(UNTITLED)

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP72-00450R000100260017-6
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 4
• Document Creation Date: November 11, 2016
• Document Release Date: June 4, 1999
• Sequence Number: 17
• Content Type: OPEN

Approved For Release 1999/09/16 hG l AbRDI "G) 5M 4OQ2600 -6ar-
LST married to 1620 ft. Pontoon Causeway Pier (long-
est on record) at Huelva, Spain.
Next remember that interest is a charge for money
and that it has a dimension in time. Because engi-
neering alternatives involve comparisons of equal
money amounts for different times or different money
amounts for equal times, these variables must be tied
together by some common function. The rate of in-
terest supplies this tie.
Further, because time is an exponent in equations
for interest, variations in the money amounts or in
the time periods produce wide and usually rapid di-
vergence when two or more alternatives are compared.
Similarly, the rate of interest selected produces a
marked effect, since this factor is raised by the power
of the exponent-time.
Finally, interest must be applied across the peri-
ods of the times under study, because it is the only
measure of the value the money would actually have
if left in the hands of the lender and the only reflec-
tion of the true cost of an investment to the Govern-
ment (borrower).
This leads inescapably to the reason why a simple
inspection of first costs is oversimplification. The
true costs are comparable only when converted to
uniform series of annual payments, or to present
worths if one prefers.
If all this can be granted, what rate of interest
appropriate for a military engineer?
Some non-federal public works authorities custom-
arily use a rate between three and four percent per
annum. The burden appears low.
One federal source, and it seems authority enough-
the Bureau of the Budget-offers a guide. In its 1959
Bulletin No. 60-2 on commercial-industrial activities
of the Government, the following footnote appears:
"After having determined the value of the Govern-
ment's investment in the activity, the interest cost
Approved For Release 1999/09/16
ket yield of outstanding marketable obligations of the
United States, having maturities comparable to the
useful life of the item."
This is a pretty tall order. U. S. Government and
Agency bonds, notes, bills, etc. (there were forty-
seven different kinds in 1959, and as many or more
now) are sold and traded in the market like any other
commodity. Some are rated for interest and others at
face amount. Those carrying specified interest rates
are bid for at the price the buyer is willing to lend
for that interest; the fixed amount types are purchased
by the buyer who offers the least interest charge.
Some are long-term and others short. But whatever
the types, because these complicating factors exist,
the rates of interest the Government pays are many
and they change from issue to issue. It is therefore
difficult to compute an exact average interest that
can be used without challenge for the total outstand-
ing obligations.
Those obligations having maturities approximately
equal to the lives of the alternatives are less diffi-
cult to extract from the financial pages of the news-
papers, but their meanings have uncertain value. For
instance, many capital investment alternatives com-
pare a single long life with a series of renewable
shorter lives-what interest or what yields should ap-
ply for what periods. Additionally, yield is an ex-
pression of worth to an ultimate owner based on his
purchase price; it derives from, but does not neces-
sarily reflect, the interest charge to the Government-
the original seller. Finally, neither the yields nor
the interest rates pay their due to the cost of initiat-
ing and servicing the loans.
The dilemma seems severe, but there is a rational
solution if the thing is put in context. The military
engineer is dealing in the future where nothing is in-
evitable. His estimates may go awry, the cost of
money may gyrate, missions may change, bases may
close, technology may completely ruin his assess-
ment of useful lives. So it is fruitless to seek the
fifth decimal point in what is essentially a slide
rule operation. It is far easier to estimate intelli-
gently a defensible rate of interest.
A departure point is the current ratio of interest
payments to debt. In Fiscal 1966 this is 3.6%. This
must be tempered by subjective evaluations of the
administrative machinery required for servicing the
debt, of the inconvenience to the taxpayer of being
deprived of satisfactions and earnings he might other-
wise enjoy, and of the risks that the future will not be
continued on page 16
: CIA-RDP72-0045OR000100260017-6
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Paperwork-"The Endless Horizon"
by William D. Carey
Executive Assistant Director
Bureau of the Budget
This article is an excerpt from a speech, "The Endless Horizon," given at a Paperwork Symposium held in
the International Conference Room, State Department, on 16 November 1964. Mr. Carey first discussed the im-
pact of President Johnson's recent order to initiate a planning-programming-budgeting system throughout the
Executive Branch. Most REVIEW readers are familiar with the concept of the system, which is similar to the
one developed in the Office of the Secretary of Defense in 1961 and used throughout DOD.
By far the most important feature of the new Plan-
ning-Programming-Budgeting System is the quality of
the analytic work that is done by the agencies. Here
we will be focussing on the consideration and weigh-
ing of alternative objectives and programs, in terms
of the probable payoffs to be obtained from various
investments, and we will be using systems analysis
and operations research. In other words, what is now
being called the "new administrative technology" is
being deliberately and consciously worked into the
vital decision-making process that-one way or
another-must be improved in these times of relentless
policy innovation and twelve-digit budgets.
The new system will probably confront us with
some very uncomfortable choices. There is little
doubt in my mind that it will raise very serious ques-
tions about the contemporary relevance of some Gov-
ernment programs that have come to be taken for
granted, year after year. It will force us to think in
terms of trade-offs between continuing existing pro-
grams, or organizations, or installations, or proce-
dures, and meeting new needs which we can finance
only by the process of substitution of resources. The
fur will fly, and the going will be tough. But in a
purposeful society which expects its Government to
do first things first and get full value for the dollars
it spends, this is what the future holds. And I think
it will be better Government.
Now, as a corollary to all of this, the President
has also made it clear that he expects every agency
head to set in motion a formal cost reduction effort
based on concrete targets for savings and specific
plans for meeting them. This is the President's War
on Waste, and he wages it every day. He has in-
structed us, incidentally, to show him what each
agency's cost reduction plans are before we ask him
to approve the agency's budget for next year. If your
agency has not submitted a program that meets the
President's expectations, there is likely to be a very
lively telephone conversation originating from the
oval office in the White House. The President doesn't
want rhetoric. He wants to know exactly what each
agency is doing to reorganize, to close out activities
that are nice to have but are not vital, to introduce
efficient information-processing equipment, to improve
the utilization of manpower, to use excess and sur-
plus Government property, to share high-priced ADP
equipment, to join other agencies in common services,
to eliminate marginal reports and publications, to use
sampling methods for getting necessary information.
And surprisingly, cost reduction works. Over a year
and a half, it produced savings of $5 billion in De-
fense alone, and over $1 billion in the nondefense
agencies. I can promise you that we are going to
hear more rather than less about it over the coming
year.
When we talk about reducing paperwork costs, we
often are trying to put the toothpaste back into the
tube. What about cost-avoidance? We cause most of
our own grief. When we organize our public business
badly, we not only invite duplication and overlapping
and administrative friction, but we make it necessary
to pile up paperwork as a desperate attempt to com-
pensate for organizational mistakes. A few weeks
ago, for instance, we found that four major depart-
ments of the Federal Government were getting into
the business of making grants and loans for water
and sewer systems throughout the country. This
could have resulted in appalling confusion. And so
we formed a task force to work out jurisdictions and
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 cutoffs, and Appr edcFor-# 19be0set4999i09/16aPEClA4RD 2a@OOOiO?20006
information on the grants and loans. Now we think as I define it.
the program will work. But how many of these situa-
tions slip past unnoticed until the harm is done? I
simply want to stress the point that cost-avoidance
begins at the stages of legislative planning, budget-
ing, and management analysis. kPaperwork is not
created in a vacuum; it is a result of dewy 'that
a4 ma a every day _people whose minds -are on
other things. They are the program managers, the
people in the line, the coordinating bodies, the over-
sight committees, the investigating groups, and the
research-minded. And so I say that if we are going
to make progress in avoiding root causes of unneces-
sary paperwork, there will have to be a lot more edu-
cating done at the points where major decisions are
made in Government-both in the executive and legis-
lative branches.
I suppose nobody knows what the cost of paper-
work in the Government is; and perhaps that's just as
well. It would take a lot of paperwork to find out.
But we do have some idea what it is costing to mod-
ern a that part of our information handling that is
uterized. Our annual public investment in ADP
runs at about $3 billion and even this may not tell
the whole story. The very existence of this new
technology invites its proliferation. Now there is
little doubt that the Government has saved a great
deal of money, and improved its productivity, by con-
verting conventional information-handling over to au-
tomated systems. Our Supply Systems, and our In-
surance Operations are cases in point. We have
accomplished a great deal to improve productivity in
most of the places where we have large concentra-
tions of clerks. In addition we are accomplishing
tasks now that literally could not have been done
without computers-as in space, and medical research.
And there are exceedingly interesting new opportuni-
ties to extend the art in sectors of Government opera-
tions that are going to bog down in a few years un-
less something drastic is done-for example, the
independent regulatory agencies, where backlogs are
a way of life and economic decisions have profound
consequences for a growing and healthy economy.
But having said all this, we still have to reckon with
the fact that we can make costly mistakes in taking
the long leap to computers. We must do a great deal
more if this $3 billion a year is to be spent responsi-
bly; and this will mean a stronger drive for machine
compatibility, for equipment sharing, and for language
standardization. Whether we keep our information on
Common Sense Approach
There is one avenue for reducing paperwork costs
that does not require expert technical knowledge of
the computer. That avenue is the common sense eval-
uation of the reports that the computer produces.
A common complaint is that we pro uce too much
information and not enough of the right kind. Right
here in the State Department building valiant efforts
are being made to help the harassed men who must
read huge quantities of reports for fear of missing
something crucial, but who still complain that they
don't get enough of the right kind of information.
Here again we have created our own problems. We
have invented all these wonderful ways to produce
information, even including the direct connection of
the computer to the printer's press, and those of us
in a position to push the buttons succumb to the
temptation to produce all the information possible
rather than just what is needed. It's the human factor.
And the human factor keeps turning up wherever
we touch paperwork. If I may get a little personal, I
have achieved a status in my old age that entitles me
to write letters back to the people who write in to the
President. Each morning I can depend upon it that
the big red jacket will be on my desk, full of letters
that need only my signature. I usually have a choice:
I can cover up the body of a letter and sign it as fast
as I can write my name, or I can read what I am being
asked to sign. I always contemplate that choice be-
fore I open the folder, but after I play this little game
I inevitably wind up reading the prose that has been
prepared for export.
Now, I come from a literate organization, all things
considered, and yet I find that I am obliged to make
repairs to a fair number of what we picturesquely call
"final drafts" because they just aren't the kind of
thing I wish to stake my immortality upon. (I imagine
homes all over America with framed copies of letters
from Mr. Carey of the Executive Office, each a fine
blend of the best prose of the Charles and the Peder-
nales Rivers; and it is an apocalyptic vision.) So I
sit at my desk repairing these letters like my grand-
mother used to darn socks. And I keep asking myself
whatever became of the gift of clear, concise, and
responsive expression. To carry this confession a
step further, my own prose is generally improved upon
by my Director, and I have the notion that if the Presi-
dent himself had the time to do it he would rewrite
half of the correspondence issued by the White House.
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 As a matteAp vedFFo dRebeaeut199 9/1(6efaDW D 2oG045ORN@40028001fi~-6
lish as a schoolmaster, and when he came to the
White House and started to read staff drafts of state
documents and messages-including the Budget Mes-
sage and the Economic Report-he lost no time in dis-
tributing D's and F's. We found that the President
wanted economy not only in the field of costs, but in
the world of words, and it was a shock. Out went the
Ciceronian periods and the graceful cadences of the
19th Century, and in their place came the short sen-
tences, tight paragraphs, indentations, key words, and
underscoring that fitted the new President's style.
Now and then somebody still tries to launch a balloon
filled with wind past the President, but his vigilance
is excellent and most of them hit the ground before
achieving enough altitude to get safely past the West
Wing.
I have a lot of sympathy for the decree issued by
the present Budget Director to his staff before he had
been on the job long enough to learn the direction of
the lunch room. He issued a declaration to the effect
that the next person to send him a paper using such
passive voice expressions as "it is believed" and "it
is therefore concluded" would be shot on sight. A
small gesture, perhaps, but expressive of a deep agony
of literary frustration.
After all, words are delicate agents of ideas. It
was Holbrook Jackson, reflecting on the astonishing
virility of the English language, who decided that its
vigor resulted from its propensity to live dangerously.
"It is the most adventurous of all languages, he
said, "coming from anywhere and going everywhere,
while paying so little homage to rules that it seems
to risk destruction by indiscriminate breeding and un-
controlled immigration." And in this age of special-
ized management, technology, and what I call "con-
sultantship," we are in more danger than ever of
burying understanding under an avalanche of self-
important jargons and dialects. But the greater sin
is to be intentionally vague, pompous, or ambiguous.
There is an oft-told tale of the occasion when the
Gettysburg Address was submitted for clearance to
an interdepartmental committee. Every agency had a
number of helpful suggestions. It is alleged that the
State Department "objected to the phrase `our fore-
fathers brought forth upon this continent' on the
grounds that while technically correct the phrase was
so loosely worded as to leave the impression that we
thought the entire continent belonged to us, a position
in conflict with our current hemispheric policy. State
therefore suggested as a substitute the phrase `our
north by 49 degrees North Latitude, on the south by
30 degrees North Latitude, on the west by the Pacific
Ocean, and on the east by the Atlantic.' Defense
suggested that in place of `we are now engaged in a
great civil war' the statement say `we have now en-
tered on a period of civil uncertainty involving fairly
full mobilization.' "
In a way, I am suggesting that we will make more
inroads on the paperwork problem if we worry less
about how dignified we sound and concentrate more
on telling people what they need to know. Malcolm
Muggeridge has remarked that most of our errors are
committed because of too much solemnity, rather than
too much mirth. We surely cannot laugh at the cold
war, or at the hot one in Vietnam, or at poverty, or at
our stricken cities; indeed, we have been looking the
other way for too long. But it is no answer to these
gigantic challenges to react by over-administering our
business, by substituting reports and statistics for
decisions, by piling one layer of control and super-
vision over others, or by indiscriminately milking
Xerox machines under the delusion that this is in-
stant efficiency.
The operation of our Government necessarily is
dependent upon a web of paperwork systems, and
those systems are expensive. You have a big respon-
sibility to help improve the quality of paperwork and
to reduce its cost.
Cost reduction-and cost-avoidance-in paperwork
management as in most other worthwhile affairs is
tough, unspectacular, and generally unpopular work.
Everybody thinks the other fellow does too much pa-
perwork, while his own is essential. For too many of
us, it is the crutch that we lean on. Take the crutch
away gently, so we won't fall flat on our faces, but
by all means take it.
~as9 On Jhe Review
This copy of the NAVY MANAGEMENT
REVIEW is intended for ten readers.
All should see it as soon as possible.
Read it - then pass it along. Others are
also interested in better management in
the Navy and the Marine Corps.
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