We all got together and stayed together until we agreed on a plan in writing. Then instead of duplicating the work of these stations, we simply all pooled our resources for one project. ADMINISTRATIVE RESERVE Mr. CANNON. You are asking for the same amount as provided for the current year? Dr. JARDINE. That is right. Mr. CANNON. You are not requesting any increase there, but you have impounded 5 percent of this fund? Dr. JARDINE. No, we have impounded $10,000. Mr. CANNON. $10,000 out of $1,200,000? Dr. JARDINE. That is right. Mr. CANNON. That is a very material reduction from 5 percent. Dr. JARDINE. That is a very material reduction. We had commitments in regional laboratories before there was an impoundment order. We had commitments, Mr. Cannon, and it was just a case of whether we would set up the laboratories. Mr. CANNON. You do not have those commitments for the coming year, do you? Dr. JARDINE. We have the commitments, because the laboratories are established. Mr. CANNON. Well, you are aware that you had been asked for a 5-percent reduction this year, and naturally it was expected that you would anticipate a similar impoundment next year. Would not that put you on notice? Dr. JARDINE. I would not think so, as long as the act itself provides for an increment of $400,000. Mr. CANNON. I know, but the act is of no avail unless an appropriation is made. The President, within his rights, has requested a reduction of the appropriation. Dr. JARDINE. We can make a cut, by just closing a laboratory. Mr. MCFARLANE. I would like to ask you about the Budget reserve. I notice under the special research fund that there is a $10,000 reserve impounded. Can you get along all right without that money? Dr. JARDINE. We impounded the $10,000 in making up our budget. We needed it, but we were asked to impound that much and we did, and we just trimmed some other items to that extent. Mr. CANNON. May I say to the gentleman that the witness has just testified that that is only a very small part of the 5 percent that they were directed to impound. It should have been 5 percent of $1,200,000 and they only impounded $10,000. EXPLANATION OF ADMINISTRATIVE RESERVE OF FUNDS MADE AVAILABLE TO DEPARTMENT OF AGRICULTURE Mr. JUMP. Mr. Chairman, may I make a statement on that whole subject? Mr. CANNON. Yes. Mr. JUMP. In the first place, none of this money has been impounded. It is placed in reserve under control of the Budget Bureau, but it is in such a status that if an emergency arises at any time during the year, it can be released, with the approval of the Director of the Budget. Of course, it is expected that the bulk of such funds will be saved at the end of the year. But they are not impounded in a legal sense. Now, all Federal administrators that I know of, who are prudent and careful, invariably put aside some money. They do not spend every cent they have; they cannot afford to do it, because when you are administering work of the type and scope of these bureaus it would be downright foolish to spend up to your last cent. There must be some leeway, however small, for the eventually unanticipated emergency. So all of them try to operate their activities in such a way as to be prepared, if possible, for something that may be unforeseen. Otherwise, they would be running up here every 2 or 3 months to get a deficiency or supplemental appropriation. As a matter of fact, as you know, we come very seldom, five or six times in the course of a year, and usually on very important items, or to get money for some new legislative enactment. And, as I said yesterday, when we were called upon to make up this 10 percent, we made up the largest part of it from certain of the larger items; the $60,000,000 under "Conservation and use of agricultural land resources" was by far the principal item involved. Some other items had a full 10 percent taken out of them. But, if we had attempted to take a flat 10 percent from all items it would have been necessary to curtail vital public services, close field stations, dismiss. permanent employees, and so forth, because so many of these activities are on practically a fixed charge basis. Then, many others had just a nominal sum. We examined into the financial condition of agencies like the Library, that was here just a few moments ago, which really cannot afford to put up a cent. There are a number of others in the same situation. But we did not think it right to have even a single bureau in the Department that did not participate at least in principle in the idea of reserving something in the budget reserve over and above any leeway that they may establish within their own administration discretion; so we called upon certain ones to put up $500 and certain ones $1,000, and so forth, just in recognition of the principle that every agency ought to participate. Mr. CANNON. In response to the Executive direction, you did place in reserve 10 percent of the total appropriation for the Department of Agriculture? Mr. MCFARLANE. That is just the point that I was coming to. I notice that you have a certain amount placed in reserve. I wondered if you could prepare a table, Mr. Jump, covering the past 5 years-in other words, covering this administration-when you have followed a similar plan. You did, did you not? Mr. JUMP. No. This is the first time. This year is the first time that was done. Mr. MCFARLANE. I understood from talking to our clerk that previous administrations had set up reserves, too; I understood that under both Mr. Coolidge's and Mr. Harding's administrations reserves were set up. Mr. JUMP. In the Coolidge and Harding administrations, the Budget did make an attempt to place money in reserve officially, but it did not work out well. That money was not exactly in the category of this money, because in the case of this money we are expected to end the year with that as a direct saving; whereas, these reserves that were set up back in the Harding and Coolidge adminis 48997-38-10 trations were reserves that were in the nature of providing for contingencies that might arise during the year and while it is true that if no contingencies arose, they were to be savings, the Budget Bureau did not then have the control that it does now under the law. Mr. MCFARLANE. Then the President's Executive order this last June represents the first time we have attempted this particular plan? Mr. JUMP. Well on as widespread and as stringent a basis as this. It is pretty definitely understood throughout the Government service that these reserves are to revert to the Treasury on June 30, barring some very severe emergency. So far we have not had any of our reserved money released, except for the purchase from "section 32 funds" of surplus products, which is handled on a special basis between the Department and the Budget Bureau. However, we have one release that is in process right now, of a small sum of money to be used to check an outbreak of a serious pest in certain wild cotton plants in the South-$28,000. That has not come through as yet, but it is about due. That illustrates my point about the money not being impounded. If it were not for the fact that $28,000 were available in the reserve under the Bureau of Entomology, the President, I feel pretty sure, would feel required to send up a supplemental estimate, for the first deficiency bill, to take care of that matter. Mr. MCFARLANE. Then we do not have any reserve that has been impounded in previous years? Mr. JUMP. Well, yes; in previous years. There were some under the economy acts. Mr. MCFARLANE. I mean of any large sum. Mr. JUMP. We have not any that would compare with those of this year; no, sir. This 10-percent reserve is on a scale that I would say is unprecedented, taking the total of the agricultural appropriations into account. Of course, I am not informed about the other Depart ments. Mr. CANNON. Last year, in response to widespread sentiment on the hill, as indicated by the introduction in both Houses of resolutions providing for arbitrary reductions of from 10 to 15 percent, the Presi dent submitted that he had that authority under the law, that it was not necessary. He approved these resolutions, because it would indicate the support of the legislative branch of the Government, but he contended, and properly so, that under the law he was authorized to reserve or impound any amount. Mr. JUMP. That was the power that was given the Director of the Budget Bureau by Congress in 1933, under the reorganization authority given to the President by the Economy Act, to approve apportionments. Mr. CANNON. And in response to that, this year, for the first time, he has attempted-and I think he should have the support of the Congress and I hope he will have the support of this committee-to bring about a very minor reduction, 5 percent. It would be hard for him to attempt to save anything less than that. And in view of the condition of the Budget, and in view of the fact that for 8 years we have spent more than we took in, that we have exercised no economy at all, so far as actual reduction of expenditures of the establishments is concerned, he has asked for this small reduction. In compliance with that, our Department of Agriculture has-and I think they are entitled to great credit for doing it has done that. It has worked hardship on certain items. They have compiled and have reduced their total appropriation 10 percent. But, of course, they could not apply it blanketwise. So he went through and on some he cut a little deeper than 10 percent, and on others, where it was not possible to exact the entire 10 percent, he took a smaller percentage, made a nominal reduction, as was done, as I understand, in this case. This was a purely nominal reduction, $10,000. Mr. MCFARLANE. This is what I had in mind. I wondered if Mr. Jump could prepare for us the amounts that were impounded last year, in order that we may have a picture of the savings that are being made. Mr. CANNON. The gentleman submitted a table yesterday. Mr. MCFARLANE. In this table is the 1938 budget reserve. But this is the point that I have in mind, to have a statement hereadding another column to this statement, perhaps showing, say, for last year or the year before, whichever figures are available, just how much of these reserves have reverted back into the Treasury. UNOBLIGATED BALANCES OF APPROPRIATIONS Mr. JUMP. You would like a statement of unexpended balances? Mr. MCFARLANE. That is it, unexpended balances. Mr. JUMP. Last year? Mr. MCFARLANE. Yes. Mr. JUMP. Very well. Mr. CANNON. I think that would be an excellent statement. Mr. MCFARLANE. That would give us some information on it. (The statement referred to follows:) Unobligated balances, Department of Agriculture, as of Feb. 1, 1938, under "Regular funds," fiscal year 1937 1 Includes unencumbered balances of $6,576 for "Examination of estimates in the field" (congressional travel) and $4,384 under nonrecurring item of $6,000 provided in 1937 for window blinds, South Building. The 1938 appropriation was reduced by the amount of this nonrecurring item ($6,000). Reserve. |