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recurrence in future of abuses similar to those which the present investigation had disclosed. This they conceive can best be effected by a change in the organization of the Department, so as to place the collection and the disbursement of its funds in different hands, and under control of officers entirely independent of each other. That Department, as at present arranged, is a dangerous anomaly in our system; and by whomsoever its concerns are hereafter to be conducted, its organization ought to be changed so as to conform more nearly to that of the other great departments of our Government (S. Doc. No. 86, op. cit.,

p. 89).

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In order to remedy the various abuses found, the committee, on January 27, 1835, reported S. 128, Twenty-third Congress, entitled "A bill to change the organization of the General Post Office." Section 9 provided for the appointment of postmasters by the President, by and with the advice and consent of the Senate, for a term of 4 years, unless sooner removed by the President.

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On February 9, 1835, Senator Calhoun of South Carolina, chairman of a new Select Committee on Executive Patronage, filed a report analyzing and reviewing the various abuses which it had found. Referring to the post office, the committee reported: "But the great and alarming strides which patronage has made ** * has demonstrated the necessity of imposing limitations on the discretionary powers of the Executive; particularly in reference to the General Post Office and the public funds, on which important subject the Executive has an almost unlimited discretion as things now are.

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"In a government like ours, liable to dangers so imminent from the excess and abuse of patronage, it would seem extraordinary that a department of such vast powers, with an annual income and expenditure so great, and with a host of persons in its service, extending and ramifying itself to the remotest point, and into every neighborhood of the Union, and having a control over the correspondence and intercourse of the whole community, should be permitted to remain so long without efficient checks or responsibility, under the almost unlimited control of the Executive. Such a power, wielded by a single will, is sufficient of itself, when made an instrument of ambition, to contaminate the community, and to control to a great extent, public opinion. To guard against this danger, and to impose effectual restrictions on Executive patronage, acting through this important department, your committee are of the opinion that an entire reorganization of the department is required; (S. Doc. No. 108, 23d Cong., 2d sess., pp. 22, 23).

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With respect to recommending specific action, the committee reported that its labor, in respect to the post office, "has been superseded by the Committee on Post Office, which has bestowed so much attention on it, and which is so much more minutely acquainted with the diseased state of the department than your committee can be, that it would be presumptuous on their part to attempt to add to their recommendation" (S. Doc., vol. 5, loc. cit., supra.).

Debate opened on S. 128 on January 28, 1835, at which time the ranking minority member of the Committee on Post Office and Post Roads moved to recommit the bill so as to enable certain amendments which he wished to offer. In the debate which ensued, Senator Clayton argued in opposition to recommittal because

66* * * This bill contained the first regular proposition that had ever been submitted to Congress for the organization of the Post Office Department, on the true principles of the Constitution."

He stated further that "The bill also contained a most important provision, limiting the terms of all postmasters, subjecting their appointment to the supervision of the Senate" (Congressional Debates; 23d Cong., 2d sess., vol. XI, pt. I, 1834-35, p. 248).

Senator Calhoun asked *6* * * whether all the corruptions and abuses discovered * * * in the Post Office Department could be traced solely to its defect of organization" (Congressional Debates, loc. cit., supra).

Senator Preston stated:

66 * * * This bill was reported as a remedy for the evils which had been pointed out by the committee. It appeared to be the conclusion of the committee that the reorganization of the Department would be the cure for the evils which existed in the Department; or, in other words, that all the evils pointed out were the result of the malorganization of the Department. Was any gentleman prepared to say that these enormous, not to say outrageous, evils, were the effect of malorganization only? Was anyone ready to say that the Senate should follow up this extraordinary, enormous, humiliating exposition, with no other

measure than a prospective remedy? supra).

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On behalf of the committee, Senator Ewing replied that the committee did not believe that the corruptions and abuses discovered by them were consequent on the defective organization of the Post Office Department. However, he felt it necessary to point out that

* * the committee never believed that these corruptions and abuses could have amounted to the enormous extent shown in the report had the Post Office Department been organized like the other departments of the Government. The committee had boldly and openly expressed the opinion that the vilest frauds had been committed in the transactions connected with that Department; but they had not proposed to devise any remedy for the evils that have passed, though they proposed a measure to prevent their recurrence. The committee did not believe that they could propose any remedy for the evils that have existed. They had not shrunk from the expression of the most candid and open opinion as to the flagrant abuses of trust, and of public law, committed in that Department; and they did not hesitate to say that the President of the United States ought long since to have hurled from their offices, with indignation and disgrace,. those who had so shamefully violated the high and sacred trusts reposed in them * * *" (Congressional Debates, op. cit., p. 249).

Senator Calhoun stated that during the 22 years in which he had in some form or other been connected with the Government, he never could have conceived that "such rottenness, such corruption, such abominable violations of trust, could ever exist in any of its departments as those he had just listened to * * * with the utmost mortification. The guilt of the Department was open and palpable. * It exceeded anything in the history of the rottenest ages of (Congressional Debates, op. cit., pp. 249-50). Senator Preston stated that they were not all the result of the malorganization of the Department, "but that they were to be ascribed, in a great degree, to the corruptions of the officers employed there." Continuing, he stated:

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"If such a collection of vermin were feeding on the Government it was their (Congress') duty to hunt out and destroy them * * *"" (Congressional Debates, op. cit., p. 253).

After some further debate and several amendments, the bill was passed by the Senate, without a roll-call vote, on February 10, 1835 (Congressional Debates, op. cit., p. 392). Although the House of Representatives took no action on the bill during the Twenty-third Congress, a substantially identical bill, H. R. 245, was introduced in the House during the Twenty-fourth Congress. After extensive debate, it passed the House on June 2, 1836 (Congressional Debates, 24th Cong., 1st sess., vol. 12, pt. 4, p. 4135), and the Senate on June 20, 1836 (Congressional Debates, op. cit., pt. 2, p. 1851), and became the act of July 2, 1836 (5 Stat. 80), which provided for the first time that postmasters would be appointed by the President, by and with the advice and consent of the Senate.

SENATE COMMITTEE ON GOVERNMENT OPERATIONS,

April 26, 1952.

Staff Memorandum No. 82-2-30. Subject: Reorganization Plan No. 3 of 1952, Bureau of Customs of the Department of the Treasury.

Three reorganization plans relative to Post Office (No. 2), Treasury (No. 3), and Justice (No. 4) Departments, were submitted on April 10, 1952, by the President to relieve "the Presidency and the Congress of the unnecessary burden of appointing and confirming a host of subordinate officers" (H. Doc. No. 424).

Unless the House or the Senate adopts disapproving resolutions on one or more of these plans by a constitutional majority, they will go into effect 60 days later, plus the length of Easter recess of the House, or at 12:01 a. m., June 21, 1952.

PRESIDENT'S TRANSMITTAL MESSAGES

Reorganization Plans Nos. 2, 3, and 4 are based on the Reorganization Act of 1949. They extend the merit system to cover more than 20,000 non-policy-making, subordinate officials. The primary objective of civil-service appointment of these many officials, according to the President's general message on all three plans is "to make the execuitve branch of the Federal Government more efficient

by permitting the Congress and the people to hold it more clearly accountable for the faithful execution of the laws." The message places strong emphasis on civil-service appointments to establish “clear lines of accountability from the top to the bottom of the executive branch," and quotes the following statement by the President's Committee on Administrative Management in 1937:

"The multiplicity of Presidential appointments defeats the power of the Chief Executive to control his establishment (by robbing) him of time urgently needed for attention to important Executive duties. It interferes with the authority that should be vested in the heads of the several departments for the proper discharge of their responsibilities. It is difficult for them to maintain appropriate relationships, discipline, and morale when their subordinates feel that they have direct and immediate responsibility to the President who appointed them. *

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The message also discusses the great advantages of the Pendleton Act of 1883, which started the successful process of placing all tasks of a non-policy-forming nature "in the hands of civil servants who get and hold their job solely on merit.” Finally, this message emphasizes that each of the three plans provides for gradual application of the proposed reorganization.

Supporting the above general message, a separate Presidential message makes additional comments on plan No. 3, to reorganize the Bureau of Customs of the Department of the Treasury (H. Doc. No. 426, dated April 10, 1952). It states that certain obsolete and unnecessary functions are to be abolished, including unduly restrictive fiscal procedures, in order to “promote a more efficient performance of customs functions and a better service to the public."

Some of these abolished functions are requirements carried over from preRevolutionary days when the British Crown provided an independent check on colonial customs revenues through its naval officers. Their abolition under the plan is made possible by two past developments to which the committee has given extended attention and support; namely, (1) the Government's joint accounting program, under which existing procedures have been reviewed by the Bureau of the Budget, the General Accounting Office, and the Treasury Department, and (2) the Budget and Accounting Procedures Act of 1950.

The message estimates that savings under plan No. 3, from abolition of offices and changes in accounting practices, should be at least $300,000 a year when the plan is in full effect.

Analysis and effect of plan No. 3.—Section 1 of plan No. 3 abolishes the offices "of collector of customs, comptroller of customs, surveyor of customs, and appraiser of merchandise," who are appointed by the President, subject to Senate confirmation. Their functions are to be assigned to "such civil-service positions as the Secretary of the Treasury may specify."

Section 2 establishes not more than 20 new supergrade offices under the classified civil service and in addition to the 1949 statutory limit of 400 supergrade appointments: at grade 16 (salary, up to $12,800 a year), grade 17 (up to $13,800), and grade 18 ($14,800). Under that limit the Bureau of Customs now has 1 grade 17 and 4 grade 16 appointments. The Commissioner has ungraded civil-service status with a statutory salary equal to that of grade 18.

Section 3 abolishes the following functions which were transferred to the Secretary of the Treasury by plan No. 26 of 1950: (1) Method of appointment of assistants to many top officials; (2) filling top vacancies; (3) duties of surveyors; (4) overtime work by New York appraiser; (5) preparation of forms; (6) suspension for delinquency; (7) and (8) detailed accounting and related statutory duties of comptrollers and other top officials; (9) examination of accounts; and (10) certain duties of collectors. These abolitions do not (a) modify similar functions specified elsewhere in the statutes; (b) preclude assignments to Bureau employees which require performance of functions similar to those abolished; or (c) authorize non-Treasury officers or agencies to perform functions now vested by law in the Secretary of the Treasury.

Section 4 provides that the plan shall take effect not later than January 1, 1953, except for unexpired terms of incumbents. (Aside from resignations, etc., 33 terms expire by the end of calendar 1953.)

The effect of plan No. 3 on the number of customs officials depends on future administrative action. The plan abolishes 52 politically appointed offices (44 collectors, 6 comptrollers, 1 surveyor of New York, and 1 appraiser of New York), and transfers their functions to whatever number of career offices is established by annual appropriation, including up to 20 new supergrade career offices beyond the 5 present supergrade appointees. All of the 52 abolished offices now have statutory terms of 4 years, except for the appraiser of New York who has an indefinite term.

DEVELOPMENT AND ORGANIZATION OF BUREAU OF CUSTOMS

The history of the Bureau of Customs starts with the very establishment of the American Government. At present, its primary objective is to enforce the Tariff Act of 1930. Principal functions are to enter and clear vessels; supervise discharge of cargo; measure, appraise, and classify imports, and collect duties thereon; control warehousing of imports; inspect international traffic by vessel, highway, railway, and air; review protests against payment of duties; determine admissibility of imports; prevent smuggling; issue documents to vessels; apprehend violators of customs and navigation laws; enforce Antidumping and Export Control Acts; and perform duties under Foreign Trade Zones Act. The Bureau's collections, number of formal entries (requests for custom's release of imported good), expenditures, and number of employees in selected years are tabulated below:

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Despite a large increase in activities, improved management of the Bureau of Customs has held down the rise in number of employees. This improvement has been based primarily on the McKinsey report which is discussed below.

The organization of the Bureau of Customs is rather complicated. Field operations are located at many different points along the periphery of the United States and its island possessions. Internally, the Bureau consists of 46 customs collection districts, 7 comptrollers' districts, 9 customs agency districts, 32 offices of appraisers of merchandise, and 9 customs laboratories. These types of districts are not uniform, and overlap in considerable degree. Except for 52 politically appointed top officials of the Bureau, these districts are in charge of career employees. Housekeeping has been consolidated with respect to payroll work, personnel records, allotment of funds, purchase of supplies and equipment, and the like.

Among the divisions of the Treasury Department (total of 89,409 employees on January 1, 1952), the Bureau of Internal Revenue is by far the largest (55,433); the Bureau of Customs is a comparatively small second in size of personnel (8,603, 7,930 full-time and 673 part-time and WAE employees); and the two next smaller divisions are the United States Coast Guard and the Bureau of Engraving and Printing (6,118 and 6,089, respectively).

GENERAL BACKGROUND

1948 McKinsey report.-Complaints were voiced by various Senators during the Eightieth Congress over the way in which the Bureau of Customs was spreading the reductions which had been voted in its appropriations. This committee thereupon directed preparation of a staff report which not only helped to correct the immediate situation, but also led to an extended management study by the private consultant firm of McKinsey & Co., which was issued in Janauary 1948. This report involved total expenditures of about $200,000, half for the survey and report, and half for its implementation. In contrast, the Treasury Department states that the report is causing the much larger permanent savings of over $1,000,000 a year on a recurring basis.

The McKinsey report recommended that the customs service be reorganized on the basis of 9 or 11 regional offices, that there be 3 assistant collectors in each collector's office, and that 1 of these assistant collectors be in charge of appraisement, classification, and merchandise and baggage inspection. It also recommended that the regional offices be furnished with technical and legal staff to advise the regional collector on all legal and technical phases of customs work. A special committee within the Treasury Department decided against the regional changes as (1) not worth the extra cost involved, and (2) likely to cause a lack of uniformity in decisions.

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