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White House Statement on the National Economy Program.
April 9, 1932

AS A RESULT of mutual exchange of views by the administration and the Economy Committee, the following was tentatively agreed upon as a national economy program.

The total of the savings so far arrived at would amount to somewhere from $160 million to $210 million. This does not include the savings to be made from consolidations (Group II) nor from reductions in appropriations (Group III).
The conferences will continue.
Reductions in expenses require action in three directions:

Class 1. The amendment or repeal of existing laws which would prevent the realization of savings.

Class 2. Legislation for the reorganization and consolidation of Government functions so as to eliminate overlap, unnecessary bureaus and commissions, and waste.

Class 3. Reduction of appropriations which are within the authority of the existing laws creating and specifying various activities of the Government.This class being under consideration by the Appropriations Committee of Congress, was not dealt with in the conference.

The savings which can be effected only by the amendment or repeal of existing laws or by the granting of additional authority in certain cases.

1. Authorize for 1 year the head of any department or independent establishment, with the approval of the Director of the Budget, to transfer some percentage, to be determined, of any specific appropriation to any other specific appropriation within the department or the independent establishment. Such a procedure will add economy and avoid so far as may be possible the necessity for supplemental or deficiency estimates in the next session of Congress. This will not entirely eliminate supplemental and deficiency estimates but unless such provision is made the inflexibility of reduced appropriations and the emergencies which are certain to arise might result in great public damage and would certainly necessitate more supplemental and deficiency estimates than will be needed if this provision is adopted.
Reduction of expenditure is indirect.
2. Retire superannuated employees.
Estimated saving $3, 000, 000
3. Suspend for 1 year the operation of all provisions providing for extra pay for overtime and night service and all automatic promotions provided by law to civilian employees.
Estimated saving $10, 750, 000
4. The Congress to take appropriate steps to reduce the congressional, Cabinet, and the President’s salary.
Inestimated

5. Instruct the Secretary of the Navy to appoint a board of naval officers to report upon the closing of all land naval stations which in their view are not essential to the national defense. The decision of this board to be final and the stations to be closed upon their recommendations.
Saving indeterminate but probably ................. $3, 000, 000
6. Require the transfer of the cost of supporting the Philippine Scouts to the Philippine Government.
Estimated saving $5, 000, 000
7. Suspend for 1 year all payments to the States under the Federal Board for Vocational Education except those for industrial rehabilitation.
Estimated saving $8, 500, 000
8. Suspend for 1 year the operation of all shipping lines operated by the Shipping Board.
Estimated saving $7, 500, 000
9. Amendments to veterans legislation as pointed out by General Hines. 1 The various projects were undetermined but range in savings from $39 million to $80 million per annum.
1 Frank T. Hines, Administrator of Veterans’ Affairs.
10. Limitation of pay of emergency officers and of retired Army and Navy officers employed by the Government...
11. Prohibition against filling civilian vacancies except key positions
12. Reduction of printing and paper
13. Establish fees for service in certain bureaus with view of making them more self-supporting
14. Discontinue appropriation for Northwest Triangle heating plant$750, 000
15. Authorize transfer of fish hatcheries to such States as will accept and operate them
16. Abolish Army and Navy and Panama transports...
17. Other subjects were referred to later consideration.

18. In considering the savings to be made in the Federal establishment, the administration group proposed:
a. For 1 year the introduction of a 5-day week be authorized for per diem employees and authority for staggering the employment of annual employees by means of furloughs without pay. The reduction of appropriations by the Congress will result in the discharge of many employees unless some provision is made to prevent this contingency. This would permit the retention of trained and qualified employees and provide a somewhat reduced income to some of the Federal staff in lieu of discharging those who cannot be retained on full time. The application of this principle into other services will produce effective economies.
Estimated saving $45, 000, 000
b. Amendments to the law pointed out by the Postmaster General to suspend for 1 year allowances to mail carriers for maintenance of vehicles and other possible items.
Estimated saving $17, 500, 000
c. Authorize the suspension for 1 year of all rights to annual leave with pay and to sick leave with pay to any civilian employee of the Federal Government in excess of 2 calendar weeks each for annual leave and sick leave, but providing that unused sick leave may accumulate to the credit of the employee in the succeeding year.
Estimated saving $35, 000,000
3. The Economy Committee’s proposal in lieu of the above was:
a. Instead of paragraph 2 was a pay cut for 1 year arrived at by the formula of exempting $1,000 before a cut of 11 percent.
Estimated saving $67, 000, 000

b. Do away with Saturday half holiday.
Estimated saving $10, 000, 000

NOTE: The White House issued the statement following a meeting between the President, Secretary of the Treasury Ogden L. Mills, Postmaster General Walter F. Brown, Secretary of the Interior Ray Lyman Wilbur, and members of the House Select Committee on Economy.