Mr. ANDERSEN. I realize that, sir. What I am thinking about, however, is where it will leave the authority of the Administrator under the proposed bill.

Mr. SCOTT. Perhaps I should ask, with your permission, that Mr. Mynatt, our attorney, comment.

Mr. ANDERSEN. I would like any comment you can give me on that to reassure me we will not be just making a figurehead out of the REA Administrator. After all, today he is a presidential appointee and it does not look to me if we permit this bill to become law that there will be any necessity for having such a presidential appointee in the future. According to the bill all discretion and authority is left with the Secretary of Agriculture.

Mr. MYNATT. Mr. Andersen, that is correct.

Mr. ANDERSEN. You agree with me on my surmise?

Mr. MYNATT. That is right, that the authority under this bill would lodge in the Secretary of Agriculture.

Mr. ANDERSEN. Certainly it would.

Mr. MYNATT. It could be delegated of course.

Mr. ANDERSEN. At the convenience of the Secretary.

Mr. MYNATT. Yes, sir.

Mr. ANDERSEN. Certainly. Mr. Chairman, am I mistaken in my impression that the basic law had as its intent giving a certain defined area of responsibility to the REA Administrator as such? Mr. WHITTEN. I think so. We read the section the other day. Mr. ANDERSEN. You feel I am correct in my assumption? Mr. WHITTEN. I do.

Mr. ANDERSEN. If you care to query further on this particular point, Mr. Chairman, I think this is basic. I will be very much disappointed if we do anything by the Congress which would take away from the REA Administrator any of his powers which the Congress certainly intends him to have.

Mr. WHITTEN. I would appreciate a chance to develop it. I would also point out that I am glad to note the very searching questions that the gentleman from Minnesota has asked.

Mr. ANDERSEN. I have spent the last 2 days and I am pleased by the way you gave us this opportunity to study this proposed legislation. But I had my staff working on it for the past 3 or 4 days, consulted with various people, and as a result we have these questions prepared which I think should be answered in the record.

Mr. WHITTEN. I do. I would like for the REA to call our attention to these replies. The reason I say that is that in the event we wish to bring your group back for any clarification of these answers we would want to have adequate notice so we could see they were respon

sive.

Mr. SCOTT. We will be delighted to do that.

Mr. WHITTEN. Pursuing this matter further, is it your understanding that the REA Administrator is set up with certain rights and duties and certain powers and that his determination is final under the basic REA Act at the present time?

Mr. SCOTT. He has full responsibility of making decisions on loan applications, if that is what you are referring to.

21494-58-pt. 3- 44

AUTHORITY OF SECRETARY OF TREASURY IN REGARD TO LOAN TERMS AND INTEREST RATES

Mr. WHITTEN. Yes. Under this bill that would be taken away and would be given to the Secretary of Agriculture. In addition to that, this bill would also make the REA associations subject to control by the Secretary of the Treasury, would it not, in that the Secretary of the Treasury could set the rate on the bonds at such a level as to preclude financing from that source? That is possible, is it not? Mr. Scorr. He has a responsibility to pass on rates as set out in the proposed legislation.

Mr. WHITTEN. Having that authority, he could, if he wished to, set a rate that would give unconscionable profits to the buyers of the bonds. On the other hand, he could set rates where they could not get any money.

Mr. SCOTT. He could set rates that would be very favorable to them also.

Mr. WHITTEN. I am talking of his authority.

Mr. Scort. The broad authority.

Mr. WHITTEN. The broad authority would enable him to set rates that would result in unconscionable profits to the fellow who bought, and it would also be authority to set so low as to preclude the REA associations from getting money. I am talking of the authority. I would hope nobody would go to that extreme but it is the general authority.

Mr. SCOTT. It is the general authority.

Mr. WHITTEN. For instance, on page 8 of your proposal it says, "Such notes shall bear interest payable semiannually at a rate determined by the Secretary of the Treasury."

We are talking about the authority in the proposal. Reading that again myself, I note that the Secretary of the Treasury would have to approve the rate of repayment. So that the Secretary of the Treasury could, under this act, if it were ever enacted into law, set the rate of repayment on such a short period as to almost invite default. Again I am pointing out the possibility under the proposed bill.

This proposal before us now would put the Secretary of Agriculture in the place now held by the Administrator of REA.

Then, in addition, it would put the Secretary of the Treasury, who has to approve certain things, in the position, by withholding his approval, of vetoing action of the Secretary of Agriculture. Is that correct?

Mr. SCOTT. He has broad authority but it seems to me under this proposal where there is to be some federally appropriated funds and some private loan funds, if the Secretary of the Treasury should exercise his authority in a way that would defeat the purpose of getting funds on reasonable terms that would facilitate carrying out the purposes of these rural electric systems, he would just invite greater use or force greater use of federally appropriated funds.

I think it would balance itself out and result in a good, reasonable discharge of those responsibilities.

Mr. WHITTEN. That is a good statement but it is not at all responsive. I asked you what the authority in the act is, and not what your opinion is. I was trying to find out how broad the authority is.

Mr. SCOTT. I thought I said in the beginning, I intended to, that is very broad authority.

Mr. WHITTEN. Is it as broad as I have indicated?

Mr. Scorr. There is no limitation on what he shall do. It merely specifies he has this authority.

Mr. WHITTEN. He has it. By witholding an approval that is required he would in effect be vetoing, would he not?

Mr. SCOTT. Yes, and that is why I responded as I did, that if he does that under this two-pronged approach here, he forces greater use of federally appropriated funds.

Mr. WHITTEN. That would leave Congress where it might still have to authorize funds, would it not?

Mr. SCOTT. The proposal contemplates appropriation of some Federal funds and some funds to be obtained from private sources.

Mr. WHITTEN. Whatever the various provisions and they are numerous-under your proposal there would be a change from the present law where the Administrator, appointed by the President and has to be confirmed by the Senate, has certain authority that nobody can take away from him.

Under this proposal, though it has many parts, that provision of present law would be set aside and then the REA associations would be dependent upon actions by the Secretary of Agriculture, many of which would have to have approval of the Secretary of the Treasury. That change would be made if this proposal were enacted into law. Mr. ANDERSEN. You made a summary of your belief as to what it does. It agrees entirely with mine.

REORGANIZATION ACT

Mr. SCOTT. I believe that under the Reorganization Act the authorities are vested in the Secretary. I do not know that this proposed change here alters that greatly. There is a great deal of testimony in relation to the reorganization plan, which indicates the intentions of the present Secretary of Agriculture as to how he is going to carry out those responsibilities.

Mr. WHITTEN. Could we have copies of that supplied to the committee, the Reorganization Act, any statements of assurances granted by the Secretary, plus any legal opinions that may have been rendered as to that? Supply that for the record.

(The following information was subsequently supplied:)

[PUBLIC LAW 109-81ST CONGRESS]

[CHAPTER 226-1ST SESSION]

[H. R. 2361-[63 Stat. 203] as amended to March 25, 1953, date of transmission of Plan 2 of 1953]

An ACT To provide for the reorganization of Government agencies, and for other purposes Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

TITLE I

SHORT TITLE

SECTION 1. This Act may be cited as the "Reorganization Act of 1949".

NEED FOR REORGANIZATION

SEC. 2. (a) The President shall examine and from time to time reexamine the organization of all agencies of the Government and shall determine what changes therein are necessary to accomplish the following purposes :

(1) to promote the better execution of the laws, the more effective management of the executive branch of the Government and of its agencies and functions, and the expeditious administration of the public business;

(2) to reduce expenditures and promote economy, to the fullest extent consistent with the efficient operation of the Government;

(3) to increase the efficiency of the operations of the Government to the fullest extent practicable;

(4) to group, coordinate, and consolidate agencies and functions of the Government, as nearly as may be, according to major purposes;

(5) to reduce the number of agencies by consolidating those having similar functions under a single head, and to abolish such agencies or functions thereof as may not be necessary for the efficient conduct of the Government; and

(6) to eliminate overlapping and duplication of effort.

(b) The Congress declares that the public interest demands the carrying out of the purposes specified in subsection (a) and that such purposes may be accomplished in great measure by proceeding under the provisions of this Act, and can be accomplished more speedily thereby than by the enactment of specific legislation.

REORGANIZATION PLANS

SEC. 3. Whenever the President, after investigation, finds that

(1) the transfer of the whole or any part of any agency, or of the whole or any part of the functions thereof, to the jurisdiction and control of any other agency; or

(2) the abolition of all or any part of the functions of any agency: or (3) the consolidation or coordination of the whole or any part of any agency, or of the whole or any part of the functions thereof, with the whole or any part of any other agency or the functions thereof; or

(4) the consolidation or coordination of any part of any agency or the functions thereof with any other part of the same agency or the functions thereof; or

(5) the authorization of any officer to delegate any of his functions; or (6) the abolition of the whole or any part of any agency which agency or part does not hvae, or upon the taking effect of the reorganization plan will not have any functions,

is necessary to accomplish one or more of the purposes of section 2 (a), he shall prepare a reorganization plan for the making of the reorganizations as to which he has made findings and which he includes in the plan, and transmit such plan (bearing an identifying number) to the Congress, together with a declaration that, with respect to each reorganization included in the plan, he has found that such reorganization is necessary to accomplish one or more of the purposes of section 2 (a). The delivery to both Houses shall be on the same day and shall be made to each House while it is in session. The President, in his mes

sage transmitting a reorganization plan, shall specify with respect to each abolition of a function included in the plan the statutory authority for the exercise of such function, and shall specify the reduction of expenditures (itemized so far as practicable) which it is probable will be brought about by the taking effect of the reorganizations included in the plan.

OTHER CONTENTS OF PLANS

SEC. 4. Any reorganization plan transmitted by the President under section 3— (1) shall change, in such cases as he deems necessary, the name of any any agency affected by a reorganization, and the title of its head; and shall designate the name of any agency resulting from a reorganiztion and the title of its head;

(2) may include provisions for the appointment and compensation of the head and one or more other officers of any agency (including an agency resulting from a consolidation or other type of reorganization) if the President finds, and in his message transmitting the plan declares, that by reason of a reorganization made by the plan such provisions are necessary. The head so provided for may be an individual or may be a commission or board with two or more members. In the case of any such appointment the term of office shall not be fixed at more than four years, the compensation shall not be at a rate in excess of that found by the President to prevail in respect of comparable officers in the executive branch, and, if the appointment is not under the classified civil service, it shall be by the President, by and with the advice and consent of the Senate, except that, in the case of any officer of the municipal government of the District of Columbia, it may be the Board of Commissioners or other body or officer of such government designated in the plan;

(3) shall make provision for the transfer or other disposition of the records, property, and personnel affected by any reorganization;

(4) shall make provision for the transfer of such unexpended balances of appropriations, and of other funds, available for use in connection with any function or agency affected by a reorganization, as he deems necessary by reason of the reorganization for use in connection with the functions affected by the reorganization, or for the use of the agency which shall have such functions after the reorganization plan is effective, but such unexpended balances so transferred shall be used only for the purposes for which such appropriation was originally made;

(5) shall make provision for terminating the affairs of any agency abolished.

LIMITATIONS OF POWERS WITH RESPECT TO REORGANIZATIONS

SEC. 5. (a) No reorganization plan shall provide for, and no reorganization under this Act shall have the effect of

(1) abolishing or transferring an executive department or all the functions thereof or consolidating any two or more executive departments or all the functions thereof; or

(2) continuing any agency beyond the period authorized by law for its exercise, or beyond the time when it would have terminated if the reorganization had not been made; or

(3) continuing any function beyond the period authorized by law for its exercises, or beyond the time when it would have terminated if the reorganization had not been made; or

(4) authorizing any agency to exercise any function which is not expressly authorized by law at the time the plan is transmitted to the Congress; or (5) increasing the term of any office beyond that provided by law for such office; or

(6) transferring to or consolidating with any other agency the municipal government of the District of Columbia or all those functions thereof which are subject to this Act, or abolishing said government or all said functions. (b) No provision contained in a reorganization plan shall take effect unless the plan is transmitted to the Congress before April 1, 1953.1

1 Date amended to read "June 1, 1957", by act of March 25, 1955 (69 Stat. 14). Date amended to read "April 1, 1955", by act of February 11, 1953 (67 Stat. 4).