Senator SCHOEPPEL. Mr. Lawton, might I ask you a question? There is probably no way of finding out about how many years as a whole in each Department would elapse before this transition in the main would be made, is there?

Mr. LAWTON. There is in the Treasury, with the exception of one office, the Appraiser of the Port of New York, but that is provided in the plan. The marshals and the Customs officials in these plans have terms of office. The post offices have no terms. So that with respect to postmasters, you cannot tell. It is when the vacancy occurs in the office.

With respect to marshals, you can.

Senator SCHOEPPEL. After 4 years, we would know that there would be a complete change-over?

Mr. LAWTON. Yes. It will occur during that period of time.

REORGANIZATION PLAN No. 2 of 1952

POST OFFICE DEPARTMENT

Reorganization Plan No. 2 provides for the gradual abolition of all existing offices of postmaster at post offices of the first-, second-, and third-class and the establishment of new offices of postmaster to be filled by appointment by the Postmaster General under the classified civil service. Under the present law, postmasters at post offices of the first-, second-, and third-class are appointed, pursuant to civilservice examination, by the President and by and with the advice and consent of the Senate.

The CHAIRMAN. Is that the only actual change in this plan?

Mr. LAWTON. That, plus a minor transfer of functions to the Postmaster General, two functions that have been added since the last plan.

The CHAIRMAN. Two functions that have been added since the last plan?

Mr. LAWTON. Yes. And they are transferred to the Postmaster General.

The CHAIRMAN. They have been added by statute?

Mr. LAWTON. By statute.

At the end of the last fiscal year there were 2,732 post offices of the first class, 5,905 of the second class, and 12,801 of the third class-a total of 21,438 offices. The Postmaster General is already authorized by law to appoint postmasters at post offices of the fourth class. At the end of the last fiscal year, there were 19,755 such offices.

The CHAIRMAN. They are not civil service? They are not required to take a civil-service examination?

Mr. LAWTON. They are civil service. But the Postmaster General appoints them rather than the President.

The CHAIRMAN. Are they appointed for an indefinite term?

Mr. LAWTON, Yes, all postmasters of all classes are appointed for indefinite tenure.

The CHAIRMAN. The fourth class as well?

Mr. LAWTON. Yes.

When Reorganization Plan No. 2 becomes fully effective, the Postmaster General will appoint postmasters of all classes.

The plan provides for a gradual and orderly change-over to the new method of appointment. All present offices of the first three classes which are vacant at the end of the regular 60-day period of congres sional consideration of this plan will be abolished and new offices of postmaster established at that time. All other present offices of the first three classes will be abolished at such time as they next become vacant, and successor offices will then be established.

By providing the change-over in this manner the plan offers two benefits. First, it does not cause the immediate separation of some 21,000 postmasters from the service and the consequent interference with the smooth operation of the postal system that that would entail. Second, the plan does not thrust upon the Civil Service Commission the immense burden of examining and rating immediately such a large number of postmasters. Rather, it continues the normally expected workload of examinations.

In addition to improving accountability in the postal service by permitting the Postmaster General to appoint the subordinates for whose performance he is responsible, Reorganization Plan No. 2 of 1952 has the objective of placing all postmaster appointments fully under the merit system so that they will be comparable to other civilservice positions. Under present law governing the appointment of postmasters, the act of June 25, 1938-the O'Mahoney-Ramspeck Actpostmasters at post offices of the first, second, and third class are appointed after civil-service examination but are required to be appointed by the President by and with the advice and consent of the Senate. The President in his transmittal message stated that "this procedure injects a hybrid mixture of political and merit considerations into appointments to offices which should be in the career service." From the beginning of our Republic in 1789 until 1836 the Postmaster General appointed all postmasters. The existence of "Presidential postmasters" began with the act of July 2, 1836, which required that postmasters at all "post offices at which the commissions allowed the postmaster amounted to $1,000 or upwards" be appointed by the President by and with the advice and consent of the Senate. Later, post offices were divided by statute into classes according to their revenues, and it was provided that the President would appoint and the Senate confirm postmasters at post offices of the first three classes and the Postmaster General would appoint those at offices in the other classes.

In 1883 the Pendleton Act was enacted providing for the establishment of a permanent civil service. Ever since, there has been a continuing movement to place postmasters under the civil service and fully under the merit system. By Executive orders of Presidents Theodore Roosevelt and Taft postmasters at post offices of the fourth class were brought under the civil service. Because the statutes required the appointment of postmasters at post offices of the first three classes to be made by the President and confirmed by the Senate, the Presidents could not bring these offices fully under the civil service. Beginning with President Wilson in 1917 and including every President up to the enactment of the O'Mahoney-Ramspeck Act in 1938, each Chief Executive provided by Executive order that, prior to nomination of a postmaster by the President, the candidate must either be a person promoted under the rules governing noncompetitive civil-service examination or be a person who qualified under com

petitive examination. The effect of the O'Mahoney-Ramspeck Act was to enact into statute this requirement for examination prior to the nomination of a postmaster by the President and to eliminate the then statutory provisions for 4-year terms.

The annual reports to the Congress of the Postmaster General and the Civil Service Commission have recommended legislation to vest postmaster appointments in the Postmaster General under the classified civil service. Reorganization Plan No. 2 of 1952 will complete the efforts to accomplish this objective.

REORGANIZATION PLAN No. 3 of 1952

TREASURY DEPARTMENT (BUREAU OF CUSTOMS)

Reorganization Plan No. 3 provides for the gradual abolition of all offices of collector of customs, comptroller of customs, surveyor of customs, and appraiser of merchandise, to which appointments are required to be made by the President by and with the advice and consent of the Senate. The 52 existing offices abolished by the plan involve 44 collectors, 6 comptrollers, one surveyor, and one appraiser.

All of these 52 offices are now filled for terms of four years except that of the appraiser of merchandise for which there is no specified statutory term of office. All offices in which there are incumbents at the end of the regular 60-day period of congressional consideration of this plan, except the appraiser's office and those in which there are hold-overs, will be abolished at such time as they next become vacant. The other offices-those vacant or filled by hold-overs at the end of the 60-day period, plus the appraiser's office-will be abolished at such time as the Secretary of the Treasury determines, but in no event later than January 1, 1953.

As to the functions of the abolished offices, the Secretary will provide for their continuation by employees in the classified civil service insofar as the functions are not abolished by the plan.

The plan permits compensation in excess of that provided for grade GS-15 for 20 officers in the Customs Bureau, without regard to the numerical limitations on positions set forth in section 505 of the Classification Act of 1949, as amended. This provision will permit more adequate compensation in the headquarters and field positions in the Bureau.

The reorganization plan also provides for the abolition of certain obsolete and unnecessary functions relating to the fiscal procedures of the Customs Bureau. These outmoded procedures have been reviewed in the Government's joint accounting program, conducted by the Bureau of the Budget, the General Accounting Office, and the Treasury Department. The abolitions contained in the reorganization plan are based, in part, on that study.

Under the Budget and Accounting Procedures Act of 1950-which your committee studied and sponsored-the Secretary of the Treasury is given certain authorities to devise and install modernized accounting procedures in his department. The abolition of restrictive requirements by the reorganization plan will permit him to utilize fully his authorities under that act and institute an internal accounting and audit system appropriate for the needs of the Bureau today.

REORGANIZATION PLAN No. 4 of 1952

DEPARTMENT OF JUSTICE (MARSHALS)

Reorganization Plan No. 4 provides for the gradual abolition of 94 offices of United States marshal and marshal. These include the 87 offices of United States marshal for the 87 judicial districts, the four offices of United States marshal for the District of Alaska, the office of United States marshal for Guam, the office of marshal for the district of the Canal Zone, and the office of marshal for the Virgin Islands. Under present law all of these offices are filled by appointment by the President by and with the advice and consent of the Senate, except the office of marshal for the Virgin Islands which is filled by appointment by the Attorney General.

All of the affected offices are now filled for terms of 4 years, except in the case of Hawaii, which has a 6-year term, the Canal Zone, which has a term of 8 years, and the Virgin Islands, which has no specified statutory term of office. All offices in which there are incumbents, other than holdover incumbents, at the end of the regular 60-day period of congressional consideration of this plan, other than that in the Virgin Islands, will be abolished at such time as they next become vacant. All other offices-those which are vacant or are filled by holdovers, at the end of the 60-day period, plus the one for the Virgin Islands—will be abolished at such time as the Attorney General determines, but in no event later than January 1, 1953.

As each office is abolished, there will be established in the same judicial district or jurisdiction a new office with the title "United States Marshal." Appointment to each new office will be made by the Attorney General under the classified civil service.

Reorganization Plan No. 4 of 1952 will result in improving the accountability of the Attorney General over the performance of the United States marshals and will extend the civil service merit principle to these field officers of the Department of Justice.

The taking effect of Reorganiaztion Plan No. 3, relating to the Bureau of Customs, is expected to produce economies. These savings will commence immediately. By fiscal year 1954 gross savings should approximate $100,000. This sum will grow each year until fiscal year 1957 which will be the first year of full savings from the plan. From then on, the savings are expected to aggregate $300,000 per year. This increase in savings will reflect the gradual abolition of offices as they become vacant, and the steps needed for complete installation of the fiscal reforms. About half of the full annual savings from 1957 onward will be attributable to abolished offices. This estimate takes into account the cost of additional compensation, and replacement positions where needed. The remaining estimated savings are expected to come from accounting reforms. All of this assumes present enforcement levels and business volume will remain substantially unchanged.

The taking effect of Reorganization Plans Nos. 2 and 4, relating to the Post Office and Justice Departments, is not expected to result in any substantial savings, but is expected to produce a better structure of accountability in those two Departments.

I urge the Congress to permit these reorganization plans to become effective.

The CHAIRMAN. Mr. Lawton, were these plans prepared under your direction and supervision?

Mr. LAWTON. Yes, sir, with assistance from the Departments involved, of course.

The CHAIRMAN. But primarily they were under your direction and supervision?

Mr. LAWTON. Yes, sir.

The CHAIRMAN. There is a question raised, in view of past opinions supplied to us, with reference to the validity or legality of effectuating the changes here that are incorporated in plans 2 and 4 particularly, by reorganization process under the authority of the Reorganization Act of 1949.

Can you recall a time, I believe, in August or September, 1949, when I called upon you to submit to us an analysis of the methods by which the various Hoover Commission recommendations might be effected? Mr. LAWTON. Yes, sir.

The CHAIRMAN. You submitted us an analysis at that time.

With respect to the recommendations relating to postmasters, do you recall advising the committee at that time that it would take substantive legislation to make that change?

Mr. LAWTON. We so listed it, and said that the items so classified could not be accomplished except with statutory authority; yes.

The CHAIRMAN. That was also true with respect to the Treasury; was it not? You said that with respect to the Treasury, those officials below the rank of Assistant Secretary, and so forth, should be appointed from the career service, and you indicated that would take substantive legislation.

Mr. LAWTON. That is right.

The CHAIRMAN. Now, with respect to the marshals, that is, in the Justice Department. Did you indicate with respect to them that it would take substantive legislation?

Mr. LAWTON. That was not covered in the Hoover Commission recommendations.

The CHAIRMAN. It was not recommended in the Hoover Commission report, but I assumed it would apply to the Department of Justice with respect to marshals the same as it would with respect to postmasters and to customs officials, would it not?

Mr. LAWTON. That is right.

The CHAIRMAN. If you were correct, then, it would apply to all three of these plans?

Mr. LAWTON. I would like to call your attention to the following sentence after that, however, in our statement.

It says that:

More detailed analysis will undoubtedly indicate the necessity of revising many of these classifications.

The CHAIRMAN. All right. Now, I want to get a little about this more detailed analysis. What has caused you now, after making such an analysis, to conclude that these are proper reorganizations?

Mr. LAWTON. The conclusion is based on the fact that the abolition of an agency in whole or in part which, on the taking effect of the reorganization plan, will not have any functions, is one of the things that are authorized by reorganization act, by the act itself. That is section 3, No. 6. The definition of an agency, in section 7 of the act, includes "officer or office."