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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: Ramspeck Act promotions..

$3, 890 Salaries of returning veterans.

900 Reclassifications...

414 Ponalty mail...

5, 896

Total...

11, 100

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.

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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

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. In 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

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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 il 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 Administration, including the cost of forms used in connection with the national service life insurance, pension and compensation, hospitalization, vocational rehabilitation, education and training, readjustment allowance, loans, etc.

Penalty-mail costs. The committee has approved the amount of $614,250 to cover the cost of handling penalty mail in accordance with the act of June 28, 1944, Public Law 364, which is an increase of $128,625 over the appropriation granted for this purpose in 1945, and a reduction of 10 percent in the estimate.

Army and Navy pensions.—The bill includes the Budget estimate of $1,080,150,000 for compensation and pensions, which is an increase of $521,898,000 over the amount approved for the current fiscal year. Expenditures under this title cover the payment of all compensation, pensions, and allowances for veterans of the various wars or the Regular Establishment and their dependents in accordance with the laws enacted by the Congress. The increase in this estimate is due almost entirely to the additional number of veterans of World War II and their dependents who are expected to be added to the pension rolls.

Readjustment benefits. The committee has approved the Budget estimate of $295,000,000 as a new appropriation under the title “Readjustment benefits.” This is to provide for the payment from one appropriation of benefits to or on behalf of veterans of World War II as authorized by titles II, III, and V of the Servicemen's Readjustment Act of 1944 (Public Law 346, 78th Cong.). The items of expense to be paid from this appropriation include subsistence allowance and tuition for veterans receiving education and training; interest and guarantee losses on loans; and readjustment allowance to unemployed veterans. This amount does not include administrative costs incident to the carrying out of that act as such expenditures will continue to be paid from the appropriation "Salaries and expenses.'

Military and naral insurance.—The bill includes the Budget estimate of $18,000,000, which is a decrease of $1,794,000 from the amount granted for the current fiscal year. This appropriation covers payments arising from contracts with World War I veterans for what was known as war-risk insurance. Payments are now being made (1) to veterans who suffered a permanent and total disability as a result of war service or during the post-war period in which they carried this type of insurance; (2) to beneficiaries of soldiers who died in service or during the post-war period in which this type of insurance was in force; and (3) to the Government life-insurance trust fund to meet obligations sustained by that fund incident to the extra hazards of military or naval service of persons so engaged while protected by Government life policies.

National service life insurance. The bill includes the Budget estimate of $1,000,000,000 for this purpose, which covers payments to the

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