Mr. DONOVAN. We recommend that transfer from the appropriation of $1,411,500 provided in the District of Columbia Appropriation Act for 1938, for emergency relief, to the appropriation for old-age assistance. This matter was considered during the conference on the District appropriation bill for 1938, but it was held at that time that the conference could not handle it as no change had been made in the estimate for old-age assistance in the Senate as the item had passed the House. The purpose of this item is to increase the old-age assistance appropriation by $125,000, which will be equalled by a similar amount to be paid to the District of Columbia by the Social Security Board.

The idea underlying the transfer is that there will be transfers of persons now on relief to the old-age assistance roll, and that by reason of that fact there should be a transfer of funds from the appropriation for relief to the appropriation for old-age assistance. In talking with the chairman of the Board of Public Welfare, in a conference with him, yesterday, and, also, with Miss Hill, the Director of the Public Assistance Division, we have come to the conclusion, as a result of figures submitted by Miss Hill, that probably not over $75,000 would have to be transferred. I have submitted the matter to the Commissioners, and they concur in reducing the amount to $75,000. As I said a moment ago, there will be an additional amount equivalent to the amount estimated and approved by Congress received from the Social Security Board.

Mr. LUDLOW. There will be no extra charge on the Treasury at all. Mr. DONOVAN. No, sir; there will be no extra charge on the Treasury; but we will receive dollar for dollar from the Social Security Board for expenditures for old-age assistance.

Mr. WOODRUM. Will the transfer of this fund enable you to carry on the old-age benefits?

Mr. DONOVAN. I might say that this matter was brought up on a recommendation submitted to the Commissioners by the Director of Public Welfare, in which he stated there would be a deficiency of approximately $180,000 in the appropriation for old-age assistance for 1938. On analyzing that figure, we found that it was too high, and I have definite assurances from the chairman of the Board of Public Welfare and from Miss Hill that the transfer of $75,000, with a similar amount from the Social Security Board, will prevent any deficiency in the old-age assistance appropriation for 1938.

TUESDAY, AUGUST 10, 1937.

MISCELLANEOUS EXPENSES OF UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLUMBIA

STATEMENT OF E. R. BUTTS, ASSISTANT GENERAL AGENT, DEPARTMENT OF JUSTICE

The CHAIRMAN. You ask in House Document No. 336 for an additional appropriation of $2,706.69 under "Miscellaneous expenses, District Court of the United States for the District of Columbia" for the fiscal year 1937. This is in addition to the combined amounts of the original appropriation of $25,000, and the supplemental appropriation

of $15,000 contained in the Second Deficiency Appropriation Act of 1937. Please explain the cause of this shortage.

Mr. BUTTS. The original appropriation of $25,000 was made upon the supposition that there would be very few if any condemnation cases to be handled during the fiscal year 1937. On the contrary, there have been 16 of these cases, and petitions are now being prepared for 3 new cases to be instituted. The additional expense for experts, jurors of view, and reporting and transcribing testimony, and so forth, in said condemnation cases, together with the increased cost of heat, light, and power for the courthouse building have caused both the original appropriation and the supplemental appropriation heretofore made to be insufficient.

The pending request covers only the exact ascertained amount needed to complete the payment of known obligations. This is shown somewhat in detail by the attached statement comparing expenditures for the fiscal year 1936 with those for 1937, and listing by classes the unpaid items.

The CHAIRMAN. That's all, and thank you for coming up.

Miscellaneous expenses. District Court of the United Expended, Expended,
States for the District of Columbia, 1937

1936

1937

STATEMENTS OF EMIL SCHRAM, PRESIDENT, AND WILLIAM A. WEAVER, TREASURER

INCREASED APPROPRIATION FOR ADMINISTRATIVE EXPENSES, 1938 Mr. WOODRUM. As a matter of statement of the case from the historic standpoint, in connection with the independent offices appropriation bill, H. R. 4064, Senate amendment no. 12, based on Senate Document No. 18, appropriated or permitted the Electric Home and Farm Authority to use not exceeding $300,000 of their funds for administrative expenses, and so forth, this being a reduction of $100,000 from the amount recommended by the Budget Bureau for that purpose. The subcommittee of the House had hearings on Senate amendments nos. 11, 12, and 13, to H. R. 4064, in which the matter of appropriating for the Electric Home and Farm Authority was gone into very carefully. The conferees, however, were powerless to

reinstate the original amount, inasmuch as they could not go above the amount the Senate fixed in the bill. The purpose of this hearing now is to hear a statement from the Electric Home and Farm Authority as to the necessity of including in the third deficiency bill the remaining $100,000 estimated by them and approved by the Bureau of the Budget. Is that a correct statement of it?

Mr. SCHRAM. Yes, sir.

Mr. WOODRUM. Will you tell us, please, what is the need for this additional amount?

Mr. SCHRAM. The need for that amount is to preserve our assets. As you know, we are not asking for an appropriation from the Treasury, because we will use our own funds. In the past year we have increased our portfolio by approximately $3,000,000. We have at the present time, about $4,500,000 in financing paper. I am assuming that you are familiar with our operations.

Mr. WOODRUM. That is fully set out in the hearings we had before. Mr. SCHRAM. In order to properly preserve that portfolio, it is necessary that we have sufficient funds to take care of the business. Now, we are not carrying on a large expansion program, and we spend no money for advertising or promotion work, but we are following the Rural Electrification Administration in their projects, handling the financing of the appliances in those areas. We have considerable business in urban territories, and we are continually negotiating for these services. We have requests from many municipalities as well as private utilities, and naturally, we have to be in a position to give those communities the service when they have asked for it. Now, as I have said, we are not carrying on an extensive expansion program, but we do want to be in a position to protect the portfolio we have, and to keep the business in a sound condition.

Mr. WOODRUM. Will you need this additional $100,000?
Mr. SCHRAM. We think we will.

Mr. WOODRUM. It is not for putting on additional personnel, but is a matter of transfers?

Mr. SCHRAM. There is very little personnel involved. It is difficult to tell at this time what new personnel we will have to take on. It will require little additional personnel in Washington, but we may have to have some additional personnel to handle the service in the field. While we maintain but two field offices, we have representatives in the field to follow the paper through and to check to see that the paper is being properly handled by the dealers and utilities that have the contracts.

Mr. WOODRUM. As I stated, we have had rather full statements from these gentlemen here before, and they are available. I do not know that it would be necessary to go into the matter very much further now, unless there are some questions.

Mr. WIGGLESWORTH. When did the expansion you spoke of take place?

Mr. SCHRAM. In the past fiscal year.

Mr. WIGGLESWORTH. There has been a steady increase throughout the year?

Mr. SCHRAM. Yes, sir.

Mr. WIGGLESWORTH. What percentage of increase does that represent as compared with a year ago?

Mr. SCHRAM. Approximately 200 percent for the fiscal year.

Mr. WIGGLESWORTH. In dollars and cents, what would the total be for this fiscal year?

Mr. SCHRAM. Do you mean the increase in business?

Mr. WIGGLESWORTH. I mean the total.

Mr. SCHRAM. We have at the present time approximately $4,500,000 of business in our portfolio.

Mr. WIGGLESWORTH. Was all that acquired during the last fiscal year?

Mr. SCHRAM. No, sir; that is the total business. A year ago, in June, we had approximately $1,500,000 of business in our portfolio. Mr. WIGGLESWORTH. If this is allowed, you will have the exact amount you asked for and that the Budget approved in the first instance.

Mr. SCHRAM. Yes, sir; they approved $400,000, after cutting our estimate approximately $190,000.

Mr. WOODRUM. Do you have a statement showing how much of the $300,000 you have spent, and what your monthly expenses are? Mr. SCHRAM. Do you mean for this year?

Mr. WOODRUM. Yes.

Mr. SCHRAM. No, sir; we do not have it for this year, but we have it for the past fiscal year. We do not have such a statement for this

fiscal year.

Mr. WOODRUM. Do you know what your administrative expenses were in the month of July?

Mr. WEAVER. Approximately between $20,000 and $25,000 for July.

Mr. WOODRUM. This additional $100,000 will give you room for expansion?

Mr. WEAVER. Slightly; yes, sir.

Mr. SCHRAM. It is understood, of course, that this additional $100,000 does not take any money out of the Treasury; it is money that we have earned or will earn. This is merely an internal administrative matter.

Mr. TABER. How much have you been spending?

Mr. SCHRAM. Last year we spent a little over $200,000.

Mr. TABER. Why will not $300,000 take care of your service this year?

Mr. SCHRAM. At the present we are running at the rate of $300,000 annually. It would not permit any expansion at all.

Mr. TABER. Why do you need to expand?

Mr. SCHRAM. Because this is business that comes to us. We would simply freeze our operations.

Mr. TABER. You could get along. That is a considerable development with what you have in the original appropriation.

Mr. SCHRAM. We could not have any development. It would mean declining a lot of new business in a lot of territory that is entitled to our service.

Mr. TABER. Where is that?

Mr. SCHRAM. We have much in prospect at the present time in the Northwest, and we have some in Kentucky. Just recently we closed a contract with a Minnesota utility. We are just getting started in that territory now. The business we have on the books now and the contracts we have just made will create considerable new business in addition to what we had during this past year.

Mr. TABER. When you get one job completed, you go on to the next? You do not operate those outfits.

Mr. SCHRAM. We have to keep in contact with them continually, and we must keep in contact with the utilities.

Mr. TABER. Do not those people do that after they are set up? Mr. SCHRAM. They do not look after our business for us. We must do that ourselves. We must check up on the credit ratings of dealers and buyers. Nobody will do that for us. They make the collections for us, and we pay for that service, and there are certain administrative costs we must pay. We must run the business in a businesslike manner. Our portfolio will grow considerably in the next 12 months. We must protect and watch the business that we have on hand. This will take no money out of the Treasury, but we will have profits sufficient to take care of it. I might add that the Rural Electrification Administration at the present time has authorized about 385 projects, and by January 1 they expect to have around 550 projects. We go into those communities and handle the financing of the electrical appliances. That is business that we do not go in and ask for, but it comes to us, and we must be in a position to handle it. Our business is a profitable operation, and is conducted on a sound business basis.

Mr. WOODRUM. We thank you gentlemen for your statements.

TUESDAY, AUGUST 10, 1937.

TREASURY DEPARTMENT

STATEMENT OF H. J. ANSLINGER, COMMISSIONER OF NARCOTICS, BUREAU OF NARCOTICS, DEPARTMENT OF THE TREASURY

BUREAU OF NARCOTICS

EXPENSES OF ADMINISTERING AND ENFORCING PROVISIONS OF THE MARIHUANA TAX ACT

Mr. WOODRUM. We have before us a draft of a proposed provision pertaining to existing appropriations for the Treasury Department, fiscal year 1938, for the enforcement of the Marihuana Act, as follows:

The appropriation for collecting the internal revenue contained in the Treasury Department Appropriation Act for the fiscal year 1938 is hereby made available for the payment of expenses of assessing and collecting the taxes imposed under the Marihuana Tax Act of 1937; and the appropriation for salaries and expenses, Bureau of Narcotics, contained in the Treasury Department Appropriation Act for the fiscal year 1938, is hereby made available for the payment of expenses in administering and enforcing the provisions of the Marihuana Tax Act of 1937. Mr. Anslinger, will you give us an explanation of this language that you ask to have included in the deficiency bill?

Mr. ANSLINGER. Mr. Chairman, the Marihuana Tax Act was signed by the President on August 2, and will go into effect on October 1. In order to enforce that act, we will need this language so we can enforce it and, also, handle the necessary paper work.

Mr. WOODRUM. Suppose you give us a brief explanation of that act, and state what it is your Bureau will be called upon to do.