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Mr. Graham, I note you hold out the promise that by 1957 the total annual savings resulting from this reorganization plan will be about $300,000 annually. Mr. GRAHAM. That is correct.

Senator DWORSHAK. Why is it going to take 5 years to reach that goal?

Mr. GRAHAM. Well, when we are dealing with the first part of it, a $150,000 saving, you have a gradual shift of these offices which would account for it, Senator. The reason with respect to the second part of the savings is that whenever you start on a change and you still have to be in business and be in operation every day, the system that Customs has heretofore very successfully used is to put in a pilot-plant installation, as we call it, and work the bugs out and then extend it.

Senator DWORSHAK. I would like to call your attention to a statement made by a member of the committee staff referring to the 1948 McKinsey report. It was pointed out that this report involved total expenditures of about $200,000, half for survey and report and half toward its implementation. In contrast, the Treasury Department states the report is causing a much larger permanent savings of over $1 million a year on a recurring basis.

Mr. GRAHAM. That is correct, sir.

Senator DWORSHAK. Why would it take under this reorganization plan 5 years to save only $300,000, whereas as a result of the McKinsey report, the studies made of the Customs Service in 1948, they achieved a savings of $1 million? It seems to me it is wholly unnecessary to come in here and ask for a lengthy extensive reorganization plan, ostensibly to get greater efficiency but in reality to save a very few dollars. Can you explain that?

Mr. GRAHAM. Customs has done, I think, a very creditable job in saving money already. We have here, and we will be glad to put in the record or to show to you, if you care, a table showing how these savings have already been accomplished in the other fields.

Senator DWORSHAK. You did not have any reorganization plan to accomplish that.

Mr. GRAHAM. We could make some of those changes administratively, sir. In the meantime there has been some legislation passed which has enabled us to make some savings. We have a table right here, if you would like to see it.

The second thing is that it is my recollection that the McKinsey & Co. report said as a minimum it would take 5 years to make these gradual changeovers.

Senator DWORSHAK. Has it taken that long?

Mr. GRAHAM. 1948 to 1952, that is about 5 years, sir. I would like to repeat that it is still not complete, because we hope that the Customs simplification bill will be passed and that will give us some savings. The thing I would like to stress, Mr. Senator, is that when we got the McKinsey & Co. report, we did not just receive it and file it. We went to work on it. The people in customs worked diligently on it. They treated it as a live and as a continuing document. The improvement program of Customs is not just something that you take in a block and leave. It is a continuing thing that keeps going.

Senator DWORSHAK. How many in the Customs Service currently are not under the civil-service regulations?

Mr. GRAHAM. Fifty-two.

Senator DWORSHAK. How many will not be under the civil service under this plan?

Mr. GRATIAM. They would all be under this plan, sir.

Senator DWORSHAK. You put in this additional amount so they would all be under civil service!

Mr. JOHNSON. We have certain temporary day laborers who can be employed for certain limited periods who are not required to be under civil service. So a categorical statement of every employee under civil service would not be quite true.

The CHAIRMAN. You mean every permanent employee. Mr. JOHNSON. But every permanent employee would be under civil service.

Senator DWORSIAK. Do you think this will eliminate all partisan politics in the selection of top-level personnel in the Customs Service? Mr. GRAIJAM. Would you mind repeating that question?

Senator DWORSHIAK. Do you think if this plan is adopted it will eliminate all partisan politics or patronage in the selection of toplevel personnel in the Bureau of Customs? Mr. GRATIAM. Yes, sir; I do. Senator DWORSIIAK. In what way will that be done? Mr. GRAHAM. Because without these 52 you will not have need for either of the political parties to have any interest in it.

Senator DWORSHAK. Who will make the appointments?
Mr. GRAHAM. The Secretary of the Treasury.
Senator DWORSHIAK. He is outside of politics?
Mr. GRAHAM. No, sir; but this is in accordance with civil service.

Senator DWORSHAK. Of course, we understand that civil service is supposed to be nonpolitical.

The CHAIRMAN. There is one thing you can get rid of and that is congressional interference."

Mr. GRAHAM. I would rather say "interest," sir, rather than interference. I could say that the Senate does not interfere with us, sir. They are always very interested, but no interference.

The CHAIRMAN. Sometimes it does not take too much interest to interfere.

Any other questions, Senator Dworshak?
Senator DWORSHAK. No.

The CHAIRMAN. I have a letter here that has come to my attention, sent over by Senator McKellar, from the Memphis Chamber of Commerce. It seems that they are apprehensive that some of their offices there are going to be closed and they would have to go to New Orleans or some other port to transact their business. I do not know much about it. I will read the first paragraph of the letter so as to ascertain whether they have any basis for their fears.

The letter is addressed to Senator McKellar, dated April 22. I will place the full letter in the record.

It says that “We understand,” quoting from the first paragraph of the letter, “that plan No. 3 under the Reorganization Act of 1949 concerns reorganization of the Bureau of Customs in the Department of the Treasury, and threatens abolition of certain customs offices at interior points. Among these are Memphis and its two other offices at Nashville and Chattanooga (cusotms district No. 43)." · They are very concerned about it. I do not know whether there is contemplated, if this plan goes into effect, the abolition of those offices. Can you advise about it, because Senator McKellar wanted this letter put in the record. I thought you might make some comment on it while you were here.

Mr. GRAHAM. Mr. Chairman, I think they are unduly alarmed. There is no present plan to close any of those offices. The first we had heard of it was this letter.

The CHAIRMAN. Has a copy of this letter reached you? Mr. GRATIAM. No, sir. It is true that if the plan were to go into effect, the office of the collector of customs, which is at Memphis, would be a polished.

The CHAIRMAN. The office of collector?
Mr. GRAHAM. The office, but not the functions.

The CHAIRMAN. But not the functions of the office that are transacted there. I will place the letter in the record following this interrogation about it. But it just occurred to me that maybe their apprehension was unfounded and that change was not necessarily envisioned in this plan.

Mr. GRAHAM. Furthermore, the Secretary already has authority to abolish offices in the sense of closing up Nashville or Elkin, N. C., as ports of entry, for example, if they did not have any business there, but you have to continue to serve the importing and traveling public wherever it is justified. - To repeat, I have heard nothing at all about any plans to close up Memphis or to close up Nashville. That all depends on your workload.

The CHAIRMAN. That would be true whether you had this plan or not? Mr. GRAHAM. That is correct, sir.

The CHAIRMAX. The plan is not directed at abolishing offices in the sense of a place where the business is transacted.

Senator SCHOEPPEL. Mr. Chairman, I would like to ask a question. Reference has been made to this letter to closing some of these places. I do not know whether it is in the record or not. Frankly, I do not know anything about customs, so if I seem to get off bounds, you can charge it to that fact. If you talk about wheat, cattle, and corn, I will go along with you.

How do you open a customs office? By that I mean, suppose you are going to enlarge one, do you have a yardstick of certain volume of business that has to go through, and where you can consolidate them to get that volume? Is that the way you generally approach it?

Mr. GRAHAM. I think I will ask Mr. Strubinger to answer that particular one for you, if you do not mind. · Mr. STRUBINGER. Probably as good a way to answer you would be to answer in reverse. Where we have ports of entry today and the volume of business goes up, we usually add more personnel if they are needed. If the volume of business goes down to a point where we are serving very few or the service is not justified, we close it.

Now, where the request is made, and we do get lots of requests, to open ports of entry, we justify it on the needs of the community. In

other words, is there enough demand by people who want to cross the border or who want to come in at a certain lake port or something of that kind to justify the expenditure of money to give service to the public. It has been entirely on that basis. Does that answer your question?

Senator SCHOEPPEL. That answers my question.
(The letter from the Memphis Chamber of Commerce follows:)

MEMPHIS CHAMBER OF COMMERCE,

Memphis, Tenn., April 22, 1952. Hon. KENNETH MCKELLAR,

United States Senate, Washington, D. C. DEAR SENATOR MCKELLAR: We understand that plan No. 3 under the Reorganization Act of 1949 concerns reorganization of the Bureau of Customs in the Department of the Treasury, and threatens abolition of certain customs offices at interior points. Among these are Memphis and its two other offices at Nashville and Chattanooga (customs district No. 43).

We believe that this is essentially a Federal Government function and service to importers which should not be impaired. At least, certain interior offices should be retained at strategic locations to expedite proper service and clearance to importers within the area.

It is our belief that their discontinuance would be extremely falacious and unwise with respect to the Memphis customs agency in the face of an apparent increased usage of such a facility with a remarkable increase in revenues. Coupled with this is the fact that the costs of collections have been materially reduced over a period of years.

We have requested the local collector of customs to supply us with figures covering the total amounts collected, the expense involved, and the cost per $100 so collected for a period from 1933 to 1951, inclusive, and to which is added the first 9 months in the fiscal year to date. A copy of this is attached.

In the face of this record, and of the evident need within this area, we respectfully urge your consideration and influence toward retention. While we realize that these collections would be likewise made if collected at seaport offices, at the same time the convenience of those engaged in international trade within the inland sections of the Nation should be considered. Very sincerely yours,

W. L. SHARPE, Chairman, National Affairs Committee.

Comparative statement of receipts and expenses, District of Tennessee, for the

fiscal years 1933 through Mar. 31, 1952, cost of collection per $100 in each fiscal year

[blocks in formation]

$1.37

1. 10 1. 44 1.36

1933. 1934. 1935. 1936. 1937 1938 1939. 1940. 1941. 1942

$71, 214.90 $23,060.32
107, 279.03 19,831.60
106, 163.03 20, 963. 46

79, 616.90 19, 968.32
125, 386.00 20,001.00
132, 826.00 19, 993.00
115, 860.00 18, 660.00
269, 413. 83 19, 276. 88
341, 404. 65 17,897.30
732, 705.07 20, 290.30

$32.38
18. 49
19. 75
25.08
15.95
15.05
16.11
7.16
5. 24
2. 77

2. 20

1943.
--------

$1,944,244.88 $26, 613. 91
1944.

2,601,522.78 28, 723. 43 1945..

2,254,243.18 32, 383. 62 1946.

2,465,247.07 33, 535.11 1947

1,873,419.7041, 131. 74 1948

545,775.20 44, 729. 95 1949.

640.732.80 50, 767.31 1950..

368,820.44 52, 946. 77 1951....

907,817.60 56, 966, 73 1952 (Mar. 31) - 2,158, 741.88 45, 545. 23

8. 20

7.90 14. 40 6. 275 2.11

The CHAIRMAN. Thank you very much, gentlemen. We are glad to have your explanation of the plan. The committee will consider the proposal very carefully

Mr. GRAHAM. Mr. Chairman, may I thank you and the members of your committee for your courtesy in receiving us and your intelligent questions.

STATEMENT OF S. A. ANDRETTA, ADMINISTRATIVE ASSISTANT, ATTORNEY GENERAL; ACCOMPANIED BY GEORGE MILLER, ASSISTANT CHIEF, ACCOUNTS BRANCH, DEPARTMENT OF JUSTICE

REORGANIZATION PLAN No. 4 OF 1952, To REORGANIZE THE

DEPARTMENT OF JUSTICE The CHAIRMAN. Mr. Andretta and Mr. George Miller. Which of you gentlemen will testify? Mr. ANDRETTA. I shall, Senator.

The CHAIRMAN. Will each of you identify yourself for the record, please?

Mr. ANDRETTA. My name is S. A. Andretta, Administrative Assistant Attorney General, Department of Justice.

Mr. MILLER. I am George M. Miller, Assistant Chief of Accounts · Branch, Department of Justice.

The CHAIRMAN. You have a prepared statement, I believe?
Mr. ANDRETTA. I do.

The CHAIRMAN. You may proceed. You are directing your re-
marks to which plan?
Mr. ANDRETTA. Reorganization Plan No. 4.
The CHAIRMAN. That has to do with the appointment of marshals.
Mr. ANDRETTA. That is right, sir.
The CHAIRMAN. You may proceed.

Mr. ANDRETTA. Mr. Chairman and members of the committee, I am glad to appear before the committee on behalf of the Department of Justice in support of the President's plan to place the office of United States marshal under the civil-service merit system.

Reorganization Plan No. 4 of 1952 approximates the same pattern as plans Nos. 2 and 3 of 1952 by endeavoring to reach the same fundamental objective; namely, greater accountability to the executive branch of the Government, of which the marshals are a part. Along with that accountability, there is attached to the new office of United States marshal an increased responsibility for observance of those normal relationships which should exist between the appointing power and the appointee. I will elaborate.

The present position of marshal is of a political nature and as such the appointee sometimes seems to feel that his first allegiance is to the appointing officer, or to the party, or the person sponsoring his . appointment, rather than to the duties of the position which he has sworn to perform. The results are not always favorable to the purpose for which the position of marshal was designed. Or the marshal may feel that his position, being the result of party service, requires little or no personal effort on his part.

Plan No. 4 would have the effect of changing all of this. By removing the position from the class of political appointments and placing it on a competitive basis, the aspirant should have no delusions as to where his allegiance lies. He will likewise realize that to continue in office it will be necessary for him to observe faithfully all the customary rules and regulations applicable to a civil service employee as well as to continue to maintain the standards and qualifications which originally earned the appointment for him.

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