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Mr. Jump. The following statement is presented for the record:
To permit of more direct and at the same time more convenient consideration of the authorization for the purchase of passenger-carrying vehicles, the aggregate authorization heretofore carried in the bill for the department as a whole has been omitted, and in lieu thereof specific authorizations have been inserted in the text pertaining to the several bureaus requiring purchase of such vehicles during the fiscal year 1934. Under this form of presentation, the Appropriations Committee will be enabled to consider this phase of contemplated expenditure in direct connection with the work and general estimates of each bureau when the bureau head appears before the committee and explains the primary objectives, in connection with which vehicles are required.
The special language heretofore carried in the lump sum item to cover procurements of the Bureau of Public Roads and the Forest Service, in connection with road construction, also is omitted, since these items now appear under the two bureaus involved.
The total estimates of all bureaus, as set forth in the individual limitations pertaining thereto for 1934, is $217,440, a decrease of $32,560 from the total authorization of $250,000 for 1933.
New language is included to provide for interchangeability of the bureau authorizations. Under former authorizations allotments for the several bureaus were left to the head of the department, a flexible procedure which will be lost under the new forms of presentation unless the new language shown is inserted. It is highly important that provision be made to continue this interchangeability feature, for without it the department will not be able to meet emergency or other unforeseen needs arising from time to time. Such an arrangement will continue to provide for meeting emergencies without the delay and added routine procedure involved in requesting additional legislation. Experience has shown that on many occasions it would have been impossible, without this interchangeability feature, to meet the sudden requirements of the service, especially during the periods when Congress was not in session or when there was no bill pending in which such routine operating authority could be secured promptly.
The restriction in connection with administrative work of the Bureau of Public Roads in the District of Columbia is omitted from the general item since it has been included in the automobile language submitted under the Bureau of Public Roads.
In connection with the general authorization for the maintenance, operation, and repair of vehicles, the restriction on expenditures for that purpose has been omitted, since a general provision covering this point applicable to all departments is submitted in the Budget estimates under the heading of the Treasury Department. General language is submitted, similarly, under the Treasury-Post Office estimates, superseding the proviso restricting purchase of any passenger vehicle to a cost not in excess of $750, except as to 10 per cent of the expenditures for this purpose, and defining the term "official use" which also is omitted from the estimates covering the Department of Agriculture.
REDUCTION IN ESTIMATE FOR 1934
Mr. Ashley is here in case you want additional information, but taking up the changes of language one by one, the first change consists of bracketing for omission the total limitation on the purchase of passenger-carrying vehicles, and substituting for that limitation the words within the limitations specified under the several headings of the lump-sum appropriations herein made for the Department of Agriculture," and so forth. You will recall, as we have been going through the bill, that each bureau chief has presented the justification for the limitation which has been applied to his specific bureau in place of the general limitation heretofore carried. That was done in order that this committee might take up these automobile authorizations as each bureau was before it and while the subject matter of that bureau was fresh in the minds of the committee. I may say for your information there that the total of the amounts asked for under
the several bureaus constitutes a reduction of $32,560 below the authorization carried in the 1933 bill.
Mr. BUCHANAN. Less than what amount?
Mr. JUMP. Less than the $200,000 for the general work of the department, plus the $50,000 for vehicles under the Federal highway act, and item appearing elsewhere in the Budget.
Mr. ASHLEY. The total difference is $32,560.
Mr. Jump. $32,560 reduction for 1934 in the total amount asked to be authorized for the purchase of passenger-carrying vehicles.
Mr. BUCHANAN. Under the appropriation for 1933.
Mr. Jump. Under the amount carried, in this provision which is now before you, in the 1933 appropriation bill. It is an authorization rather than an appropriation.
Mr. Ashley. It is a total reduction from $250,000 to $217,440.
AUTOMOBILES FOR BUREAU OF PUBLIC ROADS AND FOREST SERVICE
Mr. Jump. The second change in language is the proposed omission of the provision referring to the purchase of automobiles for the Bureau of Public Roads and the Forest Service in connection with road work. It is omitted here because it has been inserted in the language of both the Forest Service and the Bureau of Public Roads.
PURCHASE OF AUTOMOBILES FOR FIELD SERVICES
The next change is new language asked for, as follows:
Provided further, That the limitation on expenditures for purchase of passenger-carrying vehicles in the field service shall be interchangeable between the various bureaus and offices of the department, to such extent as the exigencies of the service may require.
That is put in not to give us any additional authority, but to continue the authority we have always had in the lump sum authorization, whereby, in the event emergencies arose during the year, requiring the acquisition of passenger-carrying vehicles in one bureau we were enabled to go to another bureau and say,
Here; an emergency has arisen in such and such a bureau; we will have to reduce your allotment by $100 or $200, or $500, in order to help to meet it.
Mr. BUCHANAN. The 10 per cent interchange provision is between bureaus?
Mr. Jump. Yes, but that applies to appropriations; and here we are not dealing with appropriations, but merely with authority for an interchange of allotments. That 10 per cent never did apply to allotments under this lum-sum authorization, which we have made to the various bureaus, and modified in accordance with their needs and, as emergencies arose during the year, we have revised the allotments to take care of the emergency requirements as they arose. Mr. Ashley will perhaps go to four or five bureaus and negotiate reductions in their original allotments to take care of the emergency.
But we shall be unable to do that in the future under the split-up that has occurred, without this change of language. I do not think an interchange would occur very often, but, when we need it, we need it badly, especially at times when it would be impossible to come up here and get specific legislation to cover it, which would also involve quite a legislative expense for an inconsequential operating detail.
PROVISION LIMITING PURCHASE PRICE OF AUTOMOBILES
Mr. BUCHANAN. What is the meaning of this other omission?
Mr. JUMP. This other provision is omitted because, as I have been advised verbally by the Bureau of the Budget, there is submitted in the Treasury-Post Office chapter of the Budget a general provision covering either these features or some modification of them to apply to the Government as a whole, thereby rendering the language unnecessary in the different bills.
Mr. BUCHANAN. That would be new legislation, would it not?
Mr. Jump. I do not think it would; it is a limitation on expenditures.
Mr. BUCHANAN. But here the limitation applies only to the bill under consideration and not to other bills.
Mr. Jump. I will have to stand corrected on that, then. The next language change is the omission of the amendment put on this bill on the floor of the House, a similar amendment being added later to each of the other bills as they were reported out by the Committee on Appropriations, limiting the average price, and so forth, which could be paid for various types of passenger vehicles. The omission here is for the same reason as in the previous case. It is our understanding that the proviso has been covered by a general submission in the Budget, in the Treasury-Post Office chapter, to apply to all of the departments.
I believe that covers all of the changes. We would be glad to give you any other information you want on passenger-carrying vehicles.
GOVERNMENT OPERATION OF AUTOMOBILES MORE ECONOMICAL THAN
HIRING OF TRANSPORTATION
Mr. Buchanan. Let us have something in the way of a justification for these automobiles.
Mr. Jump. I think Mr. Ashley probably understands what you have in mind and he will make a statement on that in as much detail as you may require.
Mr. BUCHANAN. I want to know whether or not there is any economy in authorizing you fellows to exchange old automobiles and to buy new ones.
Mr. ASHLEY. We think there is a distinct economy in every case where we ask for an authorization to make such purchases. In the first place, we do not ask for special transportation in the form of Government-owned passenger-carrying vehicles unless we find that the ordinary means of conveyance open to the public either do not exist or are inadequate. That is the first consideration. The second consideration is how much of that special transportation we will require in & year.
Mr. Buchanan. In a year and in the different places where we are locating the automobiles?
Mr. Ashley. I am speaking now of the considerations in each instance. The second consideration is how much of that special type of transportation we will need. If the requirement runs up to somewhere in the neighborhood of 6,000, 7,000, or 8,000 miles a year, we know definitely that we can own, operate, and dispose of a Government-owned vehicle at about 1 cent a mile less than it would
cost us to get that same transportation by paying the employee to operate his own car, even on the 5 cent rate. Mr. BUCHANAN. How about getting private conveyances?
Mr. Ashley. To rent special conveyances commercially would multiply the cost probably by three, because private conveyances rent at from 12 to 15 cents a mile, whereas we authorize about 5 cents a mile to our own people. The 5 cents a mile, of course, is not the limit authorized by Congress, which is 7 cents; but the general arrangement in the department is to cut such allowances to 5 cents or lower, and not to permit an allowance of more than 5 cents.
DISCOUNT ON PURCHASES OF AUTOMOBILES AND AUTOMOBILE ACCESSORIES,
GAS, OIL, ETC.
Mr. BUCHANAN. Do you mean to tell this committee it is cheaper to buy an automobile and pay the expenses of gas, oil, and upkeep to secure the necessary transportation, than it is to pay your employee 5 cents a mile to use his own car?
Mr. Ashley. Yes; and it is only in those cases where the mileage is sufficient to make this true that we request authority to purchase & passenger-carrying vehicle. The reason why we can operate a car more cheaply than the private individual can operate it is, first, that in the purchase of the car we get a very large Government discount as a fleet owner. That discount runs up to as high, on the average, as 18 to 20 per cent.
Mr. BUCHANAN. On the value of the car? Mr. ASHLEY. On the list price of the car. Mr. BUCHANAN. Is that by reason of getting them by the wholesale?
Mr. ASHLEY. That is because we are what the dealers call "fleet" owners; the Government as a whole buys many cars and they give us that advantage over the general public purchasing cars here and there, one at a time.
Mr. JUMP. And then competition enters into it.
Mr. BUCHANAN. In other words, several automobile manufacturers put in bids?
Mr. Ashley. Always.
Mr. JUMP. And on Government purchases, it is surprising to see the prices they will bid for this business.
Mr. Ashley. In addition to that, if we buy three cars at a time, whether of the same type or of several types, by buying three cars at a time, which is a carload, we can get the benefit of the carload rate for Government shipments, and when we get out into the Western country these rates drop to as low as 50 per cent of the commercial rates. That is our second saving.
Then we have a third saving when we come to buy tires and tubes, because we buy those commodities through the General Supply Committee at for from 40 to 50 per cent of the retail prices. That is a very large item, of course, in the operating expense of a car.
Then when we come to the gasoline and oil that we use in operating the cars, we pay no State tax. And, as Mr. Jump has pointed out, there again we have competition.
Mr. Jump. That tax amounts to 5 or 6 cents a gallon in some of the States. It is an important factor.
Mr. BUCHANAN. Your employees would have to pay those taxes, would they not?
Mr. JUMP. Yes; they do have to pay them on their own cars. Then, on the gasoline, consider the Government price, where you have contracts for the purchase of gasoline for the Government cars, joint procurements, you effect a big economy on the price you pay for gasoline and oil.
Mr. ASHLEY. We get gasoline at prices several cents lowerperhaps, 2 cents lower, say, on the average—than the retail purchaser would have to pay for it at the filling station, where an individual, of course, pays all of the taxes, both Federal and State.
Mr. BUCHANAN. How about oil?
Mr. ASHLEY. The same applies to oil. We also take advantage of the Navy contract in the purchase of our oil, wherever practicable.
Mr. JUMP. It is the same with oil, except the reduction is much greater. Where you have a Government or any other bulk contract for oil it makes the price for oil seem unbelievable to the man accustomed to driving in to a filling station and paying for oil at 30 cents a quart.
Mr. Ashley. We can buy oil for about 30 cents a gallon.
Mr. BUCHANAN. What percent of reduction on oil does the Government get?
Mr. Ashley. As I have already said, we get, in the bid prices, anywhere from 25 cents to 35 cents and 40 cents a gallon; whereas you would be paying 25 cents a quart for that same oil if you had it put into your car at the filling station.
COST PER MILE OF GOVERNMENT-OPERATED AUTOMOBILES
Now all of these economies together make it possible for the Government to operate a Government-owned car at approximately 4 cents a mile throughout the life of the car.
Mr. BUCHANAN. In that 4 cents a mile, is the value of the car, the purchase price of the car, included?
Mr. Ashley. Everything is included from the purchase price of the car to the turn-in value we get for the worn-out car when we buy a new car to replace it. Now during the life of the car, it is customary, in computing costs, to assume a depreciation charge of a cent to a cent and a half a mile. I think the variation here is the reason why the figures vary which have been given you by the several bureaus, as they have come before you here. They have assumed in some cases $150 a year depreciation, say, or they may have assumed a cent-a-mile depreciation; whereas other bureaus, under different use conditions, would assume a cent-and-a-half-a-mile depreciation.
Mr. BUCHANAN. In other words, the estimate of depreciation in the car has been different in the different bureaus?
Mr. Ashley. Yes; and these slight differences, I think, reconcile the statements of the various bureaus. It would be a fair statement that the department, as a whole, operates its cars for somewhere in the neighborhood of 4 cents a mile, depreciation included.
Mr. BUCHANAN. Some one testified here to 3.3 a mile up to 3.5 cents a mile. I do not know whether he had depreciation figured in that or not.