PAG IS 0 THK CITIZEN, F1UDAY, JANUAHY 10, 1013, EON E MY AND EFFICIENCY President Taft Reviews the Re port ot Special Commission, Commends Findings and Urges Continuance, Shows a Prospective Saving In Gov ernment Expenditures of Upward of $5,000,000, With Investigation Only Begun Wasto In Single Item of Dis tributing Public Documents Amounts to $250,000 Annually Saving In Order to Spend More Wisely, Following are tho recommendations of tho president In relation to tho re port made to hlui by tho commission en economy and efllcleuey: To tho Senate and House of llepre- seutatives: I submit for the Information of the congress this report of progress made In tho Inquiry Into tho efficiency and economy of tho methods of transact ing public business. Efficiency and economy In the gov ernment service have been demanded with increasing Insistence for a gen eration. Heal economy Is the result of efficient organization. Hy perfecting the organization tho same bcnelits may bo obtained at less expense. A reduc tion In the total of the annual appro priations Is not In Itself a proof of economy, since It Is often accompanied by a decrease In efficiency. The needs of tho nation may demand a large In crease of expenditure, yet to keep the total appropriations within the ex pected revenue is necessary to the maintenance of public credit. Upon the president must rest a large share of the responsibility for the de mands made upon tho treasury for the current administration of tho execu tive branch of the government Upon tbe congress must rest responsibility for those grants of public funds which are made for other purposes. Reason For the Inquiry. Recognizing my sharo of responsibil ity for efficient and economical admin istration, I have endeavored during the past two years, with the assistance of beads of departments, to secure the best results. As one of the means to this end I requested a grant from con gress to make my efforts more effec tive. An appropriation of $100,000 was made Juno 25, 1010, "to enablo the president to Inquire Into tho methods of transacting the public business of the executive departments and other government establishments and to rec ommend to congress such legislation as may be necessary to carry into ef fect changes found to bo desirable that cannot bo accomplished by executive action nlone." I bavo been given this fund to enablo mo to take action and to make specific recommendations with respect to tho details of transacting the business of an organization whose activities are almost as varied as those of tho entire business world. Tho op erations of the government affect the Interest of every person living within the jurisdiction of the United States. Its organization embraces stations and centers of work located in every city and in many local subdivisions of tin ouutry. Its gross expenditures amount to nearly $1,000,000,000 nunually. In cluding the personnel of the military and naval establishments, more than 400,000 persons are required to do the work Imposed by law upon the execu tive branch of the government. Magnitude of the Task. This vast organization has nevt i been studied In detail as one piece ol administrative mechanism. Never ha e the foundations been laid for a thorough consideration of tho relations of all of Us parts. No comprehensive effort has boou made to list its multi farious activities or to group them in suih a way ns to present a clear pic ture of what the government is doi'ig. Never has n complete description been Elven of tho agencies through whi'h these activities are performed. At n time has the attempt been made to study all of these activities and agen cies with a view to the assignment of each activity to the agency best fitted for Its performance, to the avoidance of duplication of plant and work, to the Integration of nil administrative agencies of the government, so far as may bo practicable, into a unified or ganization for tho most effective and economical dispatch of public busi ness. Tirst Complete Investigation. Notwithstanding that voluminous re polls are compiled annually and pre enled lo the congress, no satisfactory statement has ever been published of the fiunnclai transactions of the gov crnraeut as a whole. Provision Is made for duo accountability for nil moneys coming Into the hands of of ficers of the government, whether as collectors of revenue or disbursing agents, and for insuring that author! rations for expenditures as made by law shall not be exceeded. Hut no ceueral system has ever been devised for reporting and presenting Informa tion regarding tho character of the expenditures made In such a wny as to reveal the actual costs entailed in th5 operation of Individual services and In tho performance of particular un dertakings nor in such a way as to make possible the oxorcUe of intclll gent judgment regarding the discretion displayed In making expenditure and concerning the value of the results oh talncd when contrasted with the sacri fices required. I am convinced that results which are really worth while cannot be se cured, or at least can be secured only In small part, through the prosecution nt Irregular lutervals of special In quiries bearing on particular services or features of administration. The benefits thus obtained must be but temporary. The problem of good ad ministration is not ono that can be solved nt ouu time. It is a continuous ly present one. Plan of tho Work. In accordance with my instructions the commission on economy and effi ciency, which I organized to aid me in tho Inquiry, has directed ItH efforts primarily to the formulation of con crete recommendations looking to the betterment of the fundamental condi tions under which governmental opera tions must bo carried on. With a basis thus laid it has proceeded to the prose cution of detailed studies of Individual services and classes of work nnd of particular practices and methods, push ing these studies ns far and covering as many points and services ns the re sources and time at Its disposal have permitted. , In npproaching its task it has divid ed the work Into five fields of inquiry having to do respectively with organi zation, personnel, business methods, ac counting and reporting and the budget. Organization. I have stated that the congress, the president and the administrative of ficers are attempting to discharge the duties with which they are Intrusted without full information ns to the agencies through which the work of the government is being performed. To provide more complete information on this point tho commission has sub mitted to me a report on the organi zation of the government ns it existed July 1, 1011. This report, which is transmitted herewith, shows in great detail, by means of outlines, not only the departments, commissions, bureaus and offices through which the govern ment performs Its varied activities, but also the sections, shops, field sta tions, etc., constituting the subordinate divisions through which the work Is actually done. It shows for the serv ices at Washington each such final unit as a laboratory, library, shop and administrative subdivision and for the services outside of Washington each station and point at which any activ ity of the government Is carried on. Specific Economies Demonstrated. With this outline as a basis the com mission has entered upon the prepara tion of three series of reports. The first series deals with the man ner in which the services of the gov ernment should be grouped in depart ments. Tho second and third series of re ports deal, respectively, with the or ganization nnd activities of particular services and the form of organization for the performance of particular busi ness operations. One of the reports of the second se ries Is upon the revenue cutter service, which costs the government over $2,500,000 each year. In the opinion of yie commission its varied activities can be performed with equal or great er advantage by other services. The commission therefore recommends that It be abolished. It Is estimated that by so doing a saving of not less thau 51,000,000 a year can be made. Another report Illustrating the sec ond scries recommends that the light house and life saving services be ad ministered by a single bureau instead of, as ut present, by two bureaus locat ed In different departments. These services have much in common. Geo graphically they are similarly located; administratively they havo many of the same problems. It Is estimated that eonsolldatnlon would result in a saving of not less than $100,000 an nually. In n third report the commission has recommended the abolition of the re turns office of the department of the interior. Tills action, in its opinion, will cause no loss In service to the public and will result in a direct sav ing of not less than $2.,000 a year, In addition to a largo Indirect economy lu tho reduction of work to be per formed In the several offices. In another report the commission has recommended the consolidation of the six auditing offices of the treasury and the Inclusion in the auditing system of the seven naval officers who now audit customs accounts nt the principal ports. The changes recommended will Improve In many ways the auditing of public accounts and will result In nn Immedi ate saving of at least $135,000 annually. A third scries of reports Is being pre pared on those brandies of the organ ization which arc technical In charac ter and which exist for the service of tho government ns a whole branches which have to do with such matters ns public printing, heating, lighting, the making of repairs, tho providing of transportation nnd the compilation of statistics where mechanical equipment Is essential. Abolition of Local Offices. Ferhaps tho part of tho organization In which the greatest economy in pub lic expenditure Is possible is to be found lu the numerous local offices of the government. In some Instances the fcstabllshuicut nnd the discontinuance of these local offices are matters of ad ministrative discretion. In other In stances they are established by perma nent law lu such u manner that their discontinuance Is beyond the power of tho president or that of any executive officer. In a number of services these laws were passed nearly a century ago. Changes lu economic conditions hae tnken place which have had tho effect of rendering certain offices not only useless, but even worne than useless In that their very existence needlessly swells expenditures and complicates the administrative system. The responsibility for tho mainte nance if these conditions must nat urally be divided between tho con gress ::nd the executive. Hut that the executive has performed his duty when lie has called the attention of congress to the matter must also be admitted, ltealizlng-my responsibility in the premises, I have directed the commission to prepare n report setting forth the positions in tho local services of tho government which may be dis continued with advantage, the saving which would result from such netlon and the change In law which are nec essary to carry Into effect changes In organisation found to be desirable. On the coming in of the report such offices as may be found useless nnd can be abolished will bo so treated by executive order. Personnel. In my recent mcssago to the con gress 1 urged consideration of the ne eessUy of placing In the classified serv ice all of the local officers under the departments of the treasury, the In terior, postofflce nnd commerce nnd la bor. As yet little if any attempt has been made by law to secure, either for tho higher administrative positions in the service nt Washington or for local of fices, the qualifications which the In cumbents of these positions must have If the business of the government Is to be conducted In the most efficient nnd economical manner. Furthermore, In the case of many of the local of ficers the law positively provides that the term of office shall be of four years' duration. Extension of Merit System. The next step which must be taken is to require of heads of bureaus In the departments at Washington and of most of the local officers under the departments qualifications of capacity similar to those now required of cer tain heads of bureaus and of local of ficers. The extension of the merit sys tem to these officers nnd a needed re adjustment of salaries will have im portant effects In securing greater economy and efficiency. In the first place, the possession by the Incumbents of these positions of the requisite qualifications must In It self promote efficiency. In the second place, the removal of local officers from tho realm of po litical patronage In many cases would reduce the payroll of the field serv ices. At the present time the incum bents of many of these positions leave tho actual performance of many of their duties to deputies and assistants. The government often pays two per sons for doing work that could easily be done by one1. "What is the loss to the government cannot be stated, but that it Is very largo cannot be denied when it is remembered how numerous are the local officers In the postal, cus toms, internal revenue, public lands and other field services of the govern ment. In the third place, bo long as local officers nro within tho sphere of po litical patronage it Is difficult to con sider the question of the establish ment or discontinuance of local offices apnrt from tho effect upon local po litical situations. Finally tho view that these various offices nre to be filled as n result of political considerations has for its con sequence the necessity that the presi dent nnd members of congress devote to mntters of patronage time which they should devote to questions of pol icy nnd administration. Dangers of Fixed Term System. The greatest economy and efficiency and tho benefits which may accrue from the president's devoting his tlmo to the work which is most worth while may be assured only by treating all the distinctly administrative officers in the departments at Washington and In tho field in the same way as inferior officers have been treated. The time has come when nil these officers should be placed in the classified service. Tho time has also come when those pro visions of l.w which give to these offi cers a fixed term of years should be re pealed. So lng as a fixed term Is pro vided by law the question of reappoint ment of an officer, no matter how effi ciently he lr.iy have performed his du ties, will Inevitably be raised period ically. So long as appointments to these offices must bo continued by tho senate and so long as appointments to them must bo made every four years just so long will it be Impossible to provide n force of employees with a reasonably permanent tenure who are qualified by reason of education aud training to do the best work. Superannuation. I shall submit lu the near future for tho consideration or tho congress n plan for the retirement of nged em ployees In the civil hervlco which will safeguard the interests of the govern ment aud at tho same time make rea sonable provision for the needs ot those who havo given the best part of their lives to tho service of the state. Iti every case where technical proc esses have been studied It lias been demonstrated beyond question that , largo economies may be effec ted. Tho 1 subjects first approached were those which He close to each administrator viz. office practices. An illustration of the possibilities within this field may bo found in the results of the inquiry , into the methods of haudllug and filing t correspondence. Every office In the government has reported Its methods to the commission. Theso reports brought to light the fact that present ' methods were quite tho reverse of unl I form. Some offices follow tho practice I of briefing nil correspondence; somo do not Some have fiat files; others fold nil 'pors before filing. So wis use press coiile: others retain only carbon co les. Cost of Handling and Filing Ccrrc cpsi,d:nce, The reports nl.io show not only n very wide range lu the methods of doing this eouipiunthely j.lmple part of the government business, but nn ex traordinary range In cost. For tin handling of Incoming mall the aver ages of cost by departments vary from 5.SI to $31.-I0 per 1,000. For the han dling of outgoing mall the averages by departments vary from $5.01 lo $G9.Sli per 1,000. This does not include the cost of preparation, but is confined merely to tho physical side of the work. Tho variation between Indi vidual offices is many times greater than thnt shown for averages by de partments. It has been found that differences of average cost by departments closel follow differences In method and that the greatest cost is found in the de partment where tho method Is most involved. Another fact is of interest viz, that lu tho two departments nbove referred to, which show tho lowest averages, orders havo been Issued which will lead to large saving with out Impairing efficiency. It cannot be said what the saving ultimately will be when the attention of officers in all of the departments has been focused on present methods with a view to chang ing them In such manner as to reduce cost to the lowest point compatible with efficient service. It, however, must be a considerable percentage of nearly $5,000,000, the total estimated cost of handling this part of the gov ernment business at Washington. Need For Labor Saving Office Devices. The use of labor saving office devices in the service hns been made the sub ject of special Inquiry. An Impression prevails thnt the government is not making use of mechanical devices for economizing labor to the same extent as are efficiently managed private en terprises. A study has been made of the extent to which devices of this character are now being employed in the several branches of tho govern ment and the opportunities that exist for their more general use. in order to secure information ns to the various kinds of labor saving devices that are Hi existence and as to their adaptabil ity to government work, nn exhibition of labor saving office nppliances was held In Washington from July C to 15, 1011. One hundred nnd ten manufac turers and dealers participated, and more than 10,000 officers nnd employees visited the exhibition. There is no doubt that the exhibition served tho purpose of bringing to the attention of officers" devices which can be employed by them with advantage. The holding of this exhibition was, however, but a step preparatory to tho contemplated Investigation. Unnecessary Cost of Copy Work. The efforts of the commission result ed also In the adoption by several bu reaus or departments of improved methods of doing copyiug. The amount of copy work heretfore done by hand each year lu the many offices Is esti mated to aggregate several hundred thousand dollars. The commission ex hibited at Its offices appliances thnt were thought to be especially adapted to this kiud of government work. Fol lowing these demonstrations methods of copying were Introduced which have brought ubout a saving of over 73 per Cent In offices where used for six months. This change In one small cross section of office practice will more than offset the whole cost of my Inquiry. Waste In Distribution of Public Docu ments. Going outside tho office, ono of the business processes which has been In vestigated is tlie distribution of depart mental documents. This Is a subject with which both the congress aud ad ministration bends nre familiar. The prevailing practice in haudllug depart mental publications is to have them manufactured at tho government print ing office. Uach Job when completed is delivered to tho department. Here the books or pamphlets are wrapped and addressed. They nre then sent to the postolllce. There they are assorted and prepared for shipment through tho malls. From the postoffice they are pent to the railroad station, which is only a few steps from tho government printing office, whence they started. The results of this laborious nnd cir cuitous method Is to make the use of tho best mi'chuuical equipment Imprac ticable and to waste each year not less than a quarter of a million dollars ol government funds In useless handling, to say nothing of tho indirect loss duo to lack of proper co-ordination. Wasteful Use of Properties and Equip ment. Tho use of equipment Is a matter which also has been Investigated. Up to tlie present time this Investigation bus been in tho main con lined to the subject of t'lectiic lighting. The gov ernment pays over sfilOO.O'io per year for electric current. It lias made largo capital outlays for wiring and fixtures. With tlie Increasing demands in many buildings the present equipment is tax ed to Its limit, nnd if tlie present meth ods are continued much of this wir ing must be done over. In many places employees tire working nt a great physical disadvantage, duo to Inade quate nnd Improper lighting and there by with reduced efficiency. In every place where the Inquiry has been con ducted It appears that there is large waste; that without the cost of re wiring, simply by giving proper atten tlin to locnllon of lights nnd the use of proper Inmps and rellectors, the light eillclency at points whero needed may be much Increased and the cost of currjnt reduced from 30 to CO per cent. Other Inquiries Into tho uso which Is being made of properties and equipment nro contemplated which promise oien lurger results. Unnecessary Cost of Insurance. It is tho policy ot the government not to Insure public property against fire nnd other losses. Question has been raised whether the government might dot apply the same principle to other foitns of risk, Including insur ance of (lie fidelity of officials nnd em ployees. A report Is now in prepara tion on the subject which will show opportunities for large savings. I be dove that the present expense for In suring tho fnlthful executjon of con tracts, which, though paid by tho con tractor, Is more than covered In the added price to tho government, can be largely reduced without tnking away any clement of security. The importance ot establishing nnd maintaining standard specifications Is found not only in the possibility of very materially reducing tho direct cost of government trading, but nlso lu insuring to the service materials, supplies and equipment which aro bet ter adapted to its purposes. One of the results of indcflnltencss of specifi cations Is to Impose contract condi tions which make It extra hazardous for persons to enter Into contractual relations. This not only deprives the government of tno advantage of broad competition, but causes It to pay an added margin In price to venders, who must carry the risk. Excessive Co3t of Travel, The annual cost of travel to the gov ernment was found to be about $12, 000.000. It was also found that the government employees were traveling lu practically every way that was open to the public. It wa further found thnt, although the government was the largest user of transportation, it was buying railroad tickets on a less favorable basis than would be possible If the subject of traveling ex penditures were systematically han dled from tho point of view of the government ns a whole. The form of ticket most often used between such points ns New York, Philadelphia and Washington was the single trip first class ticket. In two departments defi nite tests havo been made In tho use of mileage books, and In each prac tically the same result has been re portedviz, an average saving of a lit tle over one-half of 1 cent per mile. One of the results or byproo lets of this inquiry into travel expenses was the recommendation that the Jurat or affidavit which Is now required by or der of the comptroller be discontinued. The jurat does not add to the value of the return, Involves persons traveling In much nnnoyance and trouble In go ing before nn officer competent to ad minister oaths, while every disciplina ry result is obtained through certifica tion under the law prescribing a pen alty for the falsification of accounts. A discontinuance of the jurat in all cases would result In n direct saving of nbout $00,000 per annum. Other Expenditures to Be Investigated. Before economy In government trad ing can be adequately covered such subjects ns the following must bo sys tematically inquired luto viz: Subsist ence and support of persons; subsist ence nnd care for animals and the stor age and care of vehicles; telephone, telegraph and commercial messenger service; printing, engraving, litho graphing nnd binding; advertising and the publication of notices; heat, light, power and electricity purchased; re pairs by contract nnd open market or der; building nnd other materials; drafting, scientific and stationery sup plies; fuel; mechanics', engineering and electricians' supplies; cleanlug aud toilet supplies; wearing apparel and hand sewing supplies; forage and oth er supplies for animals; provisions; ex plosives aud pyrotechnic supplies; heat, light, power and electrical equipment; live stock; furniture and furnishings; educational aud scleutltlc equipment. From what has been already ascertain ed conceruiug certalu ot these differ ent objects of government expenditure it is evident that large savings will re sult from such nn examination. Reports at Present Required by Con gress. The commission has made a study of the present requirements of law relat ing to reports which are in whole or in part financial in character from the vnrious departments aud establish ments. There are more than ninety acts of congress which annually re quire reports of this character. These requirements of the law result In near ly 200 printed reports relating to finan cial matters, which must be submitted annually to the congress by the vari ous departments nnd establishments. Studies of these reports nnd compari sons of the classification of expendi tures as set forth therein have been made by the commission to the end that, no far as practicable, uniformity of clnsshlcntlon of objects of expendi ture may be recommended nnd Identi cal terminology adopted. In duo time I shall transmit to the cougross such recommendations for changes in the present laws relating to these annual reports ns appear to bo pertinent and necessary. No National Budget. Tho United States is the only great nation whose government Is operated without ti budget. This fact seems to bo moro striking when it is consid ered "that budgets and budget proce dures nro the outgrowth of democratic doctrines nnd have had nn Important part in the development of modern constitutional rights Tho American commonwealth has suffered much from Irresponsibility on the part of its governing agencies. Tho constitutional purpose of a budget Is to make gov ernment responsive to public opinion nnd responsible for Its acts. A budget should bo the menus for getting before the legislative branch, ItAfnru the uress and bfiforo tho peo ple a definite nnnual progr..in of bm uess to be financed, it should bo tho nature of a prospectus both revenues nnd expenditures, It shoul comprehend every relation of the gol eminent to the people, whether wM reference to tho raising, of revenues the rendering ot --erMi e. In many foreign . utintr). t u,. u nual budget program is dis if J wl Hpcclul reference to the revenue to ll raised, tho thought being tliat the rail lug of revenue bears more direct rell Hon to welfaro than does govenuneil expenditure. Around questions Rource of revenue political- pnrtll have been organized, nnd on su questions voters In the United StatJ have taken sides sluce the first rcl enue law was proposed. Citizens' Interest In Expenditures. In political controversy it has h"il assumed generally that the indlvidul citizen has little interest in what til government spends. In my opluiol this has been n serious mistake, oil which Is becoming more serious cat year. Now that population has b come more dense, that large cltlJ have developed, that people are rl quired to live In congested centers, th the national resources frequently a J the subject of private ownership ail private control and that transportatltl and other public sen-Ice facilities a J held and operated by large corporl tlons, what the government does will nearly $1,000,000,000 each year Is of much concern to the average citizen :l Is tlie manner of obtaining this anioui of money for public use. In tlie prej cut inquiry special attention has beil given to the expenditure side. We want economy and efficiency want saving and saving for a purpos We want to save money to enable til government to go into somo of til beneficial projects which we nre ill barred from taking up now becau we cannot Increase our expenditure! Projects nffectlng the public healtl now public works and other beneflcil activities of government can be ful thered if we are able to get a dollar J value for every dollar of the goverl ment's money which we expend. Continuance of the Commission. I ask tho continuance of this coH mission on economy and efficiency 111 cause of the excellent beginning whiil has been made toward the reorgauizl Hon of the machinery of this goveril ment on business principles. I ask because its work Is entirely uonpal tisan in character nnd ought to appll to every citizen who wishes to givl effectiveness to popular governiuenl In which we feel a just pride. Thl work further commends Itself for tl reason that the cost of orgaulzatlnl and work has been carefully considel cd at every point. Three inontll wore taken in consideration of p'.ail before the inquiry was begun, sil months were then spent In prcllmlnar Investigations before tho cammlssiol was organized. Before March 3, 101 wueu i asset! ror n continuation 1 the original appropriation for tho eul rent year, only $12,000 had been spenl It Is n matter of public record tbn the three largest lnsurauce compnulil In New York when under leglslatlvl investigation spent more than J."O0 000 for expert services to nsslst thl administration to put the business ol a modern basis, but the economies thl first year were more than tenfe'd thl cost. I am informed that New YorlJ Chicago, Boston, St. Louis. Cincinnati Milwaukee and other cities are prosil cutlng inquiries the cost of whi-Mi ll largely disproportionate to the cost ill curreu by tho federal government Furthermore, these inquiries have thl vigorous support nnd direct co-opcni tion of citizen agencies which u'on are spending not less than $200,0ol per annum. I I sincerely hope that congress wlj not in Its anxiety to reduce expend! tures economize by cuttlug oft an nil propriatlon which is likely to offcl greater opportunity for real ecouomv ij tho future than ncy olher estimate! for. As has been said, the changes wlncl have already been made are resul'inl in economies greater ui.in the tost l the Inquiry. Hepoits in my luu.l: iiu rocoiiiineniiauons, esrunate uM proximately $2.000.uud of p issi .it ui uuul economies. Other sub vts uul Investigation Indicate nun. a inner ril suns, uiieso represent ou'y a toiv ol tho many services which should suiJ Jected to a like painstaking luqn.ry 1 1 this is done It Is beyond question tlul many millions of savings mnv be reaU ized. Over and above the economy tulul Increased efficiency which may lie salJ to result from the work of the comailsl slon as such Is un Indirect result thai cannot well bo measured. I refer tl the Influence which a vigorous, thor oughgolug executive Inquiry has oi each of the administrative units In this relation it may be said thai the expenditure for the Inqulrv durlud the present fiscal year is at the rate ol $130,000. The mass of informatloil which must bo collected, digested am! summarized pertaining to each snlil ject of inquiry is enormous. From tlx results obtained It is evident that ev ery dollar which is spent In the prosel cutlon of tho Inquiry in tho future will result In manifold savings. Kverj economy which has been or will be efl fected through changes In organization or method will Inure to tho benefit oi the government nnd of the people ill increasing measure through the year. which follow. It Is clearly the part ot wisdom to provide for the coming yeaii means at least equal to those availablil during tho current year, and lu mj opinion the appropriation should bo In creased to $200,000, and nn addltlonni amount of $.10,000 should be provided for tho publication of those results which will bo of continuing value tc olllcers of the government nnd to thi people. WILLIAM II. TAFT. Tho White nous. Jan 17 mil
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