The Paper-work Jungle

December 28, 1964

On Oct. 30, 1963, the Federal Power Commission sent out to 114 natural-gas producers a mammoth questionnaire weighing an average of 10 pounds. The questionnaire contained some 428 data sheets calling for data going back to 1955. One company estimated that completion of the forms would require 17,000 man-hours and cost it $85,000 in salaries.

This incident is not exceptional. Almost everyone who files an income tax, particularly if his income does not all come from a single source, is obliged to become a part-time accountant, or to hire one.

Ten years ago (when the Federal government, as measured by expenditures, was only two-thirds as big as it is today) a task force of the Hoover commission studied both the volume of government paper work and the paper work that the government imposed upon private industry and the private citizen. The task force found that each year the Federal government handled 25 billion pieces of paper, not including pamphlets and books. The government employed more than 750,000 full-time workers to handle them and spent more than $4 billion yearly. (That sum would have paid the entire cost of the Federal government as late as 1932.)

Each year the bureaucracy made out 3 million purchase orders to buy supplies. Each year government bureaus wrote a billion letters, at a cost to the taxpayer of $1 each. Compared with 40 years before, each employee was writing about ten times as many letters. As the number of employees had increased sevenfold in that time, the total of government letters had increased 70 times.

DUMPED ON THE FLOOR

As to the burden of paper work laid by the government on private citizens, the task force found it impossible to estimate the total. But here are a few examples: there were 4,700 requirements by the Federal government on private industry to report statistical data. Before a utility company made an addition to an existing plant, no matter how small, it had to obtain a certificate from the Federal Power Commission to prove its original cost. The FPC’s request for such data covered 82 pages, and the utility company’s average report often ran to 1,000 pages with supporting schedules, took 7,500 man-hours, and cost more than $25,000 to prepare.

It was estimated that the 4 million small business concerns of the country spent at least 5 percent, and in some instances as high as 29 percent, of their time on government paper work. Often there was no time limit on how long business had to keep these records. Yet one bureaucrat reported that copies of the payrolls that the government had demanded were so little used that he dumped them in barrels on the bare floor of empty storage rooms.

So much for the situation as officially reported ten years ago. In spite of the recommendations of the Hoover commission, is the situation any better today? On net balance it is far worse. A Congressional subcommittee headed by Rep. Arnold Olsen has so far published 752 pages of testimony on the subject. I can refer only haphazardly to some of it.

ONE WORKER, 29 FORMS

Testifying on behalf of the National Association of Manufacturers, Dr. Lewis E. Lloyd estimated that many individual companies are filing reports to the government numbering in the hundreds of thousands each year. Their number and complexity constantly grow. “There can be little doubt that government-induced paper work has been an important factor in causing small-owner businesses to go out of business or sell out to larger firms.” Another major reporting burden recently placed on industry is the requirement to report to the government and the payee information on dividend and interest payments.

As for the small-business man, one example is the testimony of Stuart Finley of Falls Church, Va., who has to fill out a total of 29 Federal tax-reporting forms because he has one salaried employee.

In sum, the Olsen subcommittee report will show that there are about a billion Federal reports a year from the public (including business, industry, social security, internal revenue, etc.). This is over five for every man, woman, and child in the United States.