Aside from the reduction of $300 in the estimate for penalty mail, the committee has denied a proposed increase of $82,766 for the fiscal year 1946. The effect of such action will be to disallow additional positions requested, enforce a slowing up of records retirement work, including that presently being performed in the war agencies, and deny increases proposed under the heading "Other obligations."

NATIONAL HOUSING AGENCY

Office of the Administrator.-Funds for the administrative expenses of this office are obtained by authorization in the bill for the transfer of funds available to the constituent units. The committee has approved an authorization for the transfer of such funds in the amount of $449,825 which is substantially the basic amount provided for the current fiscal year.

Federal Home Loan Bank Administration.-The total authorization recommended in the bill for this agency, which includes the Federal Home Loan Bank System, the Federal Savings and Loan Insurance Corporation and the Home Owners' Loan Corporation is $7,502,583, which is $26,117 less than the Budget estimate. The reduction recommended by the committee is due to the disallowance of funds for the office of the Administrator, the sum of $12,294 being the proportionate amount which the Bank Administration will not be required to furnish in view of such reduction. A further reduction of $13,823 has been effected in the item for penalty mail.

Federal Housing Administration.-The bill includes an authorization for the use of the various funds of this agency, amounting, in all, to $10,537,747, which is a reduction of $20,253 in the Budget estimates and an increase of $1,507,099 in the basic amount authorized for the same purposes for the current fiscal year. The increase will provide 504.2 man-years of employment. This substantial increase will allow the necessary personnel for an anticipated increase in foreclosures under title VI, provide additional auditors for examination of books under the large-scale housing projects, and allow personnel to handle an increased volume of business under title II. It is estimated that approximately 200,000 applications will be made for insurance under title II of the Housing Act.

The reduction of $20,253 in the Budget estimate is due to a cut of $14,753 in funds required to be transferred to the Office of the Administrator and the remainder is attributable to the 10-percent saving required in the item for penalty mail.

The bill also includes $3,000,000 payable from premiums collected as provided in the Housing Act, to cover payment of losses under insurance granted under section 2 and section 6, title I, of the National Housing Act.

H. Repts., 79–1, vol. 1— -12

Federal Public Housing Authority.-Under the reorganization plan setting up this agency the functions of a number of activities formerly engaged in war housing were consolidated into the Federal Public Housing Authority. In addition to the authorization requested in this bill the Authority carries on a number of operations consisting primarily of the operation and maintenance of a variety of housing projects, involving a total estimated cost, for such operation and maintenance during the fiscal year 1946, of $11,628,714.

The Budget estimate considered by the committee in the bill was in the sum of $2,350,000 for administrative expenses in connection with the housing program under the United States Housing Act of 1937, as amended. The reduction recommended by the committee of $22,600 is due to a cut of $22,130 in the amount of funds required to be transferred to the Office of the Administrator, the remainder being attributable to the 10-percent reduction effected in the item for penalty mail.

SECURITIES AND EXCHANGE COMMISSION

The bill contains $4,134,500 for the salaries and expenses of this agency, which is a decrease of $101,500 in the Budget estimate and an increase of $74,700 in the basic amount appropriated for the current fiscal year. The committee was impressed with the needs of this Commission and has provided an increase which should take. care of the most urgent requirements. It is not believed that a more substantial increase can be justified in a nondefense activity at this time in view of the manpower shortage referred to at another point in this report.

SMITHSONIAN INSTITUTION

For salaries and expenses of the Smithsonian Institution the committee recommends $1,065,160, which is $139,840 less than the Budget estimate. The net effect of the recommendation of the committee is to deny all requests for new positions and additional funds requested under the heading "Other obligations." The committee is of the opinion that substantial increases in agencies not engaged in war activities cannot be justified at the present time. Additional amounts allowed by the committee are as follows:

TENNESSEE VALLEY AUTHORITY

Change in appropriation language.-The committee has considered and approved a change in the appropriation language heretofore governing the expenditure of funds for this activity. In the past, congressional appropriations have been made available for two distinct purposes, (1) to provide funds necessary for development and construction activities which may not be financed from proceeds under the terms of section 26 of the Tennessee Valley Authority Act, and (2) to supplement proceeds where such proceeds have not been sufficient to finance the activities referred to in section 26 of the Act. The amounts appropriated for section 26 purposes to supplement proceeds were required primarily for the construction of power facilities to keep pace with the rapid growth in the power requirements in the area. While there were substantial cash surpluses from power sales above all costs of operations, these surpluses were insufficient to provide all the funds needed in the construction of power facilities.

During this period of heavy construction, when appropriated funds were being made available for both construction and operating purposes, the annual appropriation acts have included a provision consolidating appropriations and receipts into a single fund on the books of the Treasury, known as the Tennessee Valley Authority fund. This single-fund arrangement was included in order to simplify budget and accounting procedures during the period when receipts and appropriated funds were being used for the same purposes.

Circumstances will be substantially different in 1946. The Budget for 1946 shows that estimated proceeds from revenue producing activities in that year will exceed estimated fund requirements for the activities to be financed out of proceeds under the terms of section 26 by $10,016,000. This estimated surplus of proceeds is reserved for payment to the general fund of the Treasury, as required by section 26. The appropriation recommended for 1946 is therefore limited to funds required for activities not financed by receipts, including major construction projects, the manufacture and distribution of phosphatic fertilizers, etc.

Because of these circumstances, the board of directors of the Tennessee Valley Authority, with the permission of the Bureau of the Budget and the approval of the Comptroller General (see p. 383 of the hearings), has recommended that the single-fund provision be discontinued beginning with the fiscal year 1946.

Under the proposed change in language, deposits and disbursements of funds would be handled as follows:

1. Appropriated funds placed in a fiscal year appropriation account subject to withdrawal in the usual manner.

2. Receipts deposited, as received, in a collection account with the Treasurer of the United States.

3. Disbursements made only from the appropriation account.

4. Appropriation account reimbursed monthly from the collection account for expenditures during the month for activities which are to be financed out of proceeds in accordance with the provisions of section 26.

5. Balances in the collection account, after all settlements for the fiscal year, would be paid into the general fund of the Treasury within 6 months after the close of the fiscal year.

The committee is in accord with the proposed change and has included the language in the bill which will put the plan into effect.

The total fund requirements for the Tennessee Valley Authority for the next fiscal year, as contained in the estimates, amount to $59,903,000, of which $9,850,000 would be provided through new appropriations. In recommending a reduction of $202,000 in appropriated funds the committee has applied a cut of $200,000 to the estimates for agricultural resource development and other development activities under the resource development programs. A 10-percent reduction in the amount estimated to be required for penalty mail from appropriated funds is also recommended. A proportionate reduction in the estimate of funds required for penalty mail from operating revenues will be applied by appropriate administrative authority.

UNITED STATES MARITIME COMMISSION

In

The bill includes no additional funds or contractual authority for the construction of ships or facilities. Appropriations totaling $15,741,010,000 toward the ship-construction fund have been heretofore provided and contractual authority for ships and facilities totaling $16,926,650,000 has been granted. It is estimated that funds and contract authorizations now available will be adequate for the program as presently agreed upon by the Joint Chiefs of Staff. fact, after providing $2,759,300,000 for obligations during the fiscal year 1946, for the anticipated requirements of the Joint Chiefs of Staff for ship construction beyond the current program, it is estimated that, of the contractual authority already available, $1,167,350,000 will remain unobligated at the close of that fiscal year. The entire estimated cash balance in the construction fund at the close of the fiscal year 1945 will be $3,941,484,924, and it is estimated that the cash balance as of June 30, 1946, will be $1,629,650,000.

Since the passage of the Merchant Marine Act of 1936, the Maritime Commission, to the close of December 1944, has delivered 4,561 newly constructed ships to the Army, the Navy, the War Shipping Administration, to private operators (operations under control of the War Shipping Administration during the war period), and under the defenseaid program, in addition to 1,215 small barges and powerboats. As of December 31, 1944, there were 1,072 vessels under various stages of

construction. Early in January 1945 the Commission awarded contracts for the construction of 226 additional dry cargo vessels and tankers to be delivered in the second half of the calendar year 1945. Altogether, there are now scheduled for delivery, during the calendar year 1945, about 1,300 vessels, exclusive of any that may be completed under awards yet to be made.

The committee considered an estimate of $28,500,000 for administrative expenses payable from funds heretofore appropriated to the ship-construction fund, an amount $4,058,138 less than the basic sum authorized for the current year. In view of the substantial reduction in the construction program for the next fiscal year the committee believes that a further cut is justified. In addition to the reduction of 10 percent in the estimate for penalty mail the committee has applied a cut of $200,000, distributed among the Divisions of Public Relations, Personnel Management. Economics and Statistics and the Office of the Secretary.

VETERANS ADMINISTRATION

Administration, medical, hospital, and domiciliary services.-The committee has approved the Budget estimate of $227,675,000. This appropriation covers all expenses of administration, including salaries and operating expenses of the central office in Washington, the New York branch of central office; 9 area offices; 94 hospitals now in operation, of which 38 have regional office activities and 11 have domiciliary activities; 15 regional offices; 2 supply depots; 2 insular offices; and 8 additional hospitals to be in operation during 1946; the cost of travel and examination of beneficiaries; repairs and alterations to facilities, and other property housing Administration activities; payments to contract institutions and other Government hospitals wherein Veterans Administration patients are hospitalized; reimbursement to States for veterans cared for in State soldiers' homes; payment of burial expenses; the cost of administration in connection with national service life insurance, vocational rehabilitation, education and training readjustment allowance and loans; in general, all items of expense which are not direct monetary benefits to the veterans.

This represents an increase of $83,469,701 over the basic appropriation for similar purposes in 1945 and is due to the additional cost including personnel, required for the increasing activities of the Veterans Administration, i. e., hospitalization, insurance, pension and compensation, rehabilitation, and the new functions authorized by Public Law 346; education and training, readjustment allowance, and loans. Printing and binding.-The bill includes the Budget estimate of $780,000 for printing and binding, which is an increase of $330,000 over the appropriation granted for this purpose in 1945. This appropriation covers the printing and binding requirements of the Veterans