped to said department bears to 
 the total value of all the surplus war materials shipped by the Department 
 of Agriculture to all Government departments. 
 
 3. The allotment of such materials to Government departments will be 
 made, and clearances therefor will be issued by the Director of Sales; ship- 
 ments to be made by the Department of Agriculture as provided in paragraph 2. 
 
 4. Each Government department concerned is authorized to have a repre- 
 sentative at '- — . The Department of Agriculture agrees' to select (in case 
 
 a department Is not represented) and ship materials in an Impartial manner. 
 
 It Is further understood that Federal departments are to have priority in 
 the selection of materials over State or other municipal authorities. 
 
 Be'partment of Agriculture. 
 
 The United States PuUio Health Service. 
 
 The Supei-vising Architect. 
 
 The Yeterans' Bureau. 
 
 Some for Disahled Volunteer Soldiers. 
 
 St. Elizabeths Hospital. 
 Approved : 
 
 H. C. Smithee, 
 
 Chief Coordinator, 
 General Supply. 
 
REPORT ON 
 PUBLIC PRINTING AND BINDING 
 
 Submitted by 
 Mr. a. R. BARNES. 
 
 (71) 
 
Treasury Department, 
 Washington, Jamuary 26, 1922. 
 Hon. Charles G. Dawes, 
 Director of the Budget, 
 
 Washington, D. G. 
 
 IN RE government PRINTING OrFICE. 
 
 Dear Sir: Below I give you some facts and figures which will 
 indicate the progress of the work of economy and savings in the 
 Government printing and binding. 
 
 In the latter part of July, 1921, in conformity to an order sent 
 out by you, a permanent conference on printing was organized. Mr. 
 George H. Carter was made the permanent chairman of this organi- 
 zation. The purposes of this organization were twofold. First, to 
 reduce, as far as possible, the amount of Government printing and 
 binding by the elimination of unnecessary reports, bulletins, pub- 
 lications, etc. Second, by standardizing and changing the specifica- 
 tions to reduce the cost of such printing as was found to be necessary. 
 A great deal of printing, either unnecessary or where the usefulness 
 was not commensurate with the cost, has been eliminated. There 
 was established, under the direction of Mr. Carter in the Public 
 Printing Office, a board of review. The work of this board was to 
 carefully scrutinize the requisitions as they came to the office from 
 the various departments, with a view to reducing the cost of the 
 work without impairing its usefulness. Weekly reports of the esti- 
 mated savings effected by this board of review have been made to me 
 since its organization. The savings have been very considerable, 
 and it is my belief that in the future there will be still greater sav- 
 ings. In the first six months of the fiscal year 1921 there were pay- 
 ments made and obligations incurred amounting to $5,758,851.08. In 
 the first six months of the fiscal year 1922 the payments made and 
 obligations incurred amounted to $4,494,421.53. This shows a decrease 
 of $1,264,429.55. This decrease, I think, was largely due to a 
 reduction in the volume of work done. The cost of operation is also 
 interesting. In the first six months of the fiscal year 1921 the cost 
 of operation made up of wages and salaries paid, plus stock and 
 materials used, was $6,999,484.59. The same items in the first six 
 months of the fiscal year 1922 were $5,029,208.88, a decrease of 
 $970,276.71, or about 22.4 per cent. 
 
 (73) 
 
74 
 
 APPEOPEIATION AVAILABLE FOE FEINTING AND BINDING. 
 
 Sundry Civil Bill for 1922 appropriated $7,653,020.70 plus $166,- 
 702.70 available for 1922 out of 1921 deficiency appropriation plus 
 $167,618 in Deficiency Bill for 1922, total $7,653,020.70. 
 
 The amount expended to December 31, 1921, from this total appro- 
 priation was $3,222,645.29. The balance of the expenditures, $1,247,- 
 467.29, was from the " repay work " collections. 
 
 To summarize, instead of spending 50 per cent of the appropriation 
 in the first six months, only 42 per cent was expended. Early in 
 July of 1921, when the Director of the Bureau of the Budget asked 
 for an estimate of the savings that could be effected out of the appro- 
 priations then existing, it was promised that a total saving for the 
 year of $1,123,536 would be made. Up to December 31, 1921, the 
 first six months of the year, the savings have amounted to $603,865.06, 
 which is a little over 51 per cent of the savings promised for the 
 whole year. It is my belief that by the end of the present fiscal year 
 the total savings will equal, perhaps exceed, the amount promised. 
 
 REPAY WOEK. 
 
 For the fiscal year of 1921 this work amounted to $5,782,136.05. 
 For the first six months ending December 31, 1921, it has amounted 
 to $2,422,696.34. The estimated amount for the entire year is 
 $4,800,000. 
 
 POSTAL-CAED PEODTJCTTON. 
 
 By a reduction in price occasioned chiefly by a change in market 
 price of the raw material, a saving to the Post Office Department has 
 been effected, which, up to December 31, 1921, amounted to $414,000. 
 It is believed that still further reductions in the cost of this item 
 will be effected. 
 
 ANNUAL REPORTS. 
 
 A good many annual reports have either been curtailed in size or 
 dropped altogether. The amount of this saving, stated in number of 
 pages, is 3,054. The report of the Chief of Engineers of the War 
 Department will omit certain parts which are published in the general 
 report of the War Department, which will effect a saving of approxi- 
 mately 2,000 pages more, making the total number of folios which 
 will not be printed this year about 5,000. The saving on this score 
 will be very considerable. 
 
 PERSONNEL. 
 
 There has been a considerable reduction in the number on the pay 
 roll. For instance, on January 24, 1922, there was a decrease, as 
 
75 
 
 ■compared with January 25, 1921, of 207. As compared with Janu- 
 ary 27, 1920, the decrease was 869. It is believed that still further 
 jeductions will be made in the near future. 
 
 COST OF MATERIAL. 
 
 The Joint Committee on Printing have recently made exceedingly 
 favorable contracts for the purchase of material for the next six 
 months. It is my belief that very considerable savings will be an- 
 nounced in the Public Printing Office owing to this very favorable 
 ■contract made by the Joint Committee on Printing. 
 I I can not speak too highly of the work of Mr. Carter in bringing 
 " about much that is recited above. His work has been most efficient 
 
 and faithful. 
 I' Kespectf uUy, 
 
 ' A. E. Barnes, 
 
 I" Special Investigator. 
 
REPORT OF THE 
 CHAIRMAN OF THE FEDERAL TRAFFIC BOARD 
 
 Submitted by 
 Commander C. G. MAYO, U. S.N. 
 
 (TTi 
 
REPORT OF THE CHAIRMAN OF THE FEDERAL TRAFFIC 
 
 BOARD. 
 
 December 31, 1921. 
 From : Chairman Federal Traffic Board. 
 To : The Chief Coordinator for General Supply. 
 Subject: Rendition of quarterly report to Director of the Bureau of 
 the Budget. 
 
 The following report of the functioning of the Federal Traffic 
 Board since its inception is submitted in accordance with your re- 
 quest of December 14, 1921. This report is divided into three gen- 
 eral heads — organization, policies, and operation. 
 
 ORGANIZATION. 
 
 For some time previous to October 1, 1921, a traffic expert, under 
 the direction of the Director of the Bureau of the Budget, made a 
 careful study into traffic conditions in the Government bureaus and 
 departments. As a result of this study it was determined by the 
 Director to establish a Federal Traffic Board, which was to be charged 
 with the effecting of economies possible by reason of concentration 
 under one head of the coordination of all Government traffic. 
 
 On October 1, 1921, the Director of the Bureau of the Budget noti- 
 fied me that I was to be placed in charge of this work, which should 
 be started as soon as possible. The time between this date and 
 October 10, 1921, was devoted to a study of the situation and con- 
 sultation with the Chief Coordinator for General Supply and his 
 office. 
 
 The order establishing the Federal Traffic Board (Circular No. 41, 
 Bureau of the Budget) was issued October 10, 1921 (Appendix No. 
 1). This was followed by the issuance on October 17 of Circular 
 No. 43, Bureau of the Budget, appointing me coordinator for traffic 
 and chairman of the Federal Traffic Board. 
 
 The order establishing the Federal Traffic Board directed that 
 each Government department immediately designate one represen- 
 tative to serve as a member of the board, and these nominations 
 began to be received by the Chief Coordinator for General Supply 
 very shortly. 
 
 On October 31, 1921, the first meeting of the Federal Traffic Board 
 was held, and previous to that date I had taken occasion to per- 
 
 (79) 
 
80 
 
 sonally meet and confer with each member of the board as his nomi- 
 nation was received from his department. In this way it was possi- 
 ble to form an accurate estimate of the previous experience and 
 training of the members and decide exactly in what way their serv- 
 ices could be best utilized on the board. At this first meeting, which 
 was addressed by Col. H. C. Smither, the Chief Coordinator for 
 General Supply, and by the coordinator for traffic, the aims and pur- 
 poses of the board were defined and the organization into five com- 
 mittees outlined. 
 
 In an organization as large as the Federal Traffic Board, consist- 
 ing of 26 members, it is necessary that the work be divided into 
 more or less strictly defined parts, each part being handled by the 
 group of men best qualified by their experience and knowledge for 
 the work. The five committees mentioned and their duties are as 
 follows : 
 
 CLASSIFICATION COMMITTEE. 
 
 (a) study of the freight classification problems confronting the various de- 
 partments and independent establishments of the Government. 
 
 (b) Recommend such changes as will effect economies and better business 
 administration throughout the Government service in the handling of traffic. 
 
 ( c ) In cooperation with the representatives of the Interstate Commerce Com- 
 mission and the carriers establish unifonh classification for all commodities, 
 including raw materials as well as finished products shipped by the Govern- 
 ment, so that shipments may be made at the lowest possible tariff rates. 
 
 (d) Classification to be based upon the relation which commodities bear to 
 each other in such respects as character, use, bulk, weight, value, tonnage or 
 \'i)lume, risk, cost of carriage, ease of handling, and control of conditions caused 
 by competition. 
 
 The chairman of this committee is Mr. J. C. Colquitt, the member 
 of the board representing the Interstate Commerce Commission, who 
 has made a life study of classification. 
 
 EOUTING COMMITTEE. 
 
 (a) Study of freight-traffic problems confronting the various departments and 
 independent establishments of the Government. 
 
 (h) Plans for improving and standardizing methods of making shipments so 
 that there may be utilized in a more practicable way the various carrying facili- 
 ties available. 
 
 (r) Keconnnend such changes as will effect economie.s and better business 
 administration throughout the Government service in the routing of freight 
 traffic. 
 
 (d) Correctly route, either by general direction or by direct assignment of 
 I lie actual route, all Government shipments. 
 
 The chairman of this committee is Mr. H. B. Knowles, representa- 
 ti^•e on the board of the A^'ar Department, who has had many years 
 e.\]iericncc in railway, legal, and military service. 
 
81 
 
 PASSENGER TRAFFIC COMMITTEE. 
 
 (o) Make a complete study of passenger traffic problems confronting the 
 various departments and independent establishments of the Government. 
 
 (6) Recommend such changes as will effect economies and better business 
 administration throughout the Government service in the handling of passenger 
 traffic. 
 
 (c) Draw plans for Improving and standardizing methods in handling pas- 
 senger traffic. 
 
 (d) Furnish, upon request, routes and rates for Government passenger 
 traffic. 
 
 The chairman of this committee is Mr. G. W. Love, of the Depart- 
 ment of Labor. 
 
 ACCOUNTING AND PAYMENTS COMMITTEE. 
 
 (a) Make a complete study of traffic accounting problems confronting the 
 various departments and independent establishments of the Government. 
 
 (6) Institute methods for the prompt settlement of all transportation ac- 
 counts. 
 
 (c) Draw plans for improving and standardizing throughout all Government 
 departments and establishments the methods for the settlement of accounts. 
 
 The chairman of this committee is Mr. E. M. Foster, specially ap- 
 pointed by the War Department by reason of his wide experience in 
 the financial methods of the Government and particularly as per- 
 tain to transportation accounting. 
 
 PARCEL-POST AND EXPRESS COMMITTEE. 
 
 (o) Make complete study of parcel-post and express shipment problems con- 
 fronting the various departments and independent establishments of the 
 Government. 
 
 (b) Eecommend such changes that will effect economies and better business 
 administration throughout the Government service in the handling of parcel- 
 post and express shipments. 
 
 (o) Draw plans for improving and standardizing methods of making parcel- 
 post and express shipments. 
 
 (d) Make a thorough study of the question of substitution of parcel-post ship- 
 ments for express shipments throughout the Grovernment. 
 
 The chairman of this committee is Mr. G. W. Smith, who has had 
 wide experience both in railway accounting and governmental ac- 
 counting work, and who is a representative on the Federal Traffic 
 Board from the Post Office Department. 
 
 There have further been appointed assistants to each committee, 
 men who are specially qualified by reason of their experience both in 
 the railway world and in the Government. In addition to the above, 
 Mr. E. B. Kennedy has been appointed secretary of the board, and 
 he devotes his entire time to the work of the board, as do the three 
 assistants to the various committees, and, of course, five clerks as- 
 signed by the various Government departments to the board. Ap- 
 pendix No. 2 gives the personnel of the board and of the committees. 
 86484°— 22 6 
 
82 
 
 The members of the Federal Traffic Board devote such time as they 
 can spare from their regular duties in their departments to the work 
 of the board, some of the members devoting their entire time to traffic 
 conditions in their own departments and to the work of the board. 
 Other members, by reason of the fact that there happens to be little 
 or no traffic work in the department represented by them, are not 
 called upon for more than the making of reports and the attendance 
 at the meetings of the various committees and of the board. 
 
 In order that there might be no overlapping of dates of meetings 
 of the various committees of the board, definite dates have been set 
 for each committee meeting, which are as follows : 
 
 Routing committee, second and fourth Tuesday at 2 p. m. 
 
 Classification committee, second and fourth Thursday at 2 p. m. 
 
 Passenger traffic committee, eighth and twenty-second of each month at 10 a. m. 
 
 Payments and accounting committee, second and fourth Monday at 9 a. m. 
 
 Parcel post and express committee, second and fourth Friday at 9 a. m. 
 
 This assures each member of the committee an opportunity to so 
 arrange his work in his own department that he may be present at all 
 committee meetings and so that members of other committees may 
 attend meetings if they so desire. 
 
 In addition to the five committees outlined above, there will be 
 shortly announced the personnel of a planning committee, consisting 
 of the coordinator for traffic as chairman, and as members the chair- 
 men of the various committees enumerated above and certain other 
 members of the board whose specialized knowledge of railroad and 
 traffic conditions is of particular value to the board. This committee 
 will thoroughly study recommendations made by other committees 
 of the board and will analyze them in full before they are presented 
 to the full meeting of the Federal Traffic Board for action. 
 
 As suggestions ar£ received from any member of the board they 
 are immediately referred to the proper committee for study and re- 
 port. Provided a favorable report is made in the committee directly 
 concerned the matter will be then placed before the planning com- 
 mittee for consideration in its relation to all departments of the 
 Government and for final revision. Upon approval of this commit- 
 tee the matter will be placed before a full meeting of the Federal 
 Traffic Board, in order that there may be obtained the views of the 
 members representing all Government departments. 
 
 Coincident with the establishment of the Federal Traffic Board the 
 President of the United States requested the following gentlemen to 
 serve in an advisory capacity to this board : 
 
 Mr. Ralph C. Caples, chairman. 
 
 Mr. Lewis J. Spence, director of traffic. Southern Pacific Railway. 
 
 Mr. George H. Ingalls, vice president New York Central Innes. 
 
 Mr. Lincoln Green, vice president Southern Railway system. 
 
 Mr. H. M. Adams, vice president Union Pacific system. 
 
 Mr. Archibald Fries, vice president Baltimore & Ohio Railroad. 
 
83 
 
 Mr. Caples is a man of wide experience in railroad and commercial 
 traffic work. 
 
 Mr. Spence, Mr. Ingalls, and Mr. Green are, respectively, chairmen 
 of the executive committee of the Western, Eastern, and Southern 
 Freight Rate Associations. Mr. Adams was in charge of Govern- 
 ment traffic in the War Department during the World War, and has 
 a wide knowledge of transportation conditions in the Government. 
 Mr. Fries has wide experience and ability in railway matters and has 
 been in intimate touch with governmental affairs. 
 
 POLICIES. 
 
 The first meeting of this advisory committee was held on November 
 1, 1921, with the Director of the Bureau of the Budget, the Chief Co- 
 ordinator for General Suppty, and the Coordinator for Traffic. At this 
 meeting the coordinator for traffic placed before the advisory com- 
 mittee the broad question of the method to be followed in the routing 
 of Government commodities, asking their recommendation as to which 
 of the following three plans should be adopted : 
 
 (1) All commodities to be routed via initial carrier only. 
 
 (2) All commodities to be routed by a committee appointed by the railroads, 
 who would equalize the tonnage among the various roads concerned. 
 
 (3) All commodities to be routed throughout the movement by the Govern- 
 ment. 
 
 The advisory committee unanimously stated that method three 
 should be followed by the Federal Traffic Board, and this has been 
 adopted as one of the permanent policies of the board. 
 
 At the first meeting of the Federal Traffic Board it was decided that 
 all contact between the board and the Government departments and 
 establishments should be through the representative of such Govern- 
 ment department or establishment on the board. 
 
 It was further decided that it would be wise to strengthen in every 
 way possible the position of such member in his own department as 
 regards traffic matters in that department. In all cases where there is 
 any appreciable amount of traffic work in a department or establish- 
 ment the representative has been appointed because of his experience 
 and training in traffic matters. 
 
 The policy is therefore to look to each member for the carrying out 
 of the recommendations of the Federal Traffic Board and to, wher- 
 ever possible, use each member as the nucleus around which to build 
 a traffic organization in cases where the department concerned has no 
 such organization. 
 
 The Federal Traffic Board will as a matter of policy recommend 
 through the proper channels the presentation to Congress of a bill 
 amending section) 22 of the act to regulate commerce, which will 
 authorize the carriers to grant a voluntary concession covering the 
 
84 
 
 transportation of all persons Avliose travel is. paid by the United 
 States Government. Such amendment will grant the carriers au- 
 thority to extend the arrangement now in effect for the transporta- 
 tion of troops, whereby the railroads will allow 3 per cent deduc- 
 tion, with special exceptions, from all lawful competitive fares as 
 on file with the Interstate Commerce Commission or State commis- 
 sions, from starting point to destination at time of movement, less 
 lawful land-grant deductions to all military branches, to embrace 
 and include the personnel of all Government departments and 
 establishments. 
 
 This is not a matter that has been objected to seriously by the 
 railroads, the point at issue being whether or not the concession 
 "would be legal as extended only to the Government, or whether it 
 would involve extension to all persons traveling upon said roads. 
 The railroads have not been willing, by reason of acceptance of 
 such deduction to the Government as a whole, to place themselves 
 in a position that would be a technical violation of the interstate 
 commerce act. 
 
 The Federal Traffic Board will also endeavor to extend this 
 agreement to the transportation of officers' dependents, taking the 
 stand that inasmuch as the expense of transporting these depend- 
 ents is borne by the Government and is incident to the transporta- 
 tion of the officer and is practically tantamount to a movement 
 directed by the Government, that the deduction should also apply 
 t^o them. 
 
 As another general policy it has been decided to replace in all 
 cases possible, express shipments by freight shipments or by parcel- 
 post shipments. 
 
 It will be the policy of the board to secure the issuance of orders 
 that will prevent money appropriated in any one year being spent 
 for passenger scrip to be used during the following fiscal year, this 
 being nothing more or less than the unauthorized use of money 
 appropriated for one fiscal year in a future fiscal year. The use of this 
 scrip also lends itself to various abuses which may or may not be 
 detected and stopped by the department concerned. 
 
 As a fixed policy of the board it has been decided that there 
 should be one central office to which all carriers will submit their 
 bills for passenger, freight, and express movements and that absolute 
 standardization of methods in the submission of, audit of, and pay- 
 ment of all such bills be made. 
 
 Up to the present time the Federal Traffic, Board has not con- 
 cerned itself directly in the routing of materials moving by Gov- 
 ernment conveyance, or by trans-Atlantic, trans-Pacific, and coast- 
 line carriers, other than the consideration of such water transporta- 
 
85 
 
 tion in competition with railroad transportation in the establishment 
 of individual routings. The matter, however, is being given close 
 attention by the board, and the matter of passenger transportation 
 by water is being studied by the passenger traffic committee of the 
 board, and is now in conference between this committee and the 
 Emergency Fleet Corporation, looking into the possibility of ob- 
 taining special rates for the transportation of Government em- 
 ployees. It has been carefully estimated that the saving of such a 
 policy in the departments will amount to approximately $300,000 
 per year. 
 
 In addition to the above. Government conveyances will in every 
 case be considered and space applied for whenever any large move- 
 ment of Government commodities is concerned. 
 
 Probably the most important policy to be adopted is the plan 
 devised by Mr. H. B. Knowles, chairman of the routing committee 
 of the board, which, in brief, is to arrange -njith the carriers for the 
 publication of fiat rates applicable on Government traffic eliminating 
 fractions. This plan which I will refer to as the Knowles plan, with 
 slight modifications, will be negotiated immediately with the carriers, 
 and it is safe to state that within 60 days will be ready for approval 
 by the Government and the carriers. In its complete outline it is as 
 follows : 
 
 To arrange with the carriers for the publication and issue of 
 special tariffs which will give flat rates eliminating all fractions. 
 All rates now published in the carriers' tariffs are fixed upon some 
 basis and there is no reason why the fiat figures should not be named 
 specifically in the tariffs for the Government the same as they are 
 now named and made applicable for use on commercial shipments. 
 
 This may appear a gigantic task, involving as it does all the car- 
 riers in the United States, but inasmuch as these carriers have or- 
 ganizations of their own through membership in various committees 
 the work could be divided among the roads so as to accomxDlish the 
 work speedily. As an example, the transcontinental haul is con- 
 trolled by three organizations, the Transcontinental Freight Bureau, 
 the Central Freight Association, and the Trunk Line Association, 
 
 The detailed handling of this transcontinental tariff is vested in 
 the Transcontinental Freight Bureau so that the entire territory in 
 the East from the Missouri Kiver to the Atlantic seaboard, also the 
 Pacific coast territory comprising the States of Montana, Washing- 
 ton, Oregon, Utah, Wyoming, California, Arizona, Nevada, and 
 New Mexico, is handled by this one bureau. 
 
 It is well known that long-haul carload traffic is handled under 
 commodity rates and the commodities now carried in the transcon- 
 tinental tariffs which are now used by the Government could be 
 
86 
 
 designated to the transcontinental carriers so that they could quickly 
 show net rates of each and every commodity that might be found to 
 be necessary. 
 
 The same treatment could be accorded the class rates, thus through 
 this one agency the rates on a large number of the items of our traf- 
 fic could be figured without any expense to the Government. 
 
 Large quantities of Government freight are moved in territory 
 other than that known as the transcontinental territory and the same 
 action would be taken with other committees and individual carriers 
 to accomplish the same result on all other territories throughout the 
 United States. 
 
 The object thus obtained could be summarized briefly as follows: 
 
 1. The cumbersome method of figuring land-grant on each and every ship- 
 ment and the necessity of ascertaining carriers' divisions and what lines equal- 
 ize and what lines do not would be eliminated. 
 
 2. The publication of Government tarifts naming flat rates would do away 
 entirely with any questions as to the application of such rates in connection 
 with the numerous routes available. 
 
 3. It is proposed to have all routings shown in these proposed tariffs and 
 give each carrier the opportunity to participate or to file its objection thereto, 
 thus it would be possible at all times to readily quote a rate and all routes 
 over which such rate would apply. 
 
 4. The tariffs thus published would show a list of carriers that are parties 
 to same and give to the Federal Traffic Board valuable and necessary informa- 
 tion in the designation of routing. 
 
 5. These tariffs would eliminate entirely the difficulty that is now experi- 
 enced by the Federal Traffic Board in ascertaining the equalizing carriers over 
 the various parts of the routes employed. 
 
 6. It is further proposed to have the carriers publish not only transcon- 
 tinental rates but tariffs of the heavy commodities, such as coal, lumber, 
 cement, live stock, grain and grain products, hay and straw, following the 
 same principle now employed by the carriers in the publication of their own 
 tariffs covering commercial traffic. 
 
 7. It is proposed to give careful attention to the checking of these proposed 
 tariffs, so that the flat rates, when published, can and will be applied without 
 question, resulting in prompt settlement with the carriers, thus securing their 
 cooperation. 
 
 It will be obvious that, after flat rates have been published and 
 checked, the necessity of further checking will be eliminated, result- 
 ing in a great saving of time and expense now employed due to the 
 cumbersome method in force. The carriers, as well as the Govern- 
 ment, will be benefited by this arrangement, as it is well known that 
 the carriers and the Government are checking and rechecldng and 
 figuring divisions in deducting land grant from each and every ship- 
 ment, without any uniform method of concentrated action. 
 
 It is well known that the carriers throughout the country, espe- 
 cially the equalizing carriers have to train and employ a separate 
 staff of clerks for handling of Government traffic, due entirely to 
 
87 
 
 the complicated methods now in force for the handling of accounts 
 and collecting charges on Government traffic. With the publication 
 of flat rates, there would be no difference in the accounting of the 
 Government traffic than is now in effect on commercial traffic and, 
 consequently, the trained technical force of the various railroads, 
 as well as the Government, would no longer be necessary. 
 
 Moreover, by the establishment of flat rates, the great expense to 
 the Government necessary for the maintenance of an exceedingly 
 large force in the general accounting office will be eliminated and 
 thus all delayed accounts will be readily settled with little or no 
 delay. Furthermore, the many claims filed with and pending in the 
 Court of Claims will practically be obviated, which claims now re- 
 sult from decisions of the comptroller denying to settle based upon 
 the difference in computing land-grant decisions by the general ac- 
 counting office and the offices of the carriers. 
 
 The proposed tariffs, would not necessarily have to be filed with 
 the Interstate Commerce Commission as, under section 22 of the 
 transportation act, the carriers are permitted, by law, to handle Gov- 
 ernment freight at agreed rates; therefore, under this section rates 
 may be established at the earliest possible moment upon an agree- 
 ment entered into with the carriers, which agreement would be in 
 connection with the tariffs proposed. 
 
 The proposed tariffs would be carefully checked so as to avoid 
 any possibility of any conflict with the present act of Congress cov- 
 ering land-grant deductions via land-grant and bond-aided railroads. 
 Any possibility of violating this provision can be fully taken care 
 of, and conflict avoided, through the elimination of fractions hereto- 
 fore explained. 
 
 OPERATIONS. 
 
 Between the 2d and 10th of November various committee meetings 
 were held, at each of which the coordinator for traffic was present 
 and outlined in a general way the functions of the committee. Dur- 
 ing this period an exhaustive questionnaire was prepared by the 
 assistants to the committees, assisted by various members of the 
 board. This questionnaire consists of 268 questions, covering thor- 
 oughly all phases of traffic work throughout the Government. The 
 answers to this questionnaire will furnish the Federal Traffic Board 
 with complete knowledge of every step taken by any Government 
 department or establishment in every phase of traffic work. This 
 questionnaire was forwarded to all Government departments and 
 establishments on November 12, 1921, and is marked "Appendix 3." 
 
 The completeness of the questionnaire called for a large amount 
 of time and effort for its proper answering and consequently has not 
 been completed by all of the larger Government departments, but 
 
88 
 
 will be previous to January 1. Under the direction of the secretary 
 of the board, the answers are being tabulated and arranged so as 
 to give each committee the data required for its proper functioning. 
 This will result in the rapid formulation of concrete recommenda- 
 tions by each committee for the improvement and standardization 
 of Government procedure and economies in every department. 
 
 Under date of November 16, 1921, Bulletin No. 7, Office of Chief 
 Coordinator (Appendix No. 4) , was issued. 
 
 This directed that all Government departments and establishments 
 refer to the Federal Traffic Board for routing all shipments of mate- 
 rials and supplies of two carloads or more transported on Govern- 
 ment bills of lading. 
 
 This marked the commencement of the actual functioning of the 
 routing committee of the Federal Traffic Board, pursuant to the 
 fixed policy that this board will direct the routing of all commodi- 
 ties for all departments and establishments of the Government. 
 
 This was followed on November 30 by Bulletin No. 7B, Office of 
 Chief Coordinator (Appendix No. 5), which amplified Bulletin No. 
 7, in that it was directed that all Government departments and 
 establishments apply to the Federal Traffic Board for routing of 
 all shipments of Government materials of two carloads or more, 
 whether moving on Government or commercial bills of lading, and 
 whether or not freight charges are ultimately paid by the Federal 
 Government or not. 
 
 This bulletin further provided that all vouchers for payment of 
 freight charges moved in accordance with this bulletin and Bulletin 
 No. 7 will have indorsed thereon the number of the order issued by 
 the Federal Traffic Board routing the material, when forwarded to 
 the general accounting office. 
 
 After a careful study of the matter, Federal Traffic Board Form 
 No. 1 (Appendix No. 6) was issued to all Government departments 
 and establishments by Bulletin No. 7C, Office of Chief Coordinator 
 (Appendix No. 7). The reports submitted on this form will even- 
 tually show to the Federal Traffic Board a complete history of every 
 traffic movement of the Government, and the tabulation analysis of 
 this data will enable the board to eventually standardize all routing 
 of Government commodities. This form also provides that the rout- 
 ing order number as given by the Federal Traffic Board be noted on 
 the form. 
 
 The analysis will be recorded and tabulated on the Hellerith or 
 Powers tabulating cards, by means of which it will be possible, by 
 the use of separating and tabulating machines, to procure, at short 
 notice and very little labor, the various data that may be called for, 
 such as the amount going or incoming tonnage from various points, 
 
89 
 
 the tonnage carried by various carriers, tonnage handled in various 
 sections, etc. 
 
 'Bulletin No. 7E, Office of Chief Coordinator (Appendix No. 8), 
 provides that Form F. T. B. 2 be used by all Government depart- 
 ments and establishments in requesting routing in accordance with 
 Bulletins Nos. 7 and 7B, this form being devised for the purpose of 
 saving time in preparation, filing, and transmittal of the request for 
 routing and the answering data in both the originating department 
 and the Federal Traffic Board, it simply provides on One sheet the 
 •request for routing, with the substantiating data and the actual rout- 
 ing as directed by the Federal Traffic Board. (F. T. B. Form 2 is 
 marked "Appendix No. 9.") 
 
 The bulletins enumerated above represent the steps taken by the 
 board to date in carrying out the expressed policy of routing of Gov- 
 ernment material. Thus far this policy has extended only to the 
 routing of two or, in the case of some of the departments, one car- 
 load or more, but this is due to the fact that it has been deemed ad- 
 visable to make haste slowly, and to only direct a procedure when it 
 had been determined that there would be no delay in carrying out the 
 orders and that such instructions would result in added efficiency to 
 the Government as a whole. Since the 16th of November the Federal 
 Traffic Board has issued 439 routing orders, covering approximately 
 the shipment of 4,000 cars of Government commodities. While it is, 
 of course, impossible to estimate the saving to the Government by 
 reason of the routing of these shipments by a central agency, yet the 
 fact that these routings have been furnished without the slightest 
 delay, that they are correct in all details and that every roa(J con- 
 cerned has indicated a firm intention of giving the best possible 
 service to the Government in every movement of traffic directed by 
 the Federal Traffic Board, are of themselves auguries of the full 
 success of the board. In every case the routing is so indicated as to 
 save terminal, switching and drayage charges at both the delivery 
 and shipping points. 
 
 As a result of careful study by the classification committee of the 
 Federal Traffic Board, Bulletin No. 7D (Appendix No. 10) was 
 issued. This forwarded a supply of Federal Traffic Board freight 
 classification questionnaire, which covers two groups of commodities : 
 
 (1) Articles that have come into existence since 1914. 
 
 (2) Articles that do not appear to be (a) specifically or (b) properly classified 
 in the various classifications regardless of when they came into existence. 
 
 The careful answering of these questionnaires will furnish data by 
 Avhich to standardize classifications and correct any erroneous or 
 improper classifications and all freight will be properly described for 
 shipment and the carriers classification corrected whenever necessary ; 
 
90 
 
 it is expected that substantial savings, both direct and indirect, will 
 be made. A copy of this questionnaire is marked " Appendix No. 11." 
 
 The wisdom of the policy outlined upon the organization of the 
 Federal Traffic Board of strengthening the hands of each member of 
 the board in the department represented by him on the board, was ex- 
 emplified in the announcement of the Department of Commerce of 
 the appointment of the representative of that department of the Fed- 
 eral Traffic Board as traffic manager of the Department of Commerce, 
 giving him full and broad powers for the handling of all traffic mat- 
 ters in that department. 
 
 The immediate evidences of complete and hearty cooperation on 
 the part of this department with the policies and expressed aims and 
 purposes of the Federal Traffic Boaxd were deemed to be so advanta- 
 geous that Bulletin No. 7A, Office of Chief Coordinator (Appendix 
 No. 12) was issued. This, bulletin invited attention to the formation 
 of the Traffic Bureau in the Department of Commerce, and assuming 
 that all other Government departments were considering such steps 
 in the future, directed that the Federal Traffic Board be furnished 
 with a copy of any similar steps taken by any other Government de- 
 partment or establishment. 
 
 The action of this department has been followed by the announce- 
 ment by the Department of the Interior of the formation of a traffic 
 department, with the representative of that department on the Fed- 
 eral Traffic Board as the head. 
 
 The Treasury Department has shown a fine spirit of cooperation by 
 appointing a representative from each bureau and branch to meet 
 with the Federal Traffic Board representative and assist him in im- 
 proving conditions. This department has already accomplished sub- 
 stantial savings in express shipments. 
 
 Through the cooperation and direct influence of the Federal Traffic 
 Board the inland traffic operations of the United States Shipping 
 Board Emergency Fleet Corporation have been centered in one office 
 in Washington. The advantages are so apparent that comment would 
 seem superfluous. The results, of course, make for economy and effi- 
 ciency as well as expeditious handling of traffic matters, including set- 
 tlement of transportation bills, and the results are helpful alike to 
 this corporation and the carriers. 
 
 Other large departments of the Government will shortly publish 
 announcements of a similar policy. 
 
 Among the other operations of the board has been the protest filed 
 with the Interstate Commerce Commission, under date of November 
 4, against a general increase of freight rates between New York, 
 Philadelphia, and Baltimore, and New York and Newport News. 
 Inasmuch as no justification for the increased rates to and from Nor- 
 folk or Newport News has been furnished it has been deemed advis- 
 
91 
 
 able to protest against and to take action toward strengthening such 
 protest against this increase in rates, which amounts to approximately 
 11 per cent over the present class rates. The carriers have not cared 
 to supply any statement or data as to reasons on which such increased 
 rates were based, or as to reasonableness of these rates. 
 
 SAVINGS. 
 
 In a resume of 60 days' work, which represents the time the Federal 
 Traffic Board has actually been actually functioning, it is very hard to 
 form and give an accurate estimate of the total savings to the Gov- 
 ernment. Among the direct savings that can be figured in dollars 
 and cents may be mentioned the following : 
 
 On a shipment of 105,000 pounds of Interstate Commerce Commis- 
 sion material from San Francisco to Washington it was possible, 
 through the agencies of the Chief Coordinator for General Supply, to 
 have this material transported by Navy transport at a direct saving of 
 ■$6,572. Later, upon receipt of the material at Norfolk, the Interstate 
 Commerce Commission took up with the carriers the shipment of the 
 material to Washington, and received a quotation of $1.03 per hundred 
 pounds. The matter was then referred to the Federal Traffic Board, 
 and through the agencies of this board a special rate of 42 cents per 
 hundred pounds was received from the Norfolk & Washington Steam- 
 boat Co., resulting in a direct saving of $640.30. A further action by 
 the Federal Traffic Board for the Interstate Commerce Commission 
 resulted in a saving of $265.70, making a total saving for this one de- 
 partment of $7,589.^2. 
 
 As an example of the savings possible by the establishment of a 
 traffic bureau in a Government department which previously had had 
 no centralized traffic organization, the savings in the last 30 days in 
 the Department of Commerce are quoted from the report of the rep- 
 resentative of that department on the Federal Traffic Board. On one 
 voucher the savings were $3,977.84; on another voucher $4,963.44; on 
 many other vouchers, between $8 and $21.80 each. As a result of cer- 
 tain drastic regulations promulgated by the traffic manager of this 
 department in carrying out the expressed policies of the Federal 
 Traffic Board to obviate the use of express shipments wherever pos- 
 sible, he estimates that he is now saving between $500 and $600 per 
 month, and that this saving will be greatly increased as his control 
 over traffic matters in his department becomes more complete. 
 
 One of the most important accomplishments of the Federal Traffic 
 Board, which represents a tremendous saving, which, however, can 
 not be here stated in dollars and cents, has been the renewal of the 
 equalization agreements between the railroads of the southeastern 
 territory and the United States. 
 
92 
 
 On various dates in September and October the following lines 
 announced that in view of the decision, appeal No. 24530, issued by 
 the Comptroller of the Treasury under date of April 21, 1915, they 
 would not participate in the equalization of land-grant rates except 
 under agreement entered into by and with the Quartermaster Gen- 
 eral; that is to say, they would equalize land-grant rates with the 
 War Department, but not with any other Government department: 
 
 Atlantic Coast Line Railway. 
 
 Carolina, Glinchfleld & Ohio Railway. 
 
 Central of Georgia Railway. 
 
 Louisville & Nashville Railway. 
 
 Mobile & Ohio Railway. 
 
 Mobile, Chattanooga & St. Louis Railway. 
 
 Xorfollv & Western Railway. 
 
 Norfolli Southern Railway. 
 
 Seaboard Air Line Railway. 
 
 Southern Railway system — 
 
 Southern Railway Co. 
 
 Alabama Great Southern Railway. 
 
 Cincinnati, New Orleans & Texas-Pacific Railway. 
 
 Georgia Central & Florida Railway. 
 
 New Orleans & Northwestern Railway. 
 
 Various Government departments, upon receipt of notices from 
 these railways that they had withdrawn from the equalization agree- 
 ment, took the matter up) with the roads in attempts to have them 
 renew the agreements, but without avail. 
 
 Circular No. 41, establishing the Federal Traffic Board, directed, 
 among other things, that all questions involving disputes by any 
 Government department or establishment with the carriers be 
 handled by the board. The question of this withdrawal from the 
 equalization agreements was, therefore, recently taken up with the 
 carriers by the Federal Traffic Board, and as a result all roads enu- 
 merated above will renew the equalization agreements. 
 
 Another actual saving that might be enumerated was in connec- 
 tion Avith naval shipments of explosives, in which, at the request of 
 the Federal Traffic Board, Government transportation was utilized 
 in lieu of rail transportation, the direct saving theieby being over 
 $5,000. 
 
 Again the board was able to save the Department of Agriculture 
 $1,200 in the routing of a shipment of automobiles to the west coast. 
 
 The representative on the Federal Traffic Board of the United 
 States Shipping Board Emergency Fleet Corporation reports that, 
 prior to the inception of the Federal Traffic Board, the nonland- 
 grant railroads displayed a more or less indifferent attitude in the 
 matter of equalizing tlie rates available via land-grant roads. This 
 attitude has been changed to that of extreme friendliness, and nego-' 
 
93 
 
 tiations now in progress bid fair to result in their agreeing to ac- 
 cept the lowest net cash rates available via their land-grant com- 
 petitors. This results in extending a wider choice of routes, com- 
 petitive service, and substantially lower rates between given points. 
 Eeductions in freight bills now under suspension, which are daily 
 being accepted and passed for payment, perhaps amount to $50,000, 
 and at the present rate of traffic movements the. saving will exceed 
 $150,000 per year. The leverage wielded by the Federal Traffic 
 Board in its ability to prescribe the routings for all Government 
 traffic undoubtedly will result in this corporation's traffic receiving 
 the full benefits that have heretofore been accorded by the carriers 
 to other Government departments. 
 
 Through shippers' ignorance or oversight, not always inexcusable, 
 certain indorsements or essential particulars are frequently omitted 
 from bills of lading covering this corporation's traffic and which 
 necessitates the payment of higher charges. Negotiations are in 
 progress with the coordinator for traffic with the view of providing 
 additional " conditions " on Government bill of lading forms and 
 which will preclude the further penalization of the Government in 
 such cases. 
 
 GENERAL. 
 
 The organization of the Federal Traffic Board has brought to- 
 gether men performing both executive and detail traffic duties in 
 the various Government departments, establishments, and bureaus. 
 The resulting interchange of views has brought forward the best 
 methods in vogue among all departments with material benefits to 
 each. This enlarged acquaintance has been the means of one office 
 calling upon other offices for information which they did not have 
 at hand, and it has been indicated through the coordinator for traffic 
 that each and every member of the board has felt pleased to furnish 
 the information to other members and has not felt the slightest 
 hesitancy in requesting information and assistance from them. 
 
 Reports from all Government departments bring out very strongly 
 the fact that every one of them which has any appreciable amount of 
 traffic to handle has benefited directly or indirectly by the establish- 
 ment of the Federai Traffic Board. Members of the board, by reason 
 of their continued contact with each other in the meetings of the 
 board and various committees of the board, have been able to inaugu- 
 rate changes in their own departments which have tended toward 
 increased efficiency. 
 
 In many cases it has not been necessary to issue orders by the 
 board, the advisability of a proposed change being so apparent to all 
 of the members that they have immediately taken steps to inaugurate 
 such change in the department. Each and every detail of this sort 
 
94 
 
 shows an added efficiency and eventually means economies of admin- 
 istration. 
 
 It is too early to enumerate the tremendous savings which will be 
 obtained by the carrying out of the policies of the board, but I do 
 not hestitate to say that there will be saved in salaries due to in- 
 creased efficiency caused by putting into effect the policies of the 
 board and particularly the adoption of the Knowles plan, changes 
 in procedure and standardization of methods of auditing and pay- 
 ment of at least $1,000,000 per year. 
 
 I acknowledge with deep appreciation the hearty cooperation 
 shown by heads of the various Government departments and estab- 
 lishments, for without their broad-minded support little headway 
 could have been made. 
 
 The thanks of the' Government are also due to the advisory board, 
 headed by Mr. Ralph Caples, who have indicated, individually and 
 collectively, their great desire to assist by their own efforts and 
 through the associations represented by them the aims of the Federal 
 Traffic Board. 
 
 I desire particularly to express my pleasure in the attitude shown 
 by members of the board representing the various departments. 
 Without exception there has been shown a whole-hearted intention 
 of cooperation to the fullest degree, a willingness to work all day 
 and late into the night when necessary, kindly tolerance of the other 
 man's ideas and views, a keen insight into the possible advantages 
 of any new suggestion and an expressed determination to assist the 
 chairman in making the Federal Traffic Board a power for good 
 not only to the Government but to the carriers. 
 
 From my experience since the establishment of the Federal Traffic 
 Board I am certain that there will be no difficulty at any time in find- 
 ing men in the service of the Government specially qualified to 
 handle this work, more particularly as the carrying out of the 
 policies outlined above will tremendously reduce the mass of tech- 
 nical detail now requiring years of training in the service of the 
 carriers or in the Government to properly handle. 
 
 Finally, in closing this report I wish to emphatically state that 
 without the constant support, the advice and cheerful assistance 
 given me at all times by the Director of the Bui^eau of the Budget 
 and by you personally, little, if anything, could have been accom- 
 plished. 
 
 C. G: Mayo, 
 Coordinator far Traffic, 
 Chairman Federal Traffic Board. 
 
95 
 
 Appendix No. 1. 
 
 [Circular No. 41.] 
 
 Treasxxry Department, 
 Bureau op the Budget, 
 Washington, October 10, 19B1. 
 
 FEDERAL TRAFFIC BOARD. 
 
 To the heads of departments and estaMishments : 
 
 1. For the purpose of effecting economies and better business administration 
 throughout the Government service in the handling of passenger and freight 
 shipments, as well as shipments by express and parcel post, to utilize in a 
 more practical way the various carrying facilities available, and to institute 
 methods for the prompt settlement of all transportation accounts, there is 
 hereby established, under the general supervision of the Chief Coordinator for 
 General Supply, a Federal Traffic Board. 
 
 2. It will be the duty of the Federal Traffic Board to make a complete study 
 of the traffic problems confronting the various departments and independent 
 establishments of the Government. In cooperation with representatives of the 
 Interstate Commerce Commission and the carriers, it will establish uniform 
 classifications for all commodities, including raw material as well as finished 
 products, shipped by the Government, so that shipments may be made at the 
 lowest tariff rates. The board will draw up plans for improving and stand- 
 ardizing methods of making shipments and for the settlement of accounts. 
 These plans will be submitted to the Chief Coordinator, General Supply, who 
 will take the necessary action in each case. 
 
 3. The activities of the board shall be directed byits chairman under the 
 title of coordinator for traffic, who shall, under the general direction of the 
 Chief Coordinator for General Supply, select the necessary committees of the 
 board, direct the time and place of all meetings and the order in which the 
 various elements of the problem shall be considered. 
 
 4. Immediately upon receipt of this circular, the head of each department 
 and independent establishment making shipments from time to time shall 
 designate one representative to serve as member of the Federal Traffic Board. 
 Heads of the departments and independent establishments concerned will re- 
 port the names of such representatives to the Chief Coordinator for General 
 Supply, who, upon receipt of this information, shall call the initial meeting 
 for purpose of organization. 
 
 5. Heads of the various departments of the Government are requested to 
 furnish the coordinator for traffic such information and clerical assistance 
 as he may require in the prosecution of the duties assigned to him. Such 
 clerical force will be requested in proportion to the amount of business han- 
 dled in the respective departments. 
 
 6. The classification of commodities and the instructions governing ship- 
 ments and methods of settling transportation accounts that are adopted by 
 the board and approved by the coordinator for traffic, after the procedure 
 indicated in paragraph 2 of this circular, shall, as far as applicable and in 
 conformity with law, be binding upon and govern all departments, bureaus, 
 agencies and offices of the Government in all shipments made by them. 
 
 7. All questions pertaining to the classification of materials or terminal, 
 switching, freight rates, etc., which require the application of remedial meas- 
 ures, will be submitted to the coordinator for traffic, either for adjustment with 
 
96 
 
 the classification committees representing the carrier, or for the presentation 
 of a complaint with the Interstate Commerce Commission. 
 
 8, In event of disagreement as to classifications, instructions governing- ship- 
 ments and methods of settling accounts, or m'ethods of procedure, the case will 
 be submitted to the Chief Coordinator for General Supply, whose decision will 
 be final as to the action taken, subject only to an appeal to the head of the 
 department concerned. 
 
 By direction of the President. 
 
 Ohables 6. Dawes, 
 
 Director of the Bureau of the Budget. 
 
 Appendix No. 2. 
 
 FEDERAL TEAFFIC BOARD. 
 
 (C. G. Mayo, Commander (S. C), U. S. N., coordinator for traffic and chairman.) 
 
 Department of Agriculture, Main 4650, branch 55^ Elmer E. Forbes. 
 
 Civil Service Commission, 1724 F Street NW., Main 75, branch 27, H. G. 
 Porter. 
 
 Department of Commerce, disbursing oflSce, room 114, Main 5060, branch 13, 
 Noble Newport Potts. 
 
 Federal Board for Vocational Education, secretary and chief clerk, 200 New 
 Jersey Avenue, Main 7890, branch 136, E. Jos. AronolS. 
 
 Department of the Interior, new Interior Building, room 6306, Main 1880, 
 branch 596, Chas. E. Harris. 
 
 Interstate Commerce Commission, room 408, Main 7460, Jos. C. Colquitt. 
 
 Department of Justice, room 524, Main 196, branch 150, E. J. Matchett. 
 
 Department of Labor, disbursing office. Main 8474, Geo. W. Love. 
 
 Marine Corps, room 3215, new Navy Building, branch 635, Main 2520, Lieut 
 Spencer N. Phillips. 
 
 Department of the Navy, room 2038 A, War Trade Building, Main 2520, branch 
 171, Commander C. G. Mayo. 
 
 Panama Canal, old Land Otfice Building, Main 4294, W. J. Fisher. 
 
 Post Office Department, Division of Equipment and Supplies, Main 7272, 
 branch 327, G. W. Smith. ' 
 
 United States Railroad Administration, Hurley-Wright Building, room 1006, 
 Main 7940, branch 54, Chas. I. Johnson. 
 
 United States Shipping Board Emergency Fleet Corporation, temporary build- 
 ing No, 1, 1800 D Street, Main 5201, branch 2268, H. B. Bolton. 
 
 Smithsonian Institution, National Museum, Main 1811, branch 60, W. H. 
 Kimbal. 
 
 United States Tariff Commission, old Land Office Building, room 512, Main 
 3947, branch 1, Eighth and E Streets NW., John F. Bethune. 
 
 Department of the Treasury, Main 6400, branch 35 or 478, Chas. A. Fenner. 
 
 United States Veterans Bureau, room 142, Arlington Building, Main 6680, 
 branch 318, Horace Spence. 
 
 Department of War, room 2323, Munitions Building, Main 2520, branch 1475, 
 Capt. H. Bert Knowles. 
 
 Department of War, room 3004, Munitions Building, Main 2520, branch 1243, 
 Capt. E. M. Foster. 
 
97 
 
 Alien Property Custodian, Sixteenth and P Streets NW., Main 1962, branch 
 22, G. G. Johnston. 
 
 Commissioners of the District of Columbia, District Building, Main 6000, 
 branch 367, Morris Hacker. 
 
 Government Printing Office, Main 6840, branch 31, W. H. Kervin. 
 
 Library Building and Grounds, superintendent, Main 2727, Frank L. Averill. 
 
 Library of Congress, Mail and Delivery Section, Main 2727, Samuel M. Croft. 
 
 Department of State, State, War, and Navy Building, room 110, Main 4510, 
 branch 47, J. D. Johnson. 
 
 Committee on Classification: J. C. Colquitt (chairman), Charles E. Harris, 
 H. B. Knowles, J. F. Bethune, N. N. Potts ; assistant, M. Elenbaum. 
 
 Committee on Routing: H. B. Knowles (chairman), E. E. Forbes, H. B. Bol- 
 ton, Charles E. Harris, Charles I. Johnson ; assistant, H. P. Ware. 
 
 Committee on Passenger TrafHc: G. W. Love (chairman), Charles A. Fenner, 
 E. J. Matchett, E. E. Forbes, E. J. AronofC ; assistant, F. H. Jones. 
 
 Committee on Accounting and Payments: E. M. Foster (chairman), G. W, 
 Smith, W. J. Fisher, N. N. Potts, Charles A. Fenner, S. N. Phillips ; assistant, 
 J. 0. Speed. 
 
 Committee on Parcel Post and Express: Q. W. Smith (chairman), H. B. Bol- 
 ton, B. M. Foster, H. G. Porter, H. Spence. 
 
 Secretary to the board, Lieut. B. B. Kennedy. , 
 
 Assistant to the Secretary, Robert A Bitter. 
 
 Appendix No. 3. 
 
 Office of Chief Cookdinatok foe General Supply, 
 
 Washington, November 12, 1921. 
 Subject : Questionnaire, re Government traffic. 
 Reference : Bureau of the Budget, Circular No. 41. 
 
 Attached hereto are copies of questionnaire calling for information required 
 for the proper functioning of the Federal Traffic Board. This information is 
 required in compliance with paragraph 5 of reference above. 
 
 It is requested that this data be supplied at the earliest possible moment for 
 the department represented by you and that answers to questions 10, 73, 159, 
 and 213 be submitted separately on or before November 20, 1921. 
 
 C. G. Mayo, 
 Coordinator for Traffic. 
 
 Federal Traffic Board, 
 
 November 12, 1921. 
 
 Questionnaire Submitteij to All Departments of the Government via the 
 Members of the Federal Traffic Board. 
 
 FREIGHT. 
 
 A4min4strative. 
 
 1. Full title of department or independent establishment. 
 
 2. Does the handling of traffic matters, either passenger, freight, express, or 
 otherwise, form one of the functions of the department or bureau? 
 
 3. If so, describe in detail what this function consists of, such details to be 
 separately reported upon under the three following heads: Administrative, 
 Audit, and Payment. 
 
 86484°— 22 7 
 
98 
 
 4. What forms are used in the course of the above work? (State In detail 
 the object of the form, when rendered, by whom, and what disposition is made 
 tliereof upon its receipt. Also attach hereto copies of all forms used.) 
 
 5. Is transportation handled by a central office or by each bureau or branch 
 independently ? 
 
 6. If by a central office, in what bureau or branch is such office maintained? 
 
 7. Give title and address of officer having direct supervision. 
 
 S. If by each bureau or branch independently, are any uniform instructions 
 issued by head of the department or independent bureau to govern freight and 
 express transportation or passenger travel? If so, attach a copy of such 
 instructions. . 
 
 9. Give address and designate each bureau or branch handling transportation 
 accounts. 
 
 10. State separately the number of employees, by salary groups, engaged in 
 the handling of freight and express transportation in the department, bureau, 
 or .independent establishment at Washington and in offices outside of Washing- 
 ton for — 
 
 (a) October 1, 1921, in Washington, ; field, . 
 
 (6) October 1, 1920, in Washington. ■ ; field, . 
 
 11. Name and address of office or officer supplying blank bills of lading. 
 
 12. Are all bills of lading and transportation requests, both original and 
 copies, numbered when printed? 
 
 13. Is more than one series of numbers used on bills of lading and is a new 
 series used each fiscal year? 
 
 14. Does any particular class or are all employees supplied and permitted to 
 issue bills of lading? 
 
 15. Is a supply of blank bills of lading furnished persons authorized to make 
 shipments, or only one at a time when requested and only after the necessity 
 for the movement has been determined? 
 
 16. Does all or any particular class of employees have blanket authority to 
 issue bills of lading and make shipments? 
 
 17. Is each shipment authorized by a central office? Or, if issued by more 
 than one office, state the approximate number of such offices. 
 
 18. How many copies of bills of lading are prepared for use and distribution 
 made of each copy? 
 
 19. Are bills of lading issued to cover all Government shipments? If not, 
 state condition and circumstances. 
 
 20. Are commercial bills of lading used to cover shipments of Government 
 material? If so, under What conditions? 
 
 21. In case of supplying material to another department of the Government, 
 is Government bills of lading used? If so, of which department? 
 
 22. Is any booklet or pamphlet issued or supplied shippers directing that 
 certain data be placed on bills of lading when issued, such as length of car 
 ordered and furnished, any special rate applying, charges payable by some 
 other department? 
 
 23. If so, copy is desired. 
 
 24. When is the original bill of lading accomplished ; that is, at the freight 
 station or when material is received at address stated on bill of lading? 
 
 25. In case bill of lading is not received when freight is tendered for delivery, 
 what action is taken? 
 
 26. If some form of receipt or other substitute is supplied, a copy is desired. 
 
 27. What action is taken if the original bill of lading is received after a 
 receipt or other substitute has been tendered the carrier? 
 
99 
 
 28. In case of loss of original bill of lading, is any particular form demanded 
 be used, or will a copy of the bill of lading signed to show delivery, supported 
 ly a release of the carrier, be accepted? 
 
 29. In case of loss or damage of material, does receiving officer accomplish 
 ind surrender the bill of lading immediately or hold it indefinitely with a view 
 )f having the carrier locate the property? 
 
 30. Does the receiving officer notify the local agent in any manner other than 
 the notation on the bill of lading and give him an opportunity to examine the 
 iUeged loss or damage? 
 
 31. What steps are taken in cases of loss or damage in carloads of material, 
 bill of lading stamped " Shippers' load and count," and in cases of concealed 
 iamage to establish and place responsibility? 
 
 32. In case of damage to material, it being necessary to repair to determine 
 the actual cost, is the officer charged with settling the accounts advised by 
 letter? 
 
 33. Do receiving officers have instructions in case of loss or damage to prepare 
 a form of report or to notify by letter the officer charged with settling the 
 account? 
 
 34. Are shippers permitted to declare a valuation on shipments, thus resulting 
 in higher rates? 
 
 35. Is it a practice to make shipments at released valuation? 
 
 36. Are shipments made " Shippers' load and count " in any case where the 
 carrier is in a position to supervise or check the loading? 
 
 37. In case of a ferry car issued to transport a number of small shipments 
 from a station to the carrier's terminal, is the bill of lading stamped " Shippers' 
 load and count " ? 
 
 38. Are all or any particular classes of shipments traced? Is the tracing ac- 
 complished by letter or telegram or form ? If form is used, attach sample. 
 
 39. Do shippers state routing on the bills of lading? If so, under what condi- 
 tions or circumstances? 
 
 40. Are all shipments routed or only a particular class or kind of material 
 or traffic? 
 
 41. Is routing of movement left to the individual shipper or is it supplied 
 by a central office? 
 
 42. If routing supplied by a central office, is it furnished in each case oh a 
 specific request, or in the form of a blanket authority on certain traffic ? 
 
 43. Does the instructions for routing take the form of an individual or cir- 
 cular letter, pamphlet, booklet, or other form? 
 
 44. If a booklet or pamphlet is issued covering routing, a copy is desired. 
 
 45. What steps are taken to determine character of material to be shipped 
 and proper classification? 
 
 46. Are persons making shipments supplied with copies of freight classifi- 
 cations or tariffs for use in determining proper designation of articles to be 
 shipped and determine the route to be used? 
 
 47. Is any booklet, pamphlet, or other form issued or supplied persons mak- 
 uig shipments of various articles in use, showing the nearest analogous com- 
 Tuercial name by which to describe and list on the bill of lading to secure 
 the lowest rate? If so, attach a copy thereto. 
 
 48. Do employees authorized to make or order shipments to be made consult 
 the traffic section bureau or division as to best method of shipping, route, 
 packing, and the correct commercial name to be applied if the article or item 
 
 is not classified? , ., 
 
 49. In case shipments are expedited, is the traffic bureau notified as to the 
 
100 
 
 50. In case of a single heavy or continuous movement of freight between 
 packing, and the correct commercial name to be applied if the article or item 
 
 51. If any such rates are in effect, state the points between which they 
 apply. 
 
 52. Are water routes which are generally cheaper than rail used whenever 
 possible? 
 
 53. In connection with transcontinental traffic, are small lots forwarded to 
 ■ some central point for grouping into a carload shipment so as to secure reduced 
 
 rates ? 
 
 54. Are shipments at any time turned over to commercial forwarding com- 
 panies, such as Transcontinental Freight Forwarding Co., for movement with 
 a view to securing more advantageous rates? 
 
 55. Are through shipments made from an interior point to a point outside 
 the continental limits of the United States? 
 
 56. Have any instructions been issued as to the method to be used in loading 
 or packing any or all material? 
 
 57. If on some particular class, state kind. 
 
 58. Have instructions been issued as to loading a less carload quantity of 
 material in a car and forwarding it at the minimum carload rate? 
 
 59. If this method is permitted, state the conditions. 
 
 60. In case of shipment being made from a. place at which scales are not 
 available, are shippers instructed to take steps to secure weight and notify the 
 office charged with payment for the services? 
 
 61. In carload movements are cars sealed by the shipper with distinctive 
 Government seals before being released to the carrier? 
 
 62. Are seals numbered serially and a record maintained by both the shipper 
 and receiver? 
 
 63. Is one copy of bill of lading transmitted to office charged with the settle- 
 ment for the service by the shipper or receiver? 
 
 64. Have any instructions been issued by your department to carriers as to 
 how their bills should be prepared in being presented to your department for 
 payment? If so, attach copy of such instructions. 
 
 65. Are demurrage average agreements in effect at any stations or activities? 
 
 66. Is a report submitted to one central office of all demurrage? 
 
 67. State what data appears on such report if one is submitted. 
 
 68. Is the report submitted weekly, monthly, and by card' for each car, or 
 one report for each month to cover all cars? 
 
 69. Is drayage service to and from freight terminals rendered by commercial 
 concerns or by Government trucks? 
 
 70. If by commercial concerns, are contracts entered into and payment made 
 to contractor? 
 
 Accounting. 
 
 71. Is a complete file of tariffs, freight, and express maintained in your de- 
 partment or division? If not a complete file, state the extent of any file that 
 may be maintained. 
 
 72. How many clerks employed in filing tariffs? If only part time, state the 
 approximate time used. 
 
 73. State separately the number of rate clerks by salary groups engaged in 
 audit of freight and express bills in the department, bureau or independent 
 establishment at Washingtcm and in offices outside of Washington for— 
 
 (") October 1, 1921, in Washington, ; field, . J 
 
 (6) October 1, 1920, in Washington, ; field, . '| 
 
101 
 
 74. Does a rate clerk take any action on a bill other than the checking or 
 verification of the rates? 
 
 75. In audit of bills, if an article is not sufficiently described on the bill, of 
 lading to permit classification, Is the shipper notified? 
 
 76. If an article appears on a bill of lading that is not listed in freight 
 classification, what steps are taken to determine the proper classification to 
 apply? 
 
 77. What action is taken with the three classification committees to have 
 such article classified? 
 
 78. Is an effort made to secure a reduction in classification of article con- 
 sidered too high? 
 
 79. Is an index or record by numbers or otherwise maintained on all tariffs, 
 divisions sheets, and other publications on file? 
 
 80. Is any procedure followed to determine that all supplements to and re- 
 issue of tariffs, division sheets, and other publications on file are received as 
 issued? 
 
 81. If so, state the procedure followed. 
 
 82. What is the preference of your department as to the number of bills of 
 lading to be included in one account by the carrier? 
 
 83. Are all freight bills prepared by the carrier on Government transporta- 
 tion form? 
 
 84. If not, state the conditions under which they are not. 
 
 85. When bills or vouchers are received from a carrier, do you acknowledge 
 receipt of the same? If so, do you use a form or letter? If form is used, 
 attach sample. 
 
 86. Explain briefly step by step and in regular order the custom followed 
 in your department or bureau in the handling of transportation freight and 
 express bills, including the work done by each different clerk or group of 
 clerks from the time the bill of lading, memorandum thereof, and the carrier's 
 bill, in connection with such bill of lading Is received until the paid account 
 is forwarded to the general accounting office and the retained papers filed. 
 
 87. Are all bill's submitted by the general office of the carriers? 
 
 88. If so, and a bill is received from a local agent of a carrier, what action is 
 taken? 
 
 89. Are carriers instructed to submit freight bill to one central office? 
 
 90. To what office or bureau do carriers forward bills? 
 
 91. Is a record made of all freight and express bills when received from the 
 carrier? 
 
 92. If so, state whether record is by separate carriers on card or loose leaf and 
 what data appears thereon. 
 
 93. Are bills examined and checked by a clerk for error in extensions or 
 totals, error on bills of lading, etc., before being submitted to a rate clerk for 
 checking of the rates? 
 
 94. Are bills placed under correspondence previous to having been completely 
 checked and audited? 
 
 95. If so, state the conditions or circumstances. 
 
 96. In case of alleged overcharge, are bills returned by letter setting forth the 
 differences, with request to render bill on correct basis? 
 
 97. When the restated bill is received, is it possible to associate the bill with 
 previous audit or is it necessary to audit the same as any new bill? 
 
 98. If bills are reduced on account of alleged overcharge is the carrier notified 
 by letter, by a correction form, or by a notation placed on a copy of the bills? 
 
102 
 
 99. In audit of a bill covering considerable amount of money with a number 
 of bills of lading attached and insufHcient data on some one Item to permit audit, 
 is -the entire bill held pending information? 
 
 100. Are items cut out of a bill prepared by an employee restated on trans- 
 portation form and returned to the carrier to have bill certified? 
 
 101. If a bill of lading covering material to another department of the Gov- 
 ernment is received, is it paid and transfer of funds secured? 
 
 102. If not paid, is it forwarded to the proper Government office or returned 
 to the carrier with information? 
 
 103. Are loss and damage claims adjusted by a special group of clerks? 
 If so, the number employed. 
 
 104. Are bills on which the loss and damage claims appear paid before the 
 claims have been adjusted with the carrier? 
 
 105. In case a suspension or deduction is made from a carrier's bill and 
 subsequently the carrier makes a complete delivery or produces evidence to 
 the effect that the carrier was not at fault, in what manner do you reimburse 
 the carrier? Do you use a form for this purpose; if so, attach sample. 
 
 106. Are loss and damage claims made the subject of correspondence with 
 the carriers and a check to cover requested? If not, how are they handled? 
 
 107. If so, are claims presented on regular commercial forms? 
 
 108. What evidence or papers are supplied the carrier in substantiation of 
 the claim? 
 
 *109. Do you prefer filing a claim or making a suspension or deduction for 
 any loss or damage noted on the reverse of a bill of lading? 
 
 110. Is the value of loss or damage claims deducted from any money due 
 the carrier? 
 
 111. If so, state the' conditions and circumstances under which the action is 
 taken. 
 
 112. If claims are filed on the carrier by letters, state the approximate num- 
 ber for a month and the average time required to receive check. 
 
 113. Are bills paid by disbursing officer check or by Treasury warrant? 
 
 114. Are bills paid by central office or transmitted to various offices for 
 payment ? 
 
 115. If to various offices, state number and addresses. 
 
 116. Is check or warrant transmitted to carrier by letter accompanied by a 
 copy of bill or statement setting forth the bill numbers? 
 
 117. Does a check or warrant cover one bill or all bills in favor of a carrier 
 that may be ready for payment? 
 
 118. Is payment or settlement of bills made each day, each week, or some 
 other set period? 
 
 119. Is a record of payment made against each bill of lading? 
 
 120. If so, state what information is placed on each record of bill of lading. 
 
 121. Is this record maintained by the audit office or the office making pay- 
 ment? 
 
 122. Is a payment record maintained on card or loose leaf by individual 
 carriers ? 
 
 123. If so, what data appears thereon? 
 
 124. Is (li-ayage cliiirge paid by the carrier and the amount included with 
 the freight charges and supported by a paid bill? 
 
 12.5. State title and subheads with which transportation for freight and 
 express are charged. 
 
 126. Money collected or received on account of loss or damage is deposited 
 to credit of what appropriation? 
 
103 
 
 127. If an account is suspended in part or whole by the general accounting 
 office, is the amount deducted from any money due the carrier? 
 
 128. How many freight and express bills were received from October 1, 1920, 
 to October 1, 1921? 
 
 (a) Approximate number of bills of lading included thereon, . 
 
 (6) Approximate amount involved in such bills, . 
 
 129. How many freight and express bills were paid from October 1, 1920, to 
 October 1, 1921? . 
 
 (a) Approximate amount involved in such bills, . 
 
 130. How many freight and express bills were forwarded to the accounting 
 officers of the Treasury and general accounting office for direct settlement 
 October 1, 1920, to October 1, 1921? . 
 
 131. How many unpaid bills are now on hand? 
 (o) Advise date the count is made. 
 
 (6) What is the total amount of the unpaid bills? 
 
 (c) What is the approximate number of bills of lading? 
 
 132. Are bills involving land grant audited and settled? If so, to what 
 extent? 
 
 133. Do you settle accounts on charge slips or temporary receipts without 
 the use of a Government bill of lading? If so, what supporting papers are re- 
 quested and what method is used to prevent duplicate payment? 
 
 134. When a department or independent establishment has a contract for 
 material or supplies on which the price as quoted requires delivery at a cer- 
 tain point, and certain shipments are made to some other points under Gov- 
 ernment bill of lading the invoice credited with freight and war tax, point of 
 origin to contract delivery point, what disposition is made of the freight charges 
 and war tax credited on the invoice? 
 
 185. When bills are forwarded to the general accounting office for direct set- 
 tlement, are claims for loss or damage in transit adjusted with carrier prior 
 to such transmittal? 
 
 136. Are freight and express rates furnished for use in connection with esti- 
 mates, purchases, etc.? If so, approximately, how much time is consumed in 
 work of this nature? 
 
 137. What, if any, method is followed to determine whether a bill of lading 
 has been properly used, and that the charge is an actual liability against the 
 appropriation from which paid? 
 
 138. In case of erroneous billing or routing, are shipping officers advised with 
 a view of minimizing such instances? 
 
 139. What system is used to prevent duplicate payment on Government bill 
 of lading? 
 
 140. What system is used to prevent duplicate payments on shipments made 
 under commercial bills of lading on which the charges are payable by the 
 Government? 
 
 141. Jf case shipments are f. o. b. point of origin, what method is used in 
 making payment for articles purchased? 
 
 142. Are invoices checked against the memorandum copies of the bills of 
 lading furnished the department to see that the articles are shipped as ordered? 
 
 143. Does the shipper place the order number on the bill of lading and the 
 bill of lading number on the invoice or is an itemized shipping list furnished 
 showing the desired information? 
 
 144. Are invoices for f. o. b. shipments paid before evidence is received as to 
 the shipment of the articles ordered? 
 
104 
 
 145. In case articles are purchased f. o. b. point of origin to be forwarded by 
 parcel post, what method is used to show shipment of the article before pay- 
 ment is made on the invoice? 
 
 146. If accounts are transmitted to the general accounting office, what do 
 your records show as to the length of the time required to make settlement? 
 
 147. What is the length of time the bill remains in the department after 
 receipt from the carrier before payment is made? 
 
 148. State the approximate number and weight of express shipments per 
 month at present. 
 
 149. Is any weight limit placed on material that may be forwarded by ex- 
 press without specific approval? If so, state the weight. 
 
 150. State the approximate number and total weight of parcel post shipments 
 per month at present. 
 
 151. In making shipments by parcel post, what is your method? 
 
 152. Do you attach stamps, or do you use penalty label? 
 
 153. State any remarks covering any matter that is considered may be of 
 assistance to the Federal Traffic Board. 
 
 PASSENGER. 
 
 General. 
 
 154. Is passenger transportation handled by a central office or by each bureau 
 or branch independently? 
 
 155. If by central office, in what bureau or branch is such office maintained? 
 
 156. Give title and address of office having direct supervision. 
 
 157. If passenger transportation is handled by each bureau or branch in- 
 dependently, are any uniform instructions issued by head of the department 
 or independent bureau to govern passenger travel? 
 
 (a) If so, attach copy of such instructions. 
 
 158. Give address and designate each bureau or branch handling passenger 
 transportation accounts. 
 
 159. State separately the number of employees by salary groups engaged in 
 the handling of passenger transportation in the department, bureau, or in- 
 dependent establishment at Washington and in offices outside of Washington 
 for — 
 
 (o) October 1, 1921, in Washington, ; field, . 
 
 (6) October 1, 1920, in Washington, ; field, . 
 
 160. What proportion of a passenger clerk's time is employed on each of the 
 following duties : 
 
 (a) Preparing itineraries. 
 (6) Rating travel vouchers. 
 
 (c) Adjusting circuitous travel. 
 
 (d) Similar work not related to the audit of carriers' bills. 
 
 AdmirUstrative. 
 
 161. Are the passenger transportation requests issued on other than stand- 
 ard form prescribed in Treasury Department Circular No. 49? 
 
 (o) If so, in what manner? 
 
 162. Advise name and address of office or officer supplying passenger trans- 
 portation requests. 
 
 163. Who is authorized to countersign transportation requests? 
 
 164. What method is used in reporting transportation requests issued? 
 
105 
 
 165. To what office or bureau are reports forwarded? 
 
 166. How often are reports forwarded? 
 
 167. For what purpose are the forms used? 
 
 168. In what manner are reports filled? 
 
 169. How many clerks are employed in connection with such reports, and at 
 what salaries? 
 
 170. Do the persons Issuing transportation request insert on requests— 
 (a.) The official status of the traveler? 
 
 (6) The appropriation chargeable? 
 
 171. In case of error in the issuance of transportation requests is the person 
 issuing the request advised of such error? 
 
 172. Do the persons issuing transportation requests advise the approximate 
 cost when reporting the issuance of requests? 
 
 173. Are transportation requests issued for transportation of officers (Army, 
 Navy, Marine Corps) upon change of station? 
 
 174. Have instructions been issued in regard to stating complete route on 
 transportation requests? 
 
 175. Are transportation requests issued . without indicating complete route 
 of travel? 
 
 (a) Approximately what percentage? 
 
 176. Are Pullman or parlor car accommodations issued to cover day travel? 
 
 177. Where the journey involves day and night travel, is through Pullman 
 accommodation furnished? 
 
 178. Is a check made of the number of persons occupying space in sleeping 
 cars secured on Government requests? 
 
 179. If other than official travelers occupy such space, is adjustment required 
 of traveler signing the requests? 
 
 180. When two or more persons are traveling together, are Separate berths 
 furnished for each person? 
 
 (a) If so, what class of accommodations is furnished? 
 
 181. When two persons are traveling individually, what sleeping car accom- 
 modations are furnished (upper, lower berth, compartment, drawing-room)? 
 
 182. Are land grant routes (Army, Navy, and Marine Corps) which are not 
 equalized by other routes, used whenever practicable? 
 
 (a) If not, why? 
 
 183. Who issues instructions pertaining to the routing of travelers? 
 (a) Less than 25 persons? 
 
 (6) Parties of 25 or more? 
 
 184. When a party of 25 or more are to move, is advance notice of such move- 
 ment furnished? 
 
 185. Are party movements in every case routed over the cheapest available 
 route? 
 
 186. Are requests drawn on electric lines and steamship lines where the total 
 cost is cheaper than steam roads? 
 
 187. When transportation is issued via steamship lines and more than one 
 class of accommodation is available, what class is furnished? 
 
 (a) Have any instructions been issued regarding class of accommodation to 
 be furnished ? 
 
 188. Are all persons traveling at Government expense restricted to the 
 cheapest available staterooms? 
 
 (a) If not, what is the rule? 
 
106 
 
 189. If officers (Army, Navy, Marine Corps) secure mileage allowance and 
 pay cash for transportation, does the Government secure benefit of land grant 
 when travel is over land grant or equalization lines? 
 
 (a) If so, how accomplished? 
 (6) If not, why? 
 
 190. Is the purchase of mileage or scrip books on transportation requests 
 authorized ? 
 
 (o) Is the purchase of mileage or scrip books authorized by other methods 
 than by transportation requests? 
 (6) If so, explain method. 
 
 191. What percentage of the cost of passenger transportation is secured on 
 mileage or scrip books? 
 
 192. Do the holders of mileage or scrip books report the use thereof? 
 (a) In what manner is this done, and how often? 
 
 193. Are mileage or scrip books used for indiscriminate travel or only for 
 short journeys where there is a distinct saving of time advantageous to the 
 Government? -. 
 
 194. Is the holder of mileage or scrip books held accountable for correct de- 
 tachment? 
 
 195. In what manner is military passenger traffic equally divided as provided 
 in joint military agreement? 
 
 196. Are persons traveling on Government transportation requests, whose 
 status is not ■' troops of the United States," included in those covered by the 
 previous question? 
 
 197. Are reports forwarded to the chairman of the interterritorial military 
 committee or direct to the chairman of the various passenger associations? 
 
 198. Is the joint military arrangement a financial saving to your department? 
 (n) If so, to what extent? 
 
 199. Do all persons whose status is " troops of the United States " travel on 
 transportation requests? 
 
 (a) If not, what method is employed to secure refund of land grant? 
 200: Are carriers instructed to submit passenger bills to one central office? 
 
 201. To what office or bureau are carriers' bills forwarded? 
 
 202. Are travel vouchers audited for unauthorized or circuitous travel? 
 
 203. Are memorandum requests forwarded to paying office when requests are 
 executed for travel? 
 
 204. What action is taken when carriers' bills are received prior to receipt of 
 memorandum requests, or report of its use? 
 
 205. Is a record made of all passenger bills as soon as received from the 
 carriers ? 
 
 206. When bills are received from carriers, is the receipt thereof acknowl- 
 edged ? 
 
 (o) If so, is a form letter used? 
 
 (b) If form letter is used, attach sample. 
 
 207. Are carriers' bills submitted on prescribeil Government transportation 
 stock form? 
 
 208. Where transportntion requests are lost or stolen, what steps are taken to 
 protect the Government against the improper use thereof? 
 
 209. IIiivo instructions been issued in tlie civil departments or independent 
 branclies of the Government as to tlio use of cash fares in lieu of transportation 
 requests ? 
 
 (a) What was the amount paid in cash fares for year ending October 1, 1921? 
 
107 
 
 210. It is requested that remarks be made regarding any matters pertaining 
 to the administrative handling of passenger traffic which have not been brought 
 out by this questionnaire. 
 
 Accou7iting. 
 
 211. Explain briefly, step by step and in regular order, the custom followed 
 in the handling of passenger transportation bills, indicating the work done by 
 each different clerk or group of clerks from the time the request is issued until 
 the time the paid account is forwarded to the general accounting office and tlie 
 retained papers filed. 
 
 212. Are there any duties performed in the handling of passenger-traffic mat- 
 ters (checking, verifying, or auditing), either in or outside of the office or 
 bureau, that could be eliminated, due to duplicate work, in any action as now 
 taken on the bill, from the receipt thereof until it is sent to the general account- 
 ing office? 
 
 213. State separately the number Of rate clerks, by salary groups, engaged in 
 the audit of passenger-transportation bills in the department, bureau, or inde- 
 pendent establishment at Washington and in offices outside of Washington for — 
 
 (a) October 1, 1921, in Washington, ; field, . 
 
 (6) October 1, 1920, in Washington, ; field, . 
 
 214. Does a rate clerk take any action on a bill other than the checking of 
 verification of the rates? 
 
 (a) If so, explain additional duties. 
 
 215. How many clerks are engaged in filing passenger tariffs? 
 
 216. If only part time of a clerk, state the approximate time employed. 
 
 217. When transportation requests are issued without inserting the route, are 
 carriers' bills paid at the cheapest available fare? 
 
 218. Are all mileage or scrip detachments checked to insure correct detach- 
 ment for each trip? 
 
 (o) By whom is this done? 
 
 219. When passenger tariffs quote unreasonable fares, what steps are taken 
 to have such fares corrected? 
 
 220. Has it been necessary in the past to make formal complaint to the 
 Interstate Commerce Commission on account of unreasonable passenger fares? 
 
 (a) If so, explain them. 
 
 221. Are any such cases now pending? 
 (o) If so, explain them. 
 
 222. Are any contracts in effect with carriers covering transportation of 
 passengers. 
 
 (a) If so, describe them. 
 
 223. Are any contracts in effect with transfer or taxi companies covering 
 transfer of passengers or baggage? 
 
 (a) If so, describe them. 
 
 224. Are bills checked to ascertain that the services were requested by compe- 
 tent authority? 
 
 (o) If so, by whom? 
 
 225. Are bills checked to ascertain that the services were performed as 
 stated? 
 
 (a) If so, by whom? 
 
 226. Are rates, extensions, and footings of bill audited before payment? 
 (a) If so, by whom? 
 
108 
 
 22T. Are the services checked to ascertain the correct appropriation charge- 
 able? 
 
 (a) If so, by whom? 
 
 228. Are the services charged for on carriers' bills checked against the report 
 (or memorandum copy of request) to insure coiTect payment? 
 
 229. Where the erroneous issuance involves the expenditure of excess money, 
 what method is used to secure reimbursement to the Government? 
 
 (a) From whom is reimbursement secured? 
 
 230. Are transportation charges billed by the carriers checked against pas- 
 senger tariffs before payment? 
 
 231. What record is maintained to prevent the overobligation or overexpendi- 
 ture of moneys appropriated for passenger transportation? 
 
 232. Are any unexpended appropriations on hand at the end of any fiscal 
 year used for the purcliase of mileage or scrip books for use in the ensuing 
 fiscal year? 
 
 (o) If so state the amount of money expended for mileage or scrip book 
 in fiscal year 1921 for use in the fiscal year 1922. 
 
 233. How many appropriations and subheads are charged with the payment 
 of transportation requests? 
 
 (a) State the titles. 
 
 234. In case of overdetachment of mileage or scrip coupons, what action is 
 taken to secure reimbursement of the value thereof? 
 
 235. How many copies of memorandum voucher form are required to accom- 
 pany carrier's bills? 
 
 236. What disposition is made of copies of memorandum voucher accompany- 
 ing carriers' bills? 
 
 237. Are bills paid by the office auditing them? 
 
 238. Is there a file of passenger tariffs sufficient to properly audit carriers' 
 bills maintained? 
 
 (a) State approximately the degree of completeness of passenger tariff files. 
 
 239. By what office or bureau are passenger bills paid? 
 
 240. Have any instructions been issued by your department to carriers as to 
 how their bills should be prepared? 
 
 (o) If so, attach copy of instructions. 
 
 241. What is the preference of your department as to the number of trans- 
 portation requests to be included in one account submitted by the carriers? 
 
 242. If a file of passenger tariffs is not maintained, what method is used to 
 determine the correct fare covering services performed? 
 
 243. What system is used to show that payment of each transportation request 
 has been made? 
 
 244. What system is used 'to prevent duplicate payment for services secured 
 on transportation request or otherwise? 
 
 245. When transportation requests are lost, what supporting papers are re- 
 quired to accompany voucher submitted by carriers for services performed? 
 
 246. What system is used in recording the payment of passenger transporta- 
 tion bills? 
 
 247. Is sufficient record maintained from whicli transportation requests can 
 be located after payment? 
 
 (ft) Desci-ibe method used. 
 
 248. When passenger bills are reduced are carriers advised the reason? 
 
 (a) If reduction involves land grant route, is the carrier furnished basis for 
 determining net cash military fare allowed? 
 
 249. Are transportation requests ever eliminated from carriers' bills to be 
 restated on a new bill? 
 
. 109 
 
 250. Are any bills forwarded to the general accounting office for direct set- 
 tlement? 
 
 251. How many passenger bills were forwarded to the accounting officers 
 of the Treasury and the general accounting office for direct settlement, year 
 ending October 1, 1921? 
 
 (o) State total value of these bills. 
 
 252. If bills are forwarded to the general accounting office for direct set- 
 tlement, is a record kept showing the bill number, amount, and date forwarded? 
 
 253. In case of overpayment of a transportation request, what steps are 
 taken to secure reimbursement? 
 
 254. In the payment of passenger accounts is the check transmitted to car- 
 rier by letter, accompanied by copy of the bill or statement setting forth tlie 
 bill numbers? 
 
 255. Does a check in favor of a carrier cover one bill or all bills that may 
 be ready for payment? 
 
 256. Is payment of bills made each day, each week, or some other set period ? 
 
 257. Are any reimbursements covering overpayment secured by the general 
 accounting office? 
 
 258. Are bases used in determining net cash military fares ffied for future 
 references? 
 
 259. How many passenger bills were submitted by the carriers from October 
 1, 1910, to October 1, 1921? 
 
 (o) Approximate number of requests included thereon. 
 
 260. State the average number of passenger bills submitted by carriers 
 monthly. 
 
 261. How many passenger bills were paid from October 1, 1920, to October 
 1, 1921? 
 
 262. Advise the amount of money expended for passenger transportation. 
 
 (a) Fiscal year 1920. 
 (6) Fiscal year 1921. 
 
 263. How many unpaid bills are now on hand? 
 (a) Advise date the count is made. 
 
 (6) What is the total amount of these unpaid bills? 
 
 264. What is the approximate time required to pay a bill after receipt thereof 
 from the carrier? 
 
 265. Are refunds covering value of unused tickets audited to ascertain their 
 correctness? 
 
 266. Advise in detail system used in the handling of refund claims. 
 
 267. Are bills involving land grant audited and paid? 
 (a) If so, to what extent? 
 
 268. It is requested that remarks be made regarding any matters pertaining 
 to the paying of passenger transportation which have not been brought out by 
 this questionnaire. 
 
 Appendix No. 4. 
 
 Office of Chief Ooobdinatob foe General Sitpplt, 
 
 Washington, November 16, 1921, 
 
 [Bulletin No. 7.] 
 
 To : Heads of Government departments and establishments : 
 
 The Federal Traffic Board is now able by reason of experienced personnel 
 attached thereto, the complete tariff files and other data available, to render 
 
110 . 
 
 valuable service to the Government in all matters connected with the proper and 
 economical routing of Government traffic. 
 
 It is therefore directed that shipments of materials and supplies of any char- 
 acter vtrhatsoever of two carloads or more transported on Government bills of 
 lading for or on account of any Government department or establishment, be 
 not forwarded until reference has been made to the Federal Traffic Board, which 
 reference will be made sufficiently in advance of the contemplated movement of 
 the materials or supplies to enable that board to designate the routing without 
 delaying the movement. 
 
 This contemplates that reference to the board be made in cases where the en- 
 tire movement in question consists of two carloads or more moving from a single 
 point of origin to one or more destinations, even though the daily movement may 
 consist of single carloads. 
 
 It is further directed that all references as indicated above be made to the 
 Federal Traffic Board through the particular member of that board represent- 
 ing the department or establishment directing movement or shipment, or 
 through one designated by that member. 
 
 H. C. Smithee, 
 Chief Coordinator for General Supply. 
 
 Appendix No. 5. 
 
 Office of Chief Coordinator for General Supply, 
 
 Washington, November 30, 1921. 
 
 [Bulletin No. 7B.] 
 
 To : Heads of Government departments and establishments : 
 
 Bulletin No. 7, issued November 16, 1921, is hereby extended to include all 
 movements of Government materials of two carloads or more whether moving 
 on Government or commercial bill of lading and whether the freight charges 
 are ultimately paid by the Federal Government or not. 
 
 All bills of lading supporting vouchers for payment of freight charges, 
 incurred by reason of movement of Government materials of two carloads or 
 more, as directed in Bulletin No. 7 and the above paragraph, will have in- 
 dorsed thereon the numbe^r of the order issued by the Federal Traffic Board 
 routing the movement, when forwarded to the General Accounting Office. 
 This order will be effective December 5, 1921. 
 
 H. C. Smither, 
 Chief Coordinator for General Supply. 
 
Ill 
 
 Appendix No. 6. 
 
 [Form FTB 1.] 
 
 FEDERAL TRAFFIC BOARD. 
 
 Report of Mils of lading issued. 
 
 By 
 
 (Department or independent establishment.) 
 Office at 
 
 (Bureau or branch.) 
 
 (Station, project, or agency.) 
 On Government shipments for the period _. 
 
 
 (State.) 
 -, 192—, to , 192__. 
 
 Bill of lading. 
 
 Commodity. 
 
 From— 
 
 To— 
 
 Complete route from ship- 
 ping point to destination. 
 
 Weight. 
 
 Date. 
 
 Symbol. 
 
 Number. 
 
 
 
 
 
 
 
 
 
 I certify the above is correct. 
 
 (Title). 
 
 INSTRUCTIONS. 
 
 1. All Government shipments must be covered by Government bills of lading 
 and complete routing supplied by issuing ofBce. 
 
 2. This report will be forwarded, as directed by the head of each depart- 
 ment, immediately upon the complete filling out of the sheet, but will, in all 
 cases, be rendered at least monthly, and in such cases where no shipments have 
 been made for the particular month in question the report will be forwarded 
 bearing such notation. 
 
 3. The original copy of each report must be filed with the coordinator for 
 traffic not later than the 15th of the. following month. 
 
 4. Complete routing must be shown. For express, parcel post, or motor 
 transportation, the class of service only should be indicated in routing column. 
 
 5. Under " Commodity " a general statement as to nature of shipment, lumber, 
 machinery, dry goods, groceries, etc., is required. Do not use nondescriptive 
 or trade names. 
 
 6. The issuing officer will be responsible for the report of all bills of lading 
 issued by him. When bills of lading are transmitted to commercial shippers, a 
 blank copy of this report and an addressed franked envelope to cover each bill 
 of lading, if shipments are to move at different times, must accompany the 
 order with instructions that each shipment be reported as made. 
 
 Appendix No. 7. 
 
 Office of Chief Coordinator for General Supply, 
 
 Washington, December 13, 1921. 
 
 [Bulletin No. 7C.] 
 
 To : Heads of Government departments and establishments : 
 
 1. There has been forwarded to each Government department and establish- 
 ment this date a supply of Federal Traffic Board Form No. 1. This supply is 
 
112 
 
 estimated to answer the requirements of your department for a period of two 
 months. Bequisitions on the Government Printing Office for future require- 
 ments will be submitted via the Federal Traffic Board on or before January 15, 
 1922. 
 
 2. This form will be made out and submitted in accordance with the instruc- 
 tions printed on the reverse side of the form. It will be noted that paragraph 
 1 of the instructions calls for the complete routing to be supplied by the issuing 
 office and designated on the report. This paragra'ph of the instructions will for 
 the present be carried out in all cases where the routing has been designated by 
 the Federal Traffic Board for shipments of two carloads or more, and in all other 
 cases where it is possible to designate the complete routing at the time of ship- 
 ment. Where complete routing is not indicated, initial carrier will invariably 
 be shown. 
 
 3. In all cases where the routing has been given by the Federal Traffic Board 
 the number of the routing order will be shown in the routing column. 
 
 4. A separate sheet will be used in reporting carload shipments and less than 
 carload shipments. 
 
 H. O. Smitheb, 
 Chief Coordinator for General Supply. 
 
 Appendix No. 8. 
 
 Office of Chief Cooedinatoe foe Gbnebai, Supply, 
 
 Washington, December 21, 1921. 
 
 [Bulletin No. 7E.] 
 
 To : Heads of Government departments and establishments : 
 
 Requests to Federal Traffic Board for "routing in compliance with the instruc- 
 tions contained in Bulletin No. 7, November 16, 1921, Bulletin No. 7B, November 
 30, 1921, supplements thereto or reissues thereof should be sent to the Federal 
 Traffic Board on Form FTB-2, supply of which will be furnished on applica- 
 tion to the Federal Traffic Board. Separate requests must be sent in covering 
 each shipment. 
 
 Departments and establishments using large numbers of this form should take 
 steps to supply themselves with this form either by submission of requisition 
 for printing or by mimeographing. 
 
 H. C. Smither, 
 Chief Coordinator for General Supply. 
 
 Appendix No. 9. 
 
 [Form FTB 2.] 
 
 request foe routing. 
 
 , 192- 
 
 The Federal Traffic Board, 
 
 War Trade Building, Washington, D. C. 
 Application is hereby requested for the routing of the following-described 
 shipment : 
 
 Number of carloads 
 
 Commodity 
 
 Shipper 
 
 Origin 
 
113 
 
 Consignee 
 
 Destination 
 
 Track delivery required 
 
 Representative of the Federal Traffic Board, Department of 
 
 To 
 
 The following routing is directed for the above-described shipment: 
 
 Routing order number covering this shipment is 
 
 Reference to this routing order number must appear on bill of lading. 
 
 H. Bert Knowles, 
 Ghainnan Routing Committee. 
 
 Appendix No. 10. 
 
 Office of Chief Coordinator for General Supply, 
 
 Washington, December 21, 1921. 
 
 [Bulletin No. 7D.] 
 
 To : Heads of Gpvernment Depai-tments and Establishments : 
 
 There has been forwarded to each Government department and establish- 
 ment this date a supply of Federal Traffic Board freight classification ques- 
 tionnaire, in accordance with advice received from each representative on the 
 board as to the requirements. 
 
 It will be noted that the questionnaire covers two groups of commodities, 
 (1) articles that have come into existence since 1914; (2) articles^ that do 
 not appear to be (a) specifically or (fi) properly classified in the various 
 classifications regardless of when they came into existence. 
 
 In order to spread out the work so as not to unduly burden any branch of 
 the Government, the answers will be forwarded to the Federal Traffic Board 
 in two groups. The answers to group ISo. 1 to be forwarded not later than 
 February 1, 1922, and the answers to group No. 2 to be forwarded not later 
 than March, 1922. 
 
 It is requested that the utmost care and consideration be given to the care- 
 ful answering of these questionnaires. It will be readily apparent that this 
 data from all the Government departments will enable the Federal Traffic 
 Board to standardize classification and to correct any erroneous or Improper 
 
 classification. 
 
 H. C. Smithee, 
 Chief Coordinator -for Traffic. 
 
 Appendix No. 11. 
 
 classification committee questionnaire submitted to all departments of 
 
 the government. 
 
 Place Date , 192 . 
 
 In order that the committee on classification (of freight) might be put in 
 possession of the necessary data to determine what action is necessary to result 
 in proper and reasonable classification of all commodities on which the Govern- 
 ment pays freight, in accordance with instructions given by the Director of the 
 Bureau of the Budget, each department or bureau to whom this list of questions 
 is submitted is requested to isee that each question is answered as fully as 
 86484°— 22 ^8 
 
lit 
 
 possible by the proper representative. Obviously some of the questions need 
 not be canswered in connection vi'ith some commodities. The term " shipped " 
 as here used means forwarded or received, and the term "package" means 
 package or container. 
 
 These questions are to be answered only in connection with (1) articles that 
 havf come into existence since 1914, so far as you are informed, and (2) arti- 
 cles that do not appear to be (o) specifically or (&) properly classified in the 
 various classifications (regardless of when they came into existence). Use a 
 separate form for each commodity. Read all of the questions before under- 
 taking to answer any of them. Kindly use typewriter if practicable. Insert 
 answers on this card. 
 
 State your name : 
 
 State to what department or bureau you are attached : 
 
 State your office address: 
 
 State your telephone number if you are located in the city of Washington: 
 
 This questionnaire after being executed by the various departments or indi- 
 vidual establishments is to be returned to the Federal Traffic Board, War Trade 
 Building, Twentieth and B Streets NW., Washington, D. C. 
 
 1. What is the name of the article or commodity which you desire to have 
 the classification committee of the Federal Traffic Board consider as to classifi- 
 cation (describe accurately according to its nature, avoiding trade names)? 
 
 2. In what style of 'package or container is it shipped (describe fully as to 
 inside and outside containers ; if in bale or bundle describe wrapping and 
 method of tying or banding) ? 
 
 3. Does the classification authorize the use of this type of package or con- 
 tainer? 
 
 4. If so, does the package or container meet specifications provided therefor 
 in the classification? 
 
 5. What is the weight of the package as offered for shipment? 
 
 6. What is the weight per cubic foot? 
 
 7. What is the value per cubic foot? 
 
 8. What is the value per pound? 
 
 9. What is the approximate present value per unit of purchase or sale and 
 what is that unit? 
 
 10. Is the commodity shipped set up, knocked down, knocked down flat, par- 
 tially folded, folded flat, or nested? 
 
 11. If set up, could it not be knocked down or folded? 
 
 12. If made of wood, is the commodity shipped " in the rough," " in the white,'' 
 or " finished " ? 
 
 13. If made of iron or steel, state whether the commodity falls within classi-" 
 flcation description of castings or forgings; blanks, stamping or unfinished 
 shapes ; or billets ; or bars. 
 
 14. Could a lower rating be obtained by changing the method of packing or the 
 form in which shipped? If so, liow? 
 
 15. In what quantity is the commodity usually shipped? 
 
 16. If in carloads, is it shipped in straight carloads or mixed carloads? 
 
 17. If in mixed carloads, ai'e shipments so mixed as to obtain the benefit of 
 the lowest charges applicable under the general mixing rule of the classification? 
 If not, why? 
 
 18. Is the commodity ever shipped loose or merely racked or braced in or on 
 the car? 
 
 19. Is lli(> commodity ever shipped in bulk, i. e., without any packing? 
 
 20. Is tlie connnodity ever .shipped in the same outside container with other 
 articles (iC so, state what other articles)? 
 
115 
 
 21. Explain the method of billing shipments. 
 
 22. Is the commodity generally shipped on a commercial or Government bill 
 of lading? 
 
 23. From and to what points is the commodity usually shipped? 
 
 24. By whom are shipments made and to whom are they consigned? 
 
 25. Are there any exceptions to the classification or any'commodity rates in 
 effect (if so, state in or to what territory in a general way) ? 
 
 26. Are shipments prepaid or collected at destination? 
 
 27. Are shipments made by freight, express, or parcel post? 
 
 28. To what extent are shipments subject to land-grant deductions? 
 
 29. Are the ratings or rates dependent upon declared or agreed values? If 
 so, is the lowest basis taken advantage of? If not, why? 
 
 30. Is the commodity subject to the I. C. C. regulations governing the trans- 
 portation of explosives and other dangerous articles by freight or express (if 
 so, state what section or sections are applicable) ? 
 
 31. Do any shipping or packing instructions prescribed by your department 
 or bureau conflict with the classification provisions? If so, explain in what 
 respects. 
 
 32. Is the article specifically provided for? 
 
 
 Official. 
 
 Southern. 
 
 Western. 
 
 33. What ratings are you paying to-day: 
 
 
 
 
 C.L . . . 
 
 
 
 
 34. Under the rule analogy, what classification item do you con- 
 sider should apply? (State page and item number and I. C. 
 C. number of classification) 
 
 
 
 
 35. In what rating would application of item given by you in reply 
 to question 34 result: 
 L.C.L. . 
 
 
 
 
 C. L 
 
 
 
 
 36. The proper classification is (do not answer this qiiestion): 
 
 
 
 
 C.L . 
 
 
 
 
 
 
 
 
 37. What edition of classification have you on file (name any State classifica- 
 tions that you have on file) ? 
 
 3S. Have you on file copies of exceptions to the classification? 
 
 39. Remarks : Add here any remarks you believe would be helpful to the 
 committee. 
 
 Appendix No. 12. 
 
 Office of Chief Cooedinator foe Geneeal Supply. 
 
 Washington, . 
 
 [Bulletin No. 7A.] 
 
 FEDEEAL TEAFFIC B.0AED. 
 
 1. The following circular issued by the Department of Commerce November 
 10, 1921, is quoted : 
 
 "To officers and employees of the Department of Commerce and others con- 
 cerned : 
 
 " In compliance with Circular No. 41 of the Bureau of the Budget, dated Octo- 
 ber 10, 1921, Noble N. Potts of the secretary's office has been designated by me 
 as the representative of the Department of Commerce to serve as a member of 
 the Federal Traffic Board. He is also hereby designated to act as traffic man- 
 
116 
 
 ager for the Department of Commerce and will have complete control of the 
 movement of traffic of the department and the handling of all matters relating 
 thereto. He is herehy authorized to call for such information from each bureau 
 or division as niaj' be necessao' to enable him to properly perform his duties, 
 and to give such directions and instructions as he may deem advisable for the 
 prompt and efficient movement of the traffic and the disposition of all matters 
 arising therefrom. All communications from the traffic manager and instruc- 
 tions from him must be complied with. He will report to the Secretary of 
 Commerce." 
 
 2. The prompt and effective action taken by Secretary Hoover is an excellent 
 example of the liind of cooperation that will further the aims of the Federal 
 Traffic Board and enable the board to institute through all departments and 
 establishments such economies and changes in organization as may be adopted 
 as a result of the wide range of investigation into traffic matters now being 
 conducted. Such cooperation can not fail to result in a high state of efficiency. 
 
 3. It is assumed that other departments and establishments having repre- 
 sentatives on the Federal Traffic Board have, in accordance with their own 
 methods, taken similar action to that quoted above. 
 
 4. However, if this has not been done in any instance, it is essential in order 
 to insure that cooperation which is necessary to the solution of the important 
 problem with which the traffic board is charged, that all concerned within a 
 particular department or establishment be advised of the appointment of its 
 traffic manager or representative of the head of such department on the Federal 
 Traffic Board. 
 
 5. In order that this office may be kept informed, it is requested that it be 
 furnished with a copy of such announcement as is made by each department or 
 establishment designating its representative on the Federal Traffic Board and 
 defining his authority within his department or establishment. 
 
 H. C. Smithee, 
 Chief Coordinator for General Supply. 
 
REPORT OF 
 THE AIDE FOR PURCHASE 
 
 Submitted by 
 Lt. Comdr. E. D. STANLEY, U. S. N. 
 
 (117) 
 
REPORT OF THE AIDE FOR PURCHASE. 
 
 December 31, 1921. 
 From: Aid for Purchase. 
 
 To: Chief Coordinator, General Supply. 
 
 Subject: Report of Federal Purchasing Board for period ending 
 
 December 31, 1921. 
 
 The Federal Purchasing Board was organized September 8, 1921, 
 and 13 meetings have been held since that time. 
 
 The first efforts of the board were devoted to the subject of the 
 checking of requirements against surpluses as required by statute 
 and Bureau of the Budget circulars, with a view to perfecting this 
 process as much as possible in the interests of expedition of pro- 
 curement. It was deterniined, in conjunction with the Liquidation 
 Board, that this duty of checking against surplus was primarily one 
 for the latter board, on the principle that our primary duty was not 
 to keep from selling something we might sometime need, but to keep 
 from buying something we already had on hand. 
 
 The Liquidation Board having decided to continue and to perfect 
 the system already in effect — that of clearance through the General 
 Supply Committee — ^the Purchasing Board felt it unwise to require 
 another clearance through the Purchasing Board for purposes of dis- 
 cussion in the board, and the Chief Coordinator approved this 
 decision. 
 
 The Purchasing Board then devoted itself to the matter of the 
 reduction of useless paper work in connection with clearance, and 
 obtained authority to grant exemptions from clearance for such items 
 as are known not to be and not likely to be in surplus in any depart- 
 ment, for such items as are obviously impracticable of transfer due 
 to distant location of the requiring agency, for certain services and 
 public utilities, and for certain distant agencies for which clearance 
 through Washington is economically impractical. 
 
 The general exemption of such large classes of material as pro- 
 visions, forage, gasoline, periodicals, ice, cement, etc., has materially 
 reduced the papers to be handled without the slightest prejudice of 
 the law. 
 
 The matter of clearing all nonexempted requirements through the 
 General Supply Committee is one which must be left to the honor of 
 the departments, as no funds are available to set up the organization 
 which would be required to check the departments in this matter. 
 
 (119) 
 
120 
 
 The number of items passed upon by the General Supply Committee 
 averages around 1,500 per day. 
 
 It soon became api3arent in the deliberations o£ the Purchasing 
 Board that the greatest drawback to real coordination between 
 departments was the fact that a number of the representatives on 
 the board represent their departments only nominally and are not 
 actually in personal touch with all the purchasing activities of their 
 departments. This is not, of course, by reason of any personal defi- 
 ciency, but the natural consequence of the systems which permit one 
 department to have numerous independent procuring agencies. It 
 was found that many of the departmental representatives were not 
 only not in touch with all the buying agencies, but had no direct 
 authority to transmit information and instructions to the buying 
 agencies without the usual circumlocution of official correspondence. 
 
 If appeared that it might be necessary to remedy this situation 
 by a centralization of purchase functions within departments before 
 any successful coordination between departments could be expected. 
 It was decided to make a detailed study of all the purchase opera- 
 tions of a typical decentralized department in order to bring out 
 all phases of the situation and to determine whether considerations 
 other than those of business efficiency were strong enough to prevent 
 the application of the obvious remedy. The Treasury Department 
 was selected and a comprehensive report Avas made covering the 
 following points among others: 
 
 Purchases made for what organizations in Washington and in tlie field. 
 Ajipropriations Involved. 
 General nature of purchases. 
 
 Purchases made in Washington or in the field under Washington supervision. 
 Degree of supervision of field services. 
 
 Purchases made annually or as need arises, for periods of time or for specific 
 quantities. 
 
 Value of purchases. 
 
 Number of employees engaged. 
 
 Stores carried. 
 
 Inspection required. 
 
 Nature of speciflcations. 
 
 Advertising and distribution of proposals. 
 
 Time allowed to submit bids. 
 
 Time required to make awards. 
 
 Nature and method of openings bids. 
 
 Number of bidders. 
 
 Kind of bonds and contracts required. 
 
 Debarred bidders. 
 
 Special statutes governing purchase. 
 
 The outstanding fact revealed by the survey is that there is a 
 minimum of 13 and a maximum of 23 separate independent or semi- 
 independent purchasing agencies for the Treasury Department in the 
 
121 
 
 city of Washington, the actual number depending on the degree of 
 independence taken as a standard. 
 
 Tliis survey was delivered to the Treasury Department on October 
 21, 1921, with all available arguments for .and against centralization 
 of purchase functions, but without recommendation. A complete 
 centralization Avas later recommended by the Chief Coordinator and 
 about November 3, 1921, a plan for putting a centralized office into 
 effect was prepared for the Treasury Department, and is as yet under 
 consideration by the Secretary of Treasury. 
 
 A similar survey was made of the Department of Commerce where 
 different conditions were found and different recommendations made. 
 This report was forwarded to the Secretary of Commerce, who has 
 the matter under consideration. 
 
 The variation in the two recommendations made with respect to 
 the particular function of purchase serves to illustrate the fact that 
 the Chief Coordinator does not harbor the idea that any one iron- 
 clad system or method of performance can be clamped down and 
 made to fit every branch of the Government's diverse activities. It 
 is the hope and intention to study each activity in its relation to the 
 whole and to propose only such practical changes as will tend to co- 
 ordination without undermining individual efficiency. 
 
 It was early announced as a policy that no combined general pur- 
 chasing office for all departments should be established, that one office 
 for one major department of the Government was as far as centraliza- 
 tion could be efficiently carried. 
 
 From time to time, however, it has been suggested from various 
 sources that the Government could save money by pooling purchases 
 of a certain commodity and that by putting the purchase of all of one 
 item into the hands of one office, a more intensive study of market 
 conditions for that particular item could be maintained at the least 
 possible cost, more efficient distribution could be effected, and the 
 business made more attractive to the commercial world, one transac- 
 tion being substituted for a score. 
 
 In order to determine whether such a practice was feasible, the 
 purchasing board decided to make a study of 10 important commodi- 
 ties to ascertain if pooled buying was practicable and if not to recom- 
 mend the best method of purchase for guidance of the different de- 
 partments concerned. The following items were selected for study : 
 
 Coal, fuel oil, automobile tires and tubes, forage, provisions, lumber, cordage 
 and hemp, canvas ; packing, steam, air, etc. ; paints and ingredients. 
 
 In October subcommittees were appointed for each of these items 
 and the work divided up among the departments represented on the 
 board, the committee members not necessarily being the department 
 representative on the Purchasing Board. It was emphasized that it 
 
122 
 
 was the purchase function which was to be studied, not the technical 
 specification or the necessity for the use of the material in question. 
 
 Progress reports have been received from all these committees, but 
 no final reports have been received. From the aggregate of these 
 reports it is expected to arrive at a decision as to the practicability 
 of pooling Government purchases on particular commodities. 
 
 Previous to the establishment of the Interdepartmental Board of 
 Contracts and Adjustments, the Purchasing Board made a survey 
 of the situation with respect to a standard form of contract. The 
 pricipal obstacle to this standardization is the conflict in statutes 
 controlling the purchase routine of the several departments, and it is 
 strongly urged that the Interdepartmental Board on Contracts and 
 Adjustments prepare a uniform Federal purchasing act which will 
 permit standardization of the procurement system. Such an act will 
 eliminate the greatest cause for criticism of the so-called " red-tape " 
 in Government business. 
 
 The Purchasing Board has performed many other minor duties in 
 the ways of receiving and spraying out general information, opening 
 up cross-channels of cooperation between departments and smooth- 
 ing out difficulties. 
 
 E. D. Stanley, Assistant 
 
REPORT ON 
 
 REAL ESTATE 
 
 SURVEY OF TELEPHONES 
 
 MOTOR TRANSPORT OUTSIDE THE 
 DLSTRICT OF COLUMBIA 
 
 STANDARDIZATION OF SPECIFICATIONS 
 
 CORPS AREA COORDINATORS 
 
 Submitted by 
 Lt. Col. J. R. McANDREWS, U. S. A. 
 
 (123) 
 
REPORT ON REAL ESTATE, SURVEY OF TELEPHONES, 
 MOTOR TRANSPORT OUTSIDE THE DISTRICT OF CO- 
 LUMBIA, STANDARDIZATION OF SPECIFICATIONS, 
 CORPS AREA COORDINATORS. 
 
 December 31, 1921. 
 From: J. E. McAndrews, assistant. 
 To: The Chief Coordinator. 
 Subject : Quarterly report. 
 
 1. In accordance with your instructions of December 14, 1921, there 
 is submitted herewith a report for the period ending December 31, 
 1921, covering the duties wliich you have assigned to my supervision. 
 
 REAL ESTATE. 
 
 [Circular Xo. 22, Bureau of the Budget.] 
 
 1. All applications for authority to lease for more than one year, 
 or where the rental was in excess of $500 per annum, after being sub- 
 mitted to the Surveyor General of Real Estate and approved by him, 
 have been transmitted to this office for confirmation. Two hundred 
 and fifty-nine leases with an annual rental of approximately $1,300,- 
 000 have been tlius confirmed up to December 15, 1921. In handling 
 applications for leases, the desirability, wherever possible, of consol- 
 idating Government activities in Government-owned buildings, thus 
 releasing rented space, seems apparent. 
 
 2. It has been observed that there is a lack of uniformity in the 
 amount paid for space used for similar purposes in the same city. 
 Taking Chicago, as an example, the rates paid by different depart- 
 ments of the Government in the down-town district vary from $2.50 
 to $5.50 per square foot. 
 
 3. Area coordinators, acting under instructions from this office, 
 have been engaged in studying the situation within their respective 
 areas for the purpose of determining what can be done along the 
 lines of consolidation in Government-owned buildings, or in cheaper 
 rented buildings than those at present occupied, where economy could 
 be effected without detriment to efficiency. 
 
 The opportunity to effect changes of this character does not exist in 
 the same degree in all areas. It has not been difficult to handle a situ- 
 ation where one or two departments, occupying rented space, could 
 be accommodated in vacant space in a Government-owned building. 
 
 (i-.-,i 
 
126 
 
 There are a number of cases to serve as illustrations, of which the 
 following are types : 
 
 The War Department having surplus space in the Army base at 
 Brooklyn, set aside 33,000 square feet for the accommodation of 
 the Internal Revenue Bureau of the Treasury Department occupy- 
 ing rented space in New York City and Brooklyn. When the rented 
 space is released and the transfer made, a saving in rental of approxi- 
 mately $115,000 per year will be effected. 
 
 The Shipping Board having space on a pier at Philadelphia, ftom 
 which direct loading to transports is possible, accommodated the 
 War Department by permitting the storage of 4,000 tons of steel. 
 This action saved its shipment to Middletown, Pa., for storage and 
 a return shipment to a seaport, and involved an economy of approxi- 
 mately $12,000. 
 
 The Shipping Board accommodated in its space at Hoboken, N. J., 
 300 marines guarding the mails at New York City, making a daily 
 saving of approximately $300 possible. Prior to this arrangement 
 the marines were living in the Brooklyn Y. M. C. A., and were being 
 given commutation of rations. 
 
 4. In the consolidation of numerous activities- of the Government 
 in a Government-owned building, or in a more economical rented 
 building, careful study must be made involving the needs of the 
 various departments, the importance of location, present rentals, 
 available suitable Government-owned space, etc. In handling prob- 
 lems of this character, it is most desirable that a central body com- 
 posed of representatives of all departments be authorized and the 
 proposed Federal Eeal Estate Board will cover this need. 
 
 5. Two very striking examples of desirable consolidation which 
 involve a number of departments and the release of considerable 
 rented office space now exist in Chicago. In one case, it is proposed 
 that the various departments of the Government now occupying ex- 
 pensive rented space in the congested district, move to the General 
 Intermediate Depot, United States Army. In this case, the location 
 of these activities in the congested district is not a matter of impor- 
 tance, and the transfer can be effected without loss of efficiency and at 
 an estimated saving of approximately $150,000 per year. 
 
 In the other case, it is proposed to concentrate in a single rented 
 building within ten minutes' Avalk of the Loop district, the activities 
 which must be near the down-town district, but not necessarily within 
 the congested area, and which are now occupying expensive rented 
 space. An estimated saving in this case of $83,000 per year will be 
 effected. 
 
 At Detroit, Midi., similar concentration, but on a smaller scale, 
 can be effected. In this case, there being no Government-owned 
 property available, it is contemplated to rent sufficient space to ac- 
 
127 
 
 commodate practically all Government activities in Detroit, thus 
 releasing expensive rented space and effecting a considerable saving 
 to the Government. 
 
 6. Aside from the savings that can be effected by proper handling 
 of problems of this character, it is believed to be of great benefit to 
 the Government to bring its various departments into closer touch 
 with one another than has been the case heretofore, in order that 
 there might be brought about team play, which tenda so much to 
 unity of purpose, and cheerful cooperation with a willingness to give 
 or take where the interests of the Government as a whole are con- 
 cerned. 
 
 7. The question of storage facilities and supply, as it relates to 
 economy and efficiency, is being especially considered. In the solution 
 of problems along these lines it is realized, that while the responsi- 
 bility rests primarily on the departments concerned, whose problems 
 are in some cases materially different, there is a possibility of a more 
 economical arrangement of activities that will not only be gladly 
 accepted by the various departments, if they can be convinced of its 
 soundness, but will effect, in some cases, concentrations under the 
 same roof, which will lead to economies in overhead, transporta- 
 tion, etc. 
 
 8. Hon. James A. Wetmore, Supervising Architect, Treasury De- 
 partment, Surveyor General of Keal Estate, has submitted to the 
 Chief Coordinator his report covering in detail the organization and 
 operation of his office. 
 
 SURVEY OF TELEPHONES. 
 
 [Circular No. 33, Bureau of the Budget] 
 
 1. A survey of telephone systems within the District of Columbia 
 is being conducted by the Bureau of Standards. The report of the 
 director of that Bureau has been submitted to the Chief Coordinator. 
 
 2. When consideration is given to the large number of offices within 
 the District of Columbia in which there exist possibilities for savings 
 without detriment to service, but in some instances with a decided 
 improvement therein, it is easily conceivable that, upon completion 
 of the survey and the carrying into effect of recommendations of the 
 telephone experts of the Bureau of Standards, substantial savings to 
 the Government will be effected. 
 
 MOTOR TRANSPORT OUTSIDE THE DISTRICT OF COLUMBIA. 
 
 [Circular No. 35, Bureau of the Budget.] 
 
 1. The coordination of motor transport outside the District of 
 Columbia, due to the varying number and location of activities hav- 
 ing motor vehicles, is a problem which is different in each corps area. 
 
128 
 
 2. The coordination of motor transport, throughout the country 
 and outside the District of Columbia, has been materially assisted by 
 the hearty cooperation extended this office and the area coordinators 
 by the various departments of the Government in the handling of the 
 Christmas rush for the Post Office Department. 
 
 3. While various instances of minor importance in the cooperative 
 use of motor transport have been noted prior to this time, it may be 
 said that the handling of the mails during the Christmas rush marks' 
 the real beginning of active cooperation among the various branches 
 of the Government, and it is the purpose of this office, by careful 
 handling of this problem and fair treatment of all concerned, that 
 from a small beginning there shall grow something of real value and 
 service to the Government by the utilization of existing facilities. 
 
 4. The following statement shows the results that have been accom- 
 plished throughout the United States, exclusive of the District of 
 Columbia, in coordinating motor vehicle transportation during the 
 brief period since' the promulgation of Circular No. 35 Bureau 6f 
 the Budget, dated September 23, 1921 : 
 
 Motor vehicles furnished to post offices hy other Goverivment departments for 
 use in handling Christinas mails. 
 
 [Incomplete list.] 
 
 Post office. 
 
 Number 
 
 of 
 trucks. 
 
 Furnished by- 
 
 Boston, Mass 
 
 10 
 15 
 3 
 9 
 2 
 2 
 2 
 65 
 60 
 8 
 
 Department of Agriculture. 
 
 Do 
 
 
 Do 
 
 
 Providence, R. I.. 
 
 Do. 
 
 
 
 Hartford, Conn 
 
 Department of Agriculture. 
 
 Springfleld, Mass 
 
 
 
 
 Do ' ' 
 
 War Department. 
 
 Do 
 
 Department of Agriculture. 
 
 Harrisburg, Pa 
 
 War Department. 
 
 Philadelpma, Pa 
 
 
 Pittsburgh, Pa 
 
 
 Louisville, Ky . 
 
 Do. 
 
 Columbus, Ohio 
 
 Cincinnati, Ohio. . 
 
 14 
 20 to 25 
 
 Do. 
 Do. 
 
 Clilcago, 111 
 
 95 
 3 
 2 
 
 10 
 
 "l3 
 
 4 
 
 (') 
 4 
 
 Do. 
 
 Detroit, Mich... . . . 
 
 Do. 
 
 
 Do. 
 
 Colorado Springs 
 
 Do. • 
 
 Denver, Colo. 
 
 Do. 
 
 Dallas, Tex 
 
 Do. 
 
 
 Do. 
 
 Oalcland, CaUf 
 
 Do. 
 
 Seattle, Wash. 
 
 War and Navy Departments. 
 
 
 
 I All requirements filled. 
 
 ! Several Class B. 
 
 5. The foregoing is an incomplete list of the extra trucks furnished 
 to post offices for handling Christmas mails, complete reports not be- 
 ing available owing to the limited time in which to make necessary 
 arrangements with the various Government departments for the 
 loan of the trucks. 
 
129 
 
 6. These trucks were required at post offices from about December 
 19 to 26 and on average of approximately 10 hours daily. 
 
 7. Advance reports received from corps area coordinators indicate 
 that the saving to the Post Office Department that will result from 
 the use of extra trucks furnished by other Government departments 
 for handling the Christmas mails will amount to approximately 
 $50,000. 
 
 8. The success that has thus far attended the coordinated use of 
 motor vehicles has been due to the earnest cooperation that all de- 
 partments of the Government have manifested, and in order to 
 insure continuance of such cooperation, plans are being worked out 
 to establish a uniform method of remuneration to the department 
 providing the service, by the one receiving services. 
 
 9. It is tentatively proposed that the actual expense of opera- 
 tion, such as drivers' wages, cost of gasoline and oil, including a 
 charge for fair wear and tear, be borne by the department which 
 receives service, payable to the department by which service is pro- 
 vided, and that responsibility for damage to vehicles while in the 
 service of another department be fixed and assessed by the local 
 coordinator. 
 
 10. The attention of this office has been called to the use of Gov- 
 ernment motor vehicles for private purposes, and the attention of 
 the heads of all Government establishments has been invited to 
 Statute L, volume 33, section 4, February 3, 1905, which forbids such 
 use of Government motor vehicles. 
 
 11. Mr. B. L. Andrus, Post Office Department, who is on duty in 
 this office in connection with the coordination of motor transporta- 
 tion, has rendered valuable assistance in the work that has already 
 been accomplished. His intimate knowledge of motor transport 
 matters, his courtesy and fairness in dealing with the various de- 
 partments, make him a valuable asset to this office. 
 
 MOTOR TRANSPORT WITHIN THE DISTRICT OF COLUMBIA. 
 
 [Circulars Nos. 35 and 36, Bureau of the Budget.] 
 
 1. The coordination of motor transport within the District of 
 Columbia being under Col. C. O, Sherrill, Coordinator for Motor 
 Transport for the District, is covered by a special report of that offi- 
 cer, which has been submitted to the Chief Coordinator. 
 
 STANDARDIZATION OF SPECIFICATIONS. 
 
 (Circular No. 42, Bureau of the Budget.) 
 
 1. Prospective accomplishments of the Federal Specifications 
 Board organized by Circular No. 42, Bureau of the Budget,. will 
 86484°— 22 9 
 
130 
 
 doubtless be of great and permanent value not only to the Govern- 
 ment, but to industry and the general public as well. The chairman 
 of the Federal Specifications Board, Dr. S. W. Stratton, Director of 
 the Bureau of Standards, has submitted his report to the Chief 
 Coordinator. 
 
 2. The following quotation is taken from an address delivered by 
 Mr. P. G. Agnew, secretary of the American engineering standards 
 committee, at the standardization conference of the American Mining 
 Congress in November, 1920 : 
 
 During or since the war, national engineering standardizing bodies have been 
 formed in Austria, Belgium, Canada, France, Germany, Holland, Italy, Sweden, 
 Switzerland, and the United States, and one is in process of formation in Japan. 
 All of these are similar in form of organization and method of operation to the 
 British Engineering Standards Association, which, organized in 1901, has been 
 a most significant factor in the development of British industry. 
 
 Our own organization, the American engineering standards committee, was 
 organized in October, 1918, and has been actively at work for about a year. 
 At the time the committee was organized, there were more than a hundred 
 American organizations actively engaged in standardization work, but there 
 were no systematic unified methods of cooperation, and there had been a wide- 
 spread recognition of the need of a clearing house for standardization work, 
 which function the committee is now performing. The functons of the commit- 
 tee are : To unify methods of arriving at engineering standards ; to secure co- 
 operaton between various interested organizations in order to prevent duplica- 
 tion of work and promulgation of conflicting standards ; to act as an authori- 
 tative channel of cooperation in international engineering standardization ; to 
 promote in foreign countries the knowledge of recognized American standards; 
 t© collect and classify data on standards ; and to act as a bureau of information 
 regarding standardization. 
 
 The American engineering standards committee is in touch with all the other 
 national standardizing bodies and is actively cooperating with several of them. 
 
 ^ * -I* # 4: 4: * 
 
 The standardization is one of coojteration throughout each branch of indus- 
 try, and betAveen the different branches of industry whose interests touch or 
 overlap, and a large measure of international standardization must inevitably 
 result. 
 
 For years there has been a growing feeling among leaders in industry, which 
 was heightened by the experiences of the war, that our industries function too 
 much as independent units, and not enough as articulated parts of a national 
 whole. It is not too much to say that standardization offers a major oppor- 
 tunity toward the integration of our industries on a national scale, so that they 
 may function in a truly national way. 
 
 3. What has been so ably expressed by Mr. AgTiew regarding en- 
 gineering standardization is applicable in a broader sense to the 
 Federal Specificiitions Board, which considers the many needs of the 
 Government, harmonizes them with the best commercial practice, and 
 cooperates not only with Mr. Agnew's and other commercial stand- 
 ardization committees, but with industry as well. 
 
131 
 
 CORPS AREA COORDINATORS. 
 
 1. In the assignment of the field representatives of the Chief Co- 
 ordinator, the existing military subdivision of the territory of the 
 United States into corps areas was, as a matter of convenience, made 
 
 ' use of, and a coordinator assig-ned to each. 
 
 2. As the corps areas are military subdivisions based generally on 
 military questions, including military population, they vary consid- 
 erably in size and in the number, character, and distribution of 
 activities, so that the problems to be solved by area coordinators, 
 although pointing to a common goal, are diversified in character and 
 extent. 
 
 3. The assignment of corps area coordinators is as follows : 
 
 First Corps Area, Capt. F. T. Arms, United States Navy, Boston, Mass. 
 
 Second Corps Area, Capt. B. W. Bonnafflon, United States Navy, New- 
 York, N. Y. 
 
 Third Corps Area, Commander W. R. Bowne, United States Navy, 'Ptiiladel- 
 phia. Pa. 
 
 Fourtli Corps Area, Maj. Talbot Smitli, United States Army, Atlanta, Ga. 
 
 Fiftli Corps Area, Col. J. C. Rhea, United States Army, Indianapolis, Ind. 
 
 Sixth Corps Area, Maj. Sidney G. Brown, United States Army, Chicago, 111. 
 
 Seventh Corps Area, Col. H. C. Whitehead, United States Army, Omaha, Nebr. 
 
 Eighth Corps Area, Maj. D. A. Robinson, United States Army, San An- 
 tonio, Tex. 
 
 Ninth Corps Area, Capt. Ray Spear, United States Navy, San Francisco, Calif. 
 
 District of Columbia, Lieut. Col. C. O. Sherrill, United States Army, Wash- 
 ington, D. C. 
 
 4. The character of the work performed by the corps area coordi- 
 nators, and the enthusiasm and initiative which they have shown are 
 matters with which the Chief Coordinator is in intimate touch, since 
 the record of their performances, whether pertaining to surplus 
 property, interdepartmental transfers, utilization of Government- 
 owned real estate, relinquishment of rented property, investigations, 
 coordination of motor transport, etc., has been brought to his at- 
 tention. 
 
 5. It is felt that the service of the area coordinators to the Gov- 
 ernment will be of increasing value, and that by a willingness to 
 render aid wherever they can,^they will be of material assistance in 
 bringing into harmonious relationship the various branches of the 
 Government, some of which have been heretofore, to a greater or 
 lesser extent, but slightly acquainted with one another. Past per- 
 formance furnishes convincing proof of this statement. 
 
 GENERAL. 
 
 1. It has been found that several departments of the Government 
 have practically identical plants in the same city, one of which seems 
 
132 
 
 to be sufficient for all needs, thus indicating the desirability of con- 
 solidation and the elimination of those plants no longer necessary. 
 Questions of this character have presented themselves in several 
 areas, and are being investigated for the purpose of determining 
 whether the present situation is justified, and if not, to effect such 
 changes as may be necessary. 
 
 2. In consideration of all the cases where economies are indicated 
 by elimination of unnecessary activities, the human element is bound 
 to be encountered, since the question of reduction of personnel usually 
 accompanies a proposed saving. For this reason care should be 
 taken to provide transfers to vacancies elsewhere at the same time as 
 activities are discontinued. This action indicates the necessity of 
 making provision in advance for placing employees of discontinued 
 activities. 
 
 3. It should be established as a policy, after consultation with the 
 Civil Service Commission, that all personnel rendered surplus by 
 reason of reduction of one or more activities, concentrations, etc., 
 will be transferred without loss of grade to other existing agencies. 
 
 It is believed that an investigation will disclose the fact that the 
 annual turnover in all grades is vastly in excess of the reduction of 
 personnel, that will be brought about by economies, so that the ab- 
 sorption of this surplus personnel will be easily accomplished. 
 
 It is felt that, if upon more careful investigation such a policy is 
 found to be sound and workable, its announcement would be a vast 
 incentive to securing the hearty cooperation of all concerned in 
 effecting economies where the reduction of personnel plays an im- 
 portant part. 
 
 4. In general there has been encountered the greatest willingness 
 on the part of the various departments to cooperate whenever they 
 have been in a position to do so. In all cases, care has been taken to 
 see that the holding department or the one rendering service to an- 
 other is fully reimbursed for any additional expense to which it has 
 been put by reason of the service extended. This is not only fair, but 
 encourages a spirit of helpful cooperation in the future, which is 
 essential to the successful coordination of Government activities. 
 
 J. R. McAndeews, Assistant. 
 
REPORT OF THE 
 SURVEYOR GENERAL OF REAL ESTATE 
 
 Submitted by 
 Mr. JAMES A. WETMORE 
 
 (133) 
 
EEPORT OF THE SURVEYOR GENERAL OF REAL ESTATE. 
 
 December 31, 1921. 
 From: Surve^vor General of Real Estate. 
 To: Chief Coordinator, General Supply. 
 Subject: Report for Period Ending December 31, 1921. 
 
 Eeference is made to your memorandum of the 14th instant, re- 
 garding the submission of your quarterly report to the Director of 
 the Bureau of the Budget, and requesting a report from the Suveyor 
 General of Real Estate as to his activities under Circular No. 22 of 
 the Bureau of the Budget, dated August 18, 1921. In response to 
 your request I have the honor to submit the following : 
 
 ORGANIZATION. 
 
 No definite or charted organization has as yet been made, the per- 
 manent force of the Supervising Architect's Office having been able 
 thus far to absorb the work, and it having been considered best to 
 await the formation of the real estate board, which it is understood 
 is under consideration by the Chief Coordinator, General Supply, 
 and the Director of the Budget. 
 
 POLICIES ANNOUNCED. 
 
 Xo definite working policies have been announced, but communica- 
 tions have been addressed to the heads of the various departments, 
 emphasizing the fact that it is essential that all requests for author- 
 ity to lease property shall show that the full amount of space pro- 
 posed to be rented is necessary for the purpose intended; that no 
 other quarters suitable for the purpose can be had for a lower rental ; 
 or, that if space which could be used can be obtained at a lower rate, 
 the reason for recommending the higher-priced space must be shown 
 in detail. 
 
 The Surveyor General of Real Estate and the Chief Coordinator, 
 General Supply, have concurred in the opinion that Circular No. 
 22 requires that all leases for more than one year, regardless of 
 amount, must be approved by them; also, that all leases involving 
 amounts of $500 a year and upwards, regardless of the length of the 
 term, must receive their approval; also, that leases for less than a 
 year, where the amount is less than $500 per annum, need not be 
 
 (135) 
 
136 
 
 submitted for their approval. It is believed, all things considered, 
 that the announcement of policies had better be postponed_ until the 
 formation of the real estate board above referred to. 
 
 OPERATIONS. 
 
 After the promulgation of Circular No. 22 of the 'Bureau of the 
 Budget it required several weeks to get the necessary forms approved 
 and printed. On October 18, copies of Surveyor General's Form No. 
 600, copy attached, were sent to the heads of all departments and in- 
 dependent establishments of the Government, requesting that a sepa- 
 rate form be filled out covering each piece of property under the con- 
 trol of the department or establishment concerned. Up to the present 
 time more than 46,000 copies of these forms have been called for. 
 It was anticipated that the departments and establishments would in 
 many cases have to send the forms to field officers for completion, 
 thus entailing considerable delay. There has been more delay, how- 
 ever, than was anticipated, for at 'the present writing not over 1 per 
 cent of the forms sent out have been returned with complete informa- 
 tion. Until the information called for by these forms has been re- 
 ceived here, the broader functions of the office of the Surveyor Gen- 
 eral of Real Estate can not be exercised to the best advantage. With 
 the aid of the information as to the number of employees quartered in 
 buildings and the square- foot area occupied by the various services, 
 it is believed that considerable space can be saved by crowding some 
 services slightly. 
 
 ECONOMIES. 
 
 Bequests by the Post Office Department for authority to renew 
 leases, as well as requests for authority to make new leases for post- 
 office quarters (which, taken together, constitute ' the bulk of the 
 business of this nature coming before the Surveyor General), show a 
 marked increase over the rentals paid for such quarters under leases 
 entered into from five to ten years ago ; and naturally, in view of the 
 general increase in rents since the war, no economies can be reported 
 in connection with leases for post-office quarters. 
 
 In some cases the increases have been so great that appi'oval has been 
 given only upon condition that the leases be drawn to contain a pro- 
 vision for termination upon short notice, and that the department 
 will meanwhile exert itself to find less expensive quarters. Several 
 cases have been returned without approval, with the direction that 
 further efforts be made to get lower-priced quarters, or to negotiate 
 leases of shorter terms than proposed. In general, an effort is being 
 made to have the Post Office Department negotiate for periods shorter 
 than the usual five or ten year lease, in all cases where abnormal in- 
 creases are found, it being reasonable to expect that rents generally 
 
137 
 
 will decrease in a year or so when building activities are more com- 
 pletely resumed. 
 
 Some leases have been entered into by the Post Office Department 
 for the rental of space for terminal railway post-office purposes, which 
 show large incidental savings. The following may be mentioned : 
 
 At Binghamton, N. Y., by authorizing a lease involving a rental 
 of $2,400 per annum for a one-story building to be used for terminal 
 railway post office purposes, an estimated saving of $107,000 per 
 annum has been effected. This saving represents the salaries of rail- 
 way mail clerks, and rent heretofore paid for mail distributing space 
 in railway post office cars which could not be dispensed with were 
 it not for the leasing of the quarters mentioned. Similarly, at Cam- 
 den, N. J., a saving of $29,000 per annum can be shown by continuing 
 the lease of the present terminal office, under which $1,250 per annum 
 is paid. 
 
 Negotiations have been pending for some time, but have not as yet 
 been consummated, which are expected to result in some very consid- 
 erable economies through the use of space in Government warehouses 
 and storage depots of the Army, which are now partially vacant. 
 Among such cases are the following: 
 
 Brooklyn, N. Y. : By transfer of seized liquor and property from a com- 
 mercial warehouse to Army warehouse, a saving in storage charges 
 has been effected approximating (this transaction is practically 
 complete) $25, 000 
 
 Philadelphia, Pa. : By transfer of seized liquor and property from a com- 
 mercial warehouse to warehouse controlled by the Shipping Board — 6, .500 
 
 Minneapolis, Minn. : By transfer of seized liquor and property from a 
 commercial warehouse to Federal Building 1, 200 
 
 Baltimore, Md. : By transfer of seized liquor and property from a com- 
 mercial warehouse to Federal Building 2, 100 
 
 Chicago, 111. : By transfer of seized liquor and property from a com- 
 mercial warehouse to Army Building , 11, 200 
 
 Boston, Mass. : By transfer of seized liquor and property from a com- 
 mercial warehouse to Army Building 31,200 
 
 Springfield, Mass.: By transfer of seized liquor and property from a 
 commercial warehouse to Federal Buildings 1, 800 
 
 Kansas City, Mo. : By disposition of seized liquors under order of the 
 court now pending, space can be relinquished at an annual saving of— 1, 600 
 
 In addition to the foregoing, it is contemplated that a saving in ex- 
 penditures for storaga of seized liquor and property will be made in 
 Buffalo, N. Y., Sayracuse, N. Y., Albany, N. Y., and Worcester, Mass., 
 by the use of space which it is believed can be obtained in Federal 
 Buildings. The exact amount of saving can not be estimated at this 
 time, as the bills for storage have not yet been presented for payment. 
 
 Arrangements were practically completed to move seized liquor 
 and property from commercial space in New York City, to the Army 
 base at Brooklyn, whereby a saving of approximately $90,000 would 
 
138 
 
 be made, but the United States judge for the Southern District of 
 New York has thus far refused to permit the removal of the liquor 
 and property from his jurisdiction. Further efforts are being made 
 to accomplish this transfer,- under which it is hoped to effect the 
 economy indicated. 
 
 By a recent change in the leased premises occupied by the Prohibi- 
 tion Service in New York City, a saving of rent amounting to $17,O0(} 
 per annum has been effected. Negotiations are now pending under 
 which it is hoped to procure office space for the Prohibition Service 
 at Philadelphia, Pa., and Newark, N. J., at lower rates than now 
 paid, the present rates being considered excessive. 
 
 In addition to the foregoing the proposed relinquishment of space 
 by various governmental activities in Chicago, and the accommoda- 
 tion of those activities in the War Department General Intermediate 
 Depot in that city, which is now the subject of correspondence with 
 the War Department, and with which you are familiar, will result in 
 a vast saving, the exact amount of which depends on just which 
 activities can be advantageously housed in the intermediate depot. 
 Very respectfully, 
 
 Jas. a. Wetmore, 
 Surveyor (General of Real Estate. 
 
139 
 
 tlTreasury Department, office of Surveyoi- General of Real Estate. Form 500— Ea. 30^0(10— 
 Sept. 21-21. To be submitted In duplicate,] 
 
 , STATEMENT KELATIVE TO KEAL ESTATE LEASED OK OWNED BY THE UNITED STATES 
 OUTSIDE OP THE DISTKICT OF COLUJfcMA (EXCLr.SIVE OF MILITARY A.ND NAVAL 
 BESEBVATIONS). 
 
 Submitted By 
 
 (Date.) (Department or Government institution.) 
 
 1. Location and use of property: City State Name of build- 
 ing Street address Occupied by How used (office, 
 
 warehouse, etc. ) 
 
 2. Size and occupancy: Number of floors occupied by Government 
 
 Number of basements occupied by Government Number of Government 
 
 employees occupying building Area of each floor Area of each 
 
 basement 
 
 Rooms on 
 each floor. 
 
 Rooms 
 ineacb 
 base- 
 ment. 
 
 Is all or 
 only por- 
 tion of 
 building 
 occupied 
 by the Gov- 
 ernment? 
 
 For what purpose is each room 
 occupied? 
 
 Space oc- 
 cupied by 
 desks, files, 
 
 drafting 
 tables, etc., 
 each room. 
 
 Number of 
 occupants, 
 each room. 
 
 Square 
 
 feet per 
 
 occupant. 
 
 
 
 
 1 . .. 
 
 1 
 
 1 
 
 1 
 
 
 
 
 2 
 
 2 
 
 3. 
 
 2 
 
 2 
 
 
 
 
 3 
 
 3 
 
 3 
 
 
 
 
 4. 
 
 4 
 
 4 
 
 4 
 
 
 
 
 5 
 
 5 
 
 6 
 
 7 
 
 8 
 
 5 
 
 5 
 
 
 
 
 6 
 
 6 
 
 6 
 
 
 
 
 7 
 
 8 
 
 7 
 
 7 
 
 
 
 
 8 
 
 8 
 
 
 
 
 9 
 
 10 
 
 9 
 
 9 
 
 9 
 
 
 
 
 10 
 
 10 
 
 10 
 
 
 
 
 
 
 3. Land owned (including land surrounding buildings) : Area Cost 
 
 How utilized? 
 
 4. If building owned: When built? By what authority? For 
 
 what purpose? From what appropriation? . — Cost 
 
 5. Land leased : Area Cost per annum Authority Date 
 
 of lease Period of lease Appropriation What provision 
 
 •for terminating lease? Lessor 
 
 6. If building leased : Date of lease Period of lease Cost per 
 
 annum Authority Appropriation AVhat provision for ter- 
 minating lease? Leissor 
 
 Ncnne , 
 
 Designation 
 
 (a) The information requested above refers to property occupied in whole or in part lor 
 Government purposes. Where only a portion of a building is leased by a Government 
 .agency, information is given for that portion only and not for the entire building. 
 
 (6) Information under sections 2, 3, 4, 5, and 6 covers the property referred to under 
 .section 1. 
 
 (c) Each card will contain the record of one building, or part of a building, or parcel 
 ■of land. 
 
 (rf) If space for information is insuflScient use reverse side. 
 
 (e) Wherever possible, a blue print or sketch of the premise.s described should be 
 attached to the card. 
 
REPORT OF THE 
 
 COORDINATOR FOR MOTOR TRANSPORT 
 
 DISTRICT OF COLUMBIA 
 
 Submitted by 
 Lt. Col. C. O. SHERRILL, U. S. A. 
 
 (141) 
 
REPORT OF THE COORDINATOR FOR MOTOR TRANSPORT, 
 DISTRICT OF COLUMBIA. 
 
 December 31, 1921. 
 From: Coordinator for Motor Transport, District of Columbia. 
 To : Chief Coordinator, General Supply. 
 Subject: Report for period ending December 31, 1921. 
 
 In accordance with Executive Order No. 3578 of November 8, 1921, 
 the following report is hereby submitted covering the activities of 
 this oiRce for the quarter ending December 15, 1921 : 
 
 ORGANIZATION. 
 
 It having been brought to the attention of the Director of the 
 Budget that a considerable sum of money was being expended by 
 various governmental agencies in Washington for procuring haul- 
 age by private corporations, while other Government organizations 
 had available an abundance of motor transport to handle this work, 
 he called a meeting of. representatives of the various departments 
 and establishments to devise means of avoiding this unnecessary 
 expense. This conference was held on September 16, 1921, at which 
 the views of the various departments were presented orally and in 
 writing. The sense of the meeting appeared to be that the methods 
 then in vogue of having several entirely independent motor transport 
 activities in the different departments and establishments was waste- 
 ful and generally unsatisfactory. It was pointed out that in some 
 of the departments there were even entirely independent motor 
 transport authorities scattered among the different bureaus. Fre- 
 quently bureaus in a single department would be required to hire 
 outside transportation when other bureaus in that department might 
 have sufficient means to supply the demand on hand. 
 
 In order to eliminate these wasteful methods and to install a sys- 
 tematic business-like method of motor transport under the Govern- 
 ment agencies, the Bureau of the Budget on September 23, 1921, 
 issued a circular, No. 35, containing a plan of coordination of motor 
 transportation and designated the undersigned, in Circular No. 36, 
 as coordinator for motor transport in the District of Columbia. 
 
 There being no funds available for the operation of this office, it 
 has been found necessary to secure the necessary small office force 
 required by details from the Army, the Marine Corps, and the Post 
 
 (143) 
 
144 
 
 Office Department. This personnel, under the coordinator, consists 
 of a captain of the Army, who served as a transport officer in France,, 
 a private of the Marine Corps, and a clerk temporarily detailed by 
 the Post Office Department. This organization is actively engaged 
 in collecting information concerning motor transport activities in 
 tlie District of Columbia, particularly with reference to the number, 
 makes, and types of cars ; the cost of operation ; the methods of con- 
 trol and dispatch of vehicles; the facilities for maintenance and 
 housing; the extent of reserves available for the benefit of other 
 establishments; also as to the character of the use being made of 
 these vehicles and the necessity for such use. 
 
 POLICIES ADOPTED. 
 
 Circular No. 35 announced the general plan of coordinating the use 
 of motor transport, so that the interests of the General Government 
 may be subserved in the most economical and efficient manner. 
 
 In carrying out this general plan this office has adopted a policy of 
 coordinating motor transport in the District of Columbia by so utiliz- 
 ing existing facilities that the greatest benefit may result to the estab- 
 lishment receiving the service, with a minimum inconvenience to the 
 department furnishing the service. No attempt has been made up 
 to this time to interfere with the motor-transport operations as car- 
 ried on within the several departments, other than to call attention 
 to existing statutes that Government motor vehicles shall be used for 
 official purposes only. Since this warning was issued there has been 
 a noticeable decrease of this abuse, and it is believed that it will only 
 be necessary from time to time to call attention of the departments 
 and establishments to individual cases of improper use, or of use by 
 unauthorized persons of Government motor transportation, in order 
 to completely eradicate this evil. 
 
 The first effort of this office was to convince all the departments 
 and establishments of its desire to be helpful and to this end the first 
 work undertaken was to make arrangements by which all demands 
 for haulage by any Government agency could be met promptly by one 
 of the other agencies having at that time motor transports available. 
 This important function of the coordinator's office has worked with 
 great satisfaction to all concerned and has been the means of a con- 
 tinuous saving of considerable sums of money outlined below. 
 
 So successfully has this activity operated that it has now been 
 found possible almost entirely to eliminate the procurement of haul- 
 age by all the Government agencies from private concerns. All 
 agencies have accordingly been ordered to discontinue the hire of 
 both passenger cars and trucks from private concerns and the renting 
 
145 
 
 of additional garage space from jDersons outside the Government, 
 until such matters have been presented to this office to see if the re- 
 quired service can not be provided by other Government agencies. 
 
 One of the greatest obstacles encountered in measuring the relative 
 efficiency of motor-transport service in the different departments and 
 establishments is the fact that there is a great lack of uniformity of 
 cost accounting systems in these different activities. A few of the 
 motor-transport services have quite efficient systems of cost account- 
 ing, while others have practically none. In order to make available 
 to the Director of the Bureau of the Budget and to Congress the ac- 
 tual facts in reference to expenditure of funds for motor transporta- 
 tion, steps are now being taken to prescribe a uniform system of cost 
 accounting throughout the Government motor-transport services. 
 
 A study is also being made of methods' used in the distribution of 
 mail to the different departments and establishments, with a view 
 to decreasing the number of trucks and employees used for this pur- 
 pose. A special report will be made when this study is completed, 
 but at the present time it can be safely said that from 30 per cent to 
 40 per cent of the cost of delivering mails can be saved by a properly 
 coordinated system instead of uncoordinated methods now used. At 
 the present time the mails are sent for by the different agencies, 
 whereas the economical method would appear to be that the mails 
 should be delivered by the Post Office Department according to a well 
 designed routing and delivery system such as is used by any large 
 establishment. 
 
 A PLAN FOR EFFICIENT AND ECONOMICAL MOTOR TRANSPOR- 
 TATION IN THE DISTRICT OF COLUMBIA. 
 
 At the present time there are in the District of Columbia approxi- 
 mately 945 Government-owned vehicles, of which approximately 
 800 are in daily operation. There are 61 different makes of cars in 
 use, housed in 69 separate garages, holding from 1 to 125 cars each. 
 The total rentals now paid to private owners for garages amount 
 to $30,000 per annum. 
 
 When this office was organized it was realized that there was con- 
 siderable waste due to the uncoordinated systems of control, but it 
 was also realized that changes must proceed slowly and surely and 
 only after a complete survey had been made of all different activities. 
 With this in view, immediately after the office was organized ques- 
 tionnaires were sent out to all departments and establishments calling 
 for full information in reference to their motor transport services 
 including garage and repair service. A study of this information 
 is being made and from time to time small economies have already 
 86484°— 22 10 
 
146 
 
 suggested themselves, and steps have beeii taken to put them int<> 
 effect through the cooperation of the heads of the departments and 
 establishments concerned. 
 
 From the data collected it has been found that the general average 
 cost to the Government to maintain and operate a vehicle with 
 chauffeur is $200 per month, or without a chauffeur $110 a month. 
 This covers all the various classes of passenger and truck vehicles 
 owned by the Government, some of which, of course, are low in cost 
 of operation and some are high. 
 
 To sum up, it may safely be said that motor vehicle transportation 
 is not being operated on a businesslike basis, and, in order to correct 
 this situation, it is planned in the near future to submit to the Direc- 
 tor of the Bureau of the Budget, through the Chief Coordinator 
 of General Supply, a complete plan for placing the motor transporta- 
 tion in the District of Columbia on a sound, efficient basis, which 
 will save the Government several hundred thousand dollars a year 
 and should result in a more satisfactory service to all the departments 
 and establishments concerned. 
 
 PRINCIPAL OPERATIONS. 
 
 The principal coordination so far effected by this office has been 
 to arrange for the supply of motor transport as called for by any of 
 the governmental agencies without the necessity of hiring from 
 private corporations, except in a few cases. 
 
 This office has also been able to arrange for the removal of a num- 
 ber of vehicles' from privately owned garages and to place these 
 vehicles in Government-owned garages at a nominal cost to the de- 
 partment concerned and without any cost to the Government. 
 
 Steps have been taken toward coordinating the purchase of spare 
 parts and the repairing of vehicles, including the pressing on of 
 solid tires on trucks, by existing Government agencies well equipped 
 to handle these items. A considerable saving to the agency securing 
 the service will result from this arrangement. 
 
 It is estimated that the actual saving to the Government due to 
 the operations of this office for the three months, from September 15, 
 1921, to December 15, 1921, resulting from the furnishing of motor 
 transport services, including personnel and material, to one establish- 
 ment by another, is $34,520.53. This includes the taxi service fur- 
 nished by the War Department for the Conference on Limitation of 
 Armaments, a saving of some $20,000 as compared with the cost of 
 this service if procured by the State Department outside of the 
 Government. 
 
 The estimated annual saving to the Government resulting from 
 the furnishing of motor transport by one Government agency to 
 
147 
 
 another, without recourse to outside agencies, is at the rate of $100,000 
 per year. This is a saving now in effect as a result of the establish- 
 ment of this agency and does not include the savings that can be 
 effected by the adoption of a comprehensive plan of motor transport 
 shortly to be suggested by this office. 
 
 It is desired to express the appreciation of this office to the various 
 departments and establishments for their hearty cooperation in the 
 effort to put into effect a businesslike administration of motor trans- 
 port. The War Department has furnished the greater part of the 
 service to other departments ; next in order of service rendered comes 
 the Navy Department, but all departments have shown an entire 
 willingness to cooperate in this work, 
 
 C. O. Sherrill, 
 C oordinator for Motor Transport, 
 
 District of Columbia. 
 
Reports submitted by 
 Dr. S. W. Stratton 
 
 ON 
 
 ACTIVITIES OF FEDERAL SPECIFICATIONS BOARD 
 
 AND 
 
 SURVEY OF GOVERNMENT 
 TELEPHONE SYSTEMS 
 
 ( i4:M 
 
REPORTS SUBMITTED ON ACTIVITIES OF FEDERAL 
 SPECIFICATIONS BOARD AND SURVEY OF GOVERN- 
 MENT TELEPHONE SYSTEMS. 
 
 Decembee 31, 1921. 
 From : Chairman, Federal Si^ecifications Board. 
 To: The Chief Coordinator, General Supply. 
 Subject : Report of activities of Federal Specifications Board. 
 
 Referring to your letter of December 14, 1921, 1 am pleased to sub- 
 mit the following quarterly report on the activities of the Federal 
 Specifications Board. 
 
 The work of the Federal Specifications Board is closely related to 
 the general subject of standardization, and the importance of stand- 
 ardization to the industries in the country at large is even greater 
 than to the Federal Government. 
 
 Some of the greatest advantages of standardization are the elimi- 
 nation of unnecessary types, shapes, sizes, and grades of manufac- 
 tured articles. Standardization is therefore essentially a simplify- 
 ing process. Its great value from the standpoint of the Government 
 is in jDroviding standard reserve stocks and a greatly enlarged market 
 in which supplies can be quickly purchased in an emergency. Con- 
 solidated purchases to one single standard specification in place of 
 several, for a given article, also results in economy. 
 
 The adoption of standard specifications is but one part of the larger 
 problem of standardization. Other very important parts of the work 
 are standard nomenclature, dimensional standardization to insure 
 ready interchangeability of supplies and the interworking of parts 
 which may be made or assembled by different manufacturers, and 
 simplification by the limitation of the number of types, sizes, and 
 grades of manufactured products. 
 
 The particular duties of the Federal Specifications Board are the 
 standardization of specifications for materials, devices and equip- 
 ment. The standards of quality cover specifications for materials 
 used in engineering work, and fix in measurable terms the essential 
 properties which determine the quality in question. The standards 
 of performance cover specifications for operating efficiency or action 
 of machines and devices. 
 
 The board is composed of the officers and members shown on at- 
 tached list, which includes the departments and more important 
 independent establishments. An executive committee, consisting of 
 
 (151) 
 
152 
 
 the department representatives, together with representatives from 
 the Panama Canal and General Supply Committee, was selected as 
 being more compact for the routine handling of business. Copy of 
 the executive committee personnel is attached. 
 
 There has been established a procedure according to which the work 
 of the board is being handled. This provides a definite system for 
 initiating a specification and carrying it through its various stages 
 until it is promulgated as Government standard. Copy of procedure 
 attached. 
 
 Several technical committees are in process of formation, to investi- 
 gate existing specifications for materials and recommend unified 
 specifications suitable for the use of all departments and independent 
 establishments. 
 
 Three groups of definite specifications, namely, petroleum prod- 
 •ucts ; paints and oils ; and pneumatic and solid tires, and inner tubes, 
 have been submitted to the board for adoption, and when so adopted, 
 will be promulgated as Government standards. Eight other groups 
 of specifications are now under consideration, namely, lumber, soap, 
 rubber products, leather belting, forage and rations, fire hose, coal, 
 and refractory materials. 
 
 The definite economies effected through the efforts of the Federal 
 Specifications Board would appear in the pooling of orders to one 
 definite specification in place of several, for a given material. These 
 economies would appear in the data submitted by the purchasing 
 activities. 
 
 Respectfully submitted. 
 
 S. W. Stratton, 
 Chairman, Federal Specifications Board. 
 
 PEOCEDUEE TO BE FOLLOWED BY THE FEDEKAL SPECIFICATIONS BOAKD IN CONNECTION 
 
 WITH SPECIFICATIONS. 
 
 1. Decision by executive committee as to necessity for standard specifications 
 in tlie case of a particular article or class of articles. 
 
 2. When specifications are desired, the question will be referred by the execu- 
 tive committee to a technical committee composed of experts in the particular 
 subject for consideration of existing specifications (or the inauguration of their 
 preparation if suitable ones do not exist), with a view to recommending to the 
 executive committee of the Foacral Specifications Board the specifications best 
 suited for Government uses. 
 
 (Note. — It is assumed that all specifications selected have been prepared by 
 the usual method of cooperation between the user, manufacturer, and the test- 
 ing laboratory. In case it is necessary to inaugurate tlie preparation of a speci- 
 fication, a plan whereby such cooperation is secured will always be followed 
 by the technical committees.) 
 
 3. Consideration by the executive committee of the report of the technical 
 committee and the decision as to what specifications shall be recommended for 
 adoption. 
 
153 
 
 4. Submission of recommended specifications to the various departments and 
 independent establishments through their representatives on the Federal Speci- 
 fications Board, for comment and criticism. (This submission maye be by mail.) 
 In general, when no reply is received from a department or independent estab- 
 lishment within the time designated, it will be assumed that the department or 
 independent establishment approves the specification recommended. 
 
 5. Final adoption of the recommended specification by the Federal Specifica- 
 tions Board. 
 
 6. Promulgation. (Method to be determined in each case.) 
 
 S. W. Stbatton, 
 Chairman, Federal Speciflcations Board. 
 N. F. Haekiman, 
 
 Technical Secretary. 
 
 EXECUTIVE COMMITTEE, FEDERAL SPECIFICATIONS BOAKD. 
 
 Dr. S. W. Stratton, chairman ; Mr. N. F. Harrlman, technical secretary ; Capt. 
 E. L. Bennett, Navy Department ; Dr. Wm. F. Bevard, Department of Labor ; 
 Mr. A. F. Brewer, Office of Attorney General ; Mr. J. S. Conway, Commerce De- 
 partment ; Mr. W. A. E. Doying, Panama Canal ; Mr. J. W. Ginder, Treasury 
 Department; Mr. H. C. Hengstler, State Department; Mr. M. F. Jacques, Gen- 
 eral Supply Committee ; Mr. Geo. Landiclj, jr.. Post Office Department ; Col. W. 
 S. McNair, War Department ; Mr. S. A. Postle, Department of Agriculture ; Mr. 
 Lloyd Prather, Interior Department. 
 
 FEDERAL SPECIFICATIONS BOARD. 
 
 Dr. S. W. Stratton, chairman ; Mr. N. F. Harrlman, technical secretary ; Mr. 
 H. L. Averill, Library of Congress ; Capt. E. L. Bennett, Navy Department ; Mr. 
 John F. Bethune, United States Tariff Commission ; Dr. Wm. A. Bevard, De- 
 partment of Labor; Mr. A. F. Brewer, Office of Attorney General; Mr. J. S. 
 Conway, Department of Commerce; Mr. W. A. E. Doying, Panama Canal; 
 Mr, J. W. Ginder, Treasury Department; Mr. E. R. Halloran, United States 
 Veterans' Bureau ; Mr. H. C. Hengstler, State Department ; Mr. M. F. Jacques, 
 General Supply Committee ; Mr. C. A. Keller, Railroad Administration ; Mr. W. 
 H. Kervin, Government Printing Office ; Mr. R. C. Kldd, United States Public 
 Health Service; Mr. Geo. Landick, jr., Post Office Department; Col. W. S. 
 McNair, War Department; Mr. S. A. Postle, Department of Agriculture; Mr. 
 Lloyd Prather, Interior Department ; Maj. B. Puryear, jr.. United States Marine 
 Corps; Mr. L. Van Middlesworth, United States Shipping Board; Mr. J. L. 
 Whelen, Interstate Commerce Commission; Mr. J. W. Wlmer, Commissioners, 
 District of Columbia ; Mr. B. L. Woodward, Civil Service Commission. 
 
 December 31, 1921. 
 
 From: Director, Bureau of Standards. 
 
 To: Chief Coordinator, General Supply. 
 
 Subject: Survey of Government Telephone Systems. 
 
 1. Complying with your verbal request we are pleased to submit 
 herein a report to date of this bureau's work authorized for the 
 purpose of effecting economies in connection with telephone service 
 in the District of Columbia contracted for by the Government. 
 
154 
 
 2. Following your general Circular No. 33, instructing all depaj:t- 
 ments and bureaus to effect possible economies, and before this bu- 
 reau was authorized to make a general survey, a complete traffic 
 study of our own service was made. Calculations based on the actual 
 traffic handled showed : 
 
 (a) That the cost of routing calls via the interdepartmental 
 switchboard so greatly exceeded the cost via the Cleveland central 
 office that the continuance of the one line could not be justified. Dis- 
 continuance effected an economy of $200 per annum. 
 
 (b) The same conclusion was reached in regard to a tie line to 
 the Department of Commerce. Discontinuance effected an economy 
 of $300 per annum. 
 
 (c) That the number of Cleveland trunks in service was fully ade- 
 quate for carrying the official traffic. 
 
 3. In addition it was found that the branch line from Civil Service 
 could be dispensed with and effect an economy of $400 per annum. 
 Furthermore, steps have been taken to replace the line for time sig- 
 nals from the Naval Observatory with a radio set. This line costs 
 $388 per annum, and preliminary estimates indicate that the cost 
 of suitable radio equipment will not exceed this annual charge and 
 will practically eliminate it in the future. It is also proposed to 
 save $25 per annum by replacing two short private lines with Gov- 
 ernment-owned wire. 
 
 4. The first step taken in regard to the general survey was to secure 
 copies of all bills for the month of September. Practically all of 
 these have been thoroughly analyzed and the system corresponding 
 thereto drawn in diagrammatic form so as to show all possible inter- 
 connections or call routings, the number and location of the switch- 
 boards, the stations, both main and extensions, including the outlying 
 stations on which mileage or footage charges are made. This funda- 
 mentally important work involved careful scrutiny of a large number 
 of bills conspicuous for their nonuniformity of both form and 
 wording. 
 
 5. In this connection it is desired to advise that this bureau acting 
 for the subcommittee on class 20 of the General Supply Committee 
 had already undertaken a revision of the supply schedule for tele- 
 phone service. The occasion for this work arose from the fact that 
 the present schedule is in such a form that it is not easily understood 
 by many of those who have to check and audit the bills. Copies of 
 the proposed form have been forwarded for criticism to all those 
 interested including the telephone company. A conference in the 
 near future is anticipated. 
 
 6. It is most fortunate that this work was undertaken previous to 
 the work under your direction because of its intimate relation thereto. 
 It was found that many items involving complex service are now in 
 
155 
 
 :a form that is more or less unintelligible to even a telephone engineer. 
 Some have been found inaccurate to the detriment of the Govern- 
 ment. It is proposed to make the new schedule suit all requirements 
 and to devise standard forms and wording that will facilitate ac- 
 curate rendering and checking of bills. 
 
 7. Simultaneously with the diagrammatic work we began the 
 .survey of the two most complex systems of the Government. These 
 are in the Veterans' Bureau and the Post Office Department. Both 
 .are mechanical or automatic systems. Very complete traffic records 
 iave been obtained partly by our own force and partly by coopera- 
 tion. The required calculations have been made and conclusions have 
 been reached in the case of the veterans' Bureau. As a result the 
 following recommendations have been made after securing the in- 
 formal agreement of the Veterans' Bureau. 
 
 (a) The discontinuance of selectors and connectors i-epresenting an 
 -annual cost of $1,990. 
 
 (&) The installation of one additional tie line to the Capitol, which 
 will effect an annual saving of $200 by causing calls to be routed the 
 most economical way. 
 
 (e) The discontinuance of six trunks to the central office and eight 
 interconnecting lines not required, effecting an economy of $228 per 
 -annum. • 
 
 {d) That a credit of $48 be obtained on account of an overcharge. 
 
 8. Only a part of the calculations have been made for the Post 
 Office Department. There is a large excess of switching equipment 
 in this case also, but this system includes that of the city post office, 
 which is served over 79 lines, bearing an annual mileage charge of 
 $7,584. Preliminary calculations show that approximately half of 
 this amount can be saved by providing the city post office with a 
 separate switchboard. The necessary data has been forwarded to 
 the telephone company for the planning of a suitable system and a 
 quotation thereon based on the present supply schedule. It is not 
 possible to make specific recommiendations regarding the excess 
 equipment at the Post Office Department until the city post office 
 is disposed of, but it can be stated that the excess switching equip- 
 ment represents an annual charge of over $1,000. 
 
 9. In accordance with your instructions, each department and 
 independent establishment appointed a representative to deal with 
 the bureau in regard to telephone matters. As a direct result the 
 bureau has been requested in a number of instances to assist in special 
 determinations requiring more or less prompt consideration. These 
 
 special cases have naturally been given preference over our own 
 
 jlans. 
 
 10. It is gratifying to note that in practically every case the 
 -hearty cooperation of the interested parties has been secured, ihis 
 
156 
 
 includes the telephone company, which has struggled for- years with 
 the different departments of the Government to learn their require- 
 ments sufficiently far in advance to meet them economically. The 
 assistance of the bureau has been requested by the telephone company 
 in several cases where switching equipment is standing idle that can 
 and should be released for service elsewhere, 
 
 11. The Interior Department requested assistance in the deter- 
 mination of increased switching facilities required to relieve an over- 
 loaded condition and to meet increasing needs caused by branches of 
 other departments being moved into the Interior Building. Cer- 
 tain temporary facilities had been proposed by the telephone com- 
 pany which were disapproved on economic considerations. The 
 whole matter was settled at a conference in the office of the telephone 
 company. This bureau agreed to determine what facilities could 
 be released from the State Department building, temporary building 
 C, and the Veterans' Bureau for use at the Interior Building and 
 elsewhere. All these cases have been disposed of and the telephone 
 company is now in a position to provide permanent facilities for the 
 Interior Building through which high-grade service can be handled 
 economically. 
 
 > 12. There is a large division of the Treasui-y Department now 
 located iif the Interior Building that has complained of slow service. 
 This complaint was referred to this bureau. Traffic records were 
 obtained cooperatively and calculations based thereon showed that 
 the calls between the Treasury and Interior should all be routed 
 over the lines at present inadequate to handle the traffic, that five 
 additional tie lines were required, and that a net economy of $996 
 per annum would thereby be effected. The grade of service will be 
 automatically raised by the provision of these lines. 
 
 13. Mr. Harold Tomlin, now representing the Interior Depart- 
 ment, submitted to your bureau a proposed consolidation of facilities 
 for the Old Land Office building which they had not been able to 
 effect. The proposal was economically sound but incomplete. We 
 have substituted a broader plan for consolidating all facilities in 
 that building with those of the Patent Office because these two build- 
 ings are connected by a tunnel. The presentation of the plan awaits 
 a quotation from the telephone company for a leased cable (100 pairs) 
 through the tunnel. As soon as conclusions are reached a conference 
 of all interested persons will be called for the discussion of our plan, 
 which involves the consodilation of four small switchboards and 
 an economy of about $2,000 per annum. 
 
 14. The War Department requests assistance in the matter of 
 rearranging the switching facilities in the State, War, and Navy 
 Building so as to release a portion of the space now occupied by idle 
 facilities. This opened up a number of problems. The amount of 
 
157 
 
 switching equipment that should be retained is in a hir^v i)iiil dc 
 pendent upon how the service of 202 War Department branch sta- 
 tions and 67 extension stations in that building can be most economi- 
 cally and satisfactorily served. These are now connected direct to 
 the "War-Navy system at an annual cost of $7,272 for mileage alone: 
 A complete record of the traffic has been made and is now being sum- 
 marized by the War Department representatives. 
 
 15. The "Treasury Department has requested assistance in deter- 
 mining the proper method of serving stations in the War Industries 
 Building. These are now connected directly to the Treasury switch- 
 board and a mileage charge of $3,600 per annum is invoh'ed. A 
 quotation submitted by the telephone company indicates an annual 
 saving of about $900 if a separate switchboard is provided, but the 
 data at hand does not definitely indicate that this is the proper pro- 
 cedure. 
 
 16. The matter of releasing idle switching facilities in temporary 
 building C opened up a verj' large consolidation problem involving 
 all the temporary buildings around Sixth and B Streets except 
 building D, now housing the whole of the Bureau of the Census. 
 This includes a number of cabling problems and a number of traffic 
 studies. One of the latter has been completed. It is difficult at this 
 moment to state the probable economies to be effected. 
 
 17. The foregoing are only a very few of the many ciases to be 
 considered that involve mileage charges of large magnitude. There 
 are two phases of the general mileage problem which have been given 
 preliminary study. One involves the possibility 'of obtaining from 
 the telephone company special rates on lines in cables used exclu- 
 sively by the Government. The suggestion was made to the company 
 which agreed to consider a sliding scale of discounts, depending upon 
 the number of pairs in question. The other involves the leasing of 
 cables (according to the supply schedule) placed in Government 
 ducts and tunnels. It has been found that -the Government owns an 
 extensive system of ducts and tunnels originally designed for a cen- 
 tral light, heat, and power system but now standing practicallv 
 unused. 
 
 18. Notwithstanding the magnitude of mileage charges we are 
 finding that in general tie lines between switchboards give a more 
 economical routing than tie lines to the interdepartmental switch- 
 board located in the main central office, as well as a higher grade of 
 service. Preliminary calculations, however, show that the rate for 
 interdepartmental service is entirely too high for the service rendered. 
 This is exclusively a Government rate and is therefore subject to re- 
 vision without affecting the commercial rates filed with the D. C. 
 Public Utilities Commission. In this connection a tentative plan 
 for an automatic switching center to reduce the rate and raise the 
 
158 
 
 grade of service is receiving attention. The telephone company on: 
 its own initiative offered to cooperate in the planning of such an auto- 
 matic switching center. 
 
 19. In connection with our Interior Department survey we have- 
 "found that the number of trunk lines is considerably in excess of the 
 traffic requirements but this is because of peculiar night service re- 
 quirements. We are now developing a plan for night service that is 
 expected to yield material economies. 
 
 ■ 20. The latest request for assistance came from the Bureau of En- 
 graving and Printing. Additional switching facilities are under- 
 consideration. It is claimed that these are required to meet the 
 needs of the Liberty Loan Division, and of the Coordinator's office. 
 Traffic records have been initiated. 
 
 21. The work thus far done is but a small fraction of that which 
 should be done. The results thus far obtained are indicative of what 
 can be done by telephone engineers through proper coordination. 
 
 22. A report on the existing telephone systems of the executive 
 departments, bureaus, and independent establishments, based on the- 
 information obtained from the bills for service, personal conferences; 
 and inspections, will be forwarded to you before the end of the year.- 
 
 23. In conclusion it is desired to point out that the bureau has fol- 
 lowed a routine for handling the various cases promptly and effi- 
 ciently. Approval of recommendations is secured before they are 
 forAvarded to the appointed representatives of the interested depart- 
 ment or establishment. These issue their own orders. The bureau 
 thus acts solely in the capacity of consulting engineers and there is; 
 no conflict of authority whatever. Should any of the recommenda- 
 tions not meet with the approval of the interested parties, they, to- 
 gether with all the supporting data, as well as written objections, will 
 be forwarded to you as arranged. Very few cases requiring actioii- 
 upon your part are, however, anticipated. 
 
 Eespectfully, 
 
 S. W. Stkatton, 
 
 Director^ 
 
EXTRACTS FROM REPORT TO THE PRESIDENT OF THE UNITED 
 STATES BY THE DIRECTOR OF THE BUREAU OF THE BUDGET, 
 DATED DECEMBER 5, 1921, COVERING THE SUBJECT OF THE 
 COORDINATING AGENCIES ESTABLISHED BY EXECUTIVE ORDER 
 FOR THE COORDINATION AND IMPROVEMENT OF THE ROUTINE 
 BUSINESS OF GOVERNMENT. 
 
 Executive Oedee. 
 
 I hereby prescribe the following rules and regulations with regard to the 
 preparation and submission of the budget and the conduct of the Bureau of the 
 Budget : 
 
 Revision of the estimates. — Pursuant to the provisions of section 207 of the 
 budget and accounting act, the Bureau of the Budget, under the supervision of 
 the Director and subject to review and determination by the President, shall 
 assemble, revise, reduce, or increase the estimates of the departments or estab- 
 lishments as submitted to the bureau. The Director of the Budget shall de- 
 termine the plan as to the contents, order, and arrangement of the estimates. 
 In increasing or decreasing the estimates of the appropriations necessary for 
 any department or establishment he shall take into consideration any proper 
 reduction in working forces, reduction in compensation, and the elimination of 
 unnecessary activities. Estimates, however, in respect to the principal or in- 
 terest of the public debt shall be subject to revision only with the concurrence 
 of the Secretary of the Treasury. For the purpose of assisting the President 
 with information in the formation of business policy for the Government the 
 estimates of appropriations and of expenditures and receipts, when assembled 
 and revised by the bureau, shall be transmitted by the director to the President 
 as soon as possible after their receipt from the departments and establishments 
 by the bureau, in the form of a consolidated statement of estimated revenue 
 and expenditure, with supporting schedules. 
 
 2. Concurrently with the transmission of the estimates by the Director of 
 the Bureau of the Budget to the President, the Secretary of the Treasury shall 
 transmit a statement for the information of the President, showing, from the 
 point of view of the Treasury, the relation between the estimated appropria- 
 tions and expenditures and the estimated receipts of the Government. This 
 statement shall contain all necessary memoranda and tables, together with 
 such other comments as may be pertinent to the subject matter of the budget, 
 including suggestions and recommendations as to how the revenue needs of the 
 Government may be met. The Secretary of the Treasury shall at the same 
 time prepare and transmit to the President, for incorporation in the budget, 
 the figures for the actual expenditures of the Government for the last com- 
 pleted fiscal year, the figures for the actual and estimated receipts for the 
 last, the current, and the ensuing fiscal years, required by subdivisions (6), 
 (c), and (d) of section 201 of the budget and accounting act, and also the 
 financial statements required by the provisions of subdivisions U), (g), and 
 {h) of the same section. The Secretary of the Treasury shall, if the estimated 
 receipts for the ensuing fiscal year, on the basis of laws existing at the time 
 
 (159) 
 
IbU 
 
 tlie budget is transmitted, plus the estimated amounts in the Treasury at the 
 close of the fiscal year in progress available for expenditure in the ensuing 
 fiscal year, are less than the estimated expenditures for the ensuing fiscal year, 
 make recommendations to the President for new taxes, loans, or other appro- 
 priate action to meet the estimated deficiency. If, on the other hand, the aggre- 
 gate of such estimated receipts and such estimated amounts in the Treasury 
 is greater than such estimated expenditures for the ensuing fiscal year, the 
 Secretary, for the information of the President, shall make such recommenda- 
 tions and suggest such financial measures as in his opinion the public interest 
 may require. The Director of the Budget shall make available to the Secre- 
 tary of the Treasury, at his request, any information in the possession of the 
 bureau or any of its employees in respect to the receipts and expenditures of 
 the Government and any other matters that may be pertinent to the business 
 of the Treasury. The Secretary of the Treasury shall make available to the 
 Director of the Budget, at his request, any information in the possession of the 
 Treasury or any of Its ' employees in respect to the receipts and expenditures 
 of the Government and any other matters that may be pertinent to the business 
 of the budget. 
 
 3. The Director of the Budget, in gathering information for the use of the 
 President, acts for the President, and his calls upon the chiefs of bureaus 
 and other administrative officers for purposes of consultation or information 
 take precedence over the Cabinet head of a department or any- head ' of an 
 independent organization. 
 
 4. The budget officer in each department, being appointed by the Cabinet 
 head, will present to the Director of the Budget the vievs'S of the Cabinet head 
 upon the wisdom of conclusions drawn by the Director of the Budget for the 
 use of the Chief Executive and Congress ; but, as in the case of bureau 
 chiefs and other officers, the call of the Director of the Budget for their presence 
 and advice takes precedence over the Cabinet head. 
 
 5. The coordinating agencies established by the Executive are for the pur- 
 pose of enabling the President, in matters of routine business, to so coordinate 
 the activities of the different departments and establishments as will insure 
 the most economical and eflSclent expenditure of moneys appropriated by 
 Congress. They provide the machinery through which, with the minimum 
 of obstruction and delay, the Executive may impose a unified plan of govern- 
 mental routine business. The Director of the Bureau of the Budget shall 
 have general supervision over the work of the coordinating agencies hereto- 
 fore created by Executive order, subject to such instructions as may hereafter 
 be issued by the President. 
 
 6. The chief coordinator, general supply, appointed under the provisions of 
 Executive order of July 27, 1921, shall exercise general supervision, subject to 
 the Director of the Budget, over the coordination of the routine business 
 activities of the governmental organization, with particular attention to 
 methods of purchasing,' liquidation of supplies, specification of materiala, 
 advertising, warehousing, employment, manufacturing, disbursing, and other 
 ordinary business activities of the Government. 
 
 7. The decision of the chief coordinator, in all matters of coordination, 
 shall be transmitted to the heads of departments or independent establishments 
 concerned, and shall be final, except that such heads may appeal to the 
 Director of the Budget within four days after the receipt of notice of the 
 coordinating order, and if not sustained by the Director of the Budget may 
 appeal to the President of the United States within six days after the 
 decision of the Director of the Budget. If such appeal is not taken or is 
 
161 
 
 not sustaintd, the decision in question shall stand, and shall be published to 
 tliose affected by the heads of the departments concerned. 
 
 8. The heads of departments and subordinate officials will retain all present 
 responsibility with respect to individual business transactions, subject to such 
 policies as may be imposed in the manner indicated above. 
 
 9. All persons heretofore or hereafter appointed to duty under the chief co- 
 ordinator, either in Washington or in the corps areas of the country, shall be 
 regarded as so appointed or detailed by the President of the United States, 
 and they shall not be subject to reassignment by department heads except as 
 authorized by Executive order. Such persons shall not be required to submit 
 any report to any department except such as may be required as to their loca- 
 tion or assignment or for purposes of pay, the intention being to prevent any 
 interference with their direct responsibility to the President of the United 
 States and his agents, the Director of the Budget and the chief coordinator. 
 The above does not apply to departmental representatives on the various coordi- 
 nating boards, and in case of those detailed to coordinating duty in addition 
 to other duties it applies only with respect to such coordinating duty. 
 
 10. All bureau chiefs and employees of the executive Government are di- 
 rected to furnish any available information desired for purposes of coordina- 
 tion or to attend any conference on coordination at the request of the chief 
 coordinator. It shall not be necessary for any duly authorized representative 
 of the Director of the Budget, of the chief coordinator or any coordinating 
 authority established by Executive order to secure the approval of the head of a 
 department or military or naval authority of a request for information for 
 use in connection with the activities of the coordinating bodies. The duly 
 authorized agents of the Director of the Budget, of the chief coordinator, or 
 of the coordinating boards shall have access to all books and papers of the 
 various departments and independent establishments which contain any in- 
 formation pertinent to the subject under consideration for coordination. 
 
 11. All departments and establishments must be so organized for the transac- 
 tion of matters of routine business as to facilitate their proper cooperation with 
 the general coordinating agencies. Where the existing form of the organiza- 
 tion of the routine business of the departments and establishments or the 
 form of reorganization suggested by the head of the department or establish- 
 ment does not, in the judgment of the Director of the Bureau of the Budget, 
 properly meet the requirements of the situation, the Director of the Bureau 
 of the Budget shall recommend to the President the form which, in his judg- 
 ment, such departmental organization should take to that end. In his final 
 determination of the form of organization the President will then consider 
 the recommendations of the department head or head of the independent 
 establishment concurrently with those of the Director of the Budget. 
 
 12. All coordinating agencies made subject by Executive order to the super- 
 vision of the Director of the Budget shall make quarterly reports ' to him of 
 their activities for transmission by him to the President. 
 
 Warken G. Harding. 
 The White House, 
 
 November 8, 1921. 
 86484°— 22 11 
 
162 
 
 USE OF THE BUREAU OF THE BUDGET BT THE CHIEF EXECUTIVE AS AN 
 AGENCT FOR IMPROVING ROUTINE BUSINESS OF THE GOVERNMENT. 
 
 A. THE FAULTS TO BE CORRECTED. 
 
 Heretofore our Government, in routine business administration, 
 has labored under difficulties analogous to those of a private corpora- 
 tion in which — 
 
 First, the president of the corporation gave practically no atten- 
 tion to its ordinary routine business. He avoided his responsibility 
 for the proper conduct of the business of the corporation, and neither 
 assumed nor delegated active control over it. 
 
 Second, the administrative vice presidents of the corporation were 
 allowed to run their several departments without any enforced con- 
 tact in the discussion of routine business matters of the corporation 
 and as if each separate department was an independent authority in 
 all matters of routine business. 
 
 Third, because of the lack of any outlined business plan, resulting 
 from the absence of executive pressure and supervision, the several 
 departments operated with almost an entire lack of coordination. 
 No system existed for making purchases or in selling material along 
 business lines under a unified policy. A lack of material or facili- 
 ties on the part of any one department resulted in no adequate search 
 being made for the existence of such supplies or facilities in the 
 hands of another department, which might be available. In almost 
 every case recourse was had to the open market. 
 
 Fourth, the corporation was not operated for profit, and its prin- 
 cipal funds for operating expenses were obtained by a levy upon 
 stockholders (an appeal to Congress for an appropriation, involving 
 a collection through taxes or imposts). 
 
 Fifth, no balance sheet of the corporation as a whole was ever pre- 
 pared. No complete inventories of its properties existed. No state- 
 ment of its current assets, such as salable material and current sup- 
 plies, had ever been made, nor was there any easy method existing of 
 securing it. 
 
 Sixth, when cash was placed by the stockholders at the disposal of 
 the corporation for its purposes, the custom was to notify the different 
 departments that a certain amount of credit was available with the 
 treasurer of the corporation, to be drawn upon as might be necessary 
 to meet any estimated expenditure involved. Each department would 
 then enter upon its books the amount of cash allotted to it with which 
 to pay for its projects, against which it had the right to currently 
 draw. The treasurer, however, kept no accurate account of these con- 
 tingent obligations, which eventually crystallized into cash demands 
 upon him, thus resulting in money being drawn from him continually 
 in excess of the estimated annual running expenses. Nothing but very 
 rough estimates could be secured at any time by the treasurer as to 
 what the cash demands upon him in any given year would be, since 
 
163 
 
 to the estimates for annual running expenses was to be added an in- 
 definite amount of money demands arising out of former commit- 
 
 oients. 
 
 Seventh, as a result of all this, the corporation, in effect, seldom 
 reconsidered an unwise project entered into by any department. The 
 custom grew up among the departments of the corporation to regard 
 it as an obligation upon the part of each to spend any levy made for 
 its benefit without reporting to the president of the corporation, to 
 its directors, or to the stockholders as to whether continued expendi- 
 ture upon the project was wise under any given new set of circum- 
 
 ^ Eighth so firmly embedded in the minds and in the affections of 
 the administrative heads of the departments became the feeling of 
 independence of an executive control, owmg to its complete lack of 
 exercise, that conferences looking toward the correction of evils aris- 
 ing out of a lack of coordination in the business were apparently 
 avoided lest out of that contact information would develop which 
 might stbnulate the head of the corporation to an invasion of the 
 independent control of the departments. 
 
 Ninth, the administrative heads of the departments of the corpora- 
 tion were selected, as a rule, with less reference to their business 
 qualifications than to their qualifications as advisers to the president 
 of the corporation along other lines than routine business adminis- 
 tration. At the inception of their appointment they were intro- 
 duced to a business with which they were generally unfamiliar and 
 were compelled to rely largely upon the advice of subordinates who 
 were wedded to the theory of the right of independent operation of a 
 department. The tenure of their administration was often less than 
 four years. As a rule, they became the earnest advocates of depart- 
 mental plans which their inexperience in departmental business pre- 
 vented them from fully comprehending in aU their aspects. Being 
 held to no responsibility by the executive head to operate their de- 
 partments along a unified corporation policy in routine business, 
 "they became, therefore, in general, only a shelter and protection for 
 the independent operation of departments. Instead of becoming 
 conduits, as in the properly run corporation, for the imposition of 
 an executive plan, made in the interests of the corporation as a whole, 
 upon the body of the business administration, they became, of neces- 
 sitv more or less of an obstruction to the occasional flow of execu- 
 tive' authority in routine business. Their general position was, of 
 necessity, determined by the advice of those operating the depart- 
 ment under the theory that it was independent, while there existed 
 no one to place before them the necessities of the corporation consid- 
 
 ^'^Tenth^the subordinate members of a departmental organization of 
 the corporation were encouraged to state the needs of their particu- 
 lar subdivision of their department directly to the agency of the 
 
164 
 
 corporation (Congress), which made the desired levy upon the stock- 
 holders (the public). This custom, in violation of all the rules gov- 
 erning the correct functioning of the successful corporation, tended 
 to increase the confidence of these subordinate officials in opposing 
 any change operating to subordinate departmental control in rou- 
 tine business to an executive control of the corporation. 
 
 Eleventh, a general public interest in the operations of the cor- 
 poration encouraged subordinate members of its business organiza- 
 tion, including its administrative vice presidents, in making pro- 
 grams of business and expenditure to consider their relation to pop- 
 ular approval, whether right or wrong, thus often foreclosing a 
 question of policy which was properly in the purview of the presi- 
 dent of the corporation alone. A premium was often placed upon 
 the expenditure of money as distinguished from its saving, since un- 
 informed public approval is often reserved for activity and appar- 
 ent enterprise in extending the corporation's functions, irrespective 
 of their wisdom. 
 
 Practically all of the last ten defects of the corporation were the 
 direct result of the first one, to wit, that the president of the corpora- 
 tion gave practically no attention to its ordinary routine business. 
 
 B. THE COORDINATING AGENCIES ESTABLISHED BY EXECUTIVE OKDEK TO EECTIEY 
 FAULTS IN THE ROUTINE BUSINESS OF GOVERNMENT. 
 
 For the imposition of unified methods in the ordinary business of 
 the Government the President has established, by Executive order, 
 the following agencies, which are engaged in coordinating, in all 
 matters of routine business, the activities of the separate departments 
 and establishments: 
 
 First, the Federal Purchasing Board. On the Federal Purchasing 
 Board there is detailed the chief purchasing officer of each depart- 
 ment or establishment, with a chief coordinator as chairman, named 
 by the President. The chief coordinator has the authority, limited by 
 a right of appeal in case of any difference in opinion, to impose co- 
 ordinating orders. He can thus prevent competition between the dif- 
 ferent departments in outside purchases, not only by preventing them 
 from raising the price on each other, but where large quantities of 
 standard commodities are to be purchased, by ordering one depart- 
 ment to execute the purchase. for itself and as agent for the others. 
 By Executive order it was directed that in each executive depart- 
 ment and independent establishment of the Government there shall 
 be a director of purchases and a director of sales, who shall coordi- 
 nate all activities involving purchases and sales within their re- 
 spective departments and be in direct liaison with the chief coordina- 
 tor. These directors of purchases and sales are subject to call by 
 the chief coordinator for conference in all matters involving the co- 
 ordination of sales and purchases in the various departments of the 
 (jovernment service. This was the system adopted in the American 
 Expeditionary Forces. It is the exact system existing in many large 
 
165 
 
 private industries which have been formed by the amalgamation of 
 original units located in different parts of the country. 
 
 The power in shaping a unified purchasing policy for the Govern- 
 ment is as great as that which would be possessed by a central or- 
 ganization which would take over all Government purchases, but 
 with this great advantage over a central organization— that there is 
 no interference with the pressure from a point of departmental sup- 
 ply necessity upon a procurement agent directly responsible to it. 
 Even where there is a coordinating order imposed, a representative 
 of the head of the department which needs supplies is always able 
 to interpret its necessities, both as regards speed in delivery and 
 location of delivery. 
 
 Again, the coordinating control does not interfere in a multitude 
 of small purchase transactions by the department where the ques- 
 tion of competition is not involved. A central purchasing agency 
 for the Government of the United States which would assume to 
 take over the procurement and distribution of all Government sup- 
 plies would be a complete failure. Not only has the Federal Pur- 
 chasing Board proved already by its successful operation its adapt- 
 ability to the necessities of the situation, but the principles which 
 govern it have been tested out by years of recognition in practice by 
 private business enterprises. 
 
 Second,' the Federal Liquidation Board, created in accordance 
 with the same principles and form of organization, is now coordi- 
 nating sales, iinder a unified plan, of the large surplus stockg of the 
 various departments of the Government. It is composed of one rep- 
 resentative from each department or establishment having sales 
 activity, presided over by the chief coordinator, general supply. 
 The decisions of the chief coordinator, general supply, as to any 
 coordinating action is final, subject only to appeal to the head of his 
 department by any member. The importance of the work of this 
 board is self-evident. Under the old system, where surplus stocks 
 were sold by the independent departments irrespective of each other 
 an absurd and demoralizing situation existed.^ It was the custom 
 of the independent departments to sell their surplus stocks with 
 practically no reference to the needs of the other departments for the 
 material- sold. In some cases property was sold at public auction by 
 one department, purchased by an outsider, who then resold it at 
 large profit to another department of Government. At the time of 
 the institution of this board departments were in the open market 
 for large amounts of material which were on hand in the other 
 departments. An enormous loss has resulted to the Government 
 from this condition of things. 
 
 The Federal Liquidation Board formulates policies and plans de- 
 signed to knit the activities of the several departments and estab- 
 hshments concerned with the liquidation of stocks into a Federal 
 
166 
 
 business association to bring about business methods calculated 
 effectively to safeguard the interests of the Government. 
 
 Third, the organization of corps area coordinators. For the pur- 
 pose of making a practical extension of the principles involved in 
 the Federal Purchasing Board and Federal Liquidation Board over 
 the entire country a system of corps area coordinators has been 
 created. The points of location of Government stocks are so scat-- 
 tered, and the diffusion of the points of purchasing activities so 
 great, that central boards at Washington would be unable to cope 
 with the situation without representation at all centers of govern- 
 mental purchasing and sale activities. Accordingly, for convenience, 
 the territory of the United States was divided into nine areas, corre- 
 sponding to the nine Army corps areas, and in each area an official 
 was selected by the President by detail from a department, who is 
 known as the coordinator for general supplies for the several execu- 
 tive departments and independent establishments having activities 
 in that area. It is to be noted that these corps area coordinators are 
 responsible to the chief coordinator, general supply, and through 
 him to the President of the United States, and not to the heads of 
 the departments and independent establishments. They locate and 
 inspect surplus accumulations of Government stocks, regardless of 
 whether or not these stocks have been reported surplus by the de- 
 partments, and report thereon to the chief coordinator, general sup- 
 ply, Washington, D. C, as well as to the head of the department, 
 having particular reference to the existence of accumulated stocks 
 which appear to be in excess of reasonable reserves or current needs. 
 
 In connection with the immensely important matter of interde- 
 partmental transfer of surplus stocks, the neglect of which in the 
 past has involved the United States Government in the loss of hun- 
 dreds of millions of dollars, the corps area coordinators play a most 
 important part in determining the field needs of the separate de- 
 partments and establishments. They extend the power to insure 
 uniformity in prices received and sales effected in the corps area. 
 They exercise gene^l supervision over the purchase functions of 
 the several departments and establishments in their section. They 
 have the power to fix, over the head of the department, the price 
 of the commodity involved in interdepartmental transfer, which, of 
 course, is simply a matter of bookkeeping, but which, under the old 
 system of independent functioning between the departments, proved 
 a great obstacle to the transfer of property. 
 
 In short, this corps area organization, together with the Federal 
 Purchasing Board and the Federal Liquidation Board, the latter 
 two located at Washington, enables the entire purchase and supply 
 situation throughout the country to be properly handled. 
 
 Fourth, the surveyor genera] of real estate determines, subject to 
 the approval of the Secretary of the Treasury, as provided by law, in 
 what manner and to Avhat extent the premises, of the Government of 
 
167 
 
 the United States outside of the District of Columbia shall be oc- 
 cupied and used, by what departments, bureaus or olfices, and estab- 
 lishments. He has the power to assign and reassign rooms therein 
 to all such Federal officials, clerks, and employees as in his judgment 
 and discretion should be thus supplied, but he makes no assignment or 
 reassignment until after full and complete conference with the head 
 of the particular service directly concerned. He has the power to 
 abrogate or terminate existing leases by negotiation or by notice or 
 other action thereunder. No leases for Government uses for a period 
 of longer than one year or for an annual rental of more than $500 
 can be made except upon approval of the surveyor general of real 
 estate and the Secretary of the Treasury. 
 
 The creation of this power in the surveyor general of real estate 
 by Executive order prevents the large waste occasioned by renting 
 from private owners space which the Government, in its buildings, 
 already has at its disposal. In this power to determine what changes 
 should be made in the interest of economical and efficient use of lands, 
 buildings, and portions of buildings for the benefit of the General 
 Government, he is assisted by the area coordinators, general supply, 
 who report to him the necessary information as to real estate holdings 
 under ownership or lease which are located in their corps areas. 
 
 Fifth, Federal motor transport agent. A general survey of the 
 motor transport situation throughout the United States revealed the 
 fact that the rule of absolute fixed assignments of motor vehicles 
 to executive departments and independent establishments of the 
 Government was handicapping the Government in the use of its 
 motor transport. The motor transport of a department might be 
 overtaxed when there were motor vehicles standing idle in another 
 department. Civilian trucks were being hired when a department 
 was confronted by an emergency when the same service could be 
 performed within the limits of the Government service itself. In 
 the different corps areas of the country the coordination of motor 
 transport will be put into effect by the area coordinators, general sup- 
 ply, upon the approval of the plan by the chief coordinator, general 
 supply, at Washington. The head of each department or establish- 
 ment names a representative under the corps area coordinator for 
 each area in which the department or establishment has motor 
 vehicles in operation. The District of Columbia has been made a 
 separate area for the purpose of coordinating motor transportation. 
 A coordinator for motor transport has been designated for that dis- 
 trict and large savings are being currently effected by these or- 
 ganizations. 
 
 Sixth, the Federal Traffic Board. The overlapping of service and 
 duplication of effort are nowhere more apparent than ^ the con- 
 duct of the traffic business of the Government. The expert Mr. K. O. 
 Caples, who examined this situation for the Director of the Budget, 
 estimates that the Government's transportation bill annually is ap- 
 
168 
 
 proximately $200,000,000. In the present situation no attention is 
 given to the proper classification of articles shipped by the United 
 States, and Government classification is out of line with commercial 
 business. Government property should be relisted under commercial 
 names. Ravs^ materials should be billed out as raw materials and 
 not as finished products. The classification committees of the rail- 
 roads in specifying rates applicable to the thousands of articles 
 listed in the classification have given the Government little or no 
 consideration as to the volume or nature of its business. The sav- 
 ings to be effected through proper handling of the Government's 
 traffic, including reclassification, the correct routing of its business, 
 and a reduction in number of the various rate groups and depart- 
 mental traffic departments, is difficult to compute, but should be very 
 large. 
 
 The Federal Traffic Board is established under the chief coordi- 
 nator, general supply. Its activities are directed by its phairmen, 
 under the title of coordinator for traffic, who shall, under the general 
 direction of the chief coordinator for general supply, select the 
 committees for the board and direct the time and place for their 
 meetings. The head of each department and establishment making 
 shipments from time to time shall designate one representative to 
 serve as a member of the board. The classification of commodities 
 and the instructions governing shipments and methods of settling 
 transportation accounts, approved by the coordinator for traffic, 
 shall, as far as applicable and in conformity with law, be binding 
 upon and govern all departments, bureaus, agencies, and offices of 
 the Government in all shipments made by them. All questions 
 pertaining to the classification of materials, or terminal switch- 
 ing, freight rates, etc., which require the application of remedial 
 measures, will be submitted to the coordinator for traffic either 
 for adjustment with the classification committees representing 
 the carrier or for the presentation of a complaint with the In- 
 terstate Commerce Commission. The decision of the chief ' coordi- 
 nator, general supply, shall be final in the event of disagreement as 
 to classifications, instructions governing shipments, and methods of 
 settling transportation accounts, subject only to an appeal to the head 
 of the department concerned. 
 
 A committee composed of practical railroad men will be consulted 
 in connection with securing from the carriers cooperation in impos- 
 ing coordination in Government traffic as regards classifications and 
 economical methods. 
 
 Seventh, the Federal Board of Hospitalization. The total appro- 
 priations in 1921 for the administration of the Veterans' Bureau, the 
 office of the Surgeon General of Public Health, the Surgeon General 
 of the Army, the Surgeon General of the Navy, the Superintendent of 
 Prisons, the president Board of Managers National Home for Dis- 
 abled Volunteer Soldiers, aggregate $745,985,292. Of this amount, 
 
169 
 
 ^489,000,000 were paid in pensions, leaving as a total expenditure 
 outside of pensions $256,985,292. There are engaged in the functions 
 
 . tTJn''^T\^^'^.'^^ P^'^P^^' ^^*^ ^ t°*^l ^o^t of salaries for 1921 
 of $85,430,177 In these departments at the present time, including 
 the Army and Navy, the United States is feeding and housing about 
 ^00,000 people. The property under their control represents hun- 
 dreds of millions of dollars. It is necessary that the expenditures of 
 these great departments should be coordinated, thus preventing over- 
 lapping of service, extra ownership of supplies, overemployment, 
 unnecessary rentals, prevention of unnecessary installation, and 
 Tarious other incidental matters which naturally pertain to such 
 large activities. The Federal Board of Hospitalization is created for 
 that purpose. 
 
 The duty of the board is : 
 
 {a) To consider all questions relative to the coordination of hos- 
 ipitalization of the departments represented. 
 
 (6) To standardize requirements, to expedite the interdepartmental 
 -use of existing Government facilities, to eliminate duplication in the 
 3)urchase of supplies and the erection of buildings. 
 
 (c) To formulate plans designed to knit together in proper co- 
 •ordination the activities of the several departments and establish- 
 ments, with a view to safeguarding the interests of the Government 
 :and to increasing the usefulness and efficiency of the several organiza- 
 "tions, and to report to the President thereon. 
 
 The chief coordinator of the Federal Board of Hospitalization 
 presides over the board and is responsible for its efficiency and for 
 developing its activities along practical lines. After a full discussion 
 of any question by the board, the decision of the chief coordinator of 
 "the board will be final as to any action to be taken or any policy to 
 be pursued, but any member may appeal from the decision of the 
 •chief coordinator of the Federal Board of Hospitalization to his 
 own immediate superior. The recommendations of the board will 
 1)6 carried into effect by the head of the department or establishment 
 directly concerned. 
 
 Eighth, the Federal Specifications Board. A Federal specifica- 
 tions board has been created, of which the Director of the Bureau of 
 Standards, Department of Commerce, is ex officio chairman. The 
 head of each department and establishment purchasing materials or 
 services in accordance with specifications prepared in such depart- 
 ment designates one representative to serve as a member of the Fed- 
 eral specifications board. The duty of the board is to compile and 
 adopt standard specifications for materials and services, and to bring 
 :specifications into harmony with the best commercial practice wher- 
 ever conditions permit, bearing in mind the desirability of broaden- 
 ing the field of supply. In event of disagreement on specifications, or 
 ■on methods of procedure, the case will be submitted to the chief 
 'Coordinator, general supply, whose decision shall be final as to the 
 
170 
 
 action taken, subject only to appeal to the head of the department 
 concerned. 
 
 There was formerly in existence an interdepartmental standardiza- 
 tion committee composed of representatives of the following depart- 
 ments : War Department, Navy Department, Treasury Department, 
 Department of Agriculture, Department of the Interior, Post Office 
 Department, Panama Canal, Shipping Board, United States Em- 
 ployees' Compensation Commission, Commissioners of the District 
 of Columbia, and Department of Commerce. The findings of this 
 committee as to a common specification are in the nature of what is 
 called " a recommended specification." No one had the authority to 
 approve and make mandatory the adoption of such specification by 
 the various departments of the Government; neither was there any 
 authority competent to settle the case on its merits in the event of 
 a disagreement. 
 
 There is also in existence a committee on the standardization of 
 petroleum specifications, authorized by Executive order dated July 
 31, 1918. 
 
 The Federal Board for the Standardization of Specifications will 
 take up and carry to a prompt conclusion a complete survey of all 
 existing specifications, with a view to the adoption of common speci- 
 fications where more than one now exists for a particular commodity. 
 
 Ninth, the Interdepartmental Board of Contracts and Adjust- 
 ments. This board is in process of formation, and a description of its 
 proposed functions and field of activity is contained in the Executive 
 order just issued for its establishment, as follows : 
 
 1. Without limiting in any manner the jurisdiction or authority of heads of 
 executive departments and independent establishments over the subject matter 
 of Government contracts as the same is now defined by law, but for the pur- 
 pose of standardizing contract forms, securing the adoption of uniform policies 
 as regards construction work and uniform practices of interpretation and nego- 
 tiations both preceding and following the actual execution of such contracts, 
 there is hereby established in the office of the chief coordinator, general supply, 
 a board to be known as the interdepartmental board of contracts and adjust- 
 ments, the members and functions of which board shall be as follows : 
 
 2. The head of each executive department, including the Department of 
 Justice, shall organize a department board made up of one representative 
 of each bureau having the independent right to enter into contracts on behalf 
 of the United States. Such department board shall recommend policies to 
 control in the standardization of contracts within such department. They 
 shall choose from their number a chairman and any other necessary officers. 
 
 3. The chairman of the several department boards, together with a repre- 
 sentative designated by the head of any independent establishment now 
 authorized by law to enter into important contracts, and the chief coordinator, 
 general supply, shall constitute the interdepartmental board of contracts and 
 ndjustments, and shall serve without additional compensation. 
 
 4. This board shall be presided over by a chairman, who shall be the repre- 
 sentative of the Secretary of the Treasury. The chairman shall, upon being 
 advised of the complete membership, call the members of the board together 
 for purposes of organization. The board shall adopt such by-laws and appoint 
 such committees and subcommittees as may be deemed advisable and necessary 
 to accomplish the end sought. 
 
171 
 
 5. The functions of this board shall be- 
 First, to standardize in general, wherever possible, the forms and methods 
 
 of contract letting, to the end that a uniform policy on the jiart of the r,ovei-n- 
 ment may control the mailing of such contracts, and with a further view to 
 such changes in the form thereof as will tend to enlist the interest of the con- 
 tractor on behalf of economy and promptness of execution and eliminate those 
 uncertainties of construction and hazards to be assumed by the contractor 
 which have hitherto operated to increase the cost of Government work and 
 supplies. 
 
 Second, to recommend general policies in the settlement of outstanding obli- 
 gations arising out of contracts of the United States, such as methods of de- 
 termining and enforcing damages, of settling disputes as to questions of fact, 
 and of determining the final compensation of contractors. 
 
 Third, in an advisory capacity and when requested by the head of any de- 
 partment or establishment or his representative upon the board — 
 
 (o) To review and revise important contracts and agreements made or about 
 to be made on behalf of the United States. 
 
 (6) To advise officers authorized to contract and operating under contract as 
 to the proper interpretation of contracts in process of execution. 
 
 (c) To assist in the negotiation of Important contracts and agreements relat- 
 ing to personal services, supplies, or construction work. 
 
 6. The chairman of the board is charged with the responsibility for the 
 efficient working thereof and for its development along the practical lines above 
 indicated, and in such other ways as may become apparent after full study of 
 the situation by the board or any committee thereof. After a full discussion of 
 any question by the board and a full opportunity to the members to be heard 
 thereon, the decision of the chairman will be final as to the action to be taken 
 or the policy to be pursued. But any member may appeal therefrom to the head 
 of his department or establishment, who shall have final authority in the matter. 
 The chairman of the board may detail an assistant to sit with the board to 
 represent him in matters of routine. 
 
 The General Supply Committee was created by section 4 of the act. 
 of June 17, 1910 (36 Stat., 531), which directed the Secretary of the 
 Treasury to advertise and contract for all supplies of fuel, ice, station- 
 ery, and other miscellaneous supplies for the executive departments 
 and other Government establishments in Washington, D. C, when 
 the public exigency did not require the immediate delivery of the 
 article. By Executive order of December 10, 1918, the General Sup- 
 ply Committee was designated as the agent through which the han- 
 dling and transfer of surplus office material, supplies, and equip- 
 ment of the executive departments and other establishments of the 
 Government in the District of Columbia should be carried out. and 
 the Executive order of September 3, 1919, extended this activity of 
 the General Supply Committee to the field services outside of the 
 District of Columbia. These Executive orders provided that pur- 
 chase in the open market should not be made of any materials or 
 supplies which could be obtained through the General Supply 
 Committee. 
 
 The General Supply Committee, functioning under this act and 
 these orders, handled large quantities of surplus materials and sup- 
 plies for the Government departments and establishments but it 
 could deal only with those articles which were reported to it as 
 
172 
 
 surplus and had not definite means of enforcing the obvious inten- 
 tions of the regulations where the materials or supplies avaijable 
 differed slightly from those required. 
 
 With the establishment of the chief coordinator, general supply, 
 the Federal Purchasing Board and the Federal Liquidation Board, 
 the General Supply Committee, working in the closest cooperation 
 with these agencies, has been of material assistance in working out 
 practical operating systems, and has in return received great assist- 
 ance in the matter of locating surplus supplies which in some cases 
 had not been yet reported surplus, as well as in securing the accept- 
 ance of materials and supplies differing slightly from the original 
 request where this would result in preventing a purchase in the 
 open market. 
 
 This is unquestionably resulting in greatly increased economies 
 in the matter of interdepartmental transfer of materials and sup- 
 plies, thex'eby eliminating the necessity for many open-market 
 purchases. 
 
 RELATION OF THE COORDINATING MACHINERY TO THE CHIEF EXECUTIVE, 
 TO THE DIRECTOR OF THE BUDGET, AND TO THE BUSINESS ORGANIZA- 
 TION OF GOVERNMENT. 
 
 Where the statutes of the United States prescribe methods to be 
 followed in governmental business administration they, of course, 
 limit Executive discretion by their terms, but in all routine business 
 of government, where a method is not prescribed by law, it follows 
 •of necessity that methods may be imposed by the Executive, as in all 
 other forms of business organization. An Executive regulation 
 covering governmental business methods is simply a formula in 
 which a method of conducting business is outlined in an order. 
 
 The executive powers which the President has invoked in the 
 -establishment of coordinating machinery for the unifying of gov- 
 ernmental business are therefore only those inherent in the position 
 of the head of the Government business administration, where not 
 limited by law. The Executive orders creating these agencies are 
 signed by the President and are announced through the Budget 
 Bureau. 
 
 In any discussion of these agencies created through Executive 
 ■order by the President to assist him in the imposition of a unified 
 plan for the transaction of the routine business of the Government 
 it can not be too strongly emphasized that they are concerned only 
 with routine business and not with matters of governmental policy. 
 Policies of government are determined by the Executive and by 
 Congress. When Congress passes a law appropriating money for 
 the cost of governmental activities and projects it becomes the duty 
 of the Executive, in so far as these expenditures are concerned, to 
 see that the money is devoted to the objects of appropriation in the 
 most economical and efficient manner possible. These coordinating 
 
173 
 
 agencies established by the Executive are for the sole purpose of 
 enabling the President in matters of routine business to so coordi- 
 nate the activities of the different departments and establishments 
 as will insure the most efficient and economical expenditure of the 
 money appropriated by Congress. The powers they exercise, the 
 questions which they consider, the circumference of their activities 
 are all concerned fundamentally with the routine of business meth- 
 ods as distinguished from anything in the nature of governmental 
 policy. They operate simply as a mechanism to make more effective 
 the policy adopted by Congress and the Executive. 
 
 These agencies, concerned alone with efficient and economical 
 methods, should operate in the same manner whatever the political 
 changes which may occur in administration. Like the Budget Bu- 
 reau and other agencies for the imposition of business policy, tliey 
 are impersonal, impartial, and nonpartisan. They can never prop- 
 erly become the subject of partisan dissension. They must exist as 
 agents concerned with routine methods of business at the disposal 
 of the Executive and Congress indefinitely. If they are not kept 
 in existence there will be an immediate reversion to the demoralizing 
 lack of coordination among the independent departments and es- 
 tablishments which has obtained in the governmental business ad- 
 ministration in the past. 
 
 Made up from the continuing body of public employees and con- 
 cerned simply with the unification of the business machine, their 
 sphere is one outside of politics and of general policy and in the 
 realm alone of business common sense. 
 
 These agencies derive their authority solely from the President, 
 but the same reasons of convenience and efficiency which led the 
 President to use the machinery of the Budget Bureau in connection 
 with the imposition of Executive business policy upon the business 
 administration make advisable a close supervisory contact between 
 the Director of the Budget and the coordinating agencies created by 
 Executive order now in operating existence. The condition of gov- 
 ermnental business administration, developed by the investigations 
 of the Budget Bureau, brought to the attention of the President, re- 
 sulted in his decision to establish them. They are concerned, as is 
 the Director of the Budget, with a bird's-eye view of the Government 
 business situation and with the doing of business in terms of a 
 single Government and its interests as distinguished from, but con- 
 sistent with, the interests of the separate departments and establish- 
 ments To strengthen their supervisory relations to the separate de- 
 partments and establishments they need a constant and sympathetic 
 haison between themselves and the President of the United States, 
 who is the source of their authority. 
 
 If in the future there should at any time come into office an l^.xecu- 
 tive indifferent to the operation of the Government as a business 
 machine there would, under the immutable laws of human nature. 
 
174 
 
 immediately spring up an effort on the part of the independent de- 
 partments and establishments at first to curtail and restrict the 'ac- 
 tivities of the coordinating agencies and then to wipe them out of 
 existence. The fact that this country may be so unfortunate as to 
 pass through an Executive administration indifferent to its obliga- 
 tions to apply correct business principles to the functioning of Gov- 
 ernment business makes it a supreme duty for the President to now 
 protect as completely as possible, by Executive regulation, by custom, 
 and by his authority, the coordinating agencies recently created by 
 him. 
 
 The Director of the Budget, being of necessity not only under the 
 law but under the practical exigencies of the situation, in close con- 
 tact with the President of the United States in all matters of routine 
 business policy, becomes the natural agent for the interpretation of 
 the situation and needs of these coordinating agencies to the Presi- 
 dent. It is essential, too, that the Director of the Budget, charged 
 with the duty of advice to the President in connection with the eco- 
 nomical and efficient operation of the Government in its ordinary 
 business, should himself have the closest contact with them, since 
 through them alone can he be properly advised as to correct business 
 and interdepartmental relations. Besides being agencies for the 
 execution of Executive policy, these coordinating agencies become 
 the natural collectors of information regarding the processes of rou- 
 tine governmental business, which, in turn, may become the basis of 
 Executive policy involving changes in the coordinating agencies 
 themselves, and the creation of new ones. 
 
 In the well-managed business organization the closest contact 
 between the source of information and the power which can compel 
 corrective action is always maintained. It must be remembered that 
 we are discussing only routine business functioning. What we call 
 " red tape " in Government business largely results from the lack of 
 contact between those sensible of errors in administration and those 
 in authority responsible for their correction. The less cumbersome 
 the machinery for the transmission of the Executive will, and the 
 closer the contact between those associated with it and the President 
 himself, the more effective will be the functioning of the Government 
 as a business machine. 
 
 To sum up, the President, in assuming for the first time his posi- 
 tion of business responsibility over governmental business adminis- 
 tration, upon the advice of the Director of the Budget, based upon 
 information which the investigation of the Bureau of the Budget has 
 supplied, has created certain agencies of coordination through which 
 his business policy will be transmitted to the business organization. 
 This emphasizes the importance of the passage of Executive advice 
 and instruction througli the Director of the Budget to the coordi- 
 nating agencies. The same Drincitjle is invnlvpd n« wna ro^^n-ni-^ori 
 
175 
 
 in the budget law itself when the Bureau of the Budget was made to 
 operate directly under the President and not under any department 
 of a lesser but coordinate authority. The only agency in existence 
 which bears such a relation to the Chief Executive that it can be 
 made a proper conduit for the transmission of Executive authority 
 in routine business matters to the coordinating agencies for trans- 
 mission to all departments and establishments is the Bureau of the 
 Budget. 
 
 Coordinating agencies should be created from the body of existing 
 employees and not by legislation, where their personnel would neces- 
 sarily, be built up by outside appointments. If the creation of these 
 coordinating agencies were to be attempted by act of Congress, they 
 would sink at once into the position of bureaus and lose almost en- 
 tirely the power inherent in direct representation of the President. 
 The advantages of the creation by Executive order from the body of 
 the administration of these coordinating agencies, which are now in 
 successful operation, are : 
 
 First, they more authoritatively will convey the pressure necessary 
 in carrying out the plan of the Chief Executive in the interests of 
 the Government as a whole. 
 
 Second, they will be headed and composed of men appointed be- 
 cause of their experience and ability in connection with the work in 
 question, familiar with the environment in which they are to work, 
 and without the outside and distracting pressure of political con- 
 siderations. 
 
 Third, while more effectively functioning because of the above rea- 
 sons, they will operate without appropriations being made necessary 
 for their own salaries or for a large personnel. They will not afford, 
 therefore, a nucleus for a steadily increasing cost and complexity of 
 operation. 
 
 An examination of the Executive orders which form the basis of the 
 organizations of the coordinating agencies above mentioned will 
 develop : 
 
 First, that they involve no transfer of authority the location of 
 which has been fixed othei^wise by statute. 
 
 Second, that they involve the delegation of no questions of policy 
 save that of economy and efficiency. 
 
 Third, that they are simply agents by which, where not otherwise 
 determined by Congress, unified methods of ordinary business can be 
 imposed by the Chief Executive. 
 
 Fourth, that they are created simply to give the President of the 
 United States, in his relation to the business administration, the same 
 agencies of contact and transmission of authority as obtain in any 
 private organization. 
 
 Fifth, that they involve no material addition to the expense of gov- 
 ernmental administration. 
 
176 
 
 Sixth, that they are nonpartisan, being composed of men already in 
 the Government service, simply detailed for this duty. 
 
 Seventh, that they are in effect simply a regrouping under an 
 executive leadership of certain of the present employees of Govern- 
 ment of such experience, contact, and relation in its routine business 
 as enables them, detached from departments and acting directly 
 under the President, to make possible the application of common-sense 
 
 business methods. 
 
 It can not be too often reiterated that this most important reforma- 
 tion in the governmental business system is dependent upon the Pres- 
 ident of the United States himself, and upon his continued assump- 
 tion of his responsibility as its business head. The minute he relaxes 
 his attitude of attention to this duty there will be felt the natural 
 pull of the departments and establishments toward the old system 
 of complete independence and decentralization. This is because of 
 laws firmly embedded in human nature which have existed since man 
 began. Budget laws or other legislative enactments can not change 
 human nature, and, while compelling the letter of cooperation, can 
 not compel its spirit, which is, above all things, essential in business 
 organization. The President, and the President alone, can do this, 
 for his attitude toward the heads of the departments and the inde- 
 pendent establishments is a matter constantly in their minds. What 
 he desires it becomes their interest as well as their duty to do, where 
 consistent with right principles, and in accordance with law. In the 
 absence of his expressed desire what becomes their selfish interest in 
 action is inevitably along the lines of decentralization and the re- 
 establishment of the old condition of things, with everything running 
 haphazard. 
 
 These great coordinating agencies have already effected large 
 savings in Government business administration. They have pre- 
 vented the absurd duplication and competition existing among the 
 departments and establishments. They .have corrected the practice 
 by which the supplies and facilities of Government have been kept 
 in water-tight departmental compartments, compelling recourse con- 
 stantly to the open market, notwithstanding the Government already 
 had on hand the supplies or facilities purchased. They enable the 
 Government to transact routine business with the advantages enjoyed 
 by private business organizations, and prevent its spoliation, made 
 easy by the former ignorance and indifference on the part of a de- 
 partment of the business status and transactions of another. Through 
 their agency the routine business of the Government, for the first 
 time, is being conducted along sound business principles. 
 
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