Mr. COBURN. And I think it does. Mr. MULTER. It does give us the information, but after we have the information we can call you names or just sit back and fume about it. There is nothing we can do about it. Mr. COBURN. Well, you certainly can, as you are doing now, consider legislation and adopting legislation. We are certainly creatures of Congress and anything Congress wants to do it can do, and we certainly respect that position of Congress, and we don't do the things that we think that Congress doesn't want us to do or are not within the spirit as well as the letter of our act, and I think we have kept both within the letter and the spirit of our act. Mr. BROWN. Mr. Multer, will you yield to me? Mr. MULTER. Surely. Mr. BROWN. Mr. Cook stated the agency had worked well for the past 24 years. You said you weren't so sure of that. Mr. Cook asked you what you meant by that; would you mind answering that? Mr. MULTER. I am now addressing myself to the question of the right of the Congress and why the Congress should not enact as part of this bill a provision requiring this agency to come before the Ĉongress and get its appropriations, and have the Congress approve its expenditures before it makes them. Mr. BROWN. They don't get appropriations. Mr. MULTER. Of course, they don't. I am suggesting even though they are spending the money which they are collecting by assessments, this is a Government agency, wholly owned and controlled by the Government, created by the Congress, and I am saying that they should not be permitted to spend their money except that they come in and justify it in advance before the Congress the way every other executive department of Government does. Now, I would like to have some good reason why this agency should be exempted from that procedure other than the fact that they collect all of their money in the first instance and it does not go into the United States Treasury. The CHAIRMAN. Not a dollar of this money is appropriated funds. Mr. MULTER. Of course, it isn't. The CHAIRMAN. And you submit your expenditures to the Budget Bureau and General Accounting Office, the two agencies that look over it. Mr. COOK. We do, and we are thoroughly audited by the General Accounting Office. The CHAIRMAN. It seems to me, all the Congress could do would be resubmit it to the agencies for detailed examination. I think Congress has control, because the reports are sent to it. Mr. Cook. We are a creature of the Congress and perfectly willing to submit any information, but I might make this observation, Mr. Chairman. If we would have to come to the Congress for an appropriation, we don't know in any one year what our losses are going to be. If we had a good-size bank drop in our laps like we had down in Del Rio, Tex., for a few days, it took about $11 million just for a short time to do that. Fortunately, that situation has worked out, but taking an extreme case where we might have to use millions within a matter of hours, we can't come to the Congress for that; we have to act quickly. That is our job-to protect the depositors-and that is the reason this fund has been established-for the protection of the depositors. The CHAIRMAN. The expeditious exercise of that power is absolutely essential to maintain the faith the people have in the agency. Mr. Cook. That is correct, Mr. Chairman. We have to move fast. The CHAIRMAN. I think it would be ridiculous to come to Congress for an appropriation every time you need the money when you already have the money you have earned, and you report what you do. Mr. Cook. That would simply emasculate the powers of the agency to do the job the Congress created it for some 24 years ago. Mr. MULTER. You have nicely confused the subject, Mr. Cook, and created an atmosphere that has nothing to do with my question. I didn't for one moment infer that you should come to the Congress for an appropriation in order to be able to save a bank or protect the depositors. I am addressing myself to your appropriations for the expenditures of your office-not for the insurance operations for the operation of your office, the hiring of employees, the buying of automobiles, and the things of that kind. That is what I am talking about. The CHAIRMAN. I thought the gentleman said "expenses of administration" which would include the payment of losses and all other operations. Mr. MULTER. The expenses of administration are quite apart from the statutory obligations of paying out insurance. The CHAIRMAN. That is the difference between expenses and expenditures of the office. These are expenditures of the office. Mr. ANDERSON. Mr. Multer, you have certainly raised a point that is worth going into. The fact that the money is raised by this Government agency should not give them authority to expend it without reference to Congress. Just to put in a comparison, which is perhaps at first blush a little incongruous, the situation might be compared with that in the TVA or one of our public power hydroelectric developments where an agency of the Government is making substantial collections. All of the money goes into the Treasury of the United States, and the agency is not authorized, simply because it collects the money in the course of its business, to use it for expansion or otherwise. It seems to me that expenditures of all Government agencies should be very closely scrutinized by the Congress. Mr. Cook. We are. Mr. ANDERSON. Their budgetary expenditures also should be subject to control by the Congress; not just scrutinized but subject to control of the Congress. Mr. Cook. Let me make this comment, if you please, Mr. Chairman, and that is this: I believe for about the first 8 or 10 years of the life of the Corporation, when we had quite a number of large banks in liquidation, our liquidation staff was larger at that time than our entire staff is now, including examination, so if we had a number of banks in our hands at one time, we would have to expand that force quickly because we have to move. Mr. ANDERSON. Certainly, it would be possible to have either emergency funds that would be available for such purposes as that, or a method could be utilized by which, at the conclusion of a year of such emergency, deficiency appropriations were made available. There could be a clear understanding that normal expenses could be exceeded in the case of emergency. Considering the number of bankruptcies that are taking place, we may expect, perhaps, that such an emergency may arise in the not too distant future. Mr. GREENSIDES. To point up a little bit what the problem would be in operating under a budget prepared a year or two in advance, in 1938, 9 banks failed; in 1935, 25 banks; the next year, 69 banks. Now, the rapid influx of failed banks could not have been anticipated and we had to expand our Liquidation Division from zero to 1,400 employees within a year's time. Now, that could not be anticipated in a budget prepared 2 years in advance of the event. If we tried to anticipate future bank closings, that could be used as an element to jar business confidence and so forth, so there is a very severe and difficult practical problem in setting up budgets for Congress to approve in advance, and which bind us and might have a very bad effect on our operation in case of a wave of bank failures. Mr. ANDERSON. Thank you, Mr. Multer. Mr. MULTER. You said 2 years in advance. The fact is Congress appropriates funds year by year. Mr. GREENSIDES. Year by year, but you are working on the 1958 budget early in 1957. Mr. MULTER. You mean the Budget Bureau is. Mr. GREENSIDES. Yes, and the agencies before that because they have to get their estimates over to the Budget Bureau, cleared there, to come up here, so we would be working almost 2 years in advance of the designated budget year. Mr. MULTER. Congress is only working on the new fiscal year. Mr. MULTER. As a matter of fact, when you walk into a bank that you are going to take over or close up or merge into a more solvent institution, you go in with a force of examiners and clerks that are on your payroll; don't you? Mr. GREENSIDES. In liquidating the assets of closed banks, that is done through our Liquidation Division, and employees are hired and released in accordance with need. Mr. MULTER. Will you submit to us a list of your employees that you have on a permanent basis by titles and number-I don't want names for each of the last 5 years, and an indication of how many temporary employees you had taken on each year, and indicating how long the temporary employees remained with you? Mr. GREENSIDES. Yes. (The data requested above are as follows:) Mr. ROBERT L. CARDON, FEDERAL DEPOSIT INSURANCE CORPORATION, OFFICE OF THE CHAIRMAN, Washington, D. C., September 11, 1957. Clerk, Committee on Banking and Currency, 'House of Representatives, Washington, D. C. DEAR MR. CARDON: We submit copies of schedules described below in fulfillment of the request of Congressman Multer expressed during the course of the hearings on the Financial Institutions Act, August 15, 1957. 1. A list of permanent employees by titles and number for each of the last 5 years. 2. A schedule of temporary employees taken on for each liquidation over the course of the past 5 years and showing the number of such temporary employees on duty at the closing of the year in which hired. 3. A schedule reporting the number of temporary employees taken on for each liquidation over the past 5 years and showing the number of such employees released within a 4-month period. 4. A schedule showing the number of employees of the corporation by divisions for each year since the organization of the corporation. The last-named schedule was not specifically requested, but is submitted for the reason that it illustrates how the total of permanent as well as temporary employees rises and falls with the incidence of bank closings. Inasmuch as the number of bank closings has been small in each of the last 5 years, there has been little change in our total personnel over that period. During the earlier years of the corporation's life the number of bank closings was much higher and the schedule reflects the personnel requirements for those years. We believe the schedules as enclosed will meet the needs of the committee. Sincerely, NEIL G. GREEN SIDES, Acting Assistant to the Chairman. |