Stationery. Statement of the appropriation for stationery for the fiscal year 1916 and statements of the cost of the stock on hand and issues to various offices and services of the department brought down to November 1, 1916, follow: Office of Captain Commandant, United States Coast Guard.. 1,200. 94 523. 53 207.99 247.27 394.47 133. 69 637.04 1,099. 32 43.67 2. 17 279.27 106. 04 414. 34 1, 167. 42 726. 68 474. 08 311. 22 4, 193. 97 296. 13 8, 640. 14 9, 614. 01 34. 01 4, 150. 06 11, 269. 11 2,125.25 2, 909.02 117.94 Secret Service Division Office of Director of the Bureau of Engraving and Printing.. $338.44 4, 254. 21 281. 27 General Supply Committee... Independent Treasury Service.. Mints and assay offices.. Coast Guard.. Public Health Service.. 4, 292. 80 1, 129.95 2, 654.80 2, 656. 28 Customs (collector at San Juan, P. R.)..... Federal Trade Commission.... United States Section International High Commission.. Total..... Total issues, 1916... Total issues, 1915.. 2,625. 42 931. 72 84.03 82.67 50.60 519.49 20.60 5. 21 4, 319. 74 133, 307.99 146, 238. 22 Postage. The appropriation for the fiscal year 1916 for postage to prepay matter addressed to postal union countries and for postage for the Treasury Department was $1,000, which sum was entirely expended. Materials for bookbinder. The appropriation for the fiscal year 1916 for materials for the Treasury Department bookbinder was $250. Of this amount $243.81 was expended, leaving a balance on hand of $6.19. Department advertising. The amount expended for department advertising during the fiscal year 1916 was $10,455, against $11,185 for the previous fiscal year, showing a decrease of $730. There were 2,682 authorizations for advertising, which is a reduction of 79 over the fiscal year 1915. SECTION OF SURETY BONDS. During the calendar year 1914, 17,904 bonds were passed through the Section of Surety Bonds, showing an increase for the year 1915 of 3,200 bonds. The penalties of the bonds recorded during the year 1914 aggregated $239,128,162, while during the year 1915 the aggre gate penalties were $247,104,818, an increase of $7,976,656. The foregoing statement of bonds recorded does not include the large number of bonds accepted by collectors and deputy collectors of customs at the various ports and subports of entry. During the fiscal year the work of the section has been materially increased by reason of the fact that 8 surety companies have ceased to write fidelity and surety business and the labor has devolved upon the section of securing termination evidence of liability under Government bonds executed or reinsured by these companies. During the year 2 additional companies were authorized to do business with the Government. At the present time there are 24 authorized companies doing business with the Government either as insuring or strictly as reinsuring companies, with the aggregate capital and surplus of approximately $50,000,000. The work of the section is now carried on by five clerks and an assistant messenger, with an aggregate pay roll of $7,720. It is believed that a reorganization of the force should be made, owing to the increasing volume of business and in order to promote deserving employees, and with that end in view the proposed estimates for the ensuing fiscal year have been submitted upon the basis of $10,220, or a net increase of $2,500. During the fiscal year it has become necessary to make examinations of the financial conditions of companies applying for authority to do business with the Government. These examinations have been made under the present regulations at the expense of the surety companies themselves, but a specific appropriation should be made by Congress to enable the Secretary of the Treasury to enforce the provisions of section 4 of an act of Congress approved March 23, 1910 (36 Stat., p. 241), providing that the Secretary may institute inquiry as to the solvency of surety companies with a view to requiring additional security should it become necessary as the result of such investigation. While the Secretary is empowered under the act of Congress cited to institute such inquiries, Congress has made no provision by way of an appropriation to enable the Secretary to institute such inquiries, the necessity for which is becoming more apparent from day to day, as will be shown by the number of surety companies which have been compelled to retire from the surety business frequently as the result of examinations made by insurance departments showing the complete loss of all surplus and serious impairment of capital. The Secretary of the Treasury should have under his control an appropriation which would permit him to make examinations before certifying to the continuing solvency of surety companies, especially in those cases where there is strong reason to suspect that the companies are underestimating their liabilities. Regulations have been issued by the Treasury Department fixing a limit to the liability which any surety company might assume as sole surety on any single risk running to the Government, so far as bonds accepted by the bond-approving officers of the Treasury Department were concerned, and prescribing the general conditions under which business with these companies should be conducted, so far as the Treasury Department was concerned. These regulations were promulgated in department circular No. 54, issued under date of September 21, 1910, providing that a surety company would not be accepted on any single risk where the penalty of the bond was in excess of 10 per cent of its paid-up capital and surplus, as determined by an audit of the quarterly financial statements of the company as rendered to this department. This regulation in its final form has been adopted by all of the executive departments of the Government and is in full operation. The regulation has been productive of beneficial results, and is generally approved by the companies themselves, and it is believed should be enacted into law. The enactment of a law limiting the liability of a company to 10 per cent of its capital and surplus on any single risk, whether running to the Government or in the nature of a private contract, is justified by the fact that 13 States have already enacted such a limitation. The acts of August 13, 1894 (28 Stat., pp. 279-280) as amended by the act of March 23, 1910 (36 Stat., p. 241) should be still further amended, with a view to fixing such limit of liability, and giving to the Secretary of the Treasury the right to prescribe the necessary regulations for the enforcement of the law. The following language is suggested, which, if adopted by Congress and enacted into law, will cover the situation: "That hereafter no corporate surety company authorized to do business with the Government shall expose itself to a loss on any one risk or hazard for any one principal in excess of the amount of ten per cent of its paid-up capital and surplus, as fixed by the Secretary of the Treasury, unless such excess is adequately protected under such regulations as the Secretary of the Treasury may prescribe." Other Secretaries of the Treasury have recommended legislation with a view to terminating the liability of the sureties on a bond in regard to any future transactions after a new bond has been executed at the end of four years, as required by law, for the same class of disbursements. The necessity for such legislation has been carefully considered and approved by the Attorney General, in an opinion addressed to the Secretary of the Treasury under date of October 17, 1906. Several bills have been introduced at various times in Congress with a view to carrying out this recommendation, and the following language has 62015°-FI 1916- -11 been approved by the Attorney General as entirely appropriate, and the most effective way of accomplishing the purpose in view: That when a new bond has been given and accepted and approved under the provisions of section five of the act of March second, eighteen hundred and ninety-five (28 Stats., p. 808), requiring bonds to be renewed every four years, or oftener if it shall be deemed necessary, the surety or sureties on the prior bond shall be released from responsibility for all acts or defaults of the principal on the prior bond which may be done or committed subsequent to the date of acceptance and approval of said new bond by the proper head of the department, or other officer, saving only liability on account of the default or failure of the principal to account properly for any money or property in his possession or custody prior to or at the time of the acceptance and approval of such new bond as aforesaid. OFFICE OF THE DISBURSING CLERK. The following table shows the amount of work performed during the fiscal year 1911 (the first year of the present organization) and during the fiscal year 1916, with the percentage of increase in each class of work in five years: The present organization of the office dates from July 1, 1910, on which day the work formerly performed by four disbursing clerks in the Treasury Department was taken over by the new organization. Each year since the reorganization there has been a marked increase in the work as compared with the previous year, due to assigning new work to the office from time to time and to the steady increase in the work of certain bureaus and offices, particularly the Supervising Architect's Office. It is estimated that for each occupied building this office pays 100 vouchers a year. As about 90 new buildings are completed and occupied each year the annual increase in the number of vouchers paid as compared with the preceding year is about 9,000 on public buildings alone. |