principle involved requires the complete independence of all organizations having quasi-judicial functions from even the appearance of arbitrary control. Short of terminating their work altogether, there seems to be no alternative to continuing establishments of this type.'

"As I see it, there are other unanswerable reasons why the United States Employees' Compensation Commission should not be placed under the control or merged with the Civil Service Commission. The Commission which administers the Federal Employees' Compensation Act exercises jurisdiction over the longshoremen's compensation law as well as a similar law in effect in the District of Columbia. In this way the Commission deals with thousands of wage earners who do not come under the Federal civil-service regulations.

"There is no logical connection between the administration and quasi-judicial work of the Federal Employees' Compensation Commission and the duties and service of the Federal Security Agency.

"On the score of economy, the proposed consolidation would, in my opinion, serve to increase rather than reduce the administration costs of the Federal Employees' Compensation Commission. From a standpoint of equitable and dependable operation, this consolidation would be certain to result in lessened efficiency. The Commission as now constituted has administered the law efficiently, keeping administrative costs to a minimum consistent with good service and in a way that merits warmest commendation.

"Because of our peculiar interest in injured workers, in the dependents` of killed employees, and in the discharge of the duties of the United States Employees' Compensation Commission, the American Federation of Labor regards it as its solemn duty to vigorously resist any attempt to weaken or impair the usefulness of the United States Employees' Compensation Commission. We regard this proposal to destroy its independent status as a blow on a vital principle in the administration of the workmen's compensation law and sincerely hope the Seventy-second Congress will not approve such a plan."

Mr. BURNS. I would like to make this comment concerning the letter: It applies, of course, first, to the proposed consolidation and transfer with and of the. Commission with the Civil Service Commission; insofar as any reference to the Civil Service Commission is concerned, the letter is not relevant.

It is relevant, however, to the point that I believe that it should not be combined with any agency. Also, he makes reference to the fact that at that time 42 States had enacted workmen's compensation laws. Of course, that has changed. There are also some other conditions that have changed, but the fundamental reasoning which is contained in the letter of Mr. Green which the chairman has now allowed me to include in the record, is just as cogent today with respect to the necessity and desirability from all standpoints of retaining the bipartisan independent aspects of the Employees' Compensation as it was back in 1932 when the letter was written. Now, in all sincerity, gentlemen, I was going to present another item, but inasmuch as there can be no amendment to the plan, I will only touch upon it very briefly, and I would like to refer to the fact that the proper, efficient, and economical administration of this function requires personnel of experience and training in compensation matters and procedures.

The personnel of the Employees' Compensation Commission has this specialized training and experience in properly performing and adjudicating and efficiently administering the provisions of the law which established the Commission.

That accomplishes the purpose for which the agency was independently established. The employee personnel of the Commission have conscientiously, faithfully, and efficiently performed their duties in the administration of this law. There are numerous amendments there, too. They desire of course to remain in the Government service, the career employees do, in positions which they are best qualified

to fill. They are mostly and principally old-line, Mr. Chairman, career employees in this agency. There are some, of course, which are so-called war-service appointees, but most of them are the old-line career employees. They have rendered most of their service in their adult life and capacities in this commission along lines for which they are especially qualified.

I say to you that the separation of these employees from the service would tend to mitigate against the efficient adjudication of claims arising from injuries to employees throughout the Federal service.

I do not say that all the personnel would be fired nor anything of that kind. However, under the plan, any of the personnel which the transferring agency shall find to be in excess of the personnel necessary for the administration of the functions tranferred to such agency shall be transferred or retransferred under existing law to other positions in the Government or separated from the service.

I do not say it would be possible to dismiss any of these career people from the service. It might not be possible. I think it would be very bad business if they attempted to carry on the functions of this very important commission with untrained and unqualified and unseasoned personnel. The people that are on the job are the people who can render the service expected of them under the act which created the commission, but, if they are merged into a tremendous big agency, no one can know what might be the future for those employees. Consequently, I must say that there is a possibility that not only will the employees who have the right to be considered for permanent employment in this work, their rights might be entirely destroyed, but the actual efficiency, the operating efficiency of the agency itself, could be very easily destroyed.

The CHAIRMAN. I am just wondering how you could comply with the pious hope of section 2, subsection 3, that we reduce the administrative cost at least 25 percent, if you do not lay off employees or cut salaries.

Mr. BURNS. At the present time, these people are understaffed. They should have more people right now. They have more vacancies right now than they have people to fill those vacancies. There are authorized vacancies.

I say, and I stand firmly for this economy, which is sought to be accomplished. I say that the people who are not necessary for the proper functioning of this Government should be transferred or otherwise disposed of.

However, here is a comparatively small agency which has been picked out for merger with a tremendously large agency.

Those people are all down there on the job at the present time. The CHAIRMAN. I never thought it would be possible to employ any degree of compliance with section 2, subsection (c), in any of these reorganization plans.

Mr. STENGLE. That was admitted by the Attorney General and the Budget people, and that they could not tell you how much it was going to be.

Mr. BURNS. At least they were silent as to the possibility.

Under the law which created the Commission, the act of 1916, there was a provision that all clerks and employees exclusively engaged in carrying on the work which had been theretofore done by different

agencies, should be transferred to and become employees of the Commission.

As I say, that cannot become a part of the plan and I think that is a great weakness of the plan. I think it is another reason which makes us oppose the plan, because the efficiency of that agency must not be allowed to suffer.

What can be gained by picking on this very small agency and merging them with a great agency on top of which they are creating other jobs and then allow the possibility of having this very, very important function administered by people who are not qualified for it and not trained for it, and have not had experience in the work. I say, in my opinion, gentlemen, it would be dangerous, and possibly disastrous to those who are covered within the scope of the Employees Compensation Act of 1916.

Before I conclude, I will offer now the references for inclusion in the record as has been requested by the chairman.

The CHAIRMAN. Without objection, the document will be received and placed in the record at this point.

(The document is as follows:)

JUNE 3, 1946.

The United States Employees' Compensation Commission was created by statute in 1916 as an independent workmen's compensation commission, following the pattern of like commissions in the States. It exercises only one function, namely, the quasi-judicial function of deciding workmen's compensation claims. In 1927 the Commission was given the administration of the Longshoremen's and Harbor Workers' Compensation Act. That act was later extended as the District of Columbia workmen's compensation law in 1928, and in 1941 as the compensation law for employees of Government contractors who perform work outside of the United States.

The Commission administers workmen's compensation laws in two relatively broad classes of cases (1) where compensation is paid directly by the United States, as in the case of Federal employees, and (2) where compensation is claimed by employees against their private employers or insurance carriers. In respect to the latter the Commission functions much like a judicial body: claims are filed within a certain time, notices thereof are given, and answers thereto filed by employers. In contesting cases, issues must be framed, evidence taken at formal public hearings where counsel appear, following which decisions are written in formal compensation orders which are appealable to the Federal courts. In the Federal-employee cases the process is somewhat similar, the Commission determining, upon evidence, the substantive rights of claiming individuals, which involves receiving, weighing, and resolving the evidence. A workmen's compensation law is the substituted right of an employee against his employer for the older employers' liability or common-law action. The right to compensation, therefore, is a substantial fundamental right and the processes for determining the right are in their very essence quasi-judicial. In Crowell v. Benson (285 U. S. at p. 75) Mr. Justice Brandeis spoke of review of the "quasijudicial decisions" of the Federal tribunals such as exist under the Commission (under the Longshoremen's Act) and he referred to the power entrusted to the Commission "to make initial determinations in matters within, and not outside, ordinary judicial purview." Similarly, in Paramino Lumber Company v. Marshall (18 F. Supp. 645) the court said that the deputy commissioner of the Commission "is a quasi-judicial officer having certain recognized jurisdictional and discretionary powers."

The Reorganization Plan 2 would abolish this statutory quasi-judicial independent Commission, diffusing its functions into the Federal Security Agency, not as a separate workmen's compensation commission or board, but passing the functions to the Federal Security Agency to be performed "in such manner” as that agency shall prescribe.

The first serious objection to the abolition of the Commission rests on a constitutional ground. The Reorganization Act is not a law requiring administration which sets up standards for the President to apply. It contains a clear delegation to the President of legislative authority of the kind which

is unconstitutional (Cf. Schechter Poultry Corp. v. United States, 295 U. S. 495). The Compensation Commission was created by statute; it can only be abolished by statute; that is, by Congress which has created it. It is apparently beyond the power of Congress to hand over to the Executive power to abolish agencies of the Government. Under previous reorganization plans it had been clearly understood by Congress that the power to abolish necessarily lies in Congress and could not be delegated. Reference to this can readily be found in House Report No. 1126, dated April 25, 1932 (accompanying H. R. 11597), in which the following statement appears:

"The power to abolish agencies of the Government created by statute cannot be delegated under the Constitution."

Significantly enough in the Reorganization Act of 1937 (S. 2700, 75th Cong.) it was provided that the President could not abolish any independent establishment. The Reorganization Act of 1939 required affirmative legislative act to put it into effect (S. 1706, 76th Cong.; S. Rept. No. 142, March 6, 1939).

Therefore, in permitting the President to abolish a statutory agency, it not only runs counter to precedent, but is so clearly an unconstitutional delegation of legislative authority as to warrant any employer under the Longshoremen's Act litigating the question, with probably successful results, which would entail an enormous loss or expense to the Government should the Commission again have to be reestablished in its independent quasi-judicial form. Moreover, Reorganization Plan No. 2 requires a board of three persons to be appointed to "make final decision on appeals taken from determinations and awards" in Government employees' workmen's compensation claims. Not only is the creation of this board an unconstitutional exercise of legislative power, but it is not purportedly authorized in the Reorganization Act of 1945. There is no authority for creating an appeals board. The only authority authorizing the President to create functionaries is that in section 4 (2) of the Reorganization Act of 1945, which authorizes the appointment of "the head and one or more assistant heads of any agency." The appeals board, in section 3 of plan No. 2, is not designated the head of an agency. As a matter of fact, the only "head" of any agency referred to is the Federal Security Administrator. Therefore, the creation of the appeals board is wholly unauthorized by any section in the Reorganization Act.

There are other legal objections to section 3 of plan No. 2. Reorganization plans were not intended to be made until "after investigation" (sec. 3). What investigation was made in respect to the Commission does not appear. The vitally interested parties in the administration of the workmen's compensation laws are the employers, insurance carriers, and the employees and labor unions. These interested parties were the initiators of the workmen's compensation laws, and no inquiry would have been entitled to be regarded as an "investigation" unless the vitally interested parties had been given opportunity to express their interest and wishes-at least to the same extent as they were initially given such opportunity when the workmen's compensation laws were considered by Congress. Therefore, it is apparent that section 3 of the Reorganization Act was not complied with in spirit and intent.

Section 3 of the Reorganization Act requires the President to prepare a reorganization plan "as to which he has made findings and which he includes in the plan." Reorganization Plan No. 2 violates section 3 of the Reorganization Act in that in respect to the Commission no findings were made as the statute requires. Presumably, the findings, if properly made, would have informed Congress as to the interest of the parties and what economies, if any, could be expected.

Section 3 also specifies that in the message transmitting a reorganization plan the President shall "specify with respect to each abolition of a function specified in the plan the statutory authority for the exercise of such function." In section 3 of plan No. 2 the the functioning of a bipartisan three-member Commission was abolished. The plan fails to state the statutory authority, as the act requires. Certain limitations on the power with respect to reorganization are stated in section 5 of the act. The pertinent ones are subparagraphs (5) and (6), reading as follows:

"(5) 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

"(6) imposing, in connection with the exercises of any quasi-judicial or quasi-legislative function possessed by an independent agency, any greater limitation upon the exercise of independent judgment and discretion, to the

full extent authorized by law, in the carrying out of such function, than existed with respect to the exercise of such function by the agency in which it was vested prior to the taking effect of such reorganization; except that this prohibition shall not prevent the abolition of any such function;

*

Section 3 of plan No. 2 violates subparagraph (5) quoted above in that it authorizes the Federal Security Agency to exercise, through a board, an appeal function which is not "expressly authorized" by the statute under which the Employees' Compensation Commission functions. An appeal function has been engrafted upon the statutory functions of the Commission.

The plan violates subparagraph (6), above quoted, of the Reorganization Act because the "full extent" of the present law requires that compensation claims receive the judgment of three Commissioners the three Commissioners being representative of more than one political party.

The abolition of the Commission ipso facto abolishes the three-member bipartisan group, thus severely limiting judgment and discretion. The substitution of a single administrator for the three-member bipartisan Commission would constitute a "greater limitation" upon the exercise of judgment and discretion than the law now provides. Hence, the violation of the Reorganization Act.

An added violation of subparagraph (6), above quoted, is inherent in the appointment of an appeal board. Under the plan, a single administrator would exercise the judgment presently vested in a three-men.ber Commission. but a newer judgment is provided beyond that which would be exercised under the compensation law. This newer judgment would be exercised by an apellate board having no statutory origin and would impose its judgment upon the finality of the administrator's decisions.

Mr. BURNS. I thank you very much for the opportunity which you have given me to express my views.

The CHAIRMAN. We thank you, Mr. Burns.

At this point, I ask unanimous consent and without obiection, will place in the record a statement made regarding the abolition of the Board of Visitors at St. Elizabeths Hospital. For obvious reasons, the who prepared this statement did not want his name attached to it, but I think it should be put in the record at this point. (The statement referred to is as follows:)

person

Reorganization Plan No. 2 of 1946 calls for the abolition of the Board of Visitors of St. Elizabeths Hospital and its functions. This Board was established by the original act of Congress in 1852. The purpose was defined as follows: "They shall visit the hospital at stated periods and exercise so careful a supervision over its expenditures and general operations that the Government and community may have confidence in the correctness of its, management." The experience of the various States has indicated that an unpaid Board of Visitors or Trustees performs a very useful service as representatives of the public and as safeguards against political intrusions. Some States have tried the experiment of abolishing their boards of trustees and in no State has this worked out beneficially. Reorganization Plan No. 3, section 201, strikes out from the original act the functions of St. Elizabeths Hospital relating to the Army and the Navy. St. Elizabeths Hospital was founded in 1855 to care for the mentally ill of the Army and Navy. Residents of the District of Columbia were added as eligible but the primary purpose of the institution was always military. During the recent war the Army made plans to care for its own mentally ill, since the problem was obviously too large to be dealt with by St. Elizabeths Hospital. The Army has continued, however, to send to St. Elizabeths Hospital some of its general prisoners who developed mental disorder, and if the plan is passed it will have to set up its own facilities for this purpose, probably at considerably greater expense than is now incurred to the Federal Government. During the recent war the Navy continued to send patients to St. Elizabeths Hospital and many such were cared for effectively at that hospital. In 1942 an Executive order was issued making the Public Health Service hospital at Fort Worth subject to the same laws as St. Elizabeths Hospital, so that Navy patients might be sent there at the expense of St. Elizabeths Hospital. In June 1945 the Navy Department was directed by the President, at the instance of the Bureau of the Budget, to discontinue sending patients to St. Elizabeths Hospital. This change in policy was not undertaken at the initiative of the Navy Department but is now in effect.