The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
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