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Trustees

Officers
r

Goodnow,

Chairman
Robert S. Brookings,

Vice-Chairma

nstitute for Government R

P. Neill,

Secretary
Frederick Strauss.

WASHINGTON, D. C.
N

Treasurer

Director

RA RY

818 CONNECTICUT AVENUE, N. W. 1-4

TEr,

W. F. Willoughby

Ilarch 27, 1919.

j

-.:::ERvF

Edwin A. Alderman
Robert S. Brookings
James F. Curtis
R. Fulton Cutting
Charles W. Eliot
Raymond B. Fosdick
Felix Frankfurter

Frank J. Go.dnow
Arthur T. Hadley
Mrs. E. H. Harriman
Cesar Lombardi
A. Lawrence Lowell
Samuel Mather
Charles P. Neill
rtin A. Ryerson
reilerick Strauss

Theodore N. Vail
Charles R. Van Him
Robert S. Woodward

71% Benjamin Strong,

New York, N. Y.

My dear Mr. Strong;
You are aware that the primary purpose of the Institute for Government
Research, to which you have so kindly lent your support, was to provide an
Organization having as its major function the subjection of the whole problem
of budgetary reform hi the United States to thorough, scientific study and
the taking of the necessary steps to accomplish this, the most important reform needed in present methods of public administration.
The first part of this task the institute has in large measure accomIn the five volumes prepared and published by it dealing with (1)
The System of Financial Administration of Great Britain; (2) The Budget, by
Rene Stourm, a Translation; (3) The Canadian Budgetary System; (4) The Move-'
ment for Budgetary Reform in the States; and (5) The Problem of a National
Budget, the Institute has rendered availabld information regarding budgetary
conditions in those foreign countries whose systems of financial administration are most worthy of study, and the problem of budgetary reform in this
country as it confronts both out national government and the individual states.
Copies of the first two of these volumes have been sent to you. Copies of the
remaining three are being forwarded to you today as a slight acknowledgement
of appreciation of the support that you have given to the Institute.
plished.

There is also being sent to you a recent number of the Nation's Business
containing an article by the Director of the Institute upon the need for a
national budget and a pamphlet on the same subject, in which the attempt has
been made to set forth in summary form the more essential features of this
problem.
At the present time the indications are very bright that Congress will
seriously apply itself to the working out of this problem.
The Deficiency
Bill which passed the House and was favorably reported in the Senate, but
which failed of passage owing to the congestion of business during the closing days of the last session, contained a section providing for the creation
of a Joint Commission of the twb Houses, with the duty of investigating and
reporting a concrete program for putting this reform into execution. This
is a step 'which the Institute strongly urged in its volume on "The Problem
of a National Budget," and has been energetically pushing. It is believed
that provision for this commission will certainly be made early in the next
session.
The pamphlet, a copy of which is being sent you, was prepared as
part of the propaganda effort of the Institute and has been given wide circulation.




With the establishment of such a comnission a vide field of usefulness
will be presented to the Institute in getting before this body the facts
that should be in its possession and in rendering technical assistance to
it in working out the many details involved in determining, listing and
classifying budgetary data and appropriation heads, in devising the form of
accounting and reporting procedure required for the production of these
data and in adjusting many other matters.
It is only proper to add that the efforts of the Institute to secure
the adoption of a national budget represents but one phase of its activities.
In the field of budgetary reform in the states the Institute has been scarcely less active. Direct assistance has been and is being rendered by the
Director in the drafting of budgetary measures and wide use will undoubtedly
be made of the Institute's volume on Budgetary Reform in the States. It is
exceedingly gratifying to note the progress that this reform is making in
the states. More than half have taken some positive action and a very considerable number have definitely adopted a budgetary system.
Among its other activities under way, special mention may be made of
the study now being made of the organization and activities of the administrative branch of the national government with a vier to determining how
such activities may be better distributed among the several services of
the government and these services grouped departmentally to the end that
greater efficiency of organization and administration may be secured. During the war the Institute placed almost its entire staff at the disposal of
the government and rendered important aid that was acknowledged by many
letters received from the heads of the servi,ces to which the assistance was
given.




Yours ve

ruly,

Chairman of the Executive C

.

April 3, 1919.,
My dear Lir. 3rooking6.

I was very glad te read your letter of ?larch L7th in regard to the work
of the institute for Government Research.

Possibly Mr. Pratt has already told

you of the interest which I have felt in the wory. of the institute ever since
it was established.

The effort now being made to bring about budget legislation,

in whiah i am already interested, will, i hope, be helpful and supplemental to the
work of the Institute for Government Reeenrch.

At any rate, it was our intention

to Md4e sure at the outset, as 1 believe was done, that nothing which we undertook
would be other than in 000peration with your organization.

I suppose you realie that those who have been raising money for the

Government for the past two yea's have developed, inevitably, a keen interest in
the methods employeil by the Government in spending the money that they have rtpsed

literally "by the sweat of their brows."
Thanking you for your letter, 1 ban,
3incerely yours,
Robert J. 3rooking0
Institute for Government Research,
818 onn. Av., N.
-ashington, J. J.







INSTITUTE FOR GOVERNMENT RESEARCH
818 CONNECTICUT AVENUE. N. W.
WASHINGTON. D. C.

A NATIONAL BUDGET SYST




A NATIONAL BUDGET 31STE2

The lost Important
Of All Governmental Reconstruction ,4ea3ures

'TmTs

Why a National Budget is Demanded.

Nature of a National Budget.

J. Wherein Present Finanoial System of the National Government ?ails to
leet Buegetary Requirements.

4. Outline of Budget 3ystem for the National Government.
.

5.

Application of Budget Systel to American Form of Government.

Comparison of Proposed System with that of Great Lritain.
lethod of Procedure in Adopting a Budget Jystem.

Detailed Data Regarding the Problem of a National Budget and the
Budgetary Systems of other Countries.




ADOPTION OF A NATIONAL BUDGET irfaTEj
THE JOST IMPORTANT OF ALL GOVERNMENTAL RECONSTRUCTION MEASURES

The problem of reconstruction presents itself to the National Government

in two forms:

the restoration of the industrial life

normal, peace Canis, and the

of the country to its

reorLAnization of its own administratiVe

In meeting the seoond of these two phases

machinery.

the one reform Which, in urgency and

importance, stands Wit beyond all others is the adoption of a budget system as
the fundamental basis for its whole

system of

financial administration.

Ay_WikNsAttionalBilnAsi.- The adoption of a budget system by the
National Government is demanued:
Beeause it is

the only

system under which an efficient administration of

the financial affairs of a government can be obtained.
Because the United states

is the only country in

the world claiming to

have a modern government that does not Make use of such a system.

Because the loading politleal earties, in

their

platforms,

the President

and his predecessors in offlco, through official oommuniaations, and the in-

dustrial and commercial interests of the country, through their organization,
the Chamber of Oommerce of the United atates, have urged that

this action be

taeon.
Because a budget system is

the only system unuer which the Executive,

having responsibility for the actual administration
be held to a rigid accountability for the manner in

of public affairs, can
Wbioh rands granted for;

the support of the government have been expended.




7Iceoutive can
Because it is the only system under wlieh the

effectively

discharge

its

duty of laying before the fund-raising and fund-granting

statement of the financial

authority -- Congress -- a complete

condition

and needs of the government so itemized and classified as to enable that
body to see their fall purport and significance.

Beeauee it is the only system under which

Congress, having received

this information in proper form, can properly discharge its duty of ma.Ung
provision for

these

needs in a manner that

specific requirements,eut

the general

will have regard, not only for

interests

of the government as a whole.

Because it is the only system under which the present evils of porkbarrel legislation can be eliminated.

because it is the only system under which the people on enjoy
right, and exercise their essential fanotion, of holding

both

their

the executive

and the legislative branches of government to a rigid accountability for the
monner in which they perform their respective duties.
Because it is

the only

system that will autometically present each year

a complete and clear picture of
sent, oring

and

to

the

organization and aotivities of the govern-

light all oases of overlapping and

duplication of

organization

activities and lay the basis for the organization of the administrative

branch of the government as one logically

olassified and integrated scheme

of administrative machinery.

Because, once established, It will greatly simplify and standardize all

methods of

accounting and reporting; and

Because in countless other ways

it will

promote intelligent legislation,

reality
simplify and standardize methods of administration, and make more of a

the

fundamental principle upon which our government rests, -- that of real

legislative and execs.popular control by the people of their representatives,

tie.



-2-

Eature of a gationul budget.-

That a budget system will uccomplish these

several ends den be seen if appreciation is had of the
upon which such a system rests.

fundamental

principles

These principles are:

That the financial affairs of the government shall be considered as a
unit.

That the definite obligation shall be placed upon the Chief Executive, as
the head of the administration, of laying before the legislature each gear a
complete statement of the condition of the

treasury, the

revenues and expendi-

taros of the goverment during the past and his estimate of the provision
that should be made for the revenue and expenditure needs of the government

for the year to oome.
That this statement shall be considered in its entirety by Congress to

the end that the two sides of the account, revenues and expenditures, may
considered in their relation to *Joh other and
aotual and prospective.

to the state of the

be

treasury,

.

That to this end the detailed examination of the buegetery proposals

s}'gull be submitted to a single committee and its conclusions embodied in a
single appropriation bill.

That adequate limitations shall be placed upon the power of individual

members of Congress to

modify the proposals of the budget oommittee.

That srovisions shall be made for an Auditor General who shall be an of-

ficer of Congress and

not of the 'steoutive whose duty it shall be to examine

oriticialy the et:mounts of all disbursements and to render to Congress a re-

port giving the results of his findings and such reoommendetions as.he may
deem pertinent.,
That provision shall also be ,7pAe for a Committee on Accounts of each

house, or bettor still, a Joint Committee on Accounts of the two Houses whose




Zollip

the reeprt of the Auditor General, submit it to

duty it will ee to receive

examination, and to report to Congress the action if any, which in its
opinion, should be taken

to correct

any improper aets wnieb euoh examinetion

mse have developed.

Wherein Present Financial

eeetem of the National Government Fails to Jeet

Examination of the system under Whioh the fine/wird

43udgetarY.Beeuirements.-

needs of the

National Government

in ecarcely a single respect

are now determined and provided for shows

does it conform to the

that

essential requisites of a

proper budget systel, or indeed to any sound system of financial administration.
Jo attempt ie made to consider the whole proelem of financing the governmerit at one time.

Expenditures are not considered in eonnection with revenues.

teren the idea of balancing the budget does not obtain.

There is a complete failure to provide the mane by which the data reaired for budgetary purposes may be
The idea that a system

Secured and presented.

of eocoente should have for its purpose

information needed for the proper conduot of affairs, as well as to

to produce

establish

the fidelity with which legal provisions are carried out, scarcely exists.
No standard classification of units of organization, activities or of expenditures according

to

their cheracter or 'object has over been adopted.

o uniform scheme of expenditure documents milling for the recording of

expenditure data in accordance with any general informational plan is employed.
The Preeident melees no eretense of laying before aongress a carefully

thought out financial and work prograe reeresenting his judgment as to the

provision that should be made for the conduct of governmental affairs.
he does not even submit to Congress

a coneolidated statement of expendi-

tures in e form permittine that body or the people to judge intelligently re


-4-

garding past operations.

Fier does he submit any report of a general administrative character in
which the operations of the government as a whole are

reviewed.

The administrative reports of the heads of departnents, establibhments

and bureaus are not prepared

a character

aocordit

to

any uniform plan, nor are they of

supporting documents to

to serve as

There is, indeed, absolutely

lacking

their estimates.

any organ corresponding in character

and powers to the Treasury under the British system through which these requirements can be met and the President enabled

properly to ,erform

head of the administration, either from a budgetary or general

control

his

duties as

supervision and

standpoint.

The estimates, soh

one principle,

as they are, are not compiled in accordance with any

nor in suet) a

Vo attempt is made

Way that

by Congress

The two sides of the budget

their

significanoe can oe

clearly seen.

to consider these estimates as a whole.

are considered independeutiy and by separate

committees.

The attempt is not even made

bility

for

to concentrate in one

committee the responsi-

the formulation of an expenditure program.

Provision for expenditures

thirteen general appropriation

is made through the passage of

no less than

acts, emanating from, and piloted through,

the

House by no loss than nine different committees.
It is exceptional when the entire needs of a service are considered by a

or provided for in a single appropriation act.
The power of individual members to initiate expenditure proposals or

single committee

cure the amendment of oroposale emanating from the appropriation
inadequately restricted




and

is

to se-

committees is

grossly abused.

and
The fundamental distinction between the authorization of an expenditure

-5-

the voting of money with which to put such authorization into execution 13
persistently ignored.

Not the first approach has been made toward the adoption of a consistent

plan in

respeat to the itemization of

appropriations

the harmonizing of

or

conflicting factors of control and flexibility in the

the

expenditure of funds.

Our National Governmant, In a word, has neither adopted nor made any stop
towards the adoption of a budget aystea such as is employed by the governments
of every other civilized nation.

2ore

than this, it has not even worked out any alternative syetea ooraeo-

pondina to sound principles of financial

administration.

Under the heading

Outline of Budget ayatea for the National Government.-

of a Budget System" has been given in

aiplee underlying a budget system.

a number of specific

If such a system is to be pat into execution

atates as the head of

These steps, in the cane of the

States, are;

That the definite

its

the moot summary form the fundamental prin-

eteps have to be taken.

government of the. United

obligation be placed upon the

the administration

President of the United

to lay before Congress, each

year, upon

assembling in regular neosion, a zonsolidatod document, known as a budget,

In which are

brought together in ono place;

the condition

full and detailed

during

the year in

statements shall be prepared

principle of classification which




proposed,

completed year, and

financed.

That these

That the

lust

progress; and the revenues and expenditures to be provided

the year to be

past and

statements of

of the treasury on the date on which the budget is prepared; the

revenues and expenditures of the government during the

for

"Nature

in accordance withsoze logiaal

shall be rigidly adhered to.

principle of classification employed

shall cal that of organization

in stating

expenditures,

units so that definite informs-

tion shall be available regarding the cost of maintaining and operating

organization unit such as a lighthouse,

army ?oat, or what not, of each areal).

of similar units, such as all lighthouses, army posts, etc.,

service, of each group of.

of

each distinct

services constituting a department, of all depart-

ments and independent establishments together constituting the

branch of

each

the government, of eaoh of the several

great

ment, the legislative, executive and judicial, and of

administrative

branches of the governthe government as a whole

viewed as an organization or public corporation.

That these general statements shall be
for each organization unit, showing

the

accompanied by supporting tables,

totals itemized according to:

distinct activities performed; (2) charaoter; that is,,

lay, fixed charges or current

operation;

and

whether for

(1)

capital out-

(5) objects of exsenditure;

that is,

things gurohased, suoh as services remunerated in the form of salaries or wages,
oluipment, supplies, eta.

That these itemizations shall so made in
olasaifioation of

conformity

expenditures so that the details of

with a standard

expenditures of differ-

ent units and different years may be brought into accurate comparison.

That a similar logical classifiaation of revenues shall be formulated
and employed.

That the sroparation and grosentation of this budget thall be made the
definite obligation of the President as the head of the
That, in .)reparing this budget, the President

administration.
shall have

the same power

to amend, revise and correlate the estimates as they come to him from the heads
of administrative departments and establishments, as the latter have to amend,

revise and correlate the estimates as submitted to them by

the heads of the

bureaus and services over which they exeroise jurisdiction.




That the *resident shall have the power to
-7-

arescrihe

the system of

eocounting and reporting to be employed by all accounting officers of
government to the end that such

require for budgetary

systems

the

will automatically produce the data

and administrative control purposes.

That, to enable him to meet the obligations thus imposed upon him,
the President r;ball have e s)ecial service whose duty it shall be to eat as

his agent in formulating

the system of accounting and reporting to be mnployed,

and in revising, examining and compiling the estimates and other budgetary

That the budget, as no prepared, shall be

submitted

to Congress,

date.
ime

mediately upon its assembling in each regular session, by the eresident, accompanied by a speoial budgetary message having for its purpose to

resent a general

survey of the financial transactions of the goverenent in the eeet, of present
financial conditions and of the more 3ignifloant features of his
posals for the future, as set
That it shall be

forth in detail in

definitely

and administrative branches of the

pro-

the bedget.

est:Ibliehed by

tho sole authority by whom requests for the

budgetary

law that

the President 13

at of funds for the executive

government .hall be made of Congrees; and

that, to this end, all officer; of the government shell be

prohieited from mak-

ing any esIeh relueets directly of Congress or of seeking to influence Congress

or any member thereof to taee any action in

respect to the granting or withhold-

ing of grants of fends for any ourposo except as they may be requested

SO

to do

by the President, in whioh case they shell be deemed to be eating with his authority.

le.

That the budget, immediately upon its receipt by the House of Repre-

sentatives shall be referred to a single eommittee on Finance, or, better still,
to

a ;ingle joint Committee on Finance of the two Houses.

14.

That;

for the

coneideration of

the expenditure proposals

contained

in the budget, this Committee 'hall orgenize itself into sub-committees, cor


-8-

responding to executive departeents and establishments, which sisal consider,

and determine in the first instance the action to be taken upon the estimates
of the corresponding departments and

That the

establishments.

determinations of these sub-committees shall be reviewed and

a,mpiled by the whole committee and the deeieions of the latter shall

be assembled

in a general appropriation bill which shall be laid before the Howe of Repro-

seetative3, or the two Houses, for ite or their consideration.
That this appropriation bill shall follow the same scheme

of classi-

fication of items that is employed in the budget, but will not enter into the
no itemization of details as the latter.
That this bill shall be accompanied by a report, setting

forth

the

amounts estimated for under the several appropriation heads in the budget and

the amounts reoommended for grant by
of the reasons which have

estimates whenever such

the Committee, together with a

actuated the Cotimittee to depart from the budgetary

departure is recommended.

That the rules of the two Houses shall;
between legislation having

for its

provide that

(1) make a clear distinction

purpose the authorization of action, and that

having for its eurpose the grunt of
out into effect; (2)

statement

funds with which such

authorization may be

consideration of legislative proposals of the

first character shall belong exclusively to committees of general. legislation;
and (3) provide that consideration of proposals of
belong exclusively to the

the second character shall

Committee on Finance.

That the rules of the two ;louses shall provide that the aperoprietion
bill shall not be subject to amendments heving for their purpose the increase of
items

appearing therein or the

affirmative vote

alter in



or the

this wag tee

insertion of

new items except ueon

meeting of other requirements

making

a-two-thirds

it difficult to

provisions of the bill as prepared and reported by the
-9-

committee.

That provision shall be made for an Auditor General, who shall be

an officer of Congress and not of the Executive, whose duty it shall be to
examine the aouounts of all

disbursements and to reader to Ooneress a report

giving the results of his findings and making such recommendations as he may
desire.

That

provision shall also oe made for a Committee on Accounts of eaoh

ikji-1309 or bettor still, a Joint Committee on Accounts of the two houses, whose.

duty it will be to receive
amination,

the

report of the Auditor Genorel, eubmit it to ex-

and to reeort to Congress the action, if any, which, in its opinion,

should be taken to correct

any improper aots which such examination may have

developed.

Apolization of Budget 6ystem to American Form of Government.- Lxaeination of
the foregoing statement of
shows that

there

the essential i'eatures of a proper

budget system

is nothing in them that is not thoroughly consonant with the

bandamental principles of the merican form of government.
They maintain,

and in6oed emphasize, the fundamental

principle of the

separation of legislative and executive powers.
They make effeotive the
account to

the legislature

obligation of the 1.,;xecutive to render e full

of the manner in which the administrative affairs of

the governeent have been oonduoted and "from time

inforeation of the state of the

to time give to the Congress

union and recommend to their consideration such

measures as he shall judge necessary and expedient."
b. They leave to Congress unimpaired its

raising and
4.

fund-ranting organ of the government.

They place in

the hands of Congress the means of exercising a real

direction, supervision and control over



function of soting as the fund-

-10-

the conduct of

administrative affairs

suoh as it has never had in the past.
5.

Finally they definitely locate responsibility and
provide for the fur-

nishing to

the oeople

of that knowledge regarding the financial operations of

their government which,

they must have

if they are

intelligently and effectively

to perform their function of holding all government officers to a
ability for the

manner in which

strict account-

they perform their duties.

CoranarisorePoothatofGreitai,1.- The administration of a budget oystem has four phases:

that of the formulation of a midget;

that of its consideration; that of action upon it; and that of review of its
execution.

In respect to the first phase the system here proposed is identical with
of Great Britain.
Both call for the preparation and

the legislature by the
chief exeoutive of a consolidated document setting forth the condition of
submission to

the treasury, past financial operations and future proposala in such a form

that their general, as well as their specific, purport can be clearly seen.
Both thus definitely place upon the Chief Executive the responsibility
for making known how money voted has been expended and what provision, in the

opinion of that officer, should be made for the future.
Both make provision for a special service through whioh the Chief Execu-

tive muy meet thin reseonsibility.

In respect, to the second, the two systems are similar in that they call
for the consideration of these proposals at one time by a single committee to
the end that the problel of financing the government will be considered as a
whole and the several propoaale examined in their relations to each-other and

the general state of the treasury.

In res oat to the third, the two aystere are radically different in that



-11-

the British system leaves practically no power to the legislature to modify
the budgetary

propele13 of the Chief Exeautive, while the syetem here pro-

posed for the United Autos leaves unimpaired the power of the legislature

to modify the proposals so coming before it for consideration.
While leaving undiminished this power of Oongres3 to modify the budgetary
proposals, the systea proposed for the United etates does seek, however, to
throw

safeguards around it exercise by aonoentrating responsibility in a

single committee and by limitine the right of individual memeers to initiate

expenditure proposals or to secure

the

amendment of proposals as formulated

by the Budget Coemittee.
In respect to the fourth, the two

ystems are identioal in that they both

call for the,examination by an officer of the legislature of the manner in

which money voted has'been expended, the report of the results of this examination to the legislature, and the consideration by the latter of such report.

Fundamentally, therefore, the only difference
that tho British system calls for what is
sense that the budget

in

both

is adopted by

,known as an Exeoutive Budget, in the

formulated, and in effect adopted by, the

tive, while the sy3tem proposed

budget, in the sense

between the two egsteme 13

for the United etatee (sails

14eceou-

for a legislative

that, though the budget is formulated by the Executive, it

the legislature.

The British ey3tem is one which is In complete ooeformity with the principles of responsible government each as is enjoyed by Great Britain:
vantages are fully appreoiated.

While there is nothing

of government that would prevent its

Its ad-

in the American 3ystee

adoption,. recognition must, however, be

had of the fact that it is hurdly nicely that Congress is prepured at this

time to make such a radical ohange in the distribution of political poeers as
would be thereby

effeated.

The system

eroposed goes as far as it is belteved

that Oonerees LI prepared to go at this time.



-12-

It moreover has one advantage

which

is lacking in the British systen. It provides for a rigid and detailed

exalination of exeoutive proposals that does not obtain under

the British sys-

tem.

If Congress can be induced to impose upon the rresident the definite

obligation of submitting to it a budget in proper form, to provide for the
consideration of this budget by a single committee,- and to throw around its
further consideration by the two houses proper safeguards, it can well happen
that

the United States will secure a budget system which, while thoroughly

consonant with its political principles, will have all or most of the undoubted

advantages of the British system, or for that

matter, of any

budgetary system

in the world.
thod of Procedure in Adopting a Budget System.- It is one thing to decide
upon the

action that should be taken and quite another to determine the means

or procedure by which this

can best be

The problem here eresented

done.

i3 so important and fundamental, and involves

so many points, that it is inconceivable that Congress will be willing to act
in reference to it until it has subjected the whole proposition to thorough

study and has carefully elaborated a program of action.
The first step looking to the accomplishment of this great reform is

the appointment by the Rouse or by the two Eouses of a
commission with the
tion in all of

duty

thus

special committee or

of not only making an examination of the whole ques-

its phases, but of definitely

recommending

the action to be taken

for its solution.

PDetailed''te_z_Laa''thel'r_oblemof a National Budget and the Budgetary
Systems of Othor

Countries.- In the receding Twos the attempt has been made

to state in as succinct a form as possible the more importent considerations
involved in the problem of the adoption by



-lb-

the National

Government of a budget

system.

Though the principles involved in this problem aro comparatively few and

easy of comprehension, the putting into effect of these prinoiplee requires

action of a far-reaching character and neoensitates what Is in effect a thorough overhauling end revision of our entire system of financial administration,
both as regards administrative methods and legislative procedure.
The aocomplishment of this reform is thus by no means a simple problem.

It is due to an apreciution of this fact that the Institute for Governesearob hos sought as one of Its major activities to make known in detail
the several phases of the lroblem and the manner in which these phases have
been met by the leading governments of the world.

This it has done through the preparation and publication of the following
five volumes to which reference is made for a full statement of the points
whieh it has been Bought to bring out in this paper and of the argumente that

are to be made in favor of the sotion here urged.
The Problem of a National Budget
By W. F. 'Alloughby.

The aovement for ftdgetary eform in the itates
By W. F. Willoughby.
S.

The System of Finansial ,dadnistration of Great britain
Willoughby and S. a. Lindsay.
by. W. F. Willoughby,
The Budget:
T.

A Translation of Le budget by 76ne Stourm

Plazinski, Translator, W. F.

AcCaleb, 1:ditor.

The Canadian budgetary System
By h. G. Villard at.1 W. W. Willoughby.

by the Institute for Government
its series " tudies in Administration," published for the Institute

all of these volumes have been published
'iesearoh in

by D. Appleton & Company, New York.







INSTITUTE FOR GOVERNMENT RESEARCH
818 CONNECTICUT AVENUE, N. W.
WASHINGTON, D. C.

A BUDGET SYSTEM FOR THE
1

WAR DEPARTMENT




mORANDUM
ON

A BUDGET SYSTEM FOR THE WAR DEPARTMENT.

A BUDGET SYSTEM FOR THE TAR DITAilrlErT
111111

The administration of the

40

OM

financial affairs of

the War Department

upon a budgetary basis calls for three things:
That its entire financial needs shall be estimated, considered

and provided for

as a unit.

That these reeds shall be set forth

classification of

items

that shall be based

according to

a scheme of

upon some principle or principles

which shall be rigidly adhered to.
That this system of classification of financial data shall be
followed in all financial operations -- estimates, appropriations, apportionments or allotments, accounts and reports.
Single Statement of Estimates:
Committee:

Consideration of this Statement by a Single

and Single Appropriation Act.-

The aocomnlishment of the first

end means: that the War Department shall submit to Congress a complete statement of its estimated financial needs in a single document, that this state-

ment shall be considered by a single committee; id that its action and that
of Congress shall find expression in a single appropriation act.
essential that the present system

under

It is thus

which rrovision is made for the

financial needs of the Tar Department through a number of appropriation
acts which are considered by two separate committees shall be abolished.
Classification of Financial Data.-

Investigation shows that information

reaarding the financial operations of the Tar Department, as of any large
undertaking having varied activities is required from five standpoints:




Function or Purpose
urganization Units
Activities
Character of expenditure; that is, whether for capital outlay,
fixed charges or current operation

5.

Objects of expenditure; that is, things Purchased, such as personal
services compensated for in the form of salaries and wages, travel,
equipment* supplies, etc.

It is highly desirable that the accounts of the Department shall be

DO

kept

that it is possible for the Department to prepare reports and estimates
showing its total expenditures and estimated needs for any one of these five
standpoints.

It

ehoald, in other -verde, be in a position where it can show

its total expenditures and its estimated financial needs from each of these
standpoints.

It is impossible for the Department to do this at the present time
since its present system of appropriation and apportionment heads is based
upon no principle of classification.

One item may be for an

unit, another for an activity, a third for an expenditure

organization

of a partioular

character, such as capital ottlay, and a fourth for a particular object,

suoh as transportation, fuel or what not.
To correct this defect, which is fundamental, it is essential that
the estimates and the appropriation and apportionment heads shall be stated
and classified according to sore one of these standpoints as the primary
basis of classification, using the other standpoints as secondary and subsequent bases of classification.

Jeneral Yunctione

Military and Civil; the Primary basis of Classification.-

The selection of the order in which the several standpoints mentioned shall
be made bases of classification should be determined by the relative importanoe of the facts which it is

desired to bring out

for information and ad-

.:str Department, it is submitted that the primary distinction which should be clearly made is that beministrative control purposes.

In the case of the

tween expenditures for military and for civil purposes.

It is of-the utmost

importance that the Departmen4, Congress and the people shall know precisely
the cost entailed in maintaining an army and the ot'er factors entering into




- 3 -

the work of public defense.

If Congress entrusts to the War Department,as it

has done, the performance of purely civil duties, the expenditures thereby entailed should at the start be segregated from that for

military purposes to

the end that each may be separately known and provided for.
Organization Units the Secondary Basis of Classification.- With the segregation of

military and civil

expenditures made, the expenditures

head should next be classified by organization units.

under each

The reasons for giving

precedence to this basis over the other bases of classification have been
fully set forth in the author's volune on
and need

not

be repeated here.

°The Problem of a National Budget',s

In classifying units of organization all

units of a like character should be thrown under a common head so that in-

formation is furnished regarding the needs and expenditures of, not only
each distinct unit of organization, but the total for all unite of a class.
For example, it is desirable

to know, not Only

army post, national milfrtary
all national military parks,

park,

cemetary,

of performing

etc., but by all Abmy posts,

and all cemetaries.

Data Regmrding Activities, Character of
penditure.-

the cost entailed by each

As has been stated it is

Expenditures and

Objects of Ex-

desirable to know, not only

the cost

each general function, and of maintaining and operating each

distinct unit of

organization,

resented by this cost; that is,

but also the nature of the expenditures, rep-

how much goes for

capital outlay,and how

much for current operation, and how much for each category of expenditures
from the standpoint of things purchased, services, transportation, supplies,
etc.

These data

can be secured threugh adopting a clasification of

expend-

itures from each of these standpoints, and then of providing for an appor-

the heads therein set up and of requir,
ing the several units to keep their accounts, render their rports and sub-it their estimates itemized under these heads. The reports and estimates
thus submitted will constitute the supporting sheets to justify the total
tionment or allotment of funds under




asked for by each unit of organization in submitting its estimates.
Classification of Objects of Expenditure.-

A task of fundamental import-

ance is the classification in detail of all objects of expenditure,'
pecia ly is this important in respect to the main heads such as salaries-,
other personal remuneration, travel, equipment, supplies, etc., and the
subclasses and items of equipment and supplies.

Large corporations have

found it advantageous to do this even at a cost running into hundreds of
thousands of dollars.

It is understood that the lack of any such standard

classification dtiring the last war gave rise to an infinite amount of
trouble.

A

standard classification of objects of expenditure is of extreme

value in property accounting, the purchase, storage, requisition and issue
of supplies, and the establishment of a uniform system of allotments, adcounts and reports by oraanization units to the end that their financial
operations may not only be compared with each other, but consolidated in
general showings by groups of units,

It is strongly urged, the

this work of classification of objects of expenditure be immediately entered upon.

Reclassification of

Existing Appropriation Heads in Accordance with the

Foregoincjrinciples.-

In a statement appended to this memorandum the at-

tempt has been made to reclassify the appropriation heads of all the appropriations made for the War Department for the year 1918 as set forth in the
Annual Report of the Secretary of Tar for the year in accordance with the
principles above laid down.

This statement has been prepared purely for

illustrative purposes, since the appropriation heads are in many oases not

of a character to lend

themselves to

any scientific syster of'

classification.

It is certain, therefore, that individual heads are not in all

where they properly

belong, and the

tributed under a number of heath-.

give in concrete form

the

amounts carried by them should be disThe statement does serve, however, to

main principles of classification of appropriation

and apportionment heads that it is



cases placed

believed should be employed,

Main Appropriation or Apportionment Heads.-

In this classification the main

appropriation or apportionment heads provided for are the following:
I.

Military Affairs
Depaftment Proper: Washington
Military Plant

Regular Army
Auxiliary Corps
Supplemental Military Service
Munitions Procurement Service
II.

Civil Affairs.

Public Works
National Parks
National Monuments

Lakes Survey
Public !uildings and Grounds: Dtstrict of Colu-bia,

and

The reasons for making this primary classification of appropriation
apportionment heads are in the main apparent. It is certainly desirable

that a clear distinction should be made between military affairs and civil
affairs.

In like manner it is desirable to

distinguish between the main

activities appearing under each of these two heads as indicated by the
classes of organiza'ion units provided for.
Munitio
practive

Procurement Service.-

that is

Much the most radical change from existing

here recommended consists in the segregation of the Muni-

tions Procurement Service from all the other divisions of
tablishment.

the

Military

The proposal here made is that this service shall be

a distinct service

having

service for the Military

set up as

the single function of acting as a procurement
Establishment.

It will hae no other responsibility.

Its jurisdiction and responsibility will cease when it has delivered to the
Military Establishment the articles demanded of it by the latter,

The

im-

portance of this recommendation is such that the reasons for making it should
be set forth with some considerable degree of particularity.



In all large private undertakings, and, to

civil branch of

a considerable

extent, in the

the national government, the importance of distinguishing be-

tween operation and procurement is deemed of the utmost importance.
son for this is evident.

The rea-

On the one hand the operating services are, or

should be, primarily interested in the performance of the work for Which they
are maintained; and, as far as possibTe, their attention should be concentrated

necessity of having to concern
other matters, On the other hand, the procurement service,
is relieved of all responsibility for operations and can
attention exclusively upon the technical problem of procur-

upon such work and not be
themselves with
if independent,

concentrate its

distracted by the

ing supplies; can build up a permanent staff specially qualified for this
work; and familiarize itself with the sources of supply and other

tions that have to be taken into account in

seouring

the supplies

considera-

required.

The advantages of this separation are excellently itlustrated in the
civil branch of the national government, in the Government Printing Office.
Due to this institution the several operating services of the government are
relieved of all necessity for maintaining in their services divisions to con-

eern

themselves with the work of securing printing.

All that

theyhave to do

is to make requisition upon the Government Printing Offic- for the printing
desired by them.

The latter service has no responsibility other than that

of meeting demands made upon it, and can devote its attention to the purely
technical

problems of providing itself

nical personnel required by it,

with the plant, equipment and tech-

and the conduct

of its procurement functions.

Under this arrangement responsibility is definitely boa'ed.

withthe operating

specifications, and

to

necessary, by detailed

make use of supplies received according to their own

The function and responsibility of the procurement service have

to do merely with the securing of the supplies asked for.




rents

services to determine What they want, to make their wants

known through definite requisitions, supported, where

dinemttinn.

It

7 -

erovision is made for a distinct procurement service to be known as
he 7,iunitions Procurement Service, as is here suggested,

tbe

Military Estab-

iishment as an operating organization will be relieved of all responsibility
for getting into touch with

having

producing

enterprises of the United States or

to concern themselves in any way with the Purely industrial problems

of manufacturing, contracting, purchasing, hiring and compensation of labor,
etc.

It can thus confine itself to the purely military duties for the per-

formance of which it is maintained,

On the other hand, the

Munitions pro-

curement Service, with its distinct organization, will furnish to the General Staff a technical agency to concern itself, not only with the procurement of equipment and supplies by purchase or manufacture, but with the
whole problem of locating sources of supplies, of inventorying the facilities of the country for

the production of

military supplies, and, when

necessary, of taking the steps necessary for the increase of such facilities
as may be demanded by the requirements of military preparedness.

Such a

all that was done for the War Department by
National Defense and the .jar Industries Board, except in so

service, in a word, should do
the Council of

far as those bodies acted as agencies for coordinating the work of the Tar,
Navy and other Departments of the government.
The Military Establishment under this plan will requisition for equipment and supplies, not only for its current needs, but for the accumulation
of such supplies as may be required to enable it promptly to meet
emergency.

any military

The custody and control of such supplies will, of course, be in

the Military 'Establishment.

From the standpoint of the budget, and financial administratior,general-

ly, there is a very special reason why this segregation should be-made,

The

War Department procures a no inconsiderable part of its product through the
process of manufacture.

It maintains and operates large industrial plants.

Its work in this field is in all essential respects analogous to that of any
large industrial concern en:aged in a varied line of



actitities.

The finan-

cial affairs of such undertakings should he maraged in accordance with the
same principles that are followed by any industrial corporation operating
upon a proper financial basis.

This means that use should be made of bal-

ance sheets, capital accounts, operation accounts, cost accounts, inventories,
depreciation accounts, etc.; all of Whieh are not required in the case of
operating services having no tangibTle product such as is the case with the

Military Establishment properly speaking, and most services of the government.

Such a system 'of financial administration cannot well be set up unless

the operations and financial transactions of the Munitions Service are
rigidly separated from those of the operating services or military retablishment strictly speaking.
It 4,1 a part of the nroposition here presented that all appropriations

and apportionments for equipment and supplies will be made to the Military

credits against which the Military Eswill make requisitions and from which payments for equipment and

Establishment.
tablishment

They will constitute

supplies purchased from the munitions Procurement Service wifl be m de.

Actual payment will be made by transfers from appropriations for the
Military Establishment to the revolving funds of bhe Munitions Procurement
service,

The only appropriations that will be made for the Munitions Pro-

curement Service will be for capital expenditures and for working capital.
In theory such appropriations will have to he made only once, unless it is
decided to add to the plant of the service.

The appronriation for working

capital should be treated as a *Revolving Fund".
should be made

From it all expenditures

by the Munitions Procurement Service, and to it should be

credited all paymetts made to the Service by the military Establishment
for equipment and supplies furnished. The Munitions Procurement Service
will charge the Ililitary Establishment *ith the cost of manufacture, or
purchase price, when the goods were purchased or received fron contractors,
Plus an agreed upon percentage sufficient to cover all overhead charges.



In effect the proposal here made is that of treating the Munitions
Procurement Service practically as a subsidiary corporation.

It may in

fact be found desirable actually to give it this character in the sane way.
that the U. S. Shipping Corporation, the Food Administration, the Labor Administration and the Treasury Department found it desirable to create

special

corporations, the Emergency Fleet Corporation, the Grain Corpora-

tion, the Housing Corporation, and the 1ar Finance Corporation, to handle
their purely industrial activities.

A necessary consequence of

this policy till, of course, be that the

Finance Department of the -Alitary Establishment will not concern itself
with the financial affairs of the Munitions Service, except in respect to
the making of settlements between the Military Establishment and the hinitions Service.

In thus defining the duties and responsibility of the Munitions Procurement Service, or the one hand, !Ind the Military Tstabliahnent on the

other, it is not meant that the two should not maintain intimate working
relations with each other.

Thus it is highly important that the iTueitions

Service should at all times place its technical knowledge regarding materials, their relative merits, costs, expedition with which they may
cured, etc., at the disposal of the Military Establishment.

be se-

This informa-

tion may be furnished in advance upon the reeuest of the Military Establishment, while the latter is considering its reeds; or after the requisitions
have actually been received by the Munitions Procurement Service.
the latter should have no power to modify a

nitt only

Though

reouisition it should, however,

have the power, but the duty, of brirging to the attention of the

requisitioning branch of the

"ilitary

Establishment facts which

might tend

to cause the latter to modify its requisition with a view to securing economy, supplies more adapted to its needs or greater expedition in delivery.
In case the point at issue is one of considerable importance the

1.1nitions

Procurement Service should also have the right to bring the natter to the



- 10-

attention of the Chief of Staff or the Secretary of Tar for a fina7. decision.
The Military Establishment, on the other hand, should, when feasible, give
advance information to the Munitions Service of demands that will be made
upon it whenever large quantities are desired or where special steps to pro-

cure the articles desired have to be taker, to the erd that

the latter may

be in a positior to make plans for the work that it will be called upon to do.
It is recognized that the adoption of the proposal here made will
raise many questions of organization and administration that will have
to be settled. For example, it will be necessary for the Military 7stabliahment as such to have a highly trained technical service, the function
of which will be that of studying the extent to which the equipment and. supplies made use of by the army give satisfaction and, on the basis of such

study and that of the equipment and supplies made use of by other armies,
of determining the character of equipment and supplies that the Military
Establishment will demand to have furnished to it by the Munitions
ment Service.

Procure-

To meet this need, it is submitted that the General Staff

should have a special service for this work. This service would in effect
constitute a service or department of scientific research. It would be
manned by officers from the army detailed for the work on account of their
special competence.

As a part of their training they might be detailed to

the several production

plants of the ..Unitions

Procurement Service with

the duty of familiarizing themselves with all the details of the manufactured the particular articles upon which they are specializing. In doing
this they could also act as.liaisor officers for certain purposes.

They

would not, however, constitute a part of the personnel of the Munitions
Procurement Service nor be responsible in any administrative way for its
work.




Again it is certain that the Military Establishment, as represented
by forces at army posts and in the field,

Till

have to have authority to

make certain purchases, such as perishable food commodities and other cosmodities to meet immediately urgent needs, directly. Careful provision must
thus be made in respect to what articles must be procured through the
Munitions Procurement Service and

what directly.

An important, though by no means an essential, feature of the plan
here proposed is the possibility of making the segregation of the Munitions
Service the means of distinguishing, more clearly than has been the case in
the past, between those classes of work which should be performed by, or
under the direction of, army officers, and those which dhould be performed

by, or under the direction of, civilians. Fundamentally the work of the
Military

Establishment i

by military men.

of a

military

character and should be

performed

The work of the Munitions Procurement Service, though

per-

Establishment is' primarily of a civil character, and,
must be performed in great tart by civil employees. The

formed for the Military
under any system,

question presented is thus that of determining the extent to which the directing persoenel of this organization shall consist of army officers detailed for that purpose or of civilians specially selected for their com-

petence to perform the duties entailed by such positions.
The author of the present memorandum does not hesitate to state that

it is his opinion that, as far as possible, the latter syetem should be the
one to be adopted. Under present conditions officers who are trained at
at great expense to the government for the. performance of purele military duties are taken away from such duties and placed in
charge of purely business activtties for the performance of which they have
received no special training nor had any past technical experience. This is
doubly unfortunate. On the one hand, it deprives the Military Estbblishment
of officers and men of whom they have urgent need; and, or the other, it
results in highly tebhnical operations being placed in charge of persons

test Point and otherwise




ea2-

This question of

not specieCly trained for the performance of that work.

the extent to which the work of the Munitions Procurement Service Should
be entrusted to civilians, it

Should again be stated, is, however, not an

essential feature of the actual proposition of giving administrative and
financial autonomy to the Munitions Procurement Service and relieving it

of all duties except those of a procurement service strictly speaking.
Segregation of Military Plant.- Another feature of the classification of
appropriation and apportionment heads

here recommended requiring special

consideration is that of the segregation of
as a Personnel

Service.

a number of standpoints.

This

military plant from

the army

segregation is believed to be desirable from

In the first place it is of importance to know

the exact expense involved in maintaining and operating each field station

and each class of field stations of a permanent character. If +his expense
is combined with that

of maintaining

troops, it is impossible to have

data which should be available for determining
ability of continting to maintain

individual

the

question of the desir-

Secondly,

stations.

of the expenditures called for in mairtairing and operating
distinct from that of expenditures for the army as a mobile
two classes of expenditures are separated the problem of
operating standardized systems of accounts for

the

the nature

plants is
body.

quite

If the

working out and

the two is much simplified.

Segregation of Services of the Army.-

A third suggestion, which is

shown in the Classification of Appropriatiore and Apportionment Heads, but
which should receive careful consideration is that of making the several
services of the army the
Army.

primary heads under the generalhead of

In other words, it is suggested

priated for the Regular

that the

Service, Artillery Service,

first instance by

it viz., Infantry Service, Cavalry

Air Service, Machine GuneService,

Medical Service, Surgical Service,

Regular

total estimated or appro-

Army should be itemized in the

the distinct service corns composing

the

Tank Service,

Engineer Service, Motor Transport Ser-

vice, and the sum called for under the heads "Pay, etc. of the army",
"Travel" and "Equipment and Supplies" be shown for each service separately.



13

If this is done this part of the classification outline would run as follors:
1.

Combat Services: Primary
1.

Infantry Service
Pay, etc.

Travel

Equivent and Supplies.
2.

Cavalry Service,

Pay, etc.
Travel,

Equipment and Supplies,
Etc.
2.

Combat Services ; Auxiliary
1,

Medical Service
Pay, etc.
Travel,

Equipment and Supplies.
2.

Surgical Service
Pay, etc.
Travel

Equipment and Supplies
Etc.

Under this system the needs and cost of each service can be taken up
on its individual merits.

The

classification

moreover would conform to

that of the overhead administration in the ',?ar Department proper, an end

which is evidently highly desirable. Though the separate service should
thus be estimated for separately it is probable that it would be desirable
that all should be appropriated for under one common head.

Certainly pro-

vision should be made whereby transfers could be made from one appropriation
or allotment head toanother.




- 14 Appropriations under Main Heads Only.-

A prime requisite of any proper

budgetary system is that a reasonable decree of flexibility shall be perThis

mitted to the spending authority in the eapenditure of funds granted,

(1) by Congress making appropriations under

can be secured in three ways:

main heads only, leasing it to the Department subsequently to apportion such
lump gams more specifically; (2) by Congress granting to the Department the
right to effect transfers from one appropriation head to another; or (3)
by a combination of both of these methods.
the most desirable.

Of these the first method is

Every effort should be made to persuade Congress not

to carry its itemization to

far.

For example, where a number of units of

a like character are concerned; such ac, army posts, cemeteries, national
parks, etc., the appropriation should not go farther than to specify the sum

available for the entire class, discretion being left

with the Department

to apportion this sum to the individual units included within the class.

In seeking to induce Congress to take this position, it should be made
plain to Congress that the expenditures on account of the several units

will be as carefully segregated and made known as if a separate appropriation was made for each. The estimates as submitted will thus show for
each unit the expenditures during the past year belonging to it and the
amount estimated for

it for the year to be provided for. There may indeed

be submitted with the estimates a supporting sheet for each unit showing
its edpenditures, actual and estimated, classified by objects
tures in accordance with the

of expendi-

standard classification of objects of exnendi-

ture,which, as set forth aboee, should be adopted by the Department.

It is

believed that if Congress appreciates that it will secure this full and de-

tailed information regarding the expenditures of the Department, past and
proposed, it will be willing to make its appropriations under more general
heads than it has in the past.

Need for a budgetary Organ
portionment System.apportionment system



in the Department if Provision is made for an Ap-

If Congress can be persuaded to authorize a liberal
in the War Department, it will be necessary for the

latter to create some organ, in the form
this power of apportionment.

of a Board or Council, to

exercise

This body will take up the work of allotting

funds to specific units of organization or objects of expenditure where
Congress leaves off.

Its action will result in the setting up of accounting

heads in all respects similar to appropriation accounting heads, with the
important exception that transfers between apportionment heads may be made
upon the order of the Budgetary Board or Council of the Department, while
transfers between appropriation heads can only be Made with the approval
of Congress.

The fact that this apportionment of funds will be made with

the same oareful consideration and formality by a general overhead apportionment body as are employed by Congress itself will go a long way towards
inducing Congress to authorize a liberal apportionment system.

It is not

thought necessary to suggest the composition of such an organ, other than
to state that it evidently should be composed of officials of the highest
rank sitting under the presidency of the Secretary of 7ar or the Chief of
Uta2f.

This body, moreover, will be the ore having responsibility for the

receiving of the reports and estimates of the several services of the Tar
Department, of correlating them, and on the basis of the data so secured
of framing the Departmental Budget for submission to Congress.

In perform-

ing this work it will make use of the Department of Finance as its executive
or administrative agent.







WiLIN APPROnIATION AND aLUMENT liZADO

WAR DEPARTV

I. Uilltury 4ffuire
epartment Proper/ ::nahlugton

idlitary 71aut
Regular Ar. .7

4. Auxiliary. corpa

S. Supplemental qilitary aervioes
6. lunitIons Procurement service

II. (iv-i1 i,ffalr3
Publi

National Pare
S. Natloaal
411 Lake

. .onuments

urvey

6, Ruello Buildincs and Grounds: District of Oolumela




&&I

AP PRO P.B IATIOR et.N1) ai2T IDL1
AR DEPARTZEST

I. Unitary lafaire
.)opartmeut Proper: ' neblngtolt

alitarytit
:Regular ilrmy

4. aexAliory Corps

8. Supplemental 4illtery 3er/floes
lUnitions %.00urement $erviae

I/. Civil ;.ffairs
10 Publi4orc
2. Vetional Parks
S. National anuments
Lakea Jurvey

Pubile Buildincs and Grounds: Distriet of olumbla

APPROPRIATION AND zu.LOTZZT 11:7:1.11i

TAR Dll'ARTMWT

1.

Military Affairs




1.

Department Proper:
General:

Washington

Undistributed.

Office of Secretary and Assitant Secretaries.
Office of Ohlef of

1.

Army War College.

Office of Adjutant General
6.

Office of Inspector General,
Offica of Judge Advocate General
Office of Provost rarshal General

S.

Office of Quartermaster General
Office of Chief of Ordnance,

Office of Chief of Engineers,
Office of Surgeon General,,
Library, Office of Surgeon General,
Army Medical Museum,

i. Office of Chief Signal ()Meer,
Office of Chief of Coast Artillery,
Bureau of Militia,

3ureau of Insular Affairs,

ke

llitary Plant.

Fortifications,

Army Posts,

Depots, Shipping Facilities, etc.
Proving Grounds,
6.

Education and Training Institutions.

6.

Communications Systems.




3.

Regular Army.

1.

Departmental and Corps Expenses.
1. Office of Secretary.
2.

General Staff Corps,

3..

Adjutant 3ereral's Department,
Surgeon Ueneral's Department,

Provost Marshal General's Department
Ordnance Department,

7.. Signal Gorps,
B. Engineers Deartment,
9. War Port Board, New York.
2.

Pay, etc. of the Army.

3. Mileage,
4.

Equipment and Supplies.

4. Auxiliary Corps,

Reserve Officers Training Corps,
Enlisted Reserve Corps,
National Guard,

Civilian. Training Institutions.
8*

Supplemental Military Services,
1, Soldiers Homes,
2.

Cenetaries,

3.

.iscellaneous.
8* Mations Procurement Service.
/. Arsenals,

General: Undistributed.
Augusta Arsenal, Augusta, Ga.

Benicia Arsenal, Benicia, Calif.
Frankfort Arsenal, Philadelphia, Pa.
b. Picatiny Arsenal, Dover, N.J.




-3
Rock Island Arsenal, Hook Island, Illinois,
7, San Antonio Arsenal, San Antonio, Texas,
B.

Springfield,Arsenal, Springfield. Illinois,
Watertown Arsenal, Watertown, Mass.

Watervliet Arsenal, West Troy, New Tork,
2. Nitrate Plants.

Civil Affairs,
1.

Public Works,

General: Undistributed.
Rivers and Harbors,
3, California Debris Commission,
Permanent Industrial Conmission of Congresses of Navigation,
Alaska,
2.

National Parks,
1. Chickamauga & ChattanTloga National. Park,
2, Shiloh National Military Park..
3. 'Gettysburg National Park.
4, Vicksburg National Military Park,
5. Guilford Courthouse National Military Park
6. Crater Lake National Park
7, Yellowstone National Park

3,

National. Monuments,

Antietam Battlefield,
Birthplace of Washington, Wakefield, Vs.
Birthplace of Lincoln, Kentucky,
Building where Lincoln Died, Washington, D.C.
4.

Lakes Survey,

Public Buildings and Grounds, District of Columbia,
1. ,,:eneral : Undistributed.




-4-.

Washington Monument,

Executive Mansion,

Telegraph connecting Capitol with the Department' and the
Government Printing Office,
Potomac River Bridge.

:U.C.E.A.o2IFICIA.T1014

4.1.PEOP1

ONJ FOB 1918

GENERAL UMARY

4LArgitAX._

I. Military Affairs
1.

:Deartask.art Proper: Washington

2.

Military Plant

3. Regular Army

4, Auxiliary Corps
5.

Supplemental Military Services

6.

Munitions Procurenent Service

417,213,049.98
1,852,640,066.36
3,765,196,744.53
23,903,000.00

7,097,065.82

_3.912.500.00

Total:Military Affairs

4)

5,690,962,426.69

II. Civil Affairs




1.

Public Works

2,

National Parks

3.

National Monuments

4.

Lake Burvey

38,266,451.17

5. Public Buildings and grounds, D.C.

380,910.00

5,820.00
125,000.00

1.070.849.00

Total: Civil Affairs
GROD -ARAI.: Military Affairs at Civil Affairs

39042.223_0.17

5,730,711,456.86

A::,P70,111ATIONS FOL 1918
Wiha atiAATUSXT

RIM

Le

kilitary Affairs
ls Departmont Fropors WasLington




L.

4emora1z

Undistributed

410,932.59

Increase of. acavenaations War Dapt.
atidittJnal employeost aar Iapt.

6,161,232.00

cellanacua, 01141.
aontintiont ext.o na ass War iapt.
Stationery, War ,:iept
Maps 'oar Dept.

177,780.44
1,394,176.00
446,000.00
10,000.00

Incr.oaso of aosi;ensation, War, .21118-

)

Po tago & kos tal Unita' (A)antria a s

War

800.00
300,399.96

topt.

Rent of bailainept War Dioy44

Tespollary Office building's war

2,377000.00

Dept.

Temporary Offico buildings, War &
Navy LOspt.

Total

2.

Qattara" $ Undia tribut au

Of floe of 'i.ieore tary

ni

li

X410u400o.00

1077.519,90

taut ;iiecre taxies.

(1) Office ut aarotary of War

155,940.00

Offide of Chief of :AMY

ill

moor War College

14 Atm War College
2. haintenance, Arav War College

9,000.00
19.a.mdaL,

Totall .4alay War 0011 ego

Office ox' adjutant Jeneral
(1) Jakjutant Genora19s ,Xfioe

5.

arias of inspector Cameral
(1) Office of inspeotor aemral

60

18,160.00

office of Judas AdvocaLe 4avora1
(1) Office a 4utige .dvosate kienerai, U.S.
Array

7.

852 640.00

Office of krovost idarshal Ueroral
(1)

36,640.00

-2Office of utrtormaster General
(1) Office of uartermaster General

410,340.00

Office of Chief of Ordnance
(1) Office of Chief of Ordn(nce

126,210.00

Office of Chief of Ent5incers
(

1)

112,510.00

Office of Chief of Engineers

Office of Surgeon Genera].

1.

Generals

Undistributed

(1) Office of Awgeon General

182,640.00

4. Libr,ry: Office of urgeon ';oneral
10,000.00

(1) Librnry urgoon General's Office
Arm: Medical Museum

7.500.00
.10s4119.0.

(1) rmy Medical Museum

TOT L: Office of -urgeon General

Office of Chief Signal Officer

(1) Sim.' Officer
Office of Chief of Coat rtillery

45,960.00

(1) Office of Chief of Coast rtillery

22,360.00

BureLu of Militia
49,800.00

(1) Militia Bureau
0.

Bnreas o

Insular AffLirs

(1) Bureau of Insular ffairs
TOT Lt Deptxtment Proper:
2.




85.230.00
aishington

17

Military Plant
1.

Fortifications

1.

Generals Undistributed
Armament for seacoast defenses

Supplies for sea coast defenses
Sub .arine Mines
TOTAL: General: Undistributed

1,517,110,000.00
60,000.00
700,000.00
i 6174 870 0,)0 00

========

1r5 OK9




-32.

Insular Possessions

Fortifications in insular possessions 115,000.00
Fire Control in insular possessions
2,000.00
Sea coast defenses, Philippine island

& Hawaii

93,000.00

Totals Insular Possessions
TOTAL; Fortifications
2.

4q,000.00
1,518,080,000.00

Army Posts
1.

Generals Undistributed
Barracks & Qaarters
Barracks &

2.

sarters, iea coast

113,407,744.00

defenses
7,027,000.00
Roads, Walks, Wharves and drainage 21,794,100.00
Construction & repair ofhospitals 55,404,300.00
Quarters for hospital stewards
25,000.00
Shooting galleries and ranges
7,043,540.00
Military post exchanges
850,000.00
Rent of buildings
79.100.10
Totals General Undistributed
205,630,784.10
Gulf Ports

(1) Repairs to buildings, 'etc.,Gulf icrts
3.

89,962.60

Fort Monroo, Va.

(1) Sewage systam, Fort Monroe, Va.

10,723.48

4, Fort Riley, Eats.
(1) Bridge across the Republican River,
Fort Riley, Hans.
5.

15,000.00

Philippine Islands
(1) Barracks and Quarters, Philippine
Islands

6.

500,000.00

Schofield Barracks, Hawaii

Purcnase of land, Military Post,
3chofie1d Barracks, Territory of Hawaii 10,300.00
Military Post, Sonofield Barracks, Territory of Hawaii
3,,077.,000.00
Total: Schofield 3arracks,Hawaii,14087.300.00,
Totals Army Posts
207,333,770.18

3.

Depots, Shipping Facilities, etc.
1.

General: Undisttibuted

Inland & port storage & shiping

facilities

Terminal $toragu & shipping facili-

ties
Otorage facilities at armories &

15,000.000.00

arsenals

1,000,000.00
30,00000

:,4ngineer depots

2

Totals General: undistributed
quartermasters Depot, $t. Iwis, 16.0.

1112141L4

(1) Quartermasters Depot, 3t. Louis, Mo.
Totals Depots, Snipping Facilities,
4.

100,000,000.00

etc.

99

cjiz.,2_,Lxit

146 3 -.4.A.45 000.00

Proving drounds

1. General UndiatTibuted

Proving drounds faoilities

8,500,000.00

And Hook, A. J.

00 Proving Grounds, dandy Hook, N. J.
Proving drounds, Sandy Hock, 1.4.
Total: arLö Hook, N.J.
Totals Proving drounds
5.




94,000.00
31.000.00
125,000.00
,4Y245)0("q5,

alueation and Training Institution;

1. kilitary Academi, asst oint, N.I.
Pskir of kilitary Acade4V
Maintenance, U.S.Military Academy

983,602.18
375.844.00
Total: Military Academy, Ast Point, iagli4d5U6U1

2. Coast Artillery School, Fort Monroe, Va.
(1) Coast Artillery F30ho01, Fort Monroe,Va.

28,000.00

3, Sngineers School, Was ington, D. 0.
(1) kngineers bohool, ashington,

C.

30,000.00

United :Aates 3erviee 3ahools

(1) United 3tatva Service Schools

35,350.00

Vocational Training for Soldiers

(1) Vocational Training for Soldiers
Total: 3ducation and Training Institutions.

.g0.00(1199.
14.9.441:Itah.?8




-56.

Communication Systems

Oosot Artillery Posts
(1) Commercial telephone service at

coast artillery posts

13,500.00

Alaska

Construction & kaintenance of military and post roads, bridges and

trails, Alaska

500,000.00

Washington-Alaskan Military Cable &
telephone systems

Total: Alaska

550la21119.1

Total: Xilitary Plant

1 S52 640 066 36
=..,m6==6====.

Regular Army

I. Departmontal and Corps Vapenses

Office of the Lecrutary

(1) 3ecretary's Office: coutingencies

50,000.00

of the Army

Gemmel staff Corps

Contingoncies,military information
section, General tItaff Corps
'rapenses of military observers

500,000.00

15.000.00
515,000.00

abrosh

Total: General Staff Corps

3, Adjutant Generals Arpartment
(1) Adjutant Generals Department, Con-

tingencies headquarters of military
departments, etc.

7,500.00

Surgeon Generals Department

(1) Hospital care Canal Zone garrisons

55,000.00

Provost Marshal Generals Department

(1) Registration & selection for military
service

12,476,490.00

6. Ordnaire Deartment
(1) Ordnance Service

12,175,000.00




-6Small arum target practice
Natinal trophy & medals for

rifle contests

Totals Urdnance Department

7.

10.000.00
k04.761,000.00

Signal Corps

Signal 3ervice of the Arm/
Increase for Aviation, Signal
Corps

Totals Signal Corps

8,

92,576,000.00

51,800,000.00
049.000,000.00
691, 800 Cr0.00

AIngineer Department

(1) ..;ngincers operations in the

field

(2)' Military Surveys & maps
(3) Contingencies, _Ingineers Dept.,

Yhilipvine Islands

Totals .1;ngineer Department

9.

256,300,000.00
500,000.00

4,000.00
2.56, 304,000 00

Port Board,liew York

(1) 3xponses, War Port Board, New York
Totals Departmental and
CMS AXODLICJI).

2.

4.500.00

1,124,61

Pay, utu., of the Army

Pay, etc., of the 4riny
Increase of compensation, military
establishment

Total: key, etc., of the Army

492,533,278.40
1.764.005.29

.iileage

1. illileage of officers & contract surgeons

6,490,000.00

i.2.quipment and Supplies

1. aulfplies, services & transportation 1,363,497,496.00
Horses for Cavalry, artillery, .1A1-

gineor, etc.

Medical & Hospital Dept.

40,400,000.00
101,000,000.00

_,Ingineer equipment of troops

12,100,000.00

Ordnance Stores: Ammunition

189,482,000.00

-7.-

Lianufacture of arms

50,686,100.00

Ordnance stores and supplies

143,346,585.00

Automatic rifles

220,277,000.00

Armored motor oars

37,350,000.00

kacainery for rifles

9,500,000.00

11. Ordnance material proceeds of sales11,22_2214.
Total: aquipment and SuppliesL:1.1.8'

,..721.24

3.75b.196.1=1.1a

Totals Regular Army

4. Auxiliary Corps




la Reserve Jfficers Training Corps
4sertermasters supplies, eqsupment,
eta.,Reserve uffioers Training Corps
Ordnarce stores, equipment, etc.,

3,170,000.00

1.000.000.00
Reserve Officers AminingrOoras
Totals Reserve Officers Training Corps 4.170.000.00

2. &nlisted Reserve Corps

Cluartermasters supplies, equivivnt, etc.
-2mlisted aeseavo Corps

U50,000.00

Signal eqsipment, nlisted Reserve Corps ma,poo.00
hm,poo.00
Tota4: nlisted Reserve Corps

3. National Guard

Arming, equipping & trainiag the Nation5,312,000.00
al Guard
Arms, uniforms, equipment, etc., for
7,000,000.00
field service, ilatiunal Guard
Supylying & exahanging infantry equip1,200.000.00
ment, Rational Guard
13 b12a000 00
Totals Rational Guard
a

4. Civilian Training Corps
Civilian military training oamps

Rifle ranges for civilian instruction
Ordnaace supplies for military equip-

ment: of schools & colleges

4,771,000.00
320,000.00
500,000.00

quartermaster supplies for military
equipment of schools & colleges

&0,000.00

Total: Civilian Training Corps

5462140e0.00

Total: Auxiliary Corps
5.




2gh90gi60j0,01

Supplemental Ililitery Services
1. Soldiers Homes

National Home for Disabled Volunteer

loldiers, Ointrict of Columbia

(1) Board of Aanapers, rational Home
for Disabled Volunteer Soldiers

4,429,000.00

14ational 13anitarium for Disabled Volun-

teer Soldiers, Hot Springs, 3. De

(1) National Sanitarium for Disabled
Volunteer Soldier's, Hot Springs,
S. D.

206,500.00

State or Territorial Homes for Disabled
Soldiers and Jailors

(1) State or territorial homes for disabled soldiers and sailors
1,030,000.00
Soldiers Home Interest Acccunt

(1) Soldiers Home interest Account
Total: Soluiere -3001W

98,206.55

4,176=3's

2. Cemeteries

iiatienal Cemeteries
Pay of superintendent, National ceme-

teries

Repairing roads of national cemeteries
Headstones for graves of soldiers
Monuments or tablets in Cuba and China

Disposition of remains of officers,
soldiers and civil employees
Burial of inaigent soldiers
Burial of indigent patients, arm i and
navy hospital, Hot Springs, Ark.
Care, eta., of Confederate burial plat

Confederate Stockade Cemetery, Johns tons
Island, Sandusky Bay, Ohio.

!otels eemetaries

120,000.00

63,120.00
12,000.00
50,000.00
1,000.00
560,000.00
2,000.00
200.00

1,250.00

250,00

3. 1Aiscelleneous

(1) Claims of officers & men of the armj for
destruction of private property

4,685.95

Claims of officers & Jaen of the any
for loss of private property
Claims for damages to & loss of private

property
judgment, Court of Claims,

.

.ar

(6) Judtcwnt, United 6tate3 Court, y,ar

Arrears of pay, bounty, etc., certified
°lairs
Pay, etc., of the army, war with Spain,

200,000.00
15,000.00
50,488.72
9,395.46

26,000.00

certified claim's
1,000.00
Axtra pay to volunteers war with Spain
1,135.68
.9) Axtra pay to regular army, war with Spain
85.46
(.10) Aelief of legal representatives of fiapoleon
B. Giddings

1,950.00
210,000.00
2,000.00
1,000.00
1,500.00

Aegimont uf infantry.
Total; iiiscollaneous

_2022.29.
t5 559.27

Artificial limbs
Trusses for disabled sol6lers
Appliances for disabled soldiers
Care of insane Filipino soldiers
Care of insane soldiers, :Porto Ala°
2otals Supplemental Military Services
6.




7..9.22.42..611:22

Munitions Procurement Service

1. Arsenals
1. General: Undistributed
Repairs of arsenals
Testing machines

Total: Genral: Undistributed

1,150,000.00
000 0_0

1 ]75 000.00

2. Augusta Arsenal: Augusta, Ga.
(1) Augusta Arsenal, Augusta, Ga.

5,000.00

3. Benicia Arsenal, Benioia, Calif.
(1) Benicia Arsenal, Benicia, Calif.

98,200.00

,.. Frankfort Arsenal, _niladelphia, Pa.
(1) Frankfort Arsenal, ailadelehia,
Pa.

2,996,000.00

e. 1.4catinny Arsenal, Dover, I. J.
(1) 2ioatinny Arsenal, Lover,

6. Took Island Arsenal, Rock Island, Ill.

108,500.00

10-

Roo K island Arsenal,ock Island,

7,434,100.00

Rook Island Bridgo,Rock Island, Ill.

20,000.00

(4) Rock Island Power Plant, Aocnc. 151and,

Total:

oc.'s Island Arsenal, aock

Island, Ill.

12.500.00
7.,466.600.00

7, San Antonio Arsenal, ban Antonio, Tex.
(1) San Antonio Arsenal,

an Antonio, 'Tex.158,000.00

S. li]xingfield Arsenal, bpringfield, Mass.

(1) Snringfield Arsenal, Avingfield,

339,500.00

Mass.

:atertown Arsenal, Watertown, Mass.
(1) Watertown Arsenal, Watertown, Mass. 1,703,100.00

Watervliet Arsenal, 7est Troi, N.Y.
982.600.0o
(1) Watervliet Arsenal, West Troy,N.Y.
15 032 .500 00
Total: Arsenals

Nitrate Ilants
(1) Nitrate 21ants

Total: Aunitiona Procurement Service

Total Military Affairs

19.680.000.00
64.912,50000 34 912 500.00
6,690.962c..26.69

II. Civil Affairs
1. fubiic Works




General: Undistributed

(1) Civilian assistants to ,Ingineer Officers

75,000.00

divers and Harbors
:Harbor at Portland, Me.
Waterway connecting Buzzards Bay and
Cape Cod Bay, Mass.

etc.
etc.

Total: Rivers and Harbors

300,000.00

5,000.00

37.974.142.65

3. California debris Commission
(2) Exvenses, California Debris Commission

15,000.00

-10-

ROOk

I11.

Island Arsenal, look Island,

7,434,100.00

Rook Island Bridge,Rock Island, III. 20,000.00
(0) Rook Island Power Plant, Rook 1,Aand,
12.500.00
7.466.600.00

Total; :.ock Island Arsenal, ;jock

island, Ill.

San Antonio Arsenal, San Antonio, Tex.

(1) San Antonio Arsenal,

an Antonio, Tex.158,000.00

6ringfield Arsenal, oprIngfield, Mass.

(1) Snringfield Arsenal, ,pringfield,

339,500.00

Mass.

tortown Arsenal, Watertown, Mass.

(1) Watertown Arsenal, Watertown, Mass. 1,703,100.00

10. Watervliet Arsenal, -est Troy, N.Y.
982.600.00
(1) Watervliet Arsenal, West Troy11.Y.
15 032 600.00
Total: Arsenals

2. Nitrate nants
(1) Nitrate ilants

Total; Muni t ons Pr ocurement '3erv1oe

in riot% nnn nn
Ap.,,,,,vvvevy
ia.21,2.., 500.00
0

Total Military Affairs

II. Civil Affairs
1. fablio Works




General: Undistributed

(1) Civilian assistants to Angineer Officers

75,000.00

Rivers and Harbors

Harbor at i'ortiand, Me.
Waterway. connecting Buzzards Bay and
Cape Cod Bev, Mass.

etc.
etc.

Total: Rivers and Harbors

300,000.00

5,000.00

37.974.142.65

3. California debris Commissin
(1) Axpenses, California Debris lommission

15,000.00

4(=._91.2,500.00
==============

690.962,26.69

iarmanent International Commission of Congresses
of Navigation

(1) Permanent International lammission of
Congresses If Navigation

3,000.00

Alaska

,I)

gon roEids,

oridbes

trai/s, Alaska

Fund

199,308.52

Totals kublic Works

38,265.e.,51.17

2. National i,arks

Chickamauga

61

Chattanooga National Park

(1) Chickamauga & Ohattspooga National Park

55,260.00

3bi1oh Rational Military Park
(1) Shiloh

National Military Park

29,550.00

Gettysbnrg National Park
(1) Gettysburg National Park

42,500.00

Vicksburg National Military Park

(1) Vicksburg National Military Park

33,000.00

Guilford Courthouse National Militarj ',ark
(1) Guilford Courthouse .Lational 1dL.l1tar

.ark O,100.00

5. Crater Lake Nati,nal Park
(1) improvement of Crater Lake Nati...nal PL,rk

50,000.00

7, Zellowstone National Park

(1) Improvement of Yellowstone National Park 167.500.00
Totafs National Parks

National




550.910.00

Monuments

Antietam Battle Field

(1) Antietam Battle field preservation
Birthplace

4,500.00

of Washington, Wakofield, Va.

( 11 Improvement, birthplace of
Wakefield, Va.

asflhixgton,

100.00




Birtnplaco of Lincoln, 4y.
(1) Lreservation birt.plade of abranain
Lincoln

1,020.00

Building *here Limoln Died, Washington, D.C.

(1) Aepairs to builaing wiere .Wranam Lincoln
died
Total: Aati,nial Uonunents

5 820.00

Lakes Alrvey

(1) Survey of Nortnern and 7.erthwestern !fakes

125,000.00

2uh1ic Buildings and Grounds, :Astrict of Columbia

1. General: Undistributed

-:alaries of orrOoyees, public buildings
and grounds

Contingent expenses, public buildings &
grunds
(3)Improvemmts & care of public grounds
Improvement & care of public grounds,
1.).

Ligiting public grounds, D. C.
Total: Genoral: Undistributed

99,305.00

8,054.00
14,400.00
376,550.00
27,620.00

Washington MOnumen t

(1) Gars & isintenance Of iathington
konum)nt

20,800.00

Oxecutive Lansion

Repairs, fuel, etc., Executive Mansion
Sighting, etc., Executive Mansion
Total: Executive Niansion

115,000.00
,8.600.00

14,600.00

l'elegraph connecting Capitol with Departments
and Government l'rinting Office

(1) Telegraph to connect the Capitol with
the DaLartmnts and Government 2rinting
uffice

500.00




?otomac Aiver Bridge

(1) Bridge across kutomao Alver ut ueorgetown. U. 0.

400

000 00

Total: Public Buildings and grounds: Dintrict of

1.070.849.00

Columbia

2ota1: 01v11 Affairs
aAAND TJTAI4 Military Affairs and Civil Affairs

39.849030.17
4).760.8834066.86


Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102