Reorganization Plan No. 1 of 1950

Loeffler, Herman C., professional staff member, and Walter L.
Reynolds, staff director, Senate Committee on Expenditures in the
Executive Departments, staff memorandum No. 81-2-49, in re
Reorganization Plan No. 1 of 1950, April 7, 1950----
Maybank, Hon. Burnet R., United States Senator from the State of
South Carolina and chairman, Senate Committee on Banking and
Currency, statement.

Robertson, Hon. A. Willis, United States Senator from the State of
Virginia:

Letter from State of Connecticut Banking Department, April 5,
1950_.

Letter from Maryland State Banking Department, April 6, 1950__
Statement in re Reorganization Plan No. 1 of 1950..
Snyder, John W., Secretary of the Treasury, letter to Senator John L.
McClellan, April 7, 1950.

REORGANIZATION PLAN NO. 1 OF 1950

TUESDAY, APRIL 11, 1950

UNITED STATES SENATE,
COMMITTEE ON EXPENDITURES IN
THE EXECUTIVE DEPARTMENTS,
Washington, D. C.

The committee met, pursuant to call, at 10 a. m., in room 357, Senate Office Building, Senator John L. McClellan, chairman of the committee, presiding.

Present: Senators McClellan (chairman), O'Conor, Benton, Ives, and Schoeppel.

The CHAIRMAN. The committee will come to order.

We will begin hearings as per schedule this morning on the President's Reorganization Plan No. 1.

At this point in the record I wish to insert the President's message transmitting the plan and also the plan.

I also wish to place in the record at this point Senate Resolutions 246 and 247, disapproving the plan, introduced respectively by Senator Robertson and Senator Capehart.

I wish also to insert in the record the Senate committee staff memorandum with reference to the plan, an analysis of the plan supplied by the staff of this committee.

I wish to also place in the record a letter from the Secretary of the Treasury dated April 7, 1950, commenting upon the plan and expressing his views about it.

Also a letter from Mr. Preston Delano, Comptroller of the Currency, in which he declines to comment on the plan.

(The documents referred to follow:)

[H. Doc. No. 505, 81st Cong., 2d sess.]

MESSAGE FROM THE PRESIDENT OF THE UNITED STATES TRANSMITTING REORGANIZATION PLAN No. 1 OF 1950 PROVIDING FOR REORGANIZATIONS IN THE DEPARTMENT OF THE TREASURY

To the Congress of the United States:

I transmit herewith Reorganization Plan No. 1 of 1950, prepared in accordance with the Reorganization Act of 1949 and providing for reorganizations in the Department of the Treasury. My reasons for transmitting this plan are stated in an accompanying general message.

After investigation I have found and hereby declare that each reorganization included in Reorganization Plan No. 1 of 1950 is necessary to accomplish one or more of the purposes set forth in section 2 (a) of the Reorganization Act of 1949. I have found and hereby declare that it is necessary to include in the accompanying reorganization plan, by reason of reorganizations made thereby, provisions for the appointment and compensation of an Administrative Assistant Secretary of the Treasury. The rate of compensation fixed for this officer is that which I have found to prevail in respect of comparable officers in the executive branch of the Government.

The taking effect of the reorganizations included in this plan may not in itself result in substantial immediate savings. However, many benefits in improved operations are probable during the next years which will result in a reduction in expenditures as compared with those that would be otherwise necessary. An itemization of these reductions in advance of actual experience under this plan is not practicable. HARRY S. TRUMAN.

THE WHITE HOUSE, March 13, 1950.

REORGANIZATION PLAN No. 1 of 1950

Prepared by the President and transmitted to the Senate and the House of Representatives in Congress assembled March 13, 1950, pursuant to the provisions of the Reorganization Act of 1949, approved June 20, 1949 DEPARTMENT OF THE TREASURY

SECTION 1. Transfer of functions to the Secretary.—(a) Except as otherwise provided in subsection (b) of this section, and subject to the provisions of subsection (c) of this section, there are hereby transferred to the Secretary of the Treasury all functions of all other officers of the Department of the Treasury and all functions of all agencies and employees of such Department.

(b) This section shall not apply to the functions vested by the Administrative Procedure Act (60 Stat. 237) in hearing examiners employed by the Department of the Treasury.

(c) Notwithstanding the transfer to the Secretary of the Treasury of the functions of the United States Coast Guard and of the functions of the Commandant of the Coast Guard, effected by the provisions of subsection (a) of this section, such Coast Guard, together with the said functions, shall operate as a part of the Navy, subject to the orders of the Secretary of the Navy, in time of war or when the President shall so direct, as provided in section 1 of the Act of January 28, 1915 (ch. 20, 38 Stat. 800, as amended, 14 U. S. C. 1).

SEC. 2. Performance of functions of Secretary.-The Secretary of the Treasury may from time to time make such provisions as he shall deem appropriate authorizing the performance by any other officer, or by any agency or employee, of the Department of the Treasury of any function of the Secretary, including any function transferred to the Secretary by the provisions of this reorganization plan. SEC. 3. Administrative Assistant Secretary.-There shall be in the Department of the Treasury an Administrative Assistant Secretary of the Treasury, who shall be appointed, with the approval of the President, by the Secretary of the Treasury under the classified civil service, who shall perform such duties as the Secretary of the Treasury shall prescribe, and who shall receive compensation at the rate of $14,000 per annum.

SEC. 4. Incidental transfers.-The Secretary of the Treasury may from time to time effect such transfers within the Department of the Treasury of any of the records, property, personnel, and unexpended balances (available or to be made available) of appropriations, allocations, and other funds of such Department as he may deem necessary in order to carry out the provisions of this reorganization plan.

[S. Res. 246, 81st Cong., 2d sess.]
RESOLUTION

Resolved, That the Senate does not favor the Reorganization Plan Numbered 1 of 1950, transmitted to Congress by the President on March 13, 1950.

[S. Res. 247, 81st Cong., 2d sess.]
RESOLUTION

Resolved, That the Senate does not favor the Reorganization Plan Numbered 1 of 1950 transmitted to Congress by the President on March 13, 1950.

SENATE COMMITTEE ON EXPENDITURES IN THE EXECUTIVE DEPARTMENTS APRIL 7, 1950.

Staff Memorandum No. 81-2-49. Subject: Reorganization Plan No. 1 of 1950, providing for reorganization within the Department of the Treasury.

This memorandum supplements staff memorandum 81-2-40 which discussed plans 1 through 6 as a whole. These six plans centralize scattered functions by transferring to individual department heads "all functions of all other officers of (the Department) and all functions of all agencies and employees of such department, except those of hearing examiners, and a few specified Government corporations and boards. The plans tackle "the first and essential step in the search for efficiency and economy (by eliminating) the present diffusion of authority and confusion of responsibility" in line with the four following numbered recommendations in Hoover Commission Report No. 1 on General Management.

HOOVER COMMISSION RECOMMENDATIONS

"14. Under the President, the heads of departments must hold full responsibility for the conduct of their departments. There must be a clear line of authority reaching down through every step of the organization and no subordinate should have authority independent from that of his superior.

"16. Department heads must have adequate staff assistance if they are to achieve efficiency and economy in departmental operations.

"18. Each department head should receive from the Congress administrative authority to organize his department.

* *

"20. We recommend that the department head should be given authority to determine the organization within his department.

* * * 1

PROVISIONS AND EFFECT OF PLAN NO. 1

This memorandum develops further those considerations particularly related to plan No. 1, as to which two resolutions of disapproval were introduced on March 31, 1950, by Senators Robertson (S. Res. 246), and Capehart (S. Res. 247). Hearings will be held on these two resolutions on April 11 and 12, 1950. Witnesses will include Senators Robertson and Capehart; the Director of the Bureau of the Budget; the American Bankers Association; and representatives of other banking groups.

Section 1 of plan No. 1 transfers to the Secretary all functions scattered throughout the Department of the Treasury, except the functions of hearing examiners and except the operations of the Coast Guard which becomes a part of the Navy in time of war or when the President so directs. The three other sections of plan No. 1 authorize the Secretary to delegate functions; to appoint an Administrative Assistant Secretary, with the approval of the President, under the classified civil service at an annual salary of $14,000; and to make those transfers of records, property, personnel, and funds which are required to carry out this plan. The statutes controlling the Treasury Department lodge most of the departmental functions in its major operating units, and, hence, plan No. 1 would shift to the Secretary the powers now scattered among the (1) Office of the Comptroller of the Currency, (2) Bureau of Internal Revenue, (3) Bureau of Customs, (4) Bureau of Narcotics, (5) Bureau of the Mint, (6) Bureau of Engraving and Printing, (7) Fiscal Service, (8) United States Secret Service, and (9) United States Coast Guard.

Since the opposition to plan No. 1 has centered on the Office of the Comptroller of the Currency, the following legal citations are limited to the statutory provisions governing his activities, as amended to date (title 12, U. S. Code).

"SECTION 1. There shall be in the Department of the Treasury a bureau charged with the execution of all laws passed by Congress relating to the issue and regulation of a national currency secured by United States bonds and, under the general supervision of the Board of Governors of the Federal Reserve System, of all Federal Reserve notes, the chief officer of which bureau shall be called the Comptroller of the Currency, and shall perform his duties under the general directions of the Secretary of the Treasury.

I The information up to this point was included in staff memorandum 81-2-40 discussing plans 1-6, but was inadvertently omitted by the printer in the reprint of that memorandum in the appendix of the Congressional Record of April 3, 1950 (p. A2583).

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