objectives and administration; the more understanding the fewer personal phone inquiries, letters, conferences, etc.; the more understanding the less lost motion in offices of both Federal and State agencies, the fewer improper applications, the less expenditures in follow-up correspondence investigation, and explanation. This Bureau consists of the Office of the Director with two Associate Directors and a small operating staff, the Administrative Division, Regional Division, Inquiry Division, Press Division, Publications Division, and Labor Information Division, each with the minimum personnel considered essential to the performance of their respective functions. The decrease of $25,690 will involve the elimination of 33 positions. It will necessitate the discontinuance or curtailment of the use of motion pictures as a means of disseminating information and the severe restriction of efforts to provide specialized information relative to the Social Security Act for businessmen and for subprofessional groups. OTHER OBLIGATIONS Justification of amounts included in Budget for 1939 Supplies and materials, $1,088,552.-The sum included for supplies and materials of all kinds represents an increase over the estimate for the fiscal year 1938 of $229,352. This increase is required by (1) the increased number of personnel to be on the staff of the Board during 1939 and (2) the fact that a considerable inventory of supplies and materials on hand June 30, 1937, and available for issue reduced expenditures for these items during the fiscal year 1938. Because of the limited funds available for the fiscal year 1938, it appears that an extremely small inventory of supplies and materials will be carried over into the fiscal year 1939. Consequently it will be necessary to purchase the entire year's requirements from such funds as may be appropriated for the purpose. The amount requested provides for an average of approximately $120 per employee. This compares favorably with the general average for the various Government establishments. Storage and care of vehicles, $6,000.-It is estimated that $6,000 will be required during the fiscal year 1939 for the operation and maintenance of the passenger cars and trucks necessary to adequately serve the needs of the offices of the Social Security Board in Washington, the regional offices, and the larger field offices. Communication service, $516,022.-The maintenance of a Nation-wide administration with more than 350 offices throughout the country requires a large expenditure for communication service. The necessity of maintaining the departmental offices in 10 separate buildings in the city of Washington and 1 building in Baltimore adds substantially to the cost of telephone service. In order to effect reasonably prompt payment of the rapidly increasing number of old-age insurance claims and to render prompt service to cooperating State governments, it is at times necessary to make extensive use of telegraph and telephone service in securing necessary information. The sum of $516,022 is requested for communication service of all kinds for the fiscal year 1939. This represents an increase of $99,821 over estimated expenditures for the current fiscal year. This amount is based on the approximate cost of communication service at the present time plus the minimum amount which will be required to provide adequate communication service in the field, Washington and Baltimore offices during 1939 when the volume of all essential activities of the Board have materially increased. This amount is estimated as follows: 12 regional offices: Service and tolls ($295 each per month), per annum $42, 480 350 field offices: Service and tolls ($70 each per month), per annum__. 294,000 Baltimore: Service and tolls ($600 per month), per annum__. Washington: Service and tolls ($7,833 per month), per annum. Telegraph services (all offices) -- Air mail and special delivery, postage Teletype news service---- Total estimated communication costs_____ 7, 200 94,000 75.442 2,000 900 516, 022 Transportation of things, $105,904.—This amount is included to cover the cost of transporting supplies and equipment from Washington to the field and the transportation costs in connection with the shipment of large quantities of paper, tabulating cards, equipment, etc., to Washington and Baltimore, as follows: Transportation of fan-fold forms and tabulating cards_-Transportation of furniture and equipment__. Transportation of miscellaneous supplies and materials_. Total---- $25,000 35,000 45, 904 105, 904 Furnishing of heat, light, and power, $105,190.-The amount requested to cover the cost of heat, light, and power for the fiscal year 1939 is $10,190 in excess of the estimated cost of such services during the fiscal year 1938. The increase is made necessary by reason of (1) the additional space to be occupied by the Board and (2) the additional tabulating equipment to be used in connection with the maintenance of employees' earnings records in the Baltimoreoffice, all of which is operated by electricity. It is estimated that for the latter purpose alone a total of 636,520 kilowatt-hours of electricity, at an average cost of approximately 5 cents per kilowatt-hour, will be required. Rents, $1,991,252.-The amount requested for rents represents an increase of $216,252 over the estimated requirements for the fiscal year 1938 and provides for the rental of equipment and the rental of space. The maintenance of the approximately 34,000,000 accounts of employers and employees in the Baltimore office will require, for the fiscal year 1939, the following International Business Machines tabulating equipment, which cannot be purchased but must be rented: The activities of the Social Security Board in Washington are now housed in 10 different buildings, with floor space of approximately 270,000 square feet, most of which are privately owned and involve rental payments. This situation results in much lost motion with its attendant additional costs. In order to centralize the activities of the Board in one building, negotiations are now in progress to effect the construtcion of a building sufficiently large to house the entire Washington staff of the Board. It is estimated that approximtely 300,000 square feet of floor space will be required for this purpose. On the basis of present estimates, the space, including maintenance, will cost in the neighborhood of $1.25 per square foot, or a total of $375.000. It will be necessary to provide 200,000 square feet in Baltimore at 50 cents a square foot, $100,000; 64,300 square foot for the 12 regional offices at an average cost of $1.40 per square foot, $90.000; and 375,000 square feet for the field offices at an average cost of $1.03 a square foot, $386,252, making a total estimated cost for rental of space of $951,252. Repairs and alterations, $101.870.-The sum requested is to cover the cost of repairs and alterations to the buildings in Washington and in the field to be Occupied by the Board. This represents an increase over the fiscal year 1938 of $9,870. The activities of the Board are housed in over 300 different buildings scattered throughout the States and Territories and these quarters require constant repair and alteration to meet the charging needs of the Board. The additional amount requested represents the normal increase due to the additional space to be occupied, which will necessarily involve added costs for such purposes. Special and Miscellaneous Current Expenses, $143,445.—The amount included for special and miscellaneous current expenses is necessary to cover the cost of all items of expense which are not included under other special headings. During the fiscal year 1937 expenditures for special and miscellaneous items totaled approximately $226,000, or about $82,000 in excess of the estimate for the fiscal year 1939. Since the Board was in process of organization during that period, expenses of this character were proportionately larger than they will be when the Board is operating on a normal basis. The amount requested for the fiscal year 1939 exceeds the requirements for the fiscal year 1938 by only $13,445. In view of the contemplated expansion of the activities of the Board, this increase is of modest proportions. Equipment, $498,275.-The amount requested for the purchase of equipment, including desks, typewriters, filing equipment, etc., is $198,275 in excESS of the amount expected to be required for this purpose during the fiscal year 1938. The increased amount is necessary (1) to provide equipment for the additional personnel, (2) to provide additional filing equipment required for the filing of the millions of employees' record cards in the Baltimore office, and (3) to replace destroyed and obsolete equipment now in use when this becomes necessary. It is expected it will be necessary to purchase the following equipment: Filing equipment, Bureau of Old-Age Insurance. Filing equipment, all other Bureaus__. Furniture, Bureau of Old-Age Insurance. Furniture, all other Bureaus.. Typewriters, adding and accounting machines, and miscellaneous equipment-- Total estimated equipment costs TRAVEL $265, 340 35,000 65,000 30,000 102, 935 498, 275 Justification of amount included in Budget for 1939 The amount included for travel expenses for the fiscal year 1939 is $1,275.000, which exceeds the estimated expenditures for the fiscal year 1938 by $156,700. This increase consists principally of additional requirements of the Bureau of Old-Age Insurance and the Bureau of Accounts and Audits. The increased cost of travel, amounting to $65,400 for the Bureau of Old-Age Insurance, is required if this agency of the Board is to reach and to serve adequately the employers and employees covered by the old-age insurance provisions of the Social Security Act. Experience to date has made manifestly clear that in those towns and cities where there are no representatives or offices of the Board, fewer aged individuals become acquainted with their rights to claims and employers' reports are less accurate and useful. The limited number of field offices, although located in the most strategic centers, will not reach thousands of employers and hundreds of thousands of employees situated outside the larger urban centers in which the Board's field offices are located. Office managers, therefore, are expected to make periodical trips to each community within the territory of their respective offices in order to serve employers and employees who seek information or assistance in meeting wholly new and little understood obligations under the act. The additional travel requirements of the Bureau of Accounts and Audits in the amount of $85,000 are brought about because of the necessity for maintaining a larger staff of field auditors on a full annual basis as contrasted with the smaller staff, a considerable number of which was employed for only part of the current year, to audit the accounts of the States in connection with grants to States for old-age assistance, aid to dependent children, aid to the blind, and unemployment compensation administration. The remainder of the increased travel costs represents the normal additional travel resulting from the expansion of the various bureaus and offices of the Board. The following statement shows the estimated travel costs by bureaus and offices for the fiscal year 1939: The request for $900,000 for printing and binding is to cover the cost of punch cards, printed forms, vouchers and records, and letterheads and the printing and binding of informational pamphlets, statistical and financial reports and other printed matter necessary in the operation of the various Bureaus of the Social Security Board. Originally it was estimated that the requirements for printed forms and letterheads would be as follows: Tabulating cards Ledger sheets Listing forms Journal voucher cover sheets Journal vouchers Application forms Office-record forms Identification cards. Letterheads $150,000 15,000 65,000 5,000 10,000 10,000 12,000 15,000 75,000 35,000 Miscellaneous forms 138, 191 Total original estimate_-- 530, 191 After a careful resurvey of the requirements based on additional experience gained since the preparation of the original estimates, it is estimated that additional printed forms will be necessary as follows: In addition to the printing of forms and letterheads, it is anticipated that it will be necessary, in order to keep the public advised as to their rights and obligations in connection with the various phases of the Social Security program, to issue informational pamphlets, statistical reports, interpretations of the act, etc. The Board is of the opinion that through effective use of this material substantial economies in operation may be effected through eliminating personal and telephone calls upon the personnel of the Board for information as well as to enable employers to prepare and submit more accurate reports which will avoid a large amount of subsequent correspondence. The sum of $369,809 was originally included for this purpose. However, since the increase in requirements for printed forms has become evident, it now appears that it will be necessary to eliminate some of the needed materials, pamphlets, and reports originally contemplated in order to provide funds for essential forms. On the basis of present estimates, there will be available not more than $150,000 for printing of such material. GENERAL STATEMENT Mr. WOODRUM. Mr. Altmeyer, if you have a general statement, we shall be glad to receive it. (The statement referred to follows:) The Social Security Act places upon the Social Security Board responsibility for the performance of three primary functions. These are: (1) The administration of grants-in-aid to States for public assistance (assistance to the needy aged, the needy blind, and dependent children); (2) the administration of grants-in-aid to States for the operation of State unemployment compensation systems; and (3) the administration, in its entirety, of the system of old-age benefits to individuals provided under title II of the act. In the performance of the first function, namely administration of grants to States for old-age assistance, aid to dependent children, and aid to the blind, the work of the Board has already attained very substantial volume and importance. Since the passage of the Social Security Act 47 States, Alaska, Hawaii, and District of Columbia have enacted legislation providing for old-age assistance; 38 States, Hawaii, and District of Columbia have provided aid to dependent children; and 36 States, Hawaii, and District of Columbia have established aid to the blind. These programs are steadily expanding. During the remainder of the current fiscal year, and the fiscal year of 1939, it is expected that the remaining States will make provision for old-age assistance: at least 4 States will establish aid to dependent children, and 7 States aid to the blind. Furthermore, the States already having assistance legislation are constantly revising their programs, as their own or the general experience indicates essential and desirable changes. Under the mandate imposed upon it by the act, the Board must assist and advise the States in the framing of their original assistance legislation, and must pass upon the program finally adopted as to its conformity with the requirements for Federal aid laid down by the act. It must do the same with respect to all subsequent changes in the program of any State. To discharge its further explicit responsibility for insuring proper employment of the granted funds, the Board must exercise continuing supervision over various aspects of their administration by each cooperating State, and must make available to all States the information illustrative of administrative experience throughout the country which the Board alone is in a position to obtain. For the discharge of functions of this nature and scope it is evident that an adequate, highly trained staff is essential. Only with such a staff is it possible for the Board to insure that the grants of Federal funds are effectively and economically expended to carry out the intent of Congress as expressed in these titles of the act. The second function of the Board is administration of grants to the States for the carrying out of their unemployment compensation programs. Already all the States, the District of Columbia, and the Territories of Hawaii and Alaska have enacted unemployment compensation legislation. In a large number of the States these programs are upon the point of becoming actually operative in terms of payment of benefits to the unemployed. One State, Wisconsin. is already paying such benefits. In 22 additional States benefit payment will begin in January 1938; in 5 additional States by July 1, 1938; and by July 1, 1939, all States and Territories will be paying benefits. With the imminent |