The first thing an Est O runs into in an area that is not hatted is Dev-T (developed unnecessary traffic).

People in an org can be working frantically, totally exhausted and yet produce nothing of value. The reason is that their actions are almost totally Dev-T.

The WHY of this is UNHATTEDNESS.

The people on the posts do not know their own hats or even if some do they are dealing in the “NOISE" of other people who don’t know their own hats.

Few if any of these people know the other hats or duties of the org and so don’t know Where to go for service or Who to approach or despatch for What.

So it’s not an org or a division. It’s a non-productive chaos.

If a management unit such as a bureaux, a Continental Liaison Office, an OT Liaison Office or any agent thereof such as a Guardian or FBO or Flag Rep is any good, THE NEAREST SERVICE ORG WILL MAKE AMPLE MONEY TO PAY the managing unit and HAVE LOTS LEFT OVER TO SWELL Sea Org reserves.

The answers arc three:

Therefore if the managing unit or activity next to a Central Org or service org is “in funds” or “without funds,” it is a direct index of management quality as expressed in the stats of the nearest service org.

1. Get Dev-T understood and

2. Get the staff at least Instant Hatted at once.

For an OTL, the term CENTRAL ORG must have active use as applied to their nearest major org.

3. Chinese school (staff or div staff all together in front of a big org board chanting together the hats, duties and products of the org as visible on the org board).

For a CLO, an AOLA or AOSH is the nearest org, therefore its major org.

In order to get anything done at all or even begin this an Est O Ethics Officer function has to be in.

For Flag and top management, the Flag Service Org is the nearest service org when considering financial support.

A schedule has to be posted including exercise, post time and study and staff has to be mustered and handled at these periods. This gets some awareness of the org group as a team of people with similar purposes.

An OTL or CLO or bureaux must manage lesser orgs so they build up a public that (1) services locally with these lesser orgs and (2) FLOWS CUSTOMERS TO THE MAJOR ORG.

Dev-T packs are made up. These consist of:

Thus field auditors — missions — small orgs — CENTRAL ORGS — SHs — AOs is THE FLOW LINE without which the Central Org or top org will go broke.

• HCO P/L 2 Jul 59 Issue II “Dev-t — The Delirium Tremens of Central Orgs”

If these lesser activities are kept prosperous and flowing persons upward via the FSM system and other systems, THE LOCAL, CONTINENTAL and INTERNATIONAL management units WILL BE IN CLOVER.

If this flow line is not made to operate that way, all will be awful. If it does operate that way, all will be well.

A CENTRAL ORG, THEREFORE, MUST GIVE HIGHER (IN TYPE) AND BETTER SERVICES THAN FEEDER ORGS.

An AO must give higher, better services than an SH.

Flag services must be higher in class than an AO’s.

Lack of precise definition as to what is income and what is “reserves” has caused trouble in identifying activities and in this flow line of management and income.

The main trouble it has caused is that a management unit, not having precise definitions and not knowing the flow lines (as above), reaches out to the wrong “finance pools” for their support.

(Examples: A Continental CLO tried to live on management 10%s which were not theirs [UKLO ’71]. A CLO let the nearby AOSH go down and tried to live off Flag [USLO ’71], A CLO let an AO go down, ignoring it completely while building up only its most distant org [USLO ’71]. A Div III would not collect actively on huge debts because it could borrow from reserves [Flag Admin Org ’71]. An OTL ignored its nearby CENTRAL ORG and kept trying to get its support from its CLO [ANZO ’71]. The earliest example was a navy admiral [Scoles] running the LA Foundation into the ground in 1950 because he thought it should be supported by Elizabeth, New Jersey.) The WHY of all these was lack of understanding of flow lines, and lack of definition of income, expenses and reserves as different, precise money pools and different types of orgs.

The following is a summary of key terms used regarding Church of Scientology finances. They refer to ecclesiastical management matters as they relate to finances of types of activities or areas. They are not intended to define the corporate structure of the Church.

THE SEA ORG: The elite religious fellowship within the Church of Scientology. The Sea Org is not incorporated and is not part of any corporation. Its membership is involved in Church management and the delivery of the higher level services of the Church.

INTERNATIONAL MANAGEMENT: Consists of the International Watchdog Committee and the International Management Executives (Exec Strata) and those units DIRECTLY attached to them such as the international office of the Finance Network. WDC covers SECTORS (entities such as Scientology Missions International, Sea Org Orgs, Class IV Orgs, FSO, etc.) and is essentially a policing and inspection organization which makes sure things get MANAGED. The Executive Strata (and ED International) does not run orgs; it handles the FUNCTIONS that orgs do. without regard to entities but coordinates the functions in them.

FLAG: The main vessel of the Sea Org. Historically, the word “Flag” means the Flotilla Commanding Officer and his personal staff and is of timeless usage and is not new. When the operations and crew of Flag are stationed on land, the term is sometimes modified to “Flag Land Base.” It consists primarily of a management organization (Flag Bureaux), a public service organization giving the highest levels of services (Flag Service Org) and an estates organization servicing public and crew.

FLAG SER VICE ORG: The main public service organization located at the Flag Land Base. It is part of the corporation known as Church of Scientology Flag Service Org.

FLAG BUREAUX: The management body located at the Flag Land Base which is responsible for the management of the Flag Service Org (FSO), Sea Org Orgs and Class IV service orgs. It is basically a tactical unit running orgs on evals done under upper echelons and is an execution arm for top level management. It operates through FOLOs (Flag Operations Liaison Offices). It is part of the Mother Church, i.e., the Church of Scientology International.

These packs are issued to staff members and they are required to check out on them.

CONTINENTAL LIAISON OFFICE (CLO): The SO office of a continent that manages that continent. A CLO contains combined representatives of all management entities (e.g., SMI, GO, etc.) represented as departments on the org board and has a department which is a FOLO acting as the management link between the FB (Flag Bureaux) and the orgs managed by the FB. A CLO would coordinate all management units for that continental area. Continental Liaison Offices are themselves put there and made to run in a coordinated manner by WDC.

Each staff member keeps a Dev-T log and writes down the name of anyone he is getting Dev-T from and also issues Dev-T chits.

FLAG OPERATIONS LIAISON OFFICE (FOLO): A department in a CLO which deals with the execution of planning and programs issued to it by or through the Flag Bureaux. Their major purpose is to see that Flag planning becomes an actuality in orgs in their zone of responsibility. The FOLO sees that orgs are put there and manages them.

OPERATION-TRANSPORT LIAISON OFFICE (OTL): The branch office of a CLO managing the area or orgs assigned to it.

The staff at the least are Instant Hatted at once place on the org board, work space, supplies, what his title is and what it means, org comm system, what he is supposed to produce on his post.

SCIENTOLOGY MISSIONS INTERNATIONAL (SMI): Scientology Missions International is a church which acts as the Mother Church for missions and is responsible for the direct management of the mission network. SMI missions pay tithes, a portion of which is used for SMI expenses. SMI reserves are part of SO reserves.

He is gotten producing what he is supposed to produce in some volume at once.

INTERNATIONAL FINANCE NETWORK: The International Finance Network is located directly under WDC. This network is responsible for seeing that finance policy in the Church is adhered to; that organization assets such as marketing, meters, books, tapes, cassettes, insignia and films are safeguarded and utilized to drive business down on the orgs; seeing that org staff are well paid; seeing that as a result of making orgs prosperous, management is well paid, and is entrusted with safeguarding and increasing Church reserves. It has representatives in continental areas and orgs. Its overall objective is to see that there is an abundance of SO reserves.

Hat checklists and packs are verified as there or are gotten ready.

THE CONTINENTAL FBO: The Flag Banking Officer and office engaged in the financial management of a continental area. He is part of the Continental Finance Office headed by the Continental Finance Director.

A full hat checkout can then begin.

ORG FLAG BANKING OFFICER: The FBO attached to an org to help manage it financially. He is under the Continental FBO.

Courses he needs are done in staff study time.

SO RESERVES: Often miscalled “Flag reserves” or “management reserves” which they are NOT. SO reserves are the amount of money collected over and above expenses that is sent by various units (via FBOs and the Finance Network) to central reserves bank accounts of Scientology corporations and trusts. It is used for purposes assigned by the boards of directors or trustees of such corporations and trusts and for NO OTHER PURPOSE. These are normally employed for periods of stress or to handle situations. They are NOT profit. It is not support money for “Flag” or “management.” It is not operating money (Examples: Huge sums were required to cover WW when under attack and to catch the PUBS 1970 crash.)

Actually hat study and checkout is done on the post a bit each day.

CENTRAL RESERVES: Funds collected over and above expenses that are held in reserve in bank accounts of Scientology corporations and trusts. Often called SO reserves.

This is in fact “on the job training” as he is expected to go on producing while he is being hatted.

INTERNATIONAL MANAGEMENT INCOME: The total money collected for international management and Flag Bureaux management services and products whether paid directly or to Scientology reserves trusts. It includes funds collected for training and processing delivered by international training orgs and billings for missions, promo, etc. A portion of this goes to support management operations and the remainder, and major portion, goes to central reserves.

INTERNATIONAL MANAGEMENT EXPENSES: Total of all expenses for international management and Flag Bureaux activities including comm, missions, training programs, promo, crew welfare plus any other costs of units connected to and supported by international management bodies.

Org Bds are rapidly gotten up or up to date in the org (in HCO) and (full org bd) in each Division.

CLO INCOME: A CLO is supported by funds from its nearest major service org, by tours and Flag Service Consultant commissions and by such services to orgs and other activities as training and packs. A maximum of 10% of the CGI of the major org should be more than adequate to support the CLO, as it should be making far more from its other income sources; and since if the CLO is any good at management at all, the income will be high in that major org. A CLO is expected to send far more to SO reserves than it consumes.

Each Division is Chinese schooled first on its own org bd, then on the org as a whole, in such a way that they know the duties of divisions, departments and posts and the flow lines of the org.

CLO EXPENSE: The total of all expenses for the operation of the CLO and any units attached to it including mission expenses and comm.

OTL INCOME: The same as for a CLO. It should be supported by a maximum of 10% of the CGI of its nearest major org plus tours and Flag Service Consultant commissions and income for other services provided to the orgs in its area of responsibility. If it is any good, it will boom the nearest major org and others as well. It has to boom others so they will feed the nearest major org. It is expected to send far more to SO reserves than it consumes.

Wherever an org or even a division falls apart or slows up, this campaign is repeated.

OTL EXPENSES: The same as a CLO but for its own and attached units’ expenses only.

CLO/OTL RESERVES: Any reserves that may be built up locally through salvage of former allocations or from current allocations.

This is a sample Executive Directive (ED) giving a program written for an actual org where the above was done to cure Dev-T and get the org hatted and producing:

CONTINENTAL FINANCE OFFICE EXPENSE: The Continental Finance Office expense is paid by the CLO to which it is attached. Thus it must make lines flow. It collects for SO reserves and management units.

ED______ Date______________

FBO LOCAL EXPENSE: Paid by the org to which the FBO is attached. The org FBO collects for SO reserves and management units.

LOCAL ORG RESER VES: The reserves built up by an org through salvage of former allocations or from current allocations.

The governing policy of finance is to

A. MAKE MONEY.

It has been very difficult to handle the org.

B. Buy more money made with allocations for expense (bean theory).

C. Do not commit expense beyond future ability to pay.

A long and intensive collection of data has finally culminated in discovering, through reports on comm and inspections by showing why the org appears fantastically busy and overworked while producing very little even when it was found the org was insolvent.

D. Don’t ever borrow.

Ethics has been very heavy for some time and has not led to any spectacular recovery.

E. Know different types of orgs and what they do.

But the Comm Line reviews and analysis reveal INVESTIGATION:

F. Understand money flow lines not only in an org but org to org as customers flow upward.

The Org and all its Units is drowning in DEV-T. HCO is even generating it. This makes an appearance of frantic action and overload while little is produced.

G. Understand EXCHANGE of valuables or service for money (PL Exec Series 3 and 4).

And an analysis has produced a

H. Know the correct money pools for any given activity.

I. Police all lines constantly.

The org is almost totally unhatted and untrained.

J. MAKE MONEY.

DEV-T comes only from AN UNHATTED UNTRAINED ORG.

K. MAKE MORE MONEY.

L. MAKE OTHER PEOPLE PRODUCE SO AS TO MAKE MONEY.

Out the bottom and below the briny bedrock of the sea so far as finished products per man-hours and as far as GI by reason of the org are concerned.

A small sack of beans will produce a whole field of beans. Allocate only with that in mind and demand money be made.

A finance management which does not understand and USE these principles will be like a driver who hasn’t the tech to drive a car. He’ll wreck it, or not driving it at all will have no transport.

A whole staff and the org fully hatted and producing only correct comm without Dev-T and at work actually producing things of real value which will exchange for value.

Money is a tech. IT FLOWS. Although one dollar looks like another dollar, they may be from completely different places and mean completely different things.

THE EST-0 SYSTEM AND DEV-T P/Ls HANDLE THIS.

1. Admin Cramming and each EST O to be furnished with packs of Dev-T Policies at once including last Exec Series P/L Routing and new Dev-T P/L Correct Comm. ALL HANDS DISSEM. ________

2. FULL Est O set-up to be gotten on post at once. They go on duty and part time train. HAS. ________

3. Existing Est Os and those to be put on at once to hammer, hammer, hammer all posts on Off Line — Off Origin and other points of Dev-T so they are UNDERSTOOD. EXEC EST O. ________

4. Big Paper Org Bd with new complement to be gotten up at once in HCO. HCO EST 0. ________

5. Big Paper Org Bds from it to be gotten up in each Div and the Div Chinese Schooled on it. Specializing in the Div but also covering the Whole Org so people know where they are and what each handles and where other terminals in the org are so they can properly route to or go to them for the exact service of that exact post. DIV EST Os under EXEC EST O. ________

6. Straighten out the Comm Lines of each post. EXEC EST O. DIV EST Os. ________

7. Report to his Div Est O (see org bd) or Ethics Officer any person originating off-line off-origin traffic or failing to originate from his post paper or body or remark. Report by “Dev-T Chit’’ EVERYONE IN THE ORG. ________

8. Send flagrant offenders to Admin Cramming. EXECUTIVES. ________

9. Put in

1. Instruct, and if no Improvement:

2. Cram, and if no Improvement

3. Retrain and if no Improvement

4. Offload

where hatting continues to fail to produce rapid comprehension of Dev-T and/or persistent inability to actually DO his hat. Court of Ethics or Comm Ev on request to remedy any injustice. EST Os. ________

10. Excuses concerning hatting and arbitraries like “Only study hat in hatting college” to be wiped out and any barriers to getting On Policy On FO-FSO wiped out by Ethics action or Cramming. EST Os. ________

11. Instant Hat every staff member. DIV EST Os. ________

12. Chinese School every Division. DIV EST Os. ________

LET’S MAKE THIS A CRACK ORG WE CAN BE PROUD OF

The above program can be completed in a few days.

It is followed by further programs to get in lines of the org, full hatting, and proper Comm set-ups for each staff member etc.

If the program falls out or Dev-T flares again, A. REHAT Est Os and B. Do the program once more.

The org will come right and begin producing PRODUCTS WHICH EXCHANGE FOR VALUABLES.

The org will become solvent.

Only the Est O system makes such a program possible.

We have long had the tech as you can see by the P/L dates. Dev-T tech has existed since the mid-1950s. But it could not be gotten in swiftly enough to make a startling change in the org morale or stats until EST Os were on post in an org.

If it does not go in rapidly even with Est Os then some of the Est Os are not well enough or firmly enough hatted as EST Os and the answer of an EXEC EST O or Est O I/C is to very rapidly cram his Est Os or following the 1. Instruct, 2. Cram, 3. Retread,

4. Offload pattern improve his Est O team.

Fully done the program works like a beautiful breeze bringing peace and a cheerful staff.

[See also HCO PL 9 May 1974. Prod-Org, Esio and Older Systems Reconciled on page 446, which modifies the above Policy Letter.]