agencies were consolidated in three new establishments, namely, the Federal Security Agency, the Federal Works Agency, and the Federal Loan Agency. Numerous other adjustments were made, including the redefinition of the content of the Executive Office of the President, the placing of agricultural credit functions in the Department of Agriculture, and the extensive rearrangement of fiscal functions in the Department of the Treasury. In my opinion the results obtained under the Reorganization Act of 1939 speak for themselves. Those results greatly exceed the results which would have been obtained had that act not been passed. I therefore feel that the best results may be obtained in the near future under legislation whereby the Congress directs the President to submit plans to the Congress subject to rejection within a period of 60 days by the two Houses of Congress, under the procedure prescribed in the Reorganization Act of 1939. DESIRABLE CONTENT OF LEGISLATION The desirable content of reorganization legislation has been indicated in broad terms by the President in the message which he transmitted to the Congress on May 24, last. I will elaborate that point, since it is of critical importance. First, I shall point out those defects, as it seems to me, which are found in the present bill, H. R. 3325, but not in the Reorganization Act of 1939; and, second, I shall draw attention to some of the shortcomings of the Reorganization Act of 1939 which it would be well to correct in enacting any future legislation. On the basis of comparing the present bill with the Reorganization Act of 1939, I would have two criticisms. The first of these relates to the provision whereby any plan submitted by the President would be subject to rejection by a resolution of either House of Congress. As I have said the Reorganization Act of 1939 provided for rejection of a Presidential plan only in the event that the two Houses of Congress would, within the prescribed time limit of 60 days, pass a concurrent resolution expressing its disapproval. I believe that any new legislation should incorporate this feature of the Reorganization Act of 1939, and, consistent therewith, the provisions of part 2 of title I of the Reorganization Act of 1939 relating to the procedure leading to a vote in each House upon any concurrent resolution of disapproval. This is the course of action recommended by the President in his message. To provide for disapproval of a Presidential plan by one House, rather than by the two Houses of Congress, seems to me potentially to place in the way of any such plan a larger obstacle than is desirable. Inasmuch as it is very difficult to put into force a reorganization proposal, however meritorious, it is reasonable and appropriate that any such proposal become effective unless it is rejected by a majority of both Houses of Congress. The second criticism which I would advance in connection with H. R. 3325 relates to section 13. This section would repeal the temporary reorganization powers of the President contained in title I of the First War Powers Act, 1941. This repeal would be highly undesirable. The President has pointed out in his message the complications which would arise upon the expiration of title I of the First War Powers Act, in the absence of proper prior steps. The situation pointed out by the President would be aggravated by advancing the expiration date and by the consequent removal of the opportunity for making proper disposition of various war-related problems under legislation such as that which I am outlining today. In my view, section 13 of H. R. 3325 should be stricken from the bill. So much for the defects of the present bill as compared with the Reorganization Act of 1939. I turn now to two features common to the 1939 act and the present bill which detract from useful legislation and should be avoided. The first undesirable feature is the exclusion of 21 agencies and their functions from the scope of the bill-the list in the bill is the same as in the 1939 act except that the National Labor Relations Board has been deleted and the Reconstruction Finance Corporation has been added. The group includes various administrative agencies which come under the jurisdiction of heads of departments or heads of other agencies. Largely, however, these agencies constitute what someone has referred to as a "headless fourth branch of the Government"the various independent commissions. An agency does not require complete independence merely because it performs a regulatory or adjudicative function; nor is it conclusive that the work of such an agency will be performed most advantageously under a status of independence. On the contrary, it is necessary that the Government have a well-rounded program and policy in each functional field and that it be organized so that such a pogram and policy can be evolved and administered. If that necessitates combining administrative and regulatory functions in a department there is nothing to prevent an arrangement whereby programs and policies are evolved under the direction of the department head and the adjudication in individual instances, under those policies, is entrusted to a board which makes independent decisions. The proper course is to recognize that a part of the work of these agencies is of such character as to require peculiar arrangements for their proper administration. I do not mean to say that all, or even most, of these 21 agencies should be rearranged under reorganization plans. However, it is my view that sufficient reason does not exist for closing the door to doing those things which may now be necessary or which may later become necessary; that these 21 agencies constitute a very sizable segment of the total Federal Government; that it would be quite impossible to achieve a reasonable satisfactory Federal executive organization if these agencies are to be again insulated and placed beyond reach under a new act; that the President is quite as sensitive as you and I to what is appropriate and would quite certainly take into account, in preparing any plans for submission to the Congress, the peculiar requirements of particular functions; and that, finally, in any instance where the arrangement proposed by the President did not, in the view of Congress, merit approval it would only be necessary that the two Houses reject, by majority vote, the plan containing that proposed arrangement. Accordingly, I urge that the bill be revised to place the 21 agencies enumerated in the bill on the same basis as the rest of the Federal establishment. The second undesirable feature common to the Reorganization Act of 1939 and the present bill is the inadequacy of the types of reor ganization actions which may be taken. It appears that it would not be possible, under the present bill, to include in a plan provision for the establishment of a department, or the establishment of an agency head, or authorizing an officer to delegate his functions, or the utilization by any agency of the services, authority, or facilities of another agency, and so forth. I believe a good deal of difficulty was encountered under the Reorganization Act of 1939 for similar reasons, and because of lack of clarity as to whether various provisions incidental to and necessary to the proper effectuation of reorganization plans could be included in the plans. It appears that difficulties of this character were obviated when Congress affirmatively made effective each reorganization plan submitted in 1939 and 1940. I would draw your attention to this statement made by the President in his message: The legislation should be sufficiently broad and flexible to permit of any form of organizational adjustment, large or small, for which necessity may arise. I would also suggest that any law enacted at this time be perfected so as to eliminate any need for compensatory patchwork by the Congress on the individual reorganization plans which may be submitted. If I were to be asked to characterize in the simplest terms possible the content of desirable reorganization legislation, my response would be that that content may be found in the reorganization bill which was introduced in the Senate, namely, S. 1120. I believe the job that needs to be done could be done under that type of bill. The CHAIRMAN. Without objection, I think it would be advisable to print Senate bill 1120 in the record at this point. Mr. WHITTINGTON. You have the President's message and H. R. 3325. Why not let S. 1120 follow the House bill in the hearings? Without meaning to interrupt, Mr. Smith, is that the same bill which was introduced by Senator McCarran? Mr. SMITH. Yes. Mr. WHITTINGTON. What is the number of the McCarran bill? Mr. WHITTINGTON. I think it would be a good idea for that bill immediately to follow the House bill. The CHAIRMAN. Without objection, it will be so ordered. (S. 1120 will be found printed at the hearings immediately following H. R. 3325.) Mr. SMITH. Í believe that its provisions appear to be fully in consonance with the message of the President of May 24. CONCLUSIONS In summary, it seems to me that there is real and practical need for achieving a Government structure that can be operated efficiently and controlled properly, and one that will give the people of this country the kind of results they are entitled to have. There is real and practical need-not for one sweeping revision of the Government structure, to be followed by a static condition unresponsive to changing developments-but rather for keeping the executive branch continuously adjusted so as to fit current programs. The practical method for filling those needs is to make it possible to proceed under legislation of the character I have indicated. To proceed on that basis has merit in several respects. First, the method works. It is the only method I know of under which reasonably rapid progress can be made toward the attainment of a smoother-operating and a more efficient Federal administrative machine. This method of cooperative action by the Congress and the President-developed wholly by the Congress itself in 1939-is best calculated to produce the improvements needed in the functioning of Federal agencies. Second, this method is fair to the Chief Executive. He has great responsibilities with respect to the operation of the executive branch of the Government and he is entitled to have available the very best tools for discharging that responsibility. It is particularly important that the President be properly implemented at the present time, facing as we do the adjustment of the Government to peacetime conditions and the assumption of new responsibilities. Those adjustments will be even more difficult than those at the beginning of the war, and the President should have all necessary facilities for dealing with them. Third, the method is fair to the Congress. Congress discharges its responsibility, which is a major one, by making arrangements for the submission of reorganization plans and by considering the plans submitted by the President. At the same time, the Congress retains complete control, since a majority of the two Houses can nullify any proposal of the President. It would be a complete misconception to regard the method which I have described as one which weakens the authority of the Congress in order to enhance that of the President. Not only does the Congress retain the essential control here at issue; in any event, it controls all Federal functions by statute and by appropriation. In short, the method I have indicated is the best known device for the purpose at hand. The CHAIRMAN. Do you have a list of agencies that are not now under a department head, the so-called independent establishments? Mr. SMITH. If we do not have one, Mr. Chairman, we can submit it to you. The CHAIRMAN. How many such agencies are in existence at the present time? Mr. SMITH. I Would not know precisely. May I submit that for the record? You would like to have a precise figure on that? (The information is as follows:) Federal Loan Agency American Battle Monuments Commis- Commission of Fine Arts Federal Communications Commission Board of Governors of the Federal Re- Federal Trade Commission National Achives National Capital Housing Authority National Labor Relations Board Tax Court of the United States United States Civil Service Commission United States Maritime Commission The CHAIRMAN. Yes. I notice you object to exempting any of the agencies from the provisions of the Reorganization Act, but you did say in your statement that there probably were some that would not be affected. Would you give the committee some idea of what agencies might not be reorganized or brought in under the heads of departments? Mr. SMITH. I think the only one we have excepted here is the General Accounting Office. But as to your question, I am afraid I cannot answer it, partly because I do not know and, secondly, if I did, I would prejudice, maybe, any plans that might be submitted. The CHAIRMAN. I suppose you realize that Congress considers the General Accounting Office an arm of the Congress and not of the executive department? Mr. SMITH. Yes. I assume that is the case. The CHAIRMAN. What about the quasi-judicial and quasi-legislative agencies that have been created by the Congress and to whom have been delegated certain functions, certain quasi-judicial authority and quasi-legislative authority? For instance, the Interstate Commerce Commission, the Securities and Exchange Commission, and the Federal Trade Commission. Mr. SMITH. I would think, Mr. Chairman, that my position would have to be that the President, in the last analysis, is responsible for the faithful execution of the laws and for the general administration of the Government, and I would take the position that none of the agencies should be exempt. Congress no doubt might take a different position, but that is the position which I think I should take and one which I certainly believe in. Of course not all the quasi-judicial and administrative functions are in the agencies that you would name; that is, many quasi-judicial functions are performed throughout the departments. It does seem to me that there is some room for experimentation with devices that tie up perhaps the independent agencies as you think of them with quasi-judicial functions. I think there is room for some experimentation there that may cast some light on a better administrative arrangement. The CHAIRMAN. Offhand can you think of any department under which you could place the Interstate Commerce Commission and still give the Interstate Commerce Commission its present freedom in rate making? Mr. SMITH. To take the first part of your question, I cannot think of any department under which we can place the Interstate Commerce Commission. Mr. GOSSETT. Just to correct the record, Mr. Chairman, the Interstate Commerce Commission does not make rates. The CHAIRMAN. It approves rates. I will correct my question to that extent. Mr. SMITH. I think that would get us into the question of whether or not we ought to have a Department of Transportation. There may come a time when it will be generally agreed that we should have a Department of Transportation, perhaps. Mr. COCHRAN. That has already been advocated in legislation. Mr. SMITH. That is correct. Mr. COCHRAN. Due to the fact that the trucking business has stepped into the picture and, further, you are going to have the airplane step |