1/01 COf'i'L- TS 1109 .U6 ^^^' I HOUSE OF REPRESENTATIVES. | Document 1919 Copy 2 n. No. 87. DISPOSAL OF WASTE PAPER IN GOVERNMENT SERVICE. LETTEE THE SECRETARY OF COMMERCE, TRANSMITTING REPORT ON THE HANDLING AND DISPO SAL OF WASTE PAPER IN GOVERNMENT SERVICE, TOGETHER WITH CERTAIN COMMENTS THEREON FROM THE OFFICE OF THE PUBLIC PRINTER AND THE REPLY OF THE DEPARTMENT OF COMMERCE. June 9, 1919. — Referred to the Committee on Printing and ordered to be printed, Department of Commerce, Washington, June 6, 1919. My Dear Mr. Speaker: I submit herewith a report on the hand- ling and disposal of waste paper in Government service, together-with certain comments thereon from the Office of the Public Printer and a reply thereto from this department, for your consideration. Very truly, yours, • William C. Redfield, Secretary. The Speaker, House of Representatives, Washington, D. 0. Department of Commerce, Waste-Reclamation Service, Washington, May 2, 1919. A Report on the Handling and Disposal of Waste Paper dt Government Service. I submit herewith the result of a recent inquiry, preliminary in nature, covering the present system of collection, sorting, and sale of waste paper in Government service. This investigation, which was undertaken at your direction, covers the present system of col- cu C>M 7- 2 DISPOSAL OF WASTE PAPER I]^ GOVERISTMEFT SERVICE. lection and sale, indicates the advantages of the present system over the previous system, as well as pointing out the defects of the system now in effect, together with recommendations looking to the further standardization of the work. The information upon which this report is made was furnished this ofRce through the courtesy of the Public Printer. The present system of handling the waste paper in Government service was inaugurated MsiV 17, 1913, following an investigation made by the President's Commission on Economy and Efficiency, which was published as a Government document under the date of Febru- ary 24, 1913, as Senate Document No. 1105 (Sixty-third Congress, third session). A system of centralized collection, sorting, and sale of all waste paper from the Federal departments located in the Dis- trict of Columbia was put in effect, and the Office of the Public Printer was directed to assume charge of this function. The President's Commission on Economy and Efficiency found that, due to the then existing system of disposal, there had been a loss of revenue to the Government, and it was argued that by plac- ing this function under the direction and control of one office the cost of the service could be greatly reduced and the revenue greatly increased. The commission recommended that inasmuch as 50 per cent of the waste paper in Government service was produced at the Government Printing Office the Public Printer be designated as the agency to perform this function. A study of the financial returns for the year 1918 proves that the contention of the commission was correct. The service has been performed with a decrease in cost and with a large increase in revenue, and this increase in revenue has been made irrespective of the fact that the increase in volume of waste paper has been relatively small. The amount of waste paper pro- duced in 1912 was estimated to be 5,712.55 net tons. The Govern- ment Printing Office collected, sorted, and sold 6,873.11 net tons last year, or an increase of 20 per cent in volume. The President's Com- mission on Economy and Efficiency estimated that the waste paper sold by departments in 1912 made a return of $62,527.95; the contract for the fiscal year 1918 yielded a return to the Government of $141,- 355.89, which is an increase of 126 per cent in the gross revenue. This increase in gross revenue can not be entirely attributed to the benefits accruing from a centralized system of collection, sorting, and sale. The prices for paper stock have shown an upward tendency during the last few years, and were the previous system still in effect the returns for 19i8 would certainly have been greater than tke amount secured for the waste paper which was sold under the 1912 price. Although the bids for the disposal of this material were sub- mitted in the spring of 1918, and as a result were not the market quotations of the fall of the year 1918, when prices were running much higher, nevertheless the higher price level of that period was reflected in the bids, and as a result the Government secured a larger return for its waste [paper in 1918 than could piave been secured under the price prevailing in 1912. Therefore in making this com- parison of the two years the element of price must be borne in mind when considering the advantages which accrued under a centralized system of collecting, sorting, and sale. n; •f •• JUN 27. 19t9 DISPOSAL OF WASTE PAPER IN GOVERl^TMENT SEEVICE. 3 In endeavoring to ascertain the net revenue which was secured under the centraUzed system of deaUng with this material it has been necessary to make an estimation of the cost of operation, as the report of the PubUc Printer for the fiscal year 1918 does not contain a financial statement covering the cost of operation and the gross revenue of this function of his office. Therefore the statement of cost of operation, which is used as a basis of estimate throughout this report, is an estimation made by this office and is based upon the statement which was furnished by the Public Printer as to the number of employees, hourly rate of wages, and the number of trucks operated. However, this estimated cost does not include interest charges on the investment or depreciation on the baling equipment nor any element of overhead. This office was advised by the Public Printer that 18 men are employed to receive and sort the waste paper, some of them being worked on a night shift. Therefore this office estimated that 10 men were necessary to handle the waste paper on the day shift and 8 men on the night shift. The daily rate of pay is 35 cents an hour. The pay for the night shift is 41 cents an hour. Consequently the cost of receiving, sorting, and baling will amount to $54.24 a day. The cost for the labor employed on the trucks will amount to $11.60 a day. It has been estimated by this office that the cost of operating the trucks, excluding labor but including interest and depreciation, will amount to $20.40 a day per truck. This esti- mation was based upon the figures which have been compiled by the highways transport committee of the Council of National Defense. The total labor cost for the year will amount to $19,752. The cost of operating two 5-ton trucks for a year (300 work days) will amount to $12,240, or a total cost for operating this service of $31,992. The estimated cost of operating in 1912 was $32,742.43. Despite the increase in tonnage, there was a decrease of about 2 per cent in the cost of operation for the year 1918. In 1912 the cost of operation was 51 per cent of the gross revenue; in 1918 it was but 23 per cent. The net revenue in 1912 was $29,785.53. In 1918 it was $89,478.37, or an increase of 233 per cent in net revenue in 1918. The following table, making a comparison of the cost and revenue on a tonnage basis for the two periods, reveals the saving which has been effected by the adoption of the plan formulated by the Presi- dent's Commission on Economy and Efficiency: 1918 Cost of operation per ton . . Net revenue per ton Gross return per ton. S5.73 5.21 S4. 65 15.91 20.56 Despite this remarkable showing, as indicated in the financial state- ments and the comparisons which have been made between the two periods, the Government is not securing the maximum return for this material, nor is it operating at the minimum cost. The financial statement but represents the potentiality which lies in this system of centralized control. There are a number of weaknesses which must be remedied if this Government service is to be developed to the highest point of efficiency. However, in pointing out the weaknesses 4 DISPOSAL OF WASTE PAPEK i:S GOVEKl^MENT SEEVICE. which now exist it is not the desire of this office to criticize this function of the Office of the Public Printer. The Public Printer deserves the highest praise for the efficient manner in which he has handled this function, lacking as he does proper equipment, adequate space, and a trained staff. Despite all the present handicaps he has been enabled to handle this function so that he could make a large return to the Government. It is now necessary to assist his office in removing those obstacles which prevent his operating at the highest point of efficiency. THE CAUSATION OF THE PRESENT INEFFICIENCIES. THE ASSORTING OF THE MATERIAL. Space is absolutely essential if the Public Printer is to be enabled to properly assort the waste paper in Government service into the proper trade classifications. Operating in but two rooms, with a combined floor space of only 1,190 square feet, it is not surprising that the gradings do not conform to the trade specffications. It is indeed surprising that a preliminary sorting approximating the trade specifications could be made. Commercial firms, handling such a flow of material, would be operating with a floor space of 10 or 20 times the amount which is now allotted to this function. As a result of this situation, the Government waste paper is sold under specifications which do not conform to the waste trade classi- fications. A few examples can be cited to illustrate this situation: Under the Government schedule, class 1 is specified to consist of shavings from blanks and blank books. Such material would be sold on the waste market as No. 1 hard white shavings were it prop- erly sorted, but due to the fact that there is a small percentage of colored shavings included in this Government schedule, and which could be readil}^ assorted and classified in their respective grades, it is necessary for the Public Printer to accept a lower price for this material than could be secured if it were possible to sell the material properly assorted. Class 2 is a mixture of No. 1 soft whites and No. 2 shavings. The amount of No. 2 shavings is relatively small, due to the fact that but little calendered stock: or coated material is used in Government printing. In addition to these mixtures of Nos. 1 and 2 shavings, there is a small amount of foreign matter which, if properly sorted, would grade in another classification. The Public Printer, due to the fact that it is impossible to make the proper sorting, is forced to sell this material at a lower price than could be secured for it if it were properly classified. Class No. 3, which constitutes about 16 per cent of the total vol- ume of waste paper handled, consists of shavings from book paper, colored and white, strawboard, trimmings and other bmder-board trimmings. In order to get this material into its proper classifica- tions sorting must be done. Due to the lack of facilities, this material is being sold at prices much lower than the amount which could be received for the several grades if sold in their proper classes. Class No. 5, which is described as manila clippings in the Govern- ment schedule, is in reality a higher grade of material than the trade manila. Manila in the trade refers to color not to quality. It is DISPOSAL OF WASTE PAPER IE" GOVERNMENT SERVICE. 5 sulphite stock colored to represent rope stock. The Government manila is of far better grade. Yet, due to the fact that cheaper grades of manila are included, the Government price is lower on the average than the trade quotations for manila clippings. Class No. 7 is in reality high-grade writings and could classify either in ledger or book stock classes except for the fact that the material consists of internal-revenue-stamp stubs, which must be handled in a special way. At present the material is taken to the car imder guard, is forwarded to the consuming plant in a sealed car, and is immediately destroyed luider guaranty. Foreign Gov- ernments destroy such paper by means of a shredder, and a number of commercial concerns here and abroad follow the same procedure m handling confidential paper. By installing a shredder at the central plant, this material could be prepared for the market with-' out danger, and a slightly higher price received for it as a high-grade wi'iting. The present system not only fails to place the material in proper trade groups, but it also is responsible for a great waste of human effort, as the paper is handled and rehandled a number of times. Under the present arrangements a preliminary sorting is made by the employees of the several bureaus collecting the paper through- out the buildings under their jurisdiction. It is rehandled at the plant where a semisorting is made. The contractor who purchases the material in this shape rarely has the facilities to handle such a flow and ships it in its present shape to a large ''packing house," where it receives its fmal grading. The graded stock may then be sold by the "packing house" to a mill either located in Washington or in the territory adjacent thereto. It is the understanding of this office that the paper is now moved to Kalamazoo, Mich., for its final sorting. The packers of that center sell on the eastern and central market, and there is nothing to guaranty that this paper, which has been handled and rehandled in the District and shipped auch a long distance for its final grading, will not be consumied by a mill either in the District or in adjacent territory. The present cost for this so-caUed assorting is now averaging S2.36 a ton. The Commission on Economy and Efficiency estimated that a ton of paper could be assorted at a cost of $1.25. This estimate was based upon the labor prices prevailing in 1912. The upward tendency of wages has slightly influenced the waste trade, and dealers estimate that it now costs about $1.75 a ton to assort this paper. If these estimates are correct, the loss through the excessive assorting costs now amounts to at least $4,192.59. THE PRESENT SYSTEM OF SALES. Under the present system of sales, the Government is not only losing monev through its failure to properly assort the paper so that it can be sold under its trade classifications, but it is also suffering a loss due to the present system of contracting for the sale of the material on a yearly basis. The prices for waste paper may fluctuate greatly during a year. This was especially true of trade conditions during the year 1918. Paper stock in January of 1918 was being sold at a price level about equal to the prices in 1916 and 1917. By August of that year new high-water marks in waste-paper j^rices had 6 DISPOSAL OF WASTE PAPER IIST GOVEEjSTMENT SEEVICE. been established. The Government could not secure the benefit of these fluctuations due to the fact that the contract had been awarded on bids which were filed in the spring of the year 1918, when the upward tendency of prices was but revealing itself. Had the Gov- ernmentsold its waste paper by carload lot on the monthly quota- tions for last year, a return possibly 61 per cent greater would have been secured. However, in making this estimation it must be borne in mind that this office has no data upon which to determine the amount of waste paper of the several trade classifications which could be secured under proper assorting. Therefore, in making the estimation of the loss it has been necessary to assume that the amount of waste paper sold under the Government classification was equal to the amount under the trade classification. Such an assumption is obviously incorrect, because in assorting class 1, to secure the No. 1 hard white shavings, at least 2,000 pounds would be found to be colored book stock, or material of a lesser value. What is true in the case of class 1 is also true in the case of class 3. There it has been assumed that all of this class was No. 1 hard and No. 1 soft shavings, and the trade quotations for No. 1 soft have been used as a basis for estima- tion of the loss. In reality, class 3 may contain 4,000 or 5,000 pounds of No. 1 hards, 2,000 or 3,000 pounds of No. 2 shavings, 3,000 or 4,000 pounds of colored shavings, and several thousand pounds of strawboard trimmings. However, it was felt that by using the trade quotations for No. 1 soft, which is of less value than No. 1 hard, that an approximation of the loss could be ascertained; and these figures are given as an indication of the loss and not the actual loss. Therefore, the tables which are attached hereto, dealing with this matter, must be considered estimates and not a true state- ment of the actual condition. Table A is based upon the statement supplied through the Office of the Public Printer, and shows the grades, the amount of paper in each grade, and the contractual price for each grade. Table Bis compiled from the monthl}^ quotations of the Waste Trade Journal, and covers the chief items of waste-paper stock. Table C is based upon Tables A and B. In developing this table it has been upon the assumption that the amount of waste paper under the Government schedule when sorted would be the same amount under the trade schedule, and the loss per pound was ascertained by comparing the contractual price and the average yearly price for each grade and multiplying by the quantity of waste paper in each classification. In developing Table D a similar estimation, open to the same criti- cism, was made. It was further necessary to assume that the monthly turnovers of material were equal. The total volume handled yearly was divided by 12, and this was assumed to be the monthly turnover for each grade. The difference between the Government price for each grade and the monthly quotations for the grade which it ap- proximated showed either a loss or gain to the Government. By multiplying this by the assumed monthly turnover an estimation of the monthly gain or loss for each grade was made. Estimates though these tables may be, they will serve to indicate wherein the weakness of the present sales system lies. By comparing Tables A, C, and D it will be possible to construct a table which will DISPOSAL OF WASTE PAPER IN GOVERNMENT SERVICE. 7 reveal at a glance that the Government is suffering the loss in those items which are poorly sorted and which constitute the greater bulk of the material handled, and for which there is the greatest market demand. Government schedule. Percentage of volume. Percentage of revenue. Percentage of loss. Class 3 15.85 11.67 46.11 1.77 2.92 21.68 20.04 23.84 24.66 3.88 2.84 24.74 52. 685 Class 2-. 24. 017 Class 6 14. 592 Class 1 5.746 Class 10. . . 1.847 1.113 100. 00 100.00 100. 00 This table not only reveals the weakness of the sorting system, but the sales system as well. Class 3, which is in a large measure a mixture of the various shavings, contributed half of the market loss. Class 2, which is believed to be practically all soft white shavings, contributed nearly one-fourth of the loss. While the three classes of shavings were responsible for over 82 per cent of the loss, they constituted but approximately 30 per cent of the volume handled. The five classes which comprise about 80 per cent of the total vol- ume and which contributed 75 per cent of the revenue, were respon- sible for 99 per cent of the loss. Irrespective of the fact that the figures upon which this table is based are estimates, they reveal the elements of weakness in the present system of handling, which can not be remedied to any ap- preciable degree as long as the Public Printer is forced to operate in inadequate quarters and to sell under a contract which guarantees to remove the material daily. THE SYSTEM OF COLLECTION. The Public Printer reports that it requires the full-time operation of two 5-ton trucks a day in order to collect the material from bureaus and departments other than his own. The cost of operating the trucks, including labor and depreciation, was estimated by this office to be $15,720 per annum. The cost of collection of the tonnage amounted to 11 per cent of the gross sales. The Department of Commerce made a study of cartage costs in the city of Washington in the year 1917. This study covered the delivery cost of 128 establishments of various kinds. The cost of delivery for all of the establishments was but 6.2 per cent of the gross sales. Merchandise was delivered for an average cost of 1.8 per cent of the gross sales; food products for 7.4 per cent; whereas the seasonal commodities were delivered at a cost of 20 per cent of the gross sales. This comparison would indicate that the cost of collection of waste paper is far too high, and that steps should be taken to ascertain the cause of this excessive cost. The cost of collection, assuming that all tonnage is moved, is averaging $2.29 per ton. Tlie waste dealers of this center are moving their material at about $1.50 a ton. It would seem that there is inefficiency and lost motion at some stage in connection with this function of the Office of the Public Prmter. 8 DISPOSAL OF WASTE PAPER IN GOVERISTMENT SERVICE. However, all tonnage is not hauled; a certain amount of this paper is produced in the Government Printmg Office. It was estimated by the Commission on Economy and Efficiency that 50 per cent of all the waste paper in the Government service originated in the Govern- ment Printing Office. If that condition still prevails, the Govern- ment Printing Office would be forced to haul 3,436 tons of paper a year, at a cost approximatmg $5 a ton. However, a study of Table A will give the impression that a much larger per cent of waste paper originated in the Office of the Public Printer. The "shavmgs" alone amounted to approximately 30 per cent of the total turnover, the printing waste nearly 16 per cent, and the wrapping waste 46.11 per cent. If these five classes are assumed to originate in that office, then at least 91 per cent of the waste paper in Government service requires no hauling prior to its assorting. If this condition is the true state of affairs, then but 556 tons would require hauling, which would increase the tonnage cost for collection to $28 a ton. Two 5-ton trucks, making but one trip a day, should logically handle 10 tons of paper a day, or, in a 300-workday year at least 3,000 tons of paper a year. At the present time they are operating full time to collect but 18 per cent of their capacity. The Commission on Economy and Efficiency estimated that the waste paper originating outside of the Government Printing Office could be hauled for $3,000 per annum. If 50 per cent of the esti- mated tonnage of that year, or approximately 2,756 tons, could be handled for that sum — which was about $1.12 per ton — it is self- evident that either the estimation of the commission was entirely too low or the present cost of this service is excessive, either assuming that 50 per cent or 91 per cent of the waste paper must be hauled from the bureaus and departments located in the District of Columbia. If $2 a ton for cartage is a fair margin for this service, and 50 per cent of the paper origmates in pomts outside of the Office of the Public Printer, the cost of this service should not have exceeded $6,872. This is $6,552 less than the estimated annual cost for collection, or a sum about equal to the amount which is estimated by the highways trasport committee as the annual cost of operation, maintenance, and depreciation of one 5-ton truck. It would seem that it can be safely assumed that the collecting service of the Office of the Public Printer should be reorganized so that this service could be performed by one truck alone. The loss resulting from the inefficient hauling is of course but an estimate. However, the cost per ton for cartage should not exceed $2 a ton; m fact it should be closer to $1.75 a ton. If 50 per cent of the paper had to be hauled during last year, there was a loss of about $3 a ton, or an annual loss of $10,298; if 91 per cent was moved, there was a loss approximating $26 a ton, or an annual loss of $14,465. The loss through the present sales system was estimated to be $86,869. The loss through the faulty sorting and collection system amounted to $14,490.59, under the first assumption, and $18,657 under the second. Therefore, the annual loss would range from about $101,395 to $105,525. DISPOSAL OF WASTE PAPER IN GOVERNMENT SERVICE. \i THE NECESSITY FOR A PROPER BUDGET SYSTEM. In the annual report of the Pubhc Printer for the year 1918, the question of the burden which has been thrown upon that department is raised, and it is pointed out that the amount of waste paper col- lected from the departments and bureaus, baled in the Office of the Public Printer, and then sold, is increasing rapidly. It has been necessary for the Public Printer to install additional equipment for baling. There has been an increase in labor cost, and it takes the full time for one or more large trucks to handle the material. The Public Printer further points out that all this expense, under the present system, is a part of the cost of operating in the Govern- ment Printing Office; whereas it should be carried by the various bureaus and departments. The Public Printer recommends that he be granted authority to make a monthly charge for service on the bass of cost per bag collected. This criticism on the part of the Public Printer reveals one of the fundamental weaknesses of the present system of dealing with this particular function of the Government. When the Public Printer was directed to assume charge of this function no arrangements were made for carrying the expense of the operation, and the Public Printer was forced to expend his general appropriation, which was made for carrying on the established functions of his office, for a service not primarily a function of his department. Under the present situation the cost of this operation must be included in the expense of the printing function, which has a tendency to increase the cost of printing to all departments, and the proceeds of the sales are deposited in the United States Treasury under the caption of "Miscellaneous receipts, proceeds of sale of Government property," and the same taken up on the books of the Treasury as if the funds deposited were net rather than gross proceeds. Nor will the sugges- tion of the Public Printer adequately deal with the situation, or remove the fundamental defects of the present system of dealing with the material. To charge the bureaus and departments for a service rendered, and from which they derive no benefit, is but to beg the issue. It is absolutely essential to reorganize the entire system not only of sorting, collection, and sales, but also of the budget as well. Therefore, it is suggested that this matter be called to the attention of competent authority, with the recommednation that a special appropriation be granted to the Public Printer, provid- ing that he is to continue to be in charge of this function, for the maintenance of this service; and that all proceeds of the sale of the waste paper be deposited to the credit of the special appropriation for the maintenance of this service, the net proceeds to be trans- ferred at the end of the fiscal year to the "Miscellaneous receipts" fund. By so doing there will be an adequate statement as to the cost of operation, as well as a statement as to the net proceeds. By adopting such a system the Government will be assured that it will not be throwing an unjust burden on any department; nor will it be encouraging the destruction of material rather than its conserva- tion, which might be the logical outcome if the system which is suggested by the Public Printer were adopted as a basis for meeting the expense of this service. 10 DISPOSAL OF WASTE PAPER IN GOVEEl^MENT SEEVICE. RECOMMENDATIONS CONCERNING REORGANIZATION. If the Government is to secure the greatest possible return for the waste paper in Government service, and at the same time develop the most economical and efficient system for collection, sorting, and sale of this material, it is imperative that steps be taken to reorganize the present service. Three plans, covering a suggested reorganiza- tion, are submitted for consideration. The first plan is based upon the concept that the Government can secure the maximum return without the element of competition, and therefore considers this function as an integral part of the work of the Office of the Public Printer. The second and third plans are based upon the concept that the greatest return can not be secured unless the element of competition is injected, and is based upon the theory that the function should be vested in some other organization rather than in the Office of the Public Printer, Expansion of the present facilities of the Public Printer. — Additional and adequate facilities must be secured if the Public Printer is to perform this function to the best interests of the Government. Additional space can not be allotted to this function in the buildings now under the control of the Public Printer. It will be necessary for him to secure authority to lease a building which is adapted to the needs of this particular function. The building should be of a two-story type so that the material can be sorted in the upper portion thereof, either over a conveyer or a sorting table, and the sorted material dropped through chutes to the balers below, the baled material to be held in separate compartments until a carload lot of any given grade is secured. The warehousing space can be estimated by ascertaining the monthly movement of carload lots of the several grades of paper secured through the assorting. In order to arrive at this estimate, the following table has been constructed, in the development of which 24,000 pounds of paper were used as a basis of measuring the carrying capacity of the standard box car: Government schedule. Number of carloads per annum. Number of carloads per month. Class 1 11 67 91 91 26/' 31 T% 17 i Class 2 Class 3 7A Class 4 7-A Class5 ts'tt Class 6 22 Class? WtiV Class 8 2-Ar Class 9 WW Classic lA Ciassll tJ-s Classl2 1 DISPOSAL OF WASTE PAPER IN GOVERNMElSrT SERVICE. 11 It will be noted that certain grades have had a very rapid turnover, while carload lots of other grades accumulate slowly. However, this situation is one which affects the sales element of this function rather than the storage feature. Compartments of sufficient storage volume to approximate a carload lot can be assigned to certain grades, and these grades moved from the compartments to the car as soon as the accumulation warrants. Certain other grades can be sold in mixed carload lots, no guarantee to be made as to the amount of each grade to be delivered in any designated shipment. By following this plan the amount of necessary storage space can be approximated with ease. Six grades accumulate with rapidity. Individual storage bins or compartments must be assigned to them. Class 1, or the assumed hard white shavijigs class, although it does not accumulate as rapidly as the other "shaving" classes, should be held in a separate storage bin, as there will be a carload lot moved every five weeks. The remaining five grades should be sorted into their classes, baled, and each bag tagged to designate its class and held in a mixed-storage compartment and sold by carload lot. It might be possible, in con- junction with these five classes, to use a contract system for disposal. B}^ following this system it will require at least eight storage com- partments. The cubical capacity of a box car is 2,400 cubic feet; therefore the cubical capacity of this storage space would be eight times the capacity of a box car, or 19,200 cubic feet. Baling material can be readily tiered either by liand or by machine; therefore the storage room could be at least 10 to 12 feet in height. A building, 64 by 30 by 10 feet would have the minimum storage requirements. However, an allowance must be made for areaways, baling space, etc. Therefore, it is estimated that a building 100 by 30 by 10 feet would prove to be quite adequate for this operation. The sales system, as well as the system of sorting and storage, should be reorganized. It has been shown that there is a heavy monthly movement of cars. This movement will approximate 45 cars a month, and 82 per cent of this monthly car movement will contain but five classes of material, and these grades have been demonstrated to be the cause of 99 per cent of the estimated loss to the Government under its present system of disposal. Therefore, the sales system should be reorganized so that these grades at least wiU be sold by carload lots, the proposals for their sale to be circularized each month. These proposals should name the class of material and the number of carloads of each to be received in a special time. By following this procedure it will be possible for the Public Printer to secure the benefit of the fluctuations of the market and to handle this material in accordance with the established trade custom. Classes 4 and 8 under the Government schedule, which accumulate with a fair degree of rapidity, should doubtless be sold under the monthly proposal plan. The amount of loss to the Government under the present system is negligible, and it is doubtful if the monthly proposal plan wiU result in much if any increase in revenue to the Government. However, this system of sale, operated in conjunction with the sale of the five classes of material which ought to be handled by this method, will not increase the clerical work of the Office of the Public Printer to any material degree. Therefore, it is suggested that these two classes be handled under the monthl}^ proposal carload lot delivery system. 12 DISPOSAL OF WASTE PAPER IN GOVERNMENT SERVICE. The five remaining grades might be sold under the yearly contract system, the bids to be filed on the separate items, the material to be shipped in mixed carload lots, no shipment to contain a guaranteed amount of any specified grade included in the five grades falling under this system. These changes would eliminate the present inefficiencies of handling and sale. The question of the causation of the loss through the collective service can not be answered with the data on hand, and it is believed that it is necessary to conduct an intensive study of this question, which can only be done by maintaining a time study on each truck for some little period so that the causation of the present loss could be discovered and plans evolved to check this waste. Due to the fact that the Office of the Public Printer has no facilities for making a searching inquiry as to this function of his office, and inasmuch as it is necessary that a comprehensive study of the ele- ments of cost to commercial firms for this service should be made, it is recommended that this question be placed before competent authority for tlie necessary instructions to have your department conduct such an investigation covering this field of Government service. The Department of Commerce is vitally interested in the element of cost of preparing a basic material for the market. Therefore, it is the opinion of this office that such an investigation should logically be conducted by your department; and it is the further opinion of this office that this investigation could be conducted by this office without any additional cost to the Government, and that data could be secured which would assist the Public Printer in standard- izing his function. In case authority can be secured for such an investigation from the special session of Congress, which may be called in the near future, it is believed that this data can be compiled and submitted in a report to the next regular session of Congress, and that it will further standardize and develop the function of the Government which was put into operation as a basis of a report filed with Congress under date of February 24, 1913. TTie utilization of prison labor. — This plan, as well as plan 3, con- templates the transfer of this function of the Public Printer to some other board or organization. It may be argued that this is not a function of the Public Printer, and that, therefore, it will be impos- sible to develop the work to the highest degree of efficiency unless a direct benefit to the division or office operating this service can be secured. Therefore, this plan has been evolved in order to interject the element of gain as a means of securing the greatest efficiency, as well as offering a solution to the problem which may be facing the local authorities in dealing with the misdemeanant population. The utilization of prison labor in the handling of waste material is not a new idea; it has been successfully adopted in several centers of this country. Therefore, in advancing this idea this office is not sponsoring a move which is theoretical in nature but one which has DISPOSAL OF WASTE PAPER IN GOVERNMENT SERVICE. 13 stood the test of operation. The Board of Charities of the District of Columbia, a municipal body having jurisdiction over the inmates of the penal, correctional, and reformatory institutions of the District, will doubtless be faced with a serious problem in conjunction with the maintenance of the prison industries of these institutions. The recent laws, culminating in the abolition of the legal traffic in intoxi- cating liquors, is certain to have a marked influence on the number of convictions before the courts of the District. During the year 1918, there were sentenced to the local institu- tions 1,10! male whites. In 72 per cent of the cases the causation of their offense was liquor. During the same time, 1,852 males, col- ored, were sentenced, and in 53 per cent of the cases the offense was attributable to liquor or violations of laws and ordinances relative to the liquor traffic. The total male convictions and sentences dur- ing this period were 2,953, and liquor was the causation of the offense in 59 per cent of the cases. The population during 1918 was low, due to the universal military service law which carried many potential misdemeanant offenders into the Army. As a result, many of the prison industries of the institutions were run at less than capacity. The prohibition legisla- tion will but intensify this situation. It may be impossible to secure adequate personnel to maintain the agricultural and industrial work of the institutions. The activities are developed to handle the flow of the population of 1917. The future population may be 50 per cent less than the 1917 turnover; a situation which may mean an entire reconstruction of the methods of caring for this type of offender. It may be possible to find an industrial all-year employment for the inmates in conjunction with the farm, the brickyard, and the sawmill, now being operated by the prison authorities. The mild climate of this region permits outdoor activity practically the entire year. However, if it is found that the situation is so changed that new lines of activities must be developed, then the handling of waste paper in Government service would be a profitable and instructive industry to develop in conjunction with the work of the institutions. In developing such a program, authority would have to be granted to the Federal departments to turn this material over to the Board of Charities, which would likewise have to secure the necessary authority to enter into an agreement to collect, sort, and sell this material. To be successful, this system would have to be operated upon a cost-plus basis — the institution submitting a statement giving all elements of cost and receiving a certain percentage of the net revenue as a profit. This profit should become the capital fund of the Board of Charities, to be utilized in developing the work of the institution, and should not revert to the Treasury at the end of each fiscal year. In order to successfully operate such a service, the Board of Charities would have to be empowered to pay the prevailing rate of wages for this class of service, the pro rata cost of maintenance being deducted therefrom. This Would be an element of cost and would be charged against the operation. By following the spirit of the Executive order of September 14, 1918, and establishing a wage fund, the Board of Charities would be enabled to establish a prisoners' rehef 14 DISPOSAL OF WASTE PAPER IlsT GOVEENMENT SERVICE. fund, which would assist in increasing the efficiency of the worker and enable the prisoner to contribute to the maintenance of his dependent family, thereby decreasing the amount of dependency in the community. However, as the present situation in regard to the population of the prison is in such a condition of flux, it is doubtful if it is practicable at this time to develop such a program; but in case the population of the prison falls off to such a degree that some change in the present system will have to be inaugurated, this plan might be put in oper- ation, to the mutual benefit of the Government and the Board of Charities of the District of Columbia. PLAN 3. A competitive cost-plus system. — This last system should be adopted only in case it is found that the first or second plan can not be put into operation. Under this plan the Government would collect the paper and turn it over to a contractor equipped to handle the flow of the material, the contractor to sort and sell the material, receiving in payment for his services the actual cost of operation and a certain percentage of the net revenue. In developing this system, a number of safeguards must be developed so that the elements that enter into the cost of operation shall not be overloaded. The question of loading on heavy charges for interest, depreciation, and supervision as an element in the cost of operation must be given consideration, and a method devised so that each element would never be more than a certain percentage of the total cost of operation; and in addition it would be necessary to arrange that the actual payment for the material must be made direct to the United States Govern- ment, the payment of the cost to the contractor to be made upon properly audited statements. The sole advantage of this plan is that the material will be handled by an individual or firm thorouglily conversant with the trade, and who can therefore locate the best market. The fact that the profits which would accrue to the individual or firm would depend upon the net revenue would be an incentive to the individual or firm to secure the highest price for this material, at the same time decreasing the cost of operation to the lowest practicable point. However, the maintenance of the staff necessary to protect the interests of the United States would be an expense which, although it would be borne by the contractor and would be charged as an element of cost, would nevertheless be an item of expense which would be avoided under the first plan. Therefore it is the feeling of this office that a thorough investigation of the elements of cost both to the Government and to the commercial concerns in this field should be made so that a report, supplementary to the report of the Presi- dent's Commission on Economy and efficiency, can be made so that it will be possible to further develop and increase the efficiency of a system which was inaugurated some six years ago, H. L. Baldensperger, Chief. Secretary of Commerce. DISPOSAL OP WASTE PAPER IX GOVERNMENT SERVICE. 15 Table A. — Amount of material and selling price of same for the year 1918. (Statement of the Public Printer.] Class. Description. Price per pound. Pounds. Per cent. Price received. Per cent. 1 2 3 Shavings from blanks and blank books Shavings from book papers (white), monotype keyboard paper (white waste in rolls) Shavings from book papers (white and colored) cover-paper trimmings, strawboard, and other binders' board trimmings $0. 0225 .021 .013 .014 .02 .0055 .008 .005 .02 .01 .016 .026 243, 484 1,604,852 2,179,357 2,195,363 4,827 6,338,268 14,990 750,380 9,824 401,153 2,518 1,222 1.77 11.67 15.85 15.97 .04 46.11 .11 5.46 .07 2.92 .02 .01 $5, 478. 39 33,701.89 28,331.64 30, 735. 08 96.54 34,860.47 119. 92 3,751.90 196. 48 4,011.53 40.28 31.77 3.88 23.84 20.04 4 Printed waste. 21. 75 5 .07 6 Wrapping waste (principally from roll paper), waste sweepings, book cloth, and buckram sweepings 24.66 7 8 Internal-revenue stamp stubs in books Cuttings from strawboard, pulpboard, tar board, and other binders' boards. .08 2.65 9 10 Twine and rope from bundles and sweepings. . Discarded publications, mutilated .14 2.84 11 12 Discarded account books or ledgers, mutilated. Cotton (bleached and imbleached), canvas (white and colored), linen canvas (un- bleached), and cotton drilling (drab) scraps. Total... .03 .02 13, 746, 238 100. 00 141,355.89 100 00 Note. — Last three columns computed in Wagte Reclamation Service. Table B. — Monthly quotations and average yearly price, principal lines of waste-paper stock. [Compiled from the Waste Trade Journal.] c^ cq «3 ■* ^ m t^ oj t-' o >, . Trade specifications. 42 tg ,^ t>. ^ to ft . ^ S ia.2 3 1-5 S ■< § 5 D < O o o < Ledger and writing $1.50 ?1 . 50 351 . 50 $1 . 50 SI . .50 $1.90 $2.2^ «2. 25 $2. 25 $2.75 $2. 75 n. 75 S2. 033 Box-board cuttings .45 .50 .50 .45 .45 .55 .60 .70 .90 1.05 1.05 .80 .666 No. 1 hard white shavings 3.15 3.15 3. 25 3. 35 3. 50 3.75 4. 75 4.80 5.25 5. 75 6. 00 5.60 4.358 No. 1 soft white shavings 2.15 2. 25 2.25 2.25 2.25 2.70 4.00 4.25 4.40 4.75 .5. 25 4.60 3. 425 Heavy books and magazines. . . 1.05 1.10 1.10 1.05 1. 05 1.05 1.50 1.50 1.90 2.10 2.15 1.45 1.416 New nianila cuttings 2.15 1.90 1.90! 1.90 1.90 2.0U 2.0U 2.00 2.00 2. 25 2.25 2.25 2.041 Bosus wrappers .50 1.90 4.80 ..50 1.90 4.80 . 50! . 45 1.90 2.00 4.80! 4. SO .55 2.00 4.80 .60 2.25 5.00 .70 2.50 5.00 .70 2.50 5.00 1.15 3.00 5.00 1.25 3.35 ,5.00 1.15 3.75 5.00 .95 3.25 4.75 2. .525 No. 1 cotton canvas 4 895 Table C. — Comparison of selling price under Government contract and average yearly price of waste material 1918. Government schedule. Waste trade specifications. Govern- ment price per pound. Waste trade average price per pound. Loss per pound. Loss per volume. Percent- age of total loss. Class 1 No. 1 hard white shavings " No. 1 soft white shavings C