1917.: .' CONGRESSIONAL' REOORD-SENATE.

, 1461
Mr. SMOOT. Yes; if it were .legislated in that way, it from Utah, if he will, permit me to do so, what he thinks is the
would be.' distinction between general'legislation and special legislation"
1\ h'. SlJTHERLAND. The authorities have said over and Does he think that everytliing that is not generai legislation
over again that we are to look at the'substance of the proposed has to be, so to speak, private legislation1
legislation and not at the form, and ,,'hen we come to do that Mr. SUTHERLAND. No; it may be distinguished' in a
and anal5·ze this pr~vision w!l. find that it does, two things: variety of ways. ' " ,
Fii'st of all, it creates an office, and that, is a legislative act, , Mr. BRANDEGEE. What would be some speCial instances
because the office could not exist until Congress had spoken; of speCial legislation which could go on an appropriation bill?
and then it provides for filling the office by an appointment. Mr. SUTHERLAND. It may be distinguished along the line
Obviously this piece of legislation creates an office, and it is that it applies geographically to the whole country or that it
general legislation. I never have heard it doubted heretofore applies only to a limit~d portion of the country. Legislation,
that the cl'eation of an office was general legislation. There for example, that 'applies to the whole State, in the case ot
are precedents here, one after another. Here is one that catches State legislation, would be general legi,slation. If it applied to
my eye, on page 134, Forty-seventh Congress: a local subdivision, it would be special legislation. But' it is
'The President pro tempore (Mr. Davis) {leclded that an amendment sufficient for this purpose to say that, so far as I know, it nevel;
to the naval appropriation bill adding 140 surgeons, of whom 50 shall has been doubted that the creation of an office by legislation
be designated as surgeons, of the first class, etc., was 'not In order was general legislation as distinguished from special legisla-
under Rule XXIX, and was general legislation to a general appropria-
tion bill. . tion. It is not always easy to draw the distinction. It is one
On appeal, the decision ,was sustained-yeas 26, nays 21. of those difficult things where the c1ivision, instead of being a
Now, if it is general legislation to provide for an additional line, is a zone. You may be quite cel'tain, when you are out-
140 surgeons, it is general legislation to provide for an add i- side of the zone on one side, that you have got genernl legisla-
tion~l 1 surgeon. The fact that there is only one in the class tion and quite certain, when you are outside of the zone on the
does not prevent it fl'om being a class. other, that you have' got speCial legislation. Now, interme-
Mr. SMOOT. The Senator takes the position, then, that no diately there are a number of cases which it is som,etimes diffi-
increase can be made in an office on an appropril\tion bill? cult to assign to the appropriate class; but here is a case
Mr. SUTHERLAND. No; the Senator does not take that which by all the authorities falls clearly outside of the zone
pOSition. 'Ve can increase the salary paid to an office already on the side of general legislation. So it is unnecessary to
in existence, but we can not create a new office. They are two refine about it.
vel'y distinct and different things. Mr. HITCHCOCK. Mr. President, I should like to ask the
1\Ir. SMOOT. I recognize that entirely. There is not any Senator from Utah if he does not think there is a clear dis-
question about that, and that has been universally held. But tinction between merely adding a clerk in a department and a
the Senator takes the position, then, that the only way in which provision which empowers the President to make an appOint-
we could have an assistant to the Secretary of the Treasury is ment, subject to the confirmation of the Senate?
by a general bill creating the office? Mr. SUTHERLAND. There is a very clear practical dis-
1\11'. SUTHERLAND. The only way is to pass legislation; tinction, and it is quite likely that there is a distinction in the
anti when the legislation Is passed it may becqme a question law; but, as it seems to me, it is not llecessary to refine upon
as to whether it is general legislation or special legislation- it, because we have here a case where by the proposed legisla-
general legislation as distinguished from special, or general tion an office is to be created which is to be filled by presiden:
legislation in the sense that it is public, as distinguished from, tial appOintment. Now, if that is not general legislation, I do
private legislation-and if it is proposed to an appropriation not know what genernl legislation is.
hill there is a rule which says that if it is general legislation it The PRESIDING OFFICER. The question is, Shall the
will not be admitted. ruling of the Chair stand as the judgment of the Senate?
l\fr. OVERMAN. 'l'his is not general legislation. , The ruling of the Chair was sustained. ,
1\11'. SMOOT. There is not an appropriation bill passed but MI'. OVERMAN. Mr. President, I desire to put in the REC-
that there is the cI'eation of some kind of an office by the ap- ORD the remarks made' before the Appropriations Committee by
propriation bill. the Secretary of the Treasury himself in regard to the neces-
Mr. GALLINGER. A point or order could be made against Sity for having this office created, so that Senators may see
e\'ery one of them. that the reason why the committee put it in was because it was
1\It-. S1\IOOT. Of course; if it is general legislation, then the just and right and ought to be done.
only way you can create a new office is to pass a bill through I therefore ask to have the statement incorporated in the
Congress creating it, and then appropriate the money to pay RECORD.
whateyer salary is attached to it. The PRESIDING OFFICER. If there be no objection, it will
1\Ir. SUTHERLAND. We do that sometimes, but it is done be so ordered. The Chair hears no objection.
because no one objects. If the point was made--- ' The matter referred to is as follows:
MI'. OVERMAN. Could we appoint a clerk1 Would that be ASSISTAXT TO THE SECRETARY OF THE TREASURY.
general legislation?
Mr. SUTBEHLAND. How does the Senator mean? . Secretary McADOO. Gentlemen, there Is one other itom here which I
confess I present with an extreme degree of diffidence, and If It wero
Mr. OVERMAN. Instead of saying 'that there should' be not practically Imperative I would not present It. That is the question
40 clerks for a certain department, suppose we put in 46; would I presented here two years ago to the House committee, of an assistant
that be general legislation? ' to the Secretary of the Treasury.
Sen!ltor OVERMAN. Yon have a letter on that, also?
Mr. SUTHERLA.i\,D. Additional clerks? Secretary MCADOO. Yes.
1\k OVERMAN. Yes. Senator OVERMAN. Is that an official estimate?
MI'. SUTHERLAND. I think undoubtedly it would be gen- Secretary McADOO. That Is my letter, transmitting the official esti-
mate to the President of the Senate.
eral legislation if it is the creation of a new office. Senator OVERMAN. You want that to go into the, record?
MI'. OVERMAN. Well, if that is so, it would be the end of Secretary McADOO. Yes; you can put In the estimate and the letter
all legislation. We never would be able to keep the Govern- also If you wish.
(The Jetter and estimate referred to arc as follows:)
ment going. The wheels would be clogged. The Government . TREASUllY DEPARTMENT, OFFICE OF THE SEClll'lTAlty,
could not move. 'Ve could not get along at all. We never could' lV ashinyton, Deccmbcr 26, 1916.
pass general bills through Congress for these clerks. That The PRESIDEXT OF THE SEXATE:
would be the enu of it. This is simply special legislation; it is -SIlt: I have the honur to submit herewith for the favorable action
not general. of Congress an estimate of appropriation for salary of an assistant to
'the Secretary of the 'l.'reasury, to be appointed by the Secretary, with
Mr. SMOOT. If that were the case, Mr. President, the House compensation at the rate of $5,000 per annum, the same to be available
of I~prescntatives might just as well make up the appropria- from the date of the approval of the act. '
tion bill and have it become a law in that shape and never The duties that have been recently Imposed upon the Secretary of tho
Treasury through the creation of the Federal Heserve Board, the, Fed-
come to the Senate of the United States for amendment by eral Farm Loan Board, the new tariff and Internal-revenue legislation,
them. . ,the Income tax, and taxes upon Inheritances, munitions, etc., and the
Mr. GALLINGER. Oh, well, if the Senator will permit me, promotion of Increased financial and commercial relations with the
several HepubUcs of Central and South America, together with the
an apl)l'OI)l'iation bill is not entirely composed of clerks. There tremendous growth of the business of the Treasury Department, make
are some other things in appropriation bills. It Imperative that the Secretary be granted addltlonai assistance, and
Mr. OVI~Rl\IAN. There is not much else in the legislative I can not too strongly urge upon the Congress the grantiug of this
request, Inasmuch as tbe Secretary himself and his three assistauts and
hill. ,their respective staffs are drl\'en to the utmost to discharge the duties
1\lr, BHANDEGEK Mr. President, I have heard this ques- of their offices. .
tion l.liscll~sed m'el' all(l over again as to what was general Respectfully, W. C. lIICADOO, Secrctary.
leg-i;;.t::tion. r nCYCI' II:! YC heen able to form an exact standard Secretary MCADOO. Not only has the worl< of the Treasury Depart-
ment increased tremendously In the last three years, but new duties
whU', it \\w:; ;:;nfe to o]l~.J'ate un(]el'. I wish to ask the Senator have been Imposed upon the Secretary which arc very exacting. For

HeinOnline -- 54 Cong. Rec. 1467 1917

1468 CONGRESSIONAL .REOOR,D-SENA~:El. JiANUARY 16;
instance:\: take' the Federal reserve act. Under that law the Secretary The next amendment was" on page 41, after line 17, to strike
of. the "rea~ury is., chairman. of the, Federal Reserve Board, being a i out: . '
member of the board ex officio. While the Secretary can, not atte~d.
every meeting of the board, he must attend, meetings frequently, and I i . Federal Far'm Loan Bureau: For salaries and expenses under' tile F~d.
do attend just as often ns'I can. Sometimes those meetings; require i eral Farm Loan, Board createil by the act approvedi July 17, 1916,
two hom·s,.·nnd sometimes mOJ:e out'of the day. ' : including the sal1iries of four members at the rate' of $10,000 each per
In addition to that, the Federal farm·loan act created the I!'ederal : annum, and their actual necessary traveling, expenses and such salaries,
Farm Loan Board as a new bureau In the Treausry Department, whiCh, i fees; and expenses as are authorized by said' act! including farm·foan
of course; must be administered; undel"' the' direction of' the Secretary. 'registrars, examiners, and' such. attorneys; experts, assistants, clerks,
'.rhla law also makes the Secretary of the Treasury a member, ex officio, laborers, and other employees as the· Farm Loan Board may find neces·.
und chairman of the Farm Loan Board. i sary, $300,000. A detailed statement of expenditures hereunder shILl! be
That work requires a. great deal of time and patience, and as tim.e I made to Congress. "
goeR on the Secretary of tile 'rrcasury' w!l1 Ile obUged to give a. great , And'to insert:
deal· of attention to, those two· organiZlLtions. It Is Ilterally impossible
for. me to keep up with aU of. tile work which th~ Secretary has to do Federal Farm Loan Bureau: For four members, of the lJOard, at $7.500
with the present assistance I \lave. I must have, In order to be' full;V each; chief, bond division, $3,000; secretary to the board, $3,000; pUll.
cll'ec!:iyc in the work, an assistant who is at my hand to, taltc' up, the i lic!ty agent, $2,000 -i four private seeretarles at $1,800' each; clerks-
mo~t important parts of the work. I!'or instance, tll~re are a great : 1 of class 4, 1 $90u, 3 at $720 each, 1 $600; clerk' and stenographer,
mall v matters relating to official corrcspolld'ence for which I should have ',$1,200; stenographers-T at $1,000 each, 4 at $900 each, 3 at $720
a mnn sitting next to· me, intimately familIar with, the matters an~ . each; messenger; and 3' assistant messengers; in all', $67,620.
baving full lmowledgc of nil that Is going on· In tire Secretary's office" so·, For salaries and expenses under ·the I!'ed'eral Farm Loan Board ere·
that 110 may relieve the Secretary of a lot of tile detaiL work which he ated by the act approved· Jnly 17, 191!6, including the actual necessary
now 'has to try to do himself. I thinl' that any Secret~ry of the Treas· traveling expenses of the· members of the boarll and' such salaries, fcc".
ury will be more efl'ective in the' future if he. can devote Ills time' and and expenses as arc authorized by said act, inc1u!Jing farm·loan regis'
his abilities to the larger affairs of the departmenf. I can not get that trars, eXlLminers, and such attorneys, experts, assistants, clerks, laborers.
relief through: any of the assistant secretlLrles of, the '.rreasury, because and other employees as the· Farm Loan Board may find necessary, $182,:
each of them, under the organization of the department, has a very 380; in all, $250,000. A detailed statement of expenditures hereunder
large division of' the bureaus under him, and Ile has got· to· administer shan be made to Congress. .
those particular bureaus. ))'or instnnce, we· have an assistant secretary, Estimates In detail for aU expenditures. under the Federal Farm I~oan
in charge of public buildings and ml,,,,,llaneous offices. He has abso· : Bureau for the fiscal year 1919\ ancl annua\:ly thereafter; shall be sub.
lutely no t.ime to devote ·to any other · , o r k . . ' mUted to Congress in the annual Book of Estinuttes.
'l~hcn we have an Assistant Secl·ot',,: .. in charge of the fiscal bureaus. 'f "rOLLIS' ",r.. 1?·d I k .
Under him are tile Internal·nev(]ll1l<J Hcrvlce, the NaHonall' Banlling lV r . .<: • lv.u:. res 1 ent, ma e the pomt of order that
Hystem of the country, In· regard to which the Comptroller of the Cur· this amendment changes, existing law and is not estimated for,
rency reports to the Assistant Secrc.tury, and many. other important, and pending the· decision of thut point of order I deSire to say
Pl~~~rth~tel~ecgg~~iriut'tnetl~e~'l~~a~~,~i~fi\c~~ devote to the matters which • to the Senate that" this. Ipatter comes, as a cOlllpl~te surprise 110
Then we have· another Assistn:nt Secretary who has charge of the : me. It is a matter which I have· very much. at heart, and 1
Customs Division. His time Is fully absorbed In that work. : want t o - '
So the' Secretary of the Treasury Is coustantly hampered, and' in' fact· M OV' T,' ",rAN 0 f S t
finds It Impossillle to meet the demands of the thousand' and' olle de tans I £ r. .dJR1Y.t. ' ne minute, i . the ena or please; Does,
which he now has to consider in the dlllly work of the 01llce; and' which i he mean the,\vhole amendment?
it would take a long time to describe to you. The correspondencp of· Mr. HOLLIS .. Yes; I mean the whole· amendment.
the Secretary's o1llce alone· is a procllglous undertaking, and many M O\TERl\"'AN D tl S t tl d t f·
people resent It-anel I think It is not unnatural-H the replies, to· their £ 1'. < ~ I. oes· le ena or mean. le amen lllell IX·
letters are not signed by the Secretary himself. They do not thin I, that ing the salaries of the clerks, and so, 'on, or simply the reduction
thc matter has received attention unless It gets to the heud of the o:fl the salaries of the members of the board to $7,500 each?
department, So that if the Secretary lIad only the two new activities 'U HOLLIS mh . t i ·f th S t ·11 ·t
which]; have mentioned added to 'his muny duties, I should think. that ",,,,r.· ' .. "" e· POlll'; S, 1 e· ena or. WI perml me,
enc assistant for which·I am now asking. is imperative.. that 1 just. want to make-'-
In addition, during the last two years we have been maklng, as you Mr. OVERMAN. The Senator has the floor, and I am inquir·
know, a very earnest effort In the Tr~asury Department to improve our i of 11· , Does tIle Senn·tOI' m ll'e tIle point as to the whol
commercial and financial relations with South and Central American ng lhl. ,u: l' , . ' e
countries. 'Out of that grew the first Pan American financial confer. amendment?'
ence of 1915, which was held by authority of Congress, and. wllich :rilr. HOLLIS. The point is that I have not llUd. an opportullity
created an international hIgh commission' composed of nine men from to examine it, and I do, not kno,v, whether the point' of orlier
each of the Latin American Republlcs and the United States, the ·mln· ,",oulel, ll·e. to tIle wllole, n.mendruellt or not. I am (wing to :lsk
Ister of finance or the Secretary of the '.rreasury of" cach country being '" u ~'
chairman of each section or me commISSIOn. '.rhe commission met ,at the Senator to allo,,! this amendment to be pa::;sed over, and pmit·
Buenos Aires last April and' effected an organization by the creation d t·t t tl t I cn I n au OPI)Ortunitv t)
of a central executive council. The. delegates at Buenos Aires pam pone un 1 o·morrow, so la "n l"ve .. '. (
the United States the compllment,' as well as the coul'tesy, of electing look it up, : ' , ,
the officers of the United States section of the interna.tional high com· Mr. OVERMAN. I hnve no objection to that. Let it j)e passed
mission as the ollicers of the central cxecutlve council. So long as that over,
organization continues, and unless a. change should be made, the Sccre" 1\,r." •. HOi':L"S. Tlle~~"ore, I. aok u'n,nn';""OHS consent thut the
tary of the Treasury wlll remnln at tile head of that commission'" and lY.LL "" '" ."'" "'''~
as iong as the commission keeps Its headquarters in the city of Wash· entire amendment be passed over, with the point of order pend·
ingtoJl, I feel that that work'is of the utmost Importance to the country ing; to be taken up to-morrow.
at It~~s j~tn~~fJ:·:it is going to 'be necessary to maintain this as' a perma. The PRESIDENT pro tempore. Is there objection'! The
nent organization, but certainly at this time and for the next two years Chair hears none,
it will be of great value to contlnue·1t. Diplomacy, as you know, deal.s Mr. FLETCHER. I raise the further point'of order tlgai.nst
more partlcul1irly
commercial with. political
and financial questions,
questions arc not'between
s'o' muchgovernments,
the subjectand
of tl. le amen d men t th nIlS t·t· genera11egIs . 1 t·
a 1011 on' ,a III ,'I
n. JP r opri l.1(
It· III
diplomatic attentl'on and negotlatlolli. Having this direct touch, with bill. The whole an1endment violates that ru:le.
the ministers' of finance of the countries of Latin. America thuough' an The. PRESIDENT pro tempore, '.rhe C\'lair .understands that
organization autllorlzed by each country, to look after the commercful ! nnder unanimous consent. the amendment is, passed over.
and financial questions, arising' bet\veen them and, this· counery, we
have the means of rather direct cOllllilnniCation and of direct action, Mr. HOLLIS .. And that it goes over until to-monow?
and as we go along we find that we are establfshlng relations of the Mr. OVERMAN. It is underst00d that it goes over until
utmos't cordiality throu.,h these se~tlons and that weare getting ma)1y 'to.morrow. ..
tangible and practical results. In my annual report for 1916 r Wive
referred somewhat coplousl.y to. the work that has' been done recently, The· next amendment WtlS, 011 page' 44, after line 6, to insert:
and the commission itself has made a report to· the· Presi<1ent which,' For law books" including' their exchange, to •. be' expended under I tho
has been filed with, the Congress. For the time' being this worle imposes cllrectlon. of, the Comptroller of the'Treasury., $250.
npon the Secretary a. very large responslbllLty and·a very large bm'dkn,
but as I regard that as perhaps of It temporary character I do not urge Tbe amendment was· agreed to.
it as a special reason, for the appointment of an assistnnt to the· Secre· The next amendment was; OIl page 45, line 4" after the wor(l
tal'Y of the Treasury. l am requesting it on· other grounds. ... clerks" to strike: out" clerks-13, of class 4, 24 (including,1
The reading of the bill was resumed. . transfel:recl from register's' office) ," and, insert "14: (includi.ng
The next. amendment w:as, on pag~ 37, line 25, after the ,yards l' transferred; from register's office) of class 4, 23," and. in line
" in all," to strike. out" $61,420," and, insert. " $6S,086~67." : 11, nfter the words ".in all," to strike out" $152,910 " and insert
,Mr. OLIVER. Mr. President, I suggest that that amendment "$-15S,lHr," 'so' as to make the clause, read:
is not necessary now, since we, struclt out the prov.ision fOl" all' Office of Auditor' fon' Navy Depar.trnent: Auditor, $4,00,0·; chief cIeri,
assistant. to. the: Secretary of the· Treasury. ,and chief: of cllvfslon.,,· $2,250; law clerk, $2,.000;, ,chIef: of division,
, . 82000· assistant cMe! of division. $2,000; clerks-14 (including' 1
Mr. OVERMAN. No. I ask. that the clerks at. the d~sk· be transfe'rred from register's office) of class 4, 23 of' Class 3; 21 of clas!!!
allowed to· arrange the· totals after the ·bill is, passed.. That, is. 2, 25 of class 1, 8 at $1,000 each, 7 at $900 each (in~ludl~g 1 trans,
usual. . ferred from rcgister.'s.ollice) i helper, $900;. messenger; .] aSsultant meso
. sengers'; 3 laborers; in all', ;:0153,110.
The' PRESIDING OFFICER. In the absence of obj.ection; The mnendment was. agreecl to. , ,
that order will be Illade. . The next amendn,l. ent was, on page 45, line 17, after the word
MI,; OVERMAN. III this case, howev.er, we should cllsag):"ee k tb
"nssorter," to insert "(unap))ortione(l)'" so as to ma 'e e
to, the anlCndrnent. clause react: , '
~I:he PIt]~SIDING Oll'FICgn. The question is on agreeing to Omee of Auditor for Interior Dcpa,·.tmcnt: Auditor, $4,000; ~hief
the a m e n d m e n t . c l e r k · and chief of division, $2,250'; law c1crR., $2,000; chief of dlVlsl·
The a'lil(!llillll()Ilt was rejected. 'slon, $2,000; clerks'"-14 of class 4, 17' of class a, 17 of dass :!, 22 ot

HeinOnline -- 54 Cong. Rec. 1468 1917

1917. CONGR,ESSIONAL REOORD-'SENATE. 1469·
class 1, 12 at $1,000 each, 11 at $900 each; check allsorter- (unappor- There are nine Independent· Subtreasuries provided for In the
tioned). $900; 2 messengers; 2 assistant messengers; laborer; In all,
$139,430. bilI, 'In five of the places we ha\'e a Federal reserve bank,
The amendment was agreed to. and there is no reason under the sun why the Federal Govern-
The i'eading was continued to page 48, line 25. ment should not carryon its fiscal operations at those points
Mr. OVERMAN. I offer a committee amendment nt this where we have a Federal reserve bank.
point. It makes no change in the appropriation whatever, but Let me call yOUl' attention in detail to this matter. At Bos-
is merely transferring one clerk to the propel' place. ton there is a Federal reserve bank. The bill appropriates
The PRESIDENT pro tempore. The amendment will be $46,570 to maintain a Subtreasury or Independent Tr~asury at
stated, that point. There is no need of that. It is a duplication and
The S~:CRETARY. On page 48, line 23, strike out the word nothing else. The Government can carryon all its fiscal opera-
" two" where it first occurs and insert in lieu thereof "one"; tions in the reserve bank at Boston, and there is no occasion for
in the saine line strike out" one" and insert in lieu thereof the Independent Treasury or Subtl'easury system at Boston.
" two"; and in line 25, in the total, strike out "$27,300" and I come next to Chicago. Tilere is another Independent Treas-
in~ert "$27,100," so as to read:
ury. Chicago undel' the Federal reserve law has a Federal
reserve bank, and there is no reason why the Federal Govern-
Ollice of Register of the Treasury: Register, $4,000; Assistant negls-
t(>r $2 ;;00 : chief of division, $2,000; clerks-1 of class 4, 2 of class 3, ment can not carryon its fiscal operations in that Federal re-
2 of cl~Rs 2, a of class 1, :3 at $1,000 each, 3 at $900 (·nch; messenger; serve bank. There is no occasion for the maintenance of the
laborer; In all; $27,100, Independent or Subtteasury system at that pOint.
The amendment was agl'eed to. The expense for the Subtreasury ut Chicago is $71,420. as
'fhe reading was continued. appears in the bill.
The next amendment was, on page 51, line 6, after'" $1,500," New York is unother place where there is a Subtreasury or
to insert "private secretary for captain commandant, $1,400," Independent Treasury, \Ve have a Federal reserve bank in
and in line 10, after the words" in all," to strike out" $72,710 " that city. There is no occasion to maintain an Independent
nnd insel't "$74,110," so as to make the clause read: Subtreasury as we did under the old system, and there is no
Ollice of the Coast Guard: Two chiefs of division, at $3,000 each; reason under the sun why the Federal Government can not
2 assistant chiefs of division, at $2.200 each; title and contract clerk, curry on its fiscal operations through the Federal reserve bank
$2.000; law and contract clerk, $1,800, an(l $200 additional while the at New York. The totul cost as appears from the bill of the
ollice is held by the present Incumbent; topogra~her and hydrographer,
$1 800' civil engineer. $2,250; draftsman, $1,uOO; private secretary Subtreasury system at New York is $154,460.
for captain commandant, $1,400; derks-4 of class 4, 9 of class 3, St. Louis is in the same category. We have a Federal reserve
5 of class 2, 8 of class 1, 7 at $1,000 each, fi at $900 each; 2 messen, bunk thel'e.
gers; asslstaut messenger; laborer;. In all, $74,110.
Ml'. OVEHMAN. Mr. President--
The amendment WitS agreed to. The PHESIDIi:NT pro tempore. Does the Senator from
'fhe next amendment was, on page 52, line 24, after the word Minnesota yield to the Senator from North Carolina:
"Chief," to strike out "$4,500" anti insert "$4,000"; on page Mr. ·NELSON, Certainly.
53, line 1, before the word" clerks," to strike out" $3,500" and Mr. OVERMAN. Does the Senator move all amendment?
in>;el't "$3,000"; and in line 3, after the words "in all," to Mr. NELSON. I will move to strike it out.
stl'ike out" $17,120" llnd insel't "$16,120,". so as' to make the Mr. OV.I<JRMAN. I was going to say thnt I shall not resist
<:lause rend: it, and we will let it go into conference. \Ve ngreed in the
Secret Sen-Ice Division: Chief. $4.000: assistant chief. who shall cOlllmittee that vrobably this will be done next year, if it is
dlscbarge the duties of chief clerk, $3,000; clerks-1 of class 4, 1 of
class 3, 2 of class 2, 1 of clnss 1, 1 $1,000; assistant messenger; in all, not done [his year; but we did not have faets sufficient to
$1(;,120. gUHl'Hntee us iu striking it out after the OPPOSition made by
~:he amendment wns agreed to. the Secretary of the Treasury, but if the Senatol' will inti'o-
'I'he next amendment was, undel' the subheall "Collecting in- dUl!e an amendment to strike it out I shall not resist it.
ternal revenue," on page 59, line 5, nfter the word "law," to MI'. N1<JLSON. I am just explaining where the Government
strike out" including pel' diem not to exceed $4 in lieu of sub- can save $332,000 a year. There is no reason why the Govern-
sistence," so as to make the clause read: ment ean not carry 011 its fiscal operations through its own
ll'or salarle., anI] expenses of 40 revenue agents rorovhled for by law, bank at that city. The cost of the Subtreasury system at St,
fees and expenses of gaugers. and salaries and expenses of storekeepers Louis is $33,860. The Slllue holds good as to San Francisco,
and storekeeper-gangers, $2,200,000. We have a Subtreasury system at San }'ranc[sco provided for
The amendment was agreed to. in the bill at a cost of $25,720. We have a Federal reserve
'fhe next amendment was, in the item of appropl'iation for bauk at San Francisco.· Here are five cities-Boston, Chicago,
"Collecting the income tax," on page 59, line 20, aftel' the word New York, St. Louis, and San Francisco-where we have five
"district:,:," to stt'ike out" including not to exceed $4 per diem Government reserve banks, uud there is no reason under the
in lieu of subsistence," so as to read: sun why the Government should not carryon its fiscal opera-
Collecting the Income tax: For expenses of assessing and collecting tions through those banks. There is no necessity for keeping
the Income tnx as provided In '.ritie [ of an act entitled "An act to the Indepell(lent TreasUl'Y system alive in those cities.
Increase the revenue, an.] for other purposes," approved September 8,
1916, including the employment of agents. inspectors, deputy collectors, Mr. VAHDAMAN. Mr. President--
clerks, and messenger. in the District of Columbia and the several The PRESIDEN'f pro tempore, Does the Senator from
collection districts, to be nppointed hy the Commissioner of Internal Minnesota yield to the Senator from Mississippi:
Ue\'l'nue, with the approvnl of the Secretary of the Treasury, nnd the
purchase of such supplies, equipment. mechanical devices, IInll other Mr. NELSON. Chtainly, I yield. .
articles as may he necessary for use In the District of Columbia nnd 1\[r. VAI1DAMAN. Will the Senator state what are the pe-
the several collection districts, $1,700,000. culiar functions of the Subtreasuries there: Is there any reason
The amendment was agreed to. why--
The reading of the bill was continued to line 20, page 62.
Mr. NIDLSON. Mr. President, I desire to call the attention of
Mr. NELSON. If I recall the date, it: seems to me that they
were established in the administmtioll of President Van Buren.
the Senate for a moment [md especially the Committee on Ap- I am not clear about the date, but they were inaugurated by
propriations to the fact that we have reached a point in the bill the Government to relieve a situation which had grown out
where they can easily save $332,000 in this appropriation bill. of the fact that the Bank of the United States was extinguished
During the existence of the last Bank of the United Stutes an(\ we had nothing left except a system of State banks. The
the fiscal operations of'the Goyernment were carried on through Goverulllent established Subtreasuries in these cities in ordel'
that bank. Aftel' the bank suspemled and went out of exist~ to carryon its fiscal operations and to distribute the money
'3l1ce as a sequel to that there was established what we call a in the country so as not to have it all congested at one central
Subtreasury system, 1111 Independent Treasury system in a num- pOint. Thut was the purpose and that is what has kept the'
ber of cities of the country thl'ough which the Goyernment cal'- system alive: There was some justification for it up to the
ried on its fiscal opel'Utiolls. That system still remains, time we crented the l.'ederal Reserve System, .
Undl',l' the act which we passed two years ago establishing Now, under the Federal Heserve System the Federal reserve
the l"erlerai Reserye System we provided for reserve banks. bunks that we have established are .Governll1ent institutions.
There is no occasioll in those cities whel'e we have a Federal The Secl'etary of the Treasury is authorized. to deposit as he
L'eserye bank for the Government to maintain a Subtreasury sees fit all the Government funds in' those institutions and to
such as we have now. The Independent or Subtreasury was es- check upon them. Such being the case, these reserve banks
tablished for' the l)lll'pose of having a place whet'e the Govern- can perform all the functions. that are required, and there is
ment in the large cities could CatTY on its fiscal operations and no use to retain the Subtreasury system at those places. .
for the Vllrpose of distributing the money of the country in the 1\fto. VARDAMAN. I quite agree with the Sennt'or from Min-
Subtreasuries instend of having it all congested and piled up nesota, The thing I can not understand is how they hapI,encd
here in Washington. to be retnined in the bill. It seems to me-

HeinOnline -- 54 Cong. Rec. 1469 1917

 147(]) OON,GRESSIONAL RECORD-.SENATE. JANUARY 16,
MI:. NELSON. ;r .canaccount for .that, The bill came from Louis, and :San FranCisco-where 'they 'have :i ,Federal reserve
the House in that ~VaY, If .tlle Senator wiU allow :me, 'I will 'bank, there is no occasion for maintaining this Independent or
state that tlle total amount at these five places is $882,000, Subtreasury system.
Mr. VARDAMAN, That is the cost of running the Subtreas- I want to say fnrtheJ' I express my indi,idual view-I belong
uries? ~o this side of the Chamber. It is up to your side. If you are
Mr. NELSON, Of nmning ·these Subtreasuries, which are 111 favor of'economy, as .you say you are, 'if you are in favor of
· utterl~ needless, utterly useless, There is a third of a million retrenchment, there 'never was a better opportunity than you
dollars tllat coulc1 be saved as easy as not. . have.in this 'b1l1 -to cut out in one cut a' third of a million dol-
Mr. VARDAMAN, Well, it ought to be done. lars, 'without doing 'harm to anybody, without injuring the public
1\'11'. NELSON.' Subcreasurles are provided in the bill at four service in the least, and leaving the public service intact with
other places for which there lllay be some justification, bec!1Use all the financial eqUipment that it needs in the cities I have
ther~ is no :reserve bank in those cities. They are Baltimore, named. In fact, whIm the bill creating the Federal reserve
Cincinnati, New Orleans, and Pltillldelphia ; but the total amount banks was under consideration it was a serious question at that
for those four Subtreasuries Is only $131,390. As I said, there time whether we ought 'not to require the Governmcut to carry
lJIay b.e some excuse and some justification in those four places on all its fiscal operations through the reserve banks; that is"
,where there is no Federal ·reserv:e bank to retain the Subtre'asu- to haye the revenues go 'into the banks and then the Government
.ries'for the present, .but there certainly is no ,occasion to retain check against the l'evenues and in that way keep the money
them in the cities where we have a reserve bank. of the country in circulation. .
So if the Senate wants to .economize and ·do no injustice to Mr. ROBINSON. Will the Senator yield for a question?
flnybody, but a benefit to the Government, it ought to strikeout 1\'[r. NELSON. Certainly.
{1'Olll the bill Boston,Chicago, New Yor.k, St. Louis, and San Mr. ROBINSON. The Senator realizes that it is necessary
IPrnncisco, because each of them has a Federal reserve bauk, to 'have legislation upon tile subject transferring the functions
~vhile they might lea1'e in for the present, ·though I 'hardly think of the various Subtreasuries to the reserve banks and that it
H is llccessm:y, the 'ollier four places, that have no reserve 'bank. requires some degree of careful consideration?
The .total Hlnount at tllOse four places is only $181,390, while at Mr. NELSON, I do .not llilnl, it is necessary at all because
tJlC five 'places that have:a reserve bank it is upward of a third the Secretary of the Treasury under the Federal reserve law
of a .million donal'S. has the right to deposit the Federal funds in the reserve banks,
I call the attention of the committee to this because I belie¥e and if you ,remove entirely tbe Subtreasury system you have
w.e ought to ,persist in u spirit of economy, and tbel'e is :no ·oc- the reserve banks and the Secretary of the Treasury has ample
casion to Illaintain these Independent TreaslIl'y systems \vhere power to deposit all the :flunds in those !banlrs,
we have Federal reserve banks, . . MI'. HITCHCOCK. I should like to ask--
l\ir. HITCHCOCK and Mr. ROBINSON addressed the Chair. Mr. NELSON. As I said, I will 'not quarrel wiNI you gentle-
:Mr. ROBINSON, Will the Senator yield to me for a moment? men. I 'have presented the facts in this case to you and shown
Mr. NELSON. I ought to yield· first to the Senator from Ne- yon where you can economize to the extent of a third of a mil-
braska, I think. ' lion dollars. I 11ave shown you -the way of gl'ace, and if you
Mr. VARDAMAN. I IlUve elicited f')'om the Senntor all I do not cal'C to accept It it is up to you; I have done my duty.
desired. I quite agree with him that that economy should be Mr. HITCHCOCK. I desire to ask the Senator from Minne-
looked after, :an(\ I hope the Senator will propose an amend- sota whether it is not true that the Subtreasuries in some cases
ment. perform functions that are hardly possible for the Teserve banks
Mr. NELSON. If the Senator from Arkanslls will excuse me, to perform under existing law?
I will yield first to the Senator from Nebraska. I think he asked Mr. NELSON. I do not think so.
me first to yield. Mr. HITCHCOCK. ' I am not sure that I know, but I notice
Mr. HITCHCOCK. I defer to the member of the cOIllJJlittee. in the press from time to time when gold is imported from
I had only a question to put. abroad in large quantities the banks or bankers who import it
Mr. NELSON. .I yield to tile Senator from Arkunsas. deposit the gold in the .Subtreasuries. I infer lliat they do it for
. Mr. ROBINSON, I presume the Senator fl'om Minnesota hus the purpose of getting gold certificates. I have the impression
observed the fact tllRt the Committee on kppropriations In- tlmt that is not possible under the existing law to be done
serted in the bill an amendment which has already been agreed through the Federal reserve banks.
to :by the Senate, 'instructing the iBureau of Efficiency to " inves- Mr. OVERMAN. If the Senntor will allow me to interrupt
tigate the worl{ performed .by tbe Subtreasuries and report to him, that is exactly one of tile reasons tile ,Secretary of the
Congress at the ,beginning of the next regular seSSion ~vhatpar.t Treasury gives here in his report.
of the 'Worl{ of llie Subtreasuries, may be trunsferred :to other Mr. NELSON. I wish to call the attention of the Senate to a
offices of the Govermnent or 'banks of the Federal Reserve Sys- mutter .that transpired during ,t.he last portion of Mr. Cleve-
tem," and so forth, land's last administration. Certnin ba'nkers of New York, when
I presume the Senator from Minnesota is also aware of the goW was at a premium, were ill the habit of gOing to tlle Sub-
fact that ,this propOSition was the subject of debate in the Honse treasury. They would go there with their ·greenbacl,s. They
of Representatives, and the House of Representatives declined to would get Treasury notes-what we call greenbacks-and go to
strike out the Subtreasuries. llie Subtreasury of New York and draw out gold and ship it to
1~he Senate Committee on Appl'opriations considered the .ad- Europe. They could go on repeating that operation, and t'hey
visability of adopting and recommending' to the Senate an can repent it to-day in the Subtreasuries. If there is any gold
umendment similar to that now snggested by the Senator from in the Subh'easury, you or I or any of those New York bankers
Minnesota, but were unable to gain sufficient information on the can go there with the greenbacks and say we W!lnt gold and
subject to determine on the advisability of its uc'option, in view deplete the Subtreasury. That is one of the causes tllat bronght
of tlle fact that the Secretary of the Treasury recommended the out llie stringency Mr. Cleveland bad to overcome with his gold
retention in the bill of the Subtreasuries. The Senate com- alone during the last two years ·of his uflministratlon. They
mittee lliought, under those circulllstances, it was best to ·have can not ·carry on the same operation to that extent in the li'ed-
the matter in,estigated by the Bureau of Efficiency, and procure eral reserve banks. But, as I said, I will not argue with you.
full and reliable informntioll with regard to the subject, ·with If you. want to keep these two systems gOing, if you want 1'11is
· a view of action upon the matter the next time tI~e question luxury, in God's name, take it.
arises, probably during the next session of Congress. Mr. HITCHCOOK. Mr. President, I have not any desire to
1\'[1'. NELSON. I apprehend the Bureau of Efliclency could get into a discussion with the Senator from Minnesota, because
not by any possibility throw any new light on the subject. It is I am rather in sympathy with the idea of abolishing tilese Sub-
· not a matter, if Senators will reflect, that requires :any investi- treasuries, if possible; but it has occurred to me that there are
gation. certain functions which they perform in the large cities that
'What is the occasion of having the Go¥ernment services under ·existing law can not be performed by the Federal reserve
.duplicated at these pOints? If we hav.e a Federal 'reserve bank, ,banks. I suggested to the Senator that ·this country during the
why can not the Goverument carryon its fiscal operations as last two years has been importing hundl'eds and millions of
it lIas a right to .do in those banI,s, and why should we retain dollars of gold which under the present practice is depOSited
this other system side by side in those places '/ with the Subtreasuries and ,those certificates taken out in its
Out of extreme caution I have segregated the places.. It may pluce, ancl that function can not be performed under exlsting
be that at the four places-Baltimore; CinCinnati', New Orleans, law by the Federal reserve banks.
and Philadelphia-where they have no reserve biwks, it woul<1 Now, as to what the' Senator says about the Treasury being
be a proper subjeCt for investigation ; but I cohceive in the five depleted, he will recall the fact that that danger has been
cities which I lmvenamed-Boston, Ohicago, New York, St. remedied by' a change of law under which greenback!'! are im-

HeinOnline -- 54 Cong. Rec. 1470 1917

1917. OONGRESSIONAL REOORD-SENATE. 1471
pounded or may be impounded in the Tl'eusury so that the end- - Deposits of post-office funds direct and indirect.
Deposits on account of 5 pcr cent redemption fund.
less chain of wIthdrawing' gold from the Treasury may be Deposits of interest on public deposits.
stopped, That is not a danger in existence now; it has been Deposits of funds belonging to disbursing officers.
obviated. Funds dcposited for transfer to some other point through a payment
by a Subtreasury located thcreat. .
I have not any desire to antagonize the Senator's suggestion Encashment of checks warrants, and drafts drawn against the 'l;rens-
of an amendment, but it occurs to me that before we make it 11I"er of the United Stafes and presented at the .Subtreasury for pay-
we ought to be sure that the Federal reserve banks are Iu a po- ment.
The payment of United States coupons and interest checks.
sition to perform all the functions of the Tl·easury.. In addition to the foregoing the Subtreasuries haYe the custody of a
1I1r. OVERMAN .. Mr. President, I mel'ely want to read along large part of the reserve and trust funds, conSisting of the gold coin
the line the Senator mentions exactly what is stated in the re- and bullion and silver dollars deposited to secure gold and sllyer cer·
tificates and greenbacks.
port of the Secretary of the Treasury. He says: The receiving of deposits and payment of checks has been as~ume<l
Since the Federal reserve bani,s are, as I have already stated, pri· to a large extent since the establishment of the Federal Reserve System
vate corporations, just as are the national banks, the duty of providing by the designation of Federal reserve banks as Government depositaries
the necessary storage vaults and of assuming the custody and control In those Subtreasury cities where Federal reserve banks are located.
of these trust funds could not be imposed upon the Federal reserve l~edernl reserve banks are located in the Subtreasury cities of Boston,
banks by legislation. It could only be accomplished by negotiation and New York, Philadelphia, Chicago, St. Louis, and San Francisco. New
agreement, involving, necessarily, compensation for the service per- Orleans luL~ a hrancil of the Federal . reserve bank of Atlanta, while
formed. Whether or not arrangements could be made with Federal' neither Baltimore nor Cincinnati has a Federal reserve bank,
reserve banks, or any private institutions, for the cnstody of these It has always been deemed advisable to deposit the gold reserve and
trust funds upon terms and ~lllder conditions satisfactory to the Gov· trUBt funds of the Government in sevel'al places rather than to concen-
ernment, and at a saving in cost over the Subtreasury methods, while trate them in one, for reasons of security as well as public conyenience.
at the same time providing all of the conveniences in hnndling these The Federal reserve act docs not expressly, .or by implication, con-
funds and the same measure of security as now a.ft'orded by the Sub· tcmplate the substitution of the Federal reserve banks .for the Sub-
treaRury system, is a matter upon which 1 am unable to express an treasul"les, nor would it, in my opinion, be possible, or adYisable if
opinion. possible, to attempt such a substitution. While the general o:r current
fund of the Treasury may, in the discretion of the Secretary, be de-
He says he Iws $152,079,000 gold in the Subtreasuries. He. posited In the b'cderaJ reserve banks, the resen'c and trust 'funds 0[
adds: the Government, viz, gold coin and bullion and silver dollars held In
t.l'U8t by tile Government against outstanding gold und sliver certificates
I desire to repeat, however. my earnest conyiction that it wouM b(' und greenbacks, nrc not included in this authorization. ',rile gold eoln
unwise to commit the custody of these trust funds to any prh·ate and bullion held against gold certificates, amounting at present to
Institution or Instlttltions. more than $2,000,000,000. a considerable part of which is deposited
In the Subtreasuries, should not, in my opinion... be committed to the
It is a long report. I believe I will have it printed in tbe custody of any private corporations-and the l"ederal reserve bunks'
RECOllD. 'Vhen this matter was before the Senate committee it are private corporations-but should be in the phYSical control of the
was our disposition to take some action in r~gard to the Sub· Government itself. 'rills applies with equul force to the $1(;2,979,025
of gold reserve held against United States notes and Treasury notes of
trea.':mries. We did not InlOW anything about tlle necessity for 1890 and the silver dollars held against silver certificates. If, )IOW-
them, and we began to inquire and had this report sent. to us. ever, it silould be deemed advisable to transfer the custody of these
We made inquiries of the Treasury Department as to whether trust fllniIB to l?ederlll reserve banks or to any other private corpora-
tion or corporations, it would be necessary to make a special deposit of
they could not be dispensed with. The Secretary of the Treasury s. uch funds in vaults espeCially constructed for the purpose and ,to
says finally in this report: maintain a Ji'ederal guard or some form of adequate Goyernment con-
trol oyer such I'aults. . .
I am of the opinion that It woul,l be inadvisable at this time to . Since the Federal reserve banks are, as I have already stated, pri-
nbolish all, or. any, of the Subtrcusuri'!8. It is an important matter vate corporations, just as are the national bani,s,. the duty of providing
and ~hould be considered deliberately. With the test of further experi- the necessnry storage vaults and of assuming the custody and control
ence it may develop that the tunctions of the Subtt·easurles, or some ot of these trust {undH could not he imposed upon the ],"ederal reserve
them, may be tranSferred to Wa.~hington or to some other agency, .but ban Its by legislation It could ,only be accomplished by negotiation and
action should not be taken bastily or inadvisedly. agreement. involving. ne~ssarily, compensation for the service per-
Therefore, as the Senator fl·Olll Arlmnsas [Mr. llOBINSON] has formeil. Whether or not arrangements could be made with Federal re-
serve banks, or any private institutions, for the custody of these trust
stated, In order to get all the information before us so ru; to funds upon terms and under conditions satisfactory to the Government.
understand the matter thoroughly we have provided in the bill and at a saving in cost over the subtreasury methods, while, at the
an appropriation for the purpose of investigating the subject so same time,. proviclinr; all of the conveulences In handllng these funds
and the .same mcasure of security as now afforded by the subtreasury
tllat we can act intelligently upon it at the next session of Con- system, IS. a matter upon which I am unable to express an opinion. I
gress. desire to repellt, however. my earnest conviction that it would be un·
I ask that the report of the Secretary of the Treasury be wise to commit the custody of these trust funds to nny private Instl-
.tution 01' institutions. The custody of these trust fundS, their mnin-
printed in the llECORD, tenance, direction, control, and administration are distinctly a gov-
The PRESIDENT pro tempore. Without objection, the report ernmental function and should be exercised only by the Government.
will be printed in the R':COIlD. Aside from the custody of the trust funds of the Government, the
Subtreasuries perform a highly useful service to the public in' making
The report of the Secretury of the Tl"er~sury refelTed to is as exchanges of money, supplying money and coin where needed, and
follows: . reducing the cost anl1 el(pense of ·shipments of money and coin from
TREASuay DEPARTMENT, a common center. It Is necessary to maintain the facllities and con-
OFFICE OF TIlE SECIIEXARY, veniences proyliled by the Suhtreasurles in the large centers of hus!·
Wa8hington, December lG, 101G. ness in the country, such as tbe cities in which the Subtreasuries are
now located. J';v8n If these particular functions could be transferrell
The SPEAKER OF THE HOUSE OF REPllESE~X,ITIVES. to Federal reserve lianks where they exist, the services rendered by
SIR: In the legislative, executive. and judicial appropriation act the substituted agencies would ha,·e to lie compensated for. This
approved May 10, 191G, it is provided thnt- . woulcl inyolye cl(penses to the Government, while, at the same time,
.. l'he Secretary of the Treasury is authorized a'od directel1 to report the faemtirs provide(1 might not be as thorough and satisfactory as
to Congress at the beginning of its next session which of the Subtreas- those supplied by the Subtreasuries themselves.
uries. if any. should be continued after the end of tile fiscal year 1017, It. has ueen suggested that the Subtreasuries are merely conyCn-
lIml !Y. In his opinion, any should be continued the reasons In full for lences and not necessities, and that their duties might be performed
such continuance; also, If any or all of said Subtreasuries may be dis- entirely by the 'rreasury in Washington. This is in a sense true,
continued, what legislation will he necessary in oruer to transfer the!r but the cost of hanrlling all tbe business from a common center. in
duties and functions to some other branch of the public service or to a country so extensive as the Unltell States, might be greater than
the Federal reserve banks." . the expense of the SUbtreasury system, whereas the delays anr} in-
In accordance with the above authorization and direction, I have the conveniences which the public woulcl haye to suITer might prove a very
honor to report as follows: serious handicap upon business. It could with equal force be argued
. There arc nine Subtrpasuries located, respectively,' in the cities of that internal-revenue ofilces throughout the United States could be
Boston. Mass.; New York City. N. Y.; Philadelphia, Pa.; Baltimore, abolished and all of the work done at Washington, and, In lilte mauner,
Md.; Cincinnati, Ohio; Chicago. Ill.; St. Louis, Mo.; New Orleans, that many of the customs omees throughout the country could be
La.; and San Fl·ant!sco, Cal. The Subtreasury system was authorized aboliShed and all of the work done from Washington. It Is the auty
by the act of August G, 184G. and subsequent acts amendatory thereof. of the Government to provide adequate facil1tles to meet the COD-
The duties and functions of the Subtreasuries may be stated generally venience and necessities of the pulllie In all parts of the country. nnd
as follows: the problem must be consillered as a whole anll not merely in detail.
Issue of gold order certificates on gold deposits. It Illay be possiule to reduce the expense of admin!stration of some,
Acceptance of gold coins for exchange. or all, of tile Subtreasuries. It has been only one year since the Fed-
Acceptance of standard silver dollars for exchange. eral reserve banks were lilllde Government depOSitaries and fisc;tl
Acceptance of fractional silver for redemption. agencies ana the current or general funds of the Government In such
Acceptance of minor coins for redemption. cities transferred to Federal reserve banks. About that· time I ap-
Acceptauce of United States notes for redemption. pointed au impl'Q,'ement committee (llescribed in my ·annual report of
Acceptance of l'reasury notes for redemption. 1(15) to mak" a careful study of departmental methods in all (lirec-
Ac(:eptnnce of gold and silYer certificates for redemption. tion" and to report upon the best means of improving the general ad-
Cancellation (befpre shipment to Washington) of unfit currency. ministration <'f the Treasury service in its various important branches.
Lllundering of unfit eurrencv which permits of this process. 'l'he adminiRtra rlon of the Subtreasuries is one of the subjects for In·
EXcbange of various kinds' of money for other kin(Js that muy be vestigation, und I sincerely hope that within another year It lllay .be
requested. . found possible to reduce the expense of operating these institutlons
Rmnittances from United States depositary banks of their surplns in SOIlle, if not in all, of the cities where they are now located.
dpposits of internal-rel-enlle, customs, moncy-ortler, posta1, nnd similar The amount of the Government funds in each SubtreasUl'y, the
fun(ls. yolume of the toml transactions annually performed by them, and
D"posits of postal-saving_ funfls direct. the eost of maintaining these institutions arc set forth in the follow-
Dl'posits of money-order' funds direct and indIrect. Ing table:

HeinOnline -- 54 Cong. Rec. 1471 1917

147·2,' CONGRESSIONAL R,EOORD-SENATE. JANUARY 16,
Mr. OVERMAN. If the Chair was correct In his preceding
Government Total transoo- E~~~~o~ ruling, we ·might let everything which is in the bill relative to
Subtreasury. funds held tions, fiscal year nance fiscal the fixing of salaries go out.
Juno 30, 1916. 1916. yeRr'1916. Mr. THOMAS. I think everything which increases the num-
ber of employees ought to go out.
Baltimore........................... $12,1>73, a7l. 07 $108,215,675.59 133,749.63 Mr. NELSON. Mr. PreSident, at the iilstance of a number
Bostou.............................. 34,452,695.24 217,020,680.17 52,051.29 of my colleagues and without taking more time than is abso-
8r~~f~~at:i·.·.·:::::::::: ::::: :::::: ::: I~N~~:~J,n~
Now Orle:ms. . . . . . . . . . ..•..••.•.. . . . 31,917,751.13
. r~~:~gg:g~Ug ~aiU:
.73, 990, 519. 44 . 27,481. 22
lutely necessary, I move to strike from the bill all under the
title of .. Independent Treas"tll'y," pertaining to Boston, Chi-
N ow York. ......................... 329, '102, 485. 45 2,464,715,492.12 187,587.75 cago, New York, St. Louis, and San FranCisco, in five pluces.
l'hiludelphia ................ ;....... 26,183,266.27 473,623, 903. IS 57,792.76 The language Is found on pages 63, 64, and 65; and I move to
St. LOllis............................ 4S,62'J,847.19 193,370,692.54 37,385.63 strike out the language relative to Boston.
San Francisco........................ 99,088,010.01 291,058,033.63 25,812.27
Total. .......•................ 1- 1 Mr. OVERMAN. Does the Senlttor make the motion as to
73-4,-1-73-,-67-1-.0-5- -4-,-525-,-0-63-,-11-1-.8-2-:1:-63-5-,0-0-4-.63 all of those p~aces?
Mr. NELSON, No; I leave out foul' of them.
It wllI be seen that the cost of mnlntalnlng these Institutions, treat· Mr. OVERMAN. I shall not consent to that. If the Senator
ing the Subtreasury ~ystem as a whole, Is only one one·hundredth of 1
""1' cent, approximately, on the total transactions Involved-an inslg- will let them all go out and If there is a necessity for any of
nlilcant sum compare!! with business done, the Important service per· them going out, the matter can go into conference and there
formed, and the conveniences afforded to the public. Aside from New be considered. I shall not object to tliat.
Yorl(, tile cost of maintaining the otller eight Subtreasuries Is $847,·
41U.88, which is a comparatively small sum to pay for the service and Mr. NELSON. Would the Senator ruther I should make the
convenience they provide. If these Institutions were abolished, the motion as· to ull of them?
totnl cost of operating them would not be saved, as a counter expendl· Mr. OVERMAN. I would rather the Senator would make the
ture by the office of the Treasurer In Washington, resulting from the
increased worlt that would be thrown upon that office, would be entailed, motion as to all of them, so that if we make an investigation
I um of the opinion th"t It would be Inadvisable at this time to at all, we may investigate as to all of them.
ahollsh nil, or any, of tile Subtreasuries. It Is an important matter Mr. NELSON. Very well, then, I will move that they all go
und should be considered deliberately. With the test of further ex· out. ' .
perlence it moy deyelop that the functions of the Subtreasuries, or
some of them, may be trnnsferred to Washington, or to some other Mr. GALLINGER. Mr. President, pending that motion, I
:lgency, but action should not be taken hastily or Inadvlsedly. suggest the absence of a quorum.
I regl'et exceedingly that my necessary absence from Washington, in
connection with the establishment of the Federal farm·loan banks and Mr. OVERMAN. That suggestion is not in order now under
other public business, made It Impossible tor me to submit this report to the agreement under which we are proceeding.
the Congress at an earlle" date. The PRESIDENT pro tempore. The Senator from New
Respectfully, W, G. lIIcADOO, Sce,·ctary.
Hampshire suggests the absence of a quorum. The Chair, how
Mr. WEEKS. Is there a motion before the Senate?' ever, desires to cull the attention of the Senator from Minnesota
The PRESIDENT pro tempore. There is no motion in con- [Mr. NELSON] and of the Senator fl'om North Carolina [Mr
nection with the matter. OVERMAN] to the fact that we are proceec1lng by unanimous
Mr. WEEKS. I ask the Senator fl'om Minnesota if he is go-. consent, first, to consider amendments reported by the com
iug to make a motion? . . mlttee.
Mr. NELSON, I huYe pointell out the path of duty to the Mr. OVERMAN. I myself made that pOint of order just now
majority of the body; I have shown them the true light, and I and I was going to say to the-Senator from Minnesota that when
think I will leave it to them to say whether they will follow the he made this motion I wanted him to make it in accordance with
puth I huve blazecl out for them nnd be ,as economical as they that agreement, and that he was proceeding out of order.
cun well be, If they so deSire, under the amendment I have The PRESIDENT pro tempore. The Chair did not hear the
suggested. If they have nQt sufiicient interest to offer amend- Senator from North Carolina when he made that point.
nients themselves, I am sure I will not draw them out of the Mr. NELSON. I was not aware of the situation. If the
Democratie slough of despond. Senator objects--
. ·Mr. WEEKS. I will not take the time under those circum- Mr. OVEJRMAN. I do not object, but we are proceeding
stances to discuss this proposition. I will merely say that I under a unanimous·consent agreement, and I was going to sug
think the Senator from Minnesota Is probably right in the con- gest that to the Senator when I was called down.
tention which he has been making. I um not sure about the de- Mr. NELSON. Very well, I will wait.
tlli1s in the matter of Subtrellsuries and Federal reserve bunks, Mr. GALLINGER. Under those circumstances I shall 116t
and I am not quite clear in fnct in my own mind to say that it insist upon my suggestion. I withdraw the suggestion.
can be done without any possible detriment to the service. If The PRESIDENT pro tempore. The Chair thought possibly
there is a provision in the bill, as I understand fl'om the Senator the Senatol' from New Hampshire woulll do so. The ClJair did.
from Arkansas, that this I11l1tter shall be investigated and a re- not want to control the action of the Senate, but he thought
port made to Congress next December, I think that is the better It proper to call the attention of Senators to the fact.
way to proceed, although I would vote, if the motion were made, The reading of the bill was resumed. 1'he next amendment
to strUm out the appropriation for the Subtreasuries and' yote of. the Comrllittee on Appropriations was, under the head of
for that proposition. I think, however, when the bill goes to "'Val' Department," on page 71, line 7, before the worll "as
conference, the proper Treasury ollicers should be brought be- sistants," to strike:out "61" and to insert "40," so as to read
fore the conferees and full Imowledge obtained from them as
to its desirability or wllat reasons they may have for Hot tal,ing Adjutant General's Office: Chief clerk, $2,500; 10 chiefs Of dlvislo11s
at $2.000 each; clerks-58 of class 4, 74 of class 3, 116 of class 2
such action. 231 of class 1, 03 at $1,000 each; engineer, $1,400; assistant engineer ,
The PRESIDliJNT pro tempore. The reading of the bill will $000; 2 firemen; sldlled mechanic, $1,000; 11 messengers; 40 assistan t
be continued. messengers; 4 watchmen.
Mr. THOMAS. I ask permission to turn back to page 51, Mr. GALLINGER. Mr. President, it was at my instance in
line 6. '1'here is a committee amendment on page 51, line 6, the committee that that amenllment was placed in the bill. I
which reads, .. Private secretary for captain commandant, received a letter from a friend on the outside who called at
$1,400." I make against that amendment the same point of tention to the number of assistant messengers in the oftice of
order which was made by the Senator from Washington a few The Adjutant General, the bill, ns it came from the other House,
moments ago to the amendment on page 37. providing for 11 messengers and 61 assistant messengers. The
'J:he PRESIDENT pro tempore. '.rhe Chai!.· did not under- statement is made thut they did not require any such number
stand to what.amendment the Senator referred. of messengers. For the purpose of sending the matter to con
1\-[1'. ~:HOMAS. The point to which I referred was made ference, I moved the amendment which was agreed to by the
against the amendment on pnge 37, beginning at line 13, pro- . committee. Since that time I have learned from Adjt. Gen
viding for an assistant to the Secretary of the Treasury and McCain, one of the most accomplished ollicers in the Govern
fixing his salary. The point was made the amendment seeks to 'ment, as I loolc upon him, that an injustice has been done to his
incorporate generlll legislation into an appropriation bill, and office by that amendment. I asked Adjt. Gen. McCain to muke a
the pOint of order was sustained. I make the same point of written statement as to the matter, and, if Sepaors will listen
order to a similar provision on p'age 51, line G. to me, I shoulc1like to read it. It is not long.
MI'. OVERMAN. -Mr. President, of course, this amendment I will say, before reading the Jetter, Mr. President, that I was
has been adopted. luboring under the impression that The Adjutant General's
~:lIe PHElSIDElNT pro tempore. The amendment as stated oftice, while'of great importance, yet did not include enough rooms'
by the Senatol' from North Carolina has been adopted. to require the assistance of such a number of messengers and
Mr. '.rHOMAS. Then I reserve the right to maIm a point of assistant messengers-61 in nIl,. I believe-but The Acljutant
order against the amendment when the bill reaches the Senate. General writes nrguing to the contrary. He says:

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19.17.«, CONGRESSIONAL ,"RECORD-SENATE. 1413
The Adjutant General's Office occupies approximately 150 rooms In Mr. G:A.LLINGER. The Senator !from ·Wyeming is wreng in
the State, War, and Navy Bulldlng, and has branches of its divisions suggesting that we have attacked that department. There is no
located In four outside buildings, two of which are -occupied exclusively
by the office, which Is charged with their custody, maintenn.nceand sucll purp.ose at all.
cleaning, The office Is also required to clean those portions of ·the 'other Mr. WARREN. I understand there is no such intention on
two outside buildIDgs which It occupies as well as all of Its ·rooms In the the part .of the .Senator, but it really amounts to that when we
State, War, and'Navy Building. ' '
Adequate com,munlcation by means of messengers must be maintained depend on the ,statements of some one on the .outside who wishes
between the maID office and the .branches, and internal messenger serv- us to reduce the employees of any. one particular department.
ice must be provided for these branches also. In three of the outside .Mr. GALLINGER. I will say that this gentleman on ,the out-
buildings the floor space occupied Is large-the Ford's Theater "Building
and annexes, with three floors; ,the bulldlng at 610 Seventeenth Street side had had service .in tIle depar.tments .of the Government and
NW., with five floors; and.a large area in -.the Army Medical Museum is a pretty W€ll informed man.
Building. :Mr. ROBINSON. Mr. President, will the Senator from New
It will rea·dlly be seen that the work of cleaning 150 rooms in ona
building, and a large nUlllber of rooms In other bulldings, providing Ice Hampshire yield to a further question?
water for their occupants (the ice being brought dally from the Bub- Ml·.GALLINGER. Certainly.
basement of the building), .and the messenger work that necessarily Is Mr. ROBINSON. The Senate committee amendment now
.required In ·an office as large as .this fully occupies the time of the
presen t messenger force. . under consideratien invelves ·the striking' out .of the language
The Increase In the Army authorized by recent legislation :bas added down te line 12, on page 71. .
largely to the worle of the office, and the demand for communication by Mr. GALLINGER. Yes.
messenger with other burl'ans of the department bas correspondingly
increased. In addition to this, there has been transferred to this .office Mr. ROBINSON. I will ask the Senator from New Hamp-
the work of distributing practically all the publlcatlons of the War De- shire if he has advised himself as to whether that language
partment, wor.k which was heretofore done at the War College. should go out or whether his amendment should be rejected?
One of the most effective means by which the work of the ollke is
kept up to date is its five-minute mall messenger service, by means of Mr. GALLINGER. Mr. PreSident, I was likewise responsible
which cases are carried to every part of the office with the utmost fer that amendment. I moved the runendmentfor the .:reasen
promptness. There are 12 messengers engaged on this lIiatl route, with that I had found that that seemed to 'be the .only office where
the necessary number of substitutes.
All of the .assistant messengers estimated for ·are absolutely necessary the inhibition could be found that theJ;"e should be no transfer
for the work of the ofllce, and the rednction proposed in the Senate re- of the employees from that particular office. It did not apply to
port on the legislative ·blll,by which there Is a reduction of aSSistant ti1eethers. I noticed also in my invel'!tigation that the Cem-
messengers from 61 to 40, would render it impossible for the ofllce to
maintain Its present state of efllclency. . missien en Economy and EffiCiency, approved by President Taft;
Mr. President, it was a revelation to me that The Adjutant had recemmended the change. I was unable to see why thnt
exception should be applied t.o this particular office. In talking
General's Office occupied 150 rooms in the main building, and with .The Adjutant General I found him very insistent that the
also had the Ford's Theater Building at its 'command, and like- law should remain as it iS,but I was ne.t fully persuaded that
wise a building on Seventeenth Street. I confess that after he was correct about it. He intimated that his clerks would
reading that statement by Adjt. Gen. McCain, and having asked be transferred and that his w.ork would be thereby crippled.
him to come and talk with me about the matter, I felt that I Of course, if I believed his work was g.oing t.o be crippled I
had done an injustice in moving the amendment. I now think would .not advocate the amendment at all; but.it has .occurred
that we ought to recede from the amendment. That is my per- to me that there iii no adequate reason why the exception should
sonal feeling. be applied simply to one office in the War Department. There
Mr. STONE. l\ir. PreSident, can the Senator from New Hamp- may be some good reason why the change should not be made
shire state the compensation for these messengers and assistant but it does not appeal to me. '
messengers?
Mr. OVERMAN. They receive, respectively, $840 and $720. Mr. WARREN. Mr. President, that .occurred in this way:
Mr. GALLINGER. I am informed that the messengers re- During the administration of a former Adjutant General, Gim.
ceive $840 and the assistant messengers $720. It is very low pay. Ainsw.orth, affairs in that office and .others had- become rather
Mr. ROBINSON. Will the Senator from New Hampshire yield .offensive te all parties on account .of the frequent transfers and
to a question? the calling on the .offices at times when they might be busiest'
Mr. GALLINGER. I yield. for a dozen, m.ore ·01' less, clerks for use ".in some ·other bureau.
Mr. ROBINSON. In the same paragraph is carried an item The matter was brought before the Military Committee, and
for 21 laborers in connecti9n with The Aq.jutant General's Office, from there before t~e Appropriations· Committee, and the effort
What se!"vice do those laborers perform? was made to prOVIde each office or bureau with the proper
lHr. GALLINGER. I do not know; I did not make any in- number .of clerks and, in so far as was possible to ,break up
quiry of The Adjutant General {)n that point. the objectionable system then prevailing. In this particular
Mr. ROBINSON. I should like to ask the Senator one further office we cut .out, as I remember, a very large number of -clerks
question. Has his investigation satisfied him that the amend- because of that. Gen. Ainsw.orth reduced the number of clerks
ment should Dot be agreed to and that the Senate should disagree materially when he brought together the Record and Pension
to the amendment? . . . Office and ~he Adjutant Generars .and .other .offices, each year
Mr. GALLINGER. That is ilie feeling I have after talking disposing of a number of clerks fer some three .or f.our years.
with The Adjutant General about the matter. I confess that I It was .for that reason that thisrunendment WilS recommended
knew little about it at the .time ·1 ·offered the amendment in and the Committee .on Approprlatiens ad .opted it. '
committee. I a~ not prepared to say whether or·not it is necessary now.
Mr. OVERMAN. Does ,the Senator .not think the matter had I am prepared to say, however, that ·1 should prefer to fellow
better go to conference? ' the ,earnest desire of the -head of that office, wh.o I believe is
Mr. GALLINGER. As I was saying, when I offered the amend- trying not only to conduct it properly but with the ieast expe~se.
ment in committee I confess I knew but little about It, exeept I shohld very much like to ,see both of those amendments dis-
from a letter I had received from an outside party, saying that agreed to; but certahHy the one as to the niductlon in the
that office was loaded down with unnecessary employees and number of messengers should not remain in the bill.
he particlilarly mentioned assistant messengers. When i saw Mr. GALLINGER. Mr. Preliident,'beyond a question tilere is
the lUlmber which was appropriated for, it struck me that it n great deal ·of red tape in that particular office, as well as in
was very large, and perhaps unnecessarily large. all the .other offices of the Government. ·1 had thought of read-
Mr. OV]<JRMAN. Mr. Prel?ident, I suggest to the Senator that ing fr.om the rElPort of the Commission on Economy and Ef-
we ascertain all about the matter in conference. I am .glad the ficiency a .paragraph .on that pOint, because, as I said to Ben.
Senator brought the amendment to our attention and I myself McCain frankly this morning, it was more interesting than any
suggested to Gen. McCain that I thought the ·m~tter ought to novel I have read in recent years ; but as we have provided in
go to conference. We could there better investigate it than the bill that the Bureau of Efficiency shall inquire into aU these
we can here. If it is right that the amendment should ·go out matters cOnnected with the departments ;[ have no disposition to
I think the conferees will :agree to let it.go out. ' prolon,g the debate.
~lr. ": ARREN .. T~le War Department is not the only one
.Mr. WARREN. Mr. President, I hope that the amendment ;WhlCh has been -excerlated. .
WIll go out of the bill. It is rather invidious that we should
attack that particular department. There is certainly no more . Mr. GAI;LINGER. No, Mr. President; I did not say that it
ably conducted department than that of The Adjutant General was. I smd aU departments. I am going to read fram the re-
and it has almost ·always been so. It is a department tb.at i~ port of the ]<Jcon.omy and Efficiency Commissi.on for the ·informa'- .
made up ·of several others combined. There are'some 500.cler"ks tion-and I do not know but for the amusement--:-of the ,Senate,
or m?re, and they are scattered ever tHfferent parts efthe;town. because it is a most extraordinary showing. Here is what the
To. dIspense with the messengers weuld simp1y put the Clerks to commission says:
Pvt. Rentz ~aci~ application t~ purchase his discharge fro~ the Gov-
demg that messenger serv-ice, and there would then be.a'demalld ernment, und his superior officer recommended that the discharge be
for more clerks. . granted. '.rhe application came to the War Department, and, according

HeinOnline -- 54 Cong. Rec. 1473 1917