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APPROPRIATION BILL FOR 1950

HEARINGS

BEFORE THE

SUBCOMMITTEE OF THE
COMMITTEE ON APPROPRIATIONS

UNITED STATES SENATE

EIGHTY-FIRST CONGRESS

FIRST SESSION

ON

H. R. 4177

A BILL MAKING APPROPRIATIONS FOR THE
EXECUTIVE OFFICE AND SUNDRY INDEPEND-
ENT EXECUTIVE BUREAUS, BOARDS, COM-
MISSIONS, CORPORATIONS, AGENCIES, AND
OFFICES, FOR THE FISCAL YEAR ENDING
JUNE 30, 1950, AND FOR OTHER PURPOSES

Printed for the use of the Committee on Appropriations

UNITED STATES
GOVERNMENT PRINTING OFFICE

WASHINGTON : 1949

90733

SUBCOMMITTEE OF THE COMMITTEE ON APPROPRIATIONS

JOSEPH C. O'MAHONEY, Wyoming, Chairman RICHARD B. RUSSELL, Georgia

HOMER FERGUSON, Michigan KENNETH MCKELLAR, Tennessee

STYLES BRIDGES, New Hampshire ELMER THOMAS, Oklahoma

GUY CORDON, Oregon BURNET R. MAYBANK, South Carolina LEVERETT SALTONSTALL, Massachusetts LISTER HILL, Alabama

KENNETH S. WHERRY, Nebraska A. WILLIS ROBERTSON, Virginia

II

INDEPENDENT OFFICES APPROPRIATION BILL, 1950

WEDNESDAY, MAY 11, 1949

UNITED STATES SENATE,
SUBCOMMITTEE OF THE COMMITTEE ON APPROPRIATIONS,

Washington, D.C. The subcommittee met, pursuant to call, at 10 a. m., in room F-82, the Capitol, Hon. Joseph C. O'Mahoney (chairman of the subcommittee) presiding

Present: Senators O'Mahoney (chairman of the subcommittee), Ferguson, and Saltonstall.

FEDERAL COMMUNICATIONS COMMISSION

GENERAL ADMINISTRATION

STATEMENTS OF WAYNE COY, CHAIRMAN; PAUL A. WALKER, COMMISSIONER; ROSEL H. HYDE, COMMISSIONER; E. M. WEBSTER, COMMISSIONER; GEORGE E. STERLING, COMMISSIONER; ROBERT F. JONES, COMMISSIONER; FRIEDA B. HENNOCK, COMMISSIONER; JOHN A. WILLOUGHBY, ACTING CHIEF ENGINEER; WILLIAM J. NORFLEET, CHIEF ACCOUNTANT; BENEDICT P. COTTONE, GENERAL COUNSEL; WILLIAM K. HOLL, ACTING EXECUTIVE OFFICER; LEO RESNICK, HEARING EXAMINER; L. G. HERNDON, ASSISTANT CHIEF, FIELD ENGINEERING AND MONITORING DIVISION, ENGINEERING; EDWARD W. CHAPIN, CHIEF, LABORATORY DIVISION, ENGINEERING; EDWARD W. ALLEN, JR., CHIEF, TECHNICAL INFORMATION DIVISION, ENGINEERING; G. E. NIELSEN, CHIEF, PUBLIC SAFETY AND SPECIAL SERVICES DIVISION, ENGINEERING; HARRY M. PLOTKIN, CHIEF, BROADCAST DIVISION, LAW; HAROLD J. COHEN, CHIEF, COMMON CARRIER DIVISION, LAW; LESTER W. SPILLANE, CHIEF, SAFETY AND SPECIAL SERVICES DIVISION, LAW; GILBERT H. HATFIELD, PERSONNEL OFFICER; ROBERT W. COX, BUDGET OFFICER; TED E. McHOLD, CHIEF, SPECIAL STUDIES BRANCH, ACCOUNTING

GENERAL STATEMENT BY CHAIRMAN COY

Senator O’MAHONEY. The committee will come to order, please. Mr. Coy, I might say that this meeting this morning is a little in advance of schedule in order to give you an opportunity to appear before the committee and to be subjected to a little examination because of your going away.

1

PROVISIONS OF HOUSE BILL

There are about 27 lines in this bill devoted to the Federal Communications Commission as the bill passed the House. It seems to provide a total of $6,525,000, which is in excess of the appropriation last

year, but which is less than the budget. The committee now extends to you, Mr. Coy, the opportunity of explaining to the committee why it is that the Federal Communications Commission feels that the appropriation made by the House is not sufficient.

The Federal Communications Commission doubtless is aware of the fact that the Senate is closely scrutinizing all appropriations, so I am hopeful that in the examination of this bill, we shall be able to examine every item of your expenditure so that, when the committee reports, it will have all the facts behind it.

We will begin by inserting in the record at this point your letter to the committee. (The letter referred to is as follows:)

APRIL 16, 1949. Hon. JOSEPH C. O'MAHONEY,

United States Senate, Washington, D. O. DEAR SENATOR O'MAHONEY: I am promptly taking advantage of the opportunity given by your letter of April 11 to request that the Senate Committee on Appropriations increase the 1950 allowance for the Commission over that in the bill as passed by the House and delete the general provision in the House bill limiting the number of employees engaged in personnel work. The Commission would also like to have a hearing.

The specific changes requested in the bill as reported to the House are as follows:

Line 6, page 16, change "$6,525,000" to "$6,633,000.”
Line 18, page 63, delete section 111.

The Commission is becoming alarmed by the ever-widening divergence between its increasing responsibilities and its diminishing appropriations. Because of the direct effect of this divergence upon almost every phase of communication the Commission is of the opinion that a hearing is very important, even though the amount involved is relatively small.

Although all the implications of the divergence cannot be covered here, sufficient high lights can be given to illustrate the seriousness of the problem. In the first place the reduction in staff is substantial for a small agency. The Commission would go from a peak employment of 1,385 for 1949 to about 1,320 employees for 1950 under the bill as passed by the House. Against this reduction are mounting problems and mounting work loads in many fields of activity. In the common-carrier field with its $10,000,000,000 investment and $3,000,000,000 annual revenues the problems are becoming critical. There is a growing inconsistency between interstate and intrastate long-distance telephone rates. Numerous States are in litigation about their telephone rates and are in need of help. The Commission has made progress in collecting facts for its telephone regulation but lack of adequate staff has made it impossible to perform the very necessary job of keeping portions of the data collected in the 1935 telephone investigation up to date. The Commission must, of necessity, make a thorough study of depreciation rates, license contract payments, prices paid for equipment, etc., in preparation for any proposals to revise long-distance charges.

Western Union is in difficulty. The merger did not solve the troubles of the domestic telegraph industry. Successive rate increases have not solved them. Western Union depends upon its $72,000,000 modernization program to make it competitive with the telephone company and the mails. A revision of its rate structure is a vital need.

International telegraph carriers are also offering increasingly complex problems. Their rate structures are unsatisfactory, as is also the assignment of radiotelegraph circuits developed under wartime conditions and the distribution of out-bound traffic by the land-line carrier monopoly among the competing international carriers. The question of merger in the international field will have to be reopened soon. The Senate Committee on Interstate and Foreign Commerce has just recently named a subcommittee to consider this problem, among others. I shall personally, together with Commissioner Walker and a number of the staff, spend the late spring and part of the summer in Paris working on the international problems. These high lights of some of our common-carrier problems will, I believe, raise the question in your mind as they have in mine as to how we are to meet a greatly increased work load with a sharply reduced staff.

In the safety and special services, the part of our activities covering such uses of radio as aviation, marine, police, railroad, dozens of other industrial uses, amateur, and citizens radio-our plight can be indicated with three sets of figures : In 1940 there were 9,896 authorized safety and special stations exclusive of amateur and citizens radio; as of June 30, 1948, there were 47,366; and we expect that there will be 89,945 by June 30, 1950. To a greater extent than might be realized at first those figures do indicate the Commission's problems in finding spectrum space for the new services, in providing engineering standards, in testing equipment, in coming to agreements with other nations, providing protection from interference for the frequencies utilized in this service, in licensing the actual stations, and in doing the many other things that fall to the regulatory agency trying to make provision for mushrooming radio services.

The picture in the broadcasting services is very similar to that in the safety and special services. In 1940, there were 847 authorized AM, FM, and television stations; on June 30, 1948, there were 3,037; it is estimated that there will be 3,829 by the end of fiscal year 1950. As of April 1, 1949, there were pending 862 applications for new stations in the broadcast field.

In spite of the urgency for increased activity in the three areas discussed above, in its budget request the Commission has asked for the largest increase for its laboratory work—it has requested that the personnel in this unit be increased from 16 to 25. The laboratory is so fundamental to the Commission's entire program that it cannot be held back longer. Even this small laboratory holds the keys to some of the major developments in radio. Furthermore, it holds the keys to our being able to handle much more safety and special work load without commensurate increases in staff, and it holds the keys to many of our policing problems.

The “policing” part of our work is the part dealing with keeping stations on their assigned frequencies after they are licensed and doing the many other things designed to keep the radio spectrum usable. This work is handled by the Field Engineering and Monitoring Division, which also licenses operators, inspects radio equipment on ships, and performs similar related tasks. In spite of the obviously pyramiding responsibility of this Division we have reluctantly provided for a decrease in its staff for 1950 in order to concentrate on work which we felt had even higher priority, work such as that in connection with the laboratory.

The Commission would also like to point out that the general provision under section 111 that personnel employees are not to exceed a ratio of 1 to 125 employees of the agency as a whole has serious implications that tend to defeat the purpose of the section. This Commission can speak with some authority on making reductions in personnel offices because in a little more than a year it has reduced its staff in the Personnel Office from 21 to 15 and it proposes to reduce it to 13 by July 1.

We have found that reductions can best be made when they are preceded by intensive work to increase efficiencies. By increased efficiency through better procedures a gradual reduction is made possible without disrupting the personnel program. In fact, in our case we feel the personnel program has been considerably strengthened. On the other hand, a drastic reduction in the personnel force can be such a disruption that it can ruin a personnel program. Another factor is that the bill as passed by the House makes a substantial cut in the Civil Service Commission. In the past cuts in the Civil Service Commission appropriation have been met by transferring more of the personnel work to the agency. Without commenting on whether or not this is advisable we do want to point out that such a transfer inevitably increases the staff requirements of the agency. For these reasons we request the Senate to delete section 111 from the House bill.

Although I don't want to put myself in the position of arguing with the House Appropriations Committee's report, I do not think it is necessary to state my disagreement with several of the statements in the report because those state

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