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I want to emphasize that committee support wasn't given to any proposition uniess the specialist involved was satisfied with it and unless all members of the committee understood it.

Using those ground rules we supported most of the Hoover Commission legislation proposed in 1949. The Department of Agriculture bill did not seem to meet all our specifications.

However, I should say here, and it is not in my prepared statement, that I personally supported the 1950 plan. I read all of Senator McClellan's prepared committee reports, and at that time the federation, which I also represent today, did not take a stand, and I do not believe that Senator Johnston can find any statements of mine one way or the other. But if there were any, they were in favor of the 1950 plan.

In 1951 another bill to reorganize the Department, S. 1149, was introduced along with bills covering other areas in the Hoover report. The committee waded through them and practically every one of them got our support. We worried over that agriculture bill for a long time and finally gave it our conditional support.

The National Milk Producers Federation, at its annual meeting in 1950, had some question as to the desirability of the reorganization plan proposed to the Congress. At that time they appointed a committee of which I was chairman. Because of the detailed nature of the plan and of some objectionable features of the parts of it relating to the Farm Credit Administration, the Federation did not feel like giving its unqualified support to the plan proposed at that time. However, it is our feeling that the present Reorganization Plan No. 2 as now proposed is completely satisfactory and should be passed promptly by this Congress.

The cutting of costs of government is one of the most important things which Government itself can do for the farmers of America. It is our firm conviction that while plan No. 2 as now proposed does not carry out all of the details suggested by the Hoover Commission, it does give the Secretary of Agriculture the power to so change the plan of organization that the advantages proposed in the Commission's reorganization plan could all be obtained.

It gives the Secretary a clear line of responsibility and authority, so that many of the overlapping functions found by the Commission in their study of the Department can be eliminated. The addition of two assistant secretaries will make it possible to streamline the organization and get effective supervision. The salaries of these two assistants, together with an administrative assistant, can be saved by the elimination of other personnel who are now operating more or less independently of the Secretary. The Commission found in their study that in many cases farmers received varying and conflicting advice from different bureaus in the Department on the same problem. The many instances of this kind can easily be found in the record of the investigations made by the Commission, and I should not take the time of this committee to elaborate on them.

Some of those who have been enthusiastic for the adoption of the Hoover Commission report in full might criticize the present bill because it does not carry out in detail more of the suggestions for reorganization. However, this may have some compensating advantages in that the present plan will give more freedom for constant change and adaptation to new conditions,

We must choose between the rigid pattern that has resulted in no headway toward reorganization and this plan which will permit streamlining and modernization. Under this plan, as we see it, progress will not go out the window if there are strong objections to some minor change Secretary Benson chooses to make.

From the reading of the President's presentation, I note that he refers to some rearranging of organizational units which is already taking place. Likewise, the President's desire to handle the separate corporations and the Farm Credit Administration in some other manner will make this reorganization plan less controversial. The National Milk Producers Federation is favorable to this approach.

I would like to say here that the inclusion of the Federal Farm Credit Administration in the other plan was one of the reasons why they could not be gotten in support of the 1950 plan.

As a general rule, the farmers of America have been conservatives. At the same time, their lives are a gamble. They sow seed and then gamble on the weather. A handful may come back as a bushel, if the days are sunny enough and not too wet or not too cold. A lot of hard work is part of the gamble.

But, members of the committee, hard as they work in their lives that are a gamble, the farmers of America are not wasteful and they do not like to see waste in any form on the part of anybody else.

I am convinced that the growth of the Department of Agriculture since it began to expand its operations in a large way in the thirties has resulted in waste-waste of manpower, money, and material. The growth haphazard, the Hoover report indicates. We have been wasting our national wealth.

I am convinced, members of the committee, that waste, overlap and irresponsibility cannot last long in the Department if all lines of authority and responsibility are clear. It's when we have little blind alleys in Government that costs run up unnecessarily.

The rapid expansion of the Department has left blind alleys where the Secretary is without authority to interfere in Department affairs which may not being carried out as well as possible. Let's give him the authority.

Speaking as a farmer who is more interested in America as a whole, rather than in any segment of our society, I would like to register in favor of this as one of the most needed reforms in our Government. Farmers enjoy the services of the United States Department of Agriculture. However, we do not think that a reorganization would necessarily curtail these services. But yet, even if it did, we consider it more paramount to cut down the costs of government than to allow the present high costs to continue.

Those groups in American life who are for the report of the Hoover Commission in every respect, except where it begins to take away some of the services which Government gives to them, are shortsighted. We feel it is our duty, as an agricultural organization, to support this sensible reorganization plan and we hope that other groups will take the same broad attitude in relation to other reorganization plans based on the findings of the Hoover Commission.

Senator Smith. Thank you very much, Mr. McKerrow.

I gather from your statement that you believe that through the years of development in the agricultural department, with new laws added from time to time, the Secretary of Agriculture should be given a chance and the authority to eliminate some of the overlapping and duplicating laws which cause the trouble?

Mr. McKERROW. Yes.

Senator Smith. And you think that he needs the authority to do that very thing? Mr. McKERROW. Yes, Madam Chairman. I think that he is in

, . the same position as a manager for one of our cooperatives. Now, we have a board of directors, which is like Congress. We fix policies. But if we hire someone as manager, we give him authority over his employees and over their functions. We want him to streamline those, and if we, as directors, tried to tell him just whom to hire and let him have a lot of employees that had a lot of authority over and above his, he would get into a mess, and our cooperative would go broke.

Senator Smith. I gather also, then, that you believe that if the Secretary went too far, Congress would stop him by legislation?

Mr. McKERROW. I am quite sure you would, just as one of our boards would stop a manager that we hired.

Senator SMITH. Senator Dworshak?

Senator DWORSHAK. From what Mr. McKerrow said, I am presuming that as a dairyman, he feels that it is good to have deep colors in dairy products, but he is not in favor of having red tape in Government.

Mr. McKERROW. Very well said, Senator Dworshak.
Senator DWORSHAK. Thank you.
Senator Smith. Senator Butler?
Senator BUTLER. No questions.

Senator Smith. Thank you very much, Mr. McKerrow, for giving us the benefit of your views. We appreciate your coming in here, both as the representative of the National Milk Producers Federation and the representative of the Hoover Commission from Wisconsin.

Mr. McKERROW. Thank you.
Senator Smith. Mr. Clyde T. Ellis.
Senator BUTLER. Madam Chairman, I must leave to go to the floor.
Senator Smith. Thank you for coming in, Senator Butler.

Mr. Ellis, will you give us your name and representation for the record?

STATEMENT OF CLYDE T. ELLIS, EXECUTIVE MANAGER,

NATIONAL RURAL ELECTRIC COOPERATIVE ASSOCIATION

Mr. Ellis. Madam Chairman and gentlemen of the committee, my name is Clyde T. Ellis. I am executive manager of the National Rural Electric Cooperative Association, the national service organization representing 934 rural electric systems, in 42 States and Alaska, which are providing services to almost 32 million farm families and rural establishments.

We appeared before the Senate Committee on Expenditures in Executive Departments in 1951 to make known our opposition to any proposal which would result in the alteration of the organization or the functions of the Rural Electrification Administration. That appearance was relative to S. 1149.

As you will recall, S. 1149 was a bill sponsored by Senators of both parties to reorganize the Department of Agriculture along the lines suggested by the Hoover Commission. The rural electric cooperatives and power districts of the country were on record against that proposal insofar as it would affect REA.

In a meeting of the national board of directors of our association here in Washington on April 14, 1953, Reorganization Plan No. 2 of the Department of Agriculture was the subject of a full discussion. The board then passed unanimously a motion torespectfully request Congress to exempt the Rural Electrification Administration from Reorganization Plan No. 2.

I believe the farmer members of our association throughout the country are as staunch advocates of economy and efficiency in Government as can be found. Nothing in my statement here, today, should be construed as indicating that we are in any way opposed to general reorganization of the governmental departments to achieve maximum efficiency and economy. We do wish to express our opposition to approval of Reorganization Plan No. 2 as submitted to the Congress and request that it be returned to the President. If Reorganization Plan No. 2 had exempted the Rural Electrification Administration, as it did some other agencies, we would not be appearing before this committee.

The functions of the Federal Government are quite varied and particular agencies are established to carry out general or special programs. We know of no Federal function comparable to that of the

. Rural Electrification Administration. REA is, in effect, the banker and technical adviser for the rural electric systems. No major industry in America is growing as rapidly as the electrical industry and the fastest growing segment of the electrical industry is the rural segment. In order to keep pace, therefore, the rural electrics must have an administration which is direct, effective, and dynamic. The problems with which a Rural Electrification Administration Administrator and his staff deal are highly technical in nature and conditions affecting the rural electrics change constantly and quickly. Consequently, we believe that the Rural Electrification Administration should not be subject to reorganization except by direct action of the Congress.

The Rural Electrification Administration was first established by the Congress as an independent agency headed by an Administrator appointed by the President, with the approval of the Senate, for a 10-year term. It was stipulated in the act that its operation and employment should be nonpolitical. Reorganization Plan No. 2, effective July 1, 1939, placed the Rural Electrification Administration in the Department of Agriculture “under the general direction and supervision of the Secretary of Agriculture," and the REA Legal Division was transferred to the office of the Solicitor of Agriculture.

At the time of the transfer there was vigorous apposition from rural electrification leaders to sacrificing the completely independent status of the REA. As a consequence of the strong feeling on the matter, a very fine Administrator, Mr. John M. Carmody, submitted his resignation. Opposition to the loss of the independent status of the REA did not cease with Mr. Carmody's resignation. As a result of continuous effort, the Senate passed a bill on May 14, 1945 (S. 89) entitled the "REA Planning Act of 1945”, which would have made REA independent again. This bill never became law and REA remained in the Department of Agriculture.

Rural electric leaders have never become reconciled to the placing of REA in the Department of Agriculture and have continued to feel that the program would be better served by a completely independent agency.

Since the reorganization in 1939, however, the various Secretaries of Agriculture have respected the independent status of REA and, as a result, the reorganization did not result in fundamental changes in the character and operation of REA, with the exception of the legal division, REA has remained a semi-independent and semiautonomous agency as conceived by the Congress and supported by the rural people.

We feel that the following provisions in Reorganization Plan No. 2 jeopardize the semi-independent and semiautonomous status of REA and would make possible the undesirable changes in its status and name recommended by the Hoover Commission and might open the way to changes even more undesirable.

Section 1 of the Reorganization Plan No. 2 provides thatthere are hereby transferred to the Secretary of Agriculture all functions not now vested in him by all other officers, and of all agencies and employees, of the Department of Agriculture.

All of the powers and functions which are now vested in the Office of the REA Administrator would be transferred to the Secretary of Agriculture. This is contrary to the language and intent of the Rural Electrification Act and contrary, we believe, to the best interests of the Government, the rural electric systems, and the farmers served by those systems. This provision, in effect, makes the Secretary of Agriculture the de facto Administrator of REA. Since the Secretary is admittedly a temporary, political appointee, such an arrangement would subject the rural electric program to the vagaries and pressure of partisan political activity. The Congress very wisely prohibited such activities in the original act. The Rural Electrification Act reads in part:

Sec. 9. This Act shall be administered entirely on a nonpartisan basis, and in the appointment of officials, the selection of employees, and in the promotion of any such officials or employees, no political test or qualification shall be permitted or given consideration, but all such appointments and promotions shall be given and made on the basis of merit and efficiency. If the Administrator herein provided for is found by the President of the United States to be guilty of a violation of this section, he shall be removed from office by the President, and any appointee or selection of officials or employees made by the Administrator who is found guilty of a violation of this Act shall be removed by the Administrator.

We express our vigorous opposition to the provisions of Reorganization Plan No. 2 which would destroy the nonpolitical, nonpartisan status of the Rural Electrification Administration.

Now, we all know the Secretary of Agriculture is a political appointee, and there is no criticism of that, but the Secretary of Agriculture is a political appointee. So you would then make the Secretary of Agriculture, a political appointee, the actual head of the Rural Electrification Administration.

Senator Smith. Mr. Ellis, let me ask you right there, who names the head of the REA?

Mr. Ellis. The President, under the REA Act, and he is confirmed by the Senate.

Senator Smith. Just the same as the Secretary of Agriculture is named?

Mr. ELLIS. That is true.

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