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did not just ask to continue business as usual. In fact, I closed my business although I had an agreement with the National Housing Agency that I could continue my own business if I desired while directing war housing but I closed it because I felt my men could do a better war job in a war plant, because as I was trying to do it in the National Housing Agency, they should try to do it in other war agencies.

Mr. HENRY. Is it not true that you object to this reorganization plan principally because it consolidates into one unit the Government subsidized housing under one head, along with the privately financed housing!

Mr. KIRKPATRICK. I would not put in in exactly those words, Mr. Henry, but something like that. I would put it this way: That it sets up' an over-all housing agency which presumably tries to help encourage the doing of an over-all housing job. That is presumably. its character but in fact the personnel is such that it is perpetually in competition with free enterprise.

Mr. HENRY. Do you feel it is possible to find one man to head that proposed agency that could give the same sympathetic approach to privately financed homes as to publicly financed homes?

Mr. KIRKPATRICK. Well, it is to be doubted, sir, because on that question, you usually have matters of pretty violent opinion. I have many people in my own industry who accused me of being a public houser because of statements I have made. On the other hand, some of the Government housers say I am one of their most violent opponents. I would say this, and try to answer your question, I would say “No," I do not think I could find one man. I do think, and I want it clearly understood that I have a great deal of respect for Wilson Wyatt. He is trying to do an emergency job. The first time I met him I told him I had come down with my tongue in my cheek, as the saying goes, and it was still there, and it is still there. However, I had a great deal of respect at least for his moral integrity.

Mr. HENRY. You would agree would you not, though, that a board of directors would be an improvement over one single head?

Mr. KIRKPATRICK. There is no question about that. You see the trouble Mr. Henry, with National Housing Agency, I mean even for its wartime job, it took new men from industry. I mean a man from industry was just unknown in the National Housing Agency. They may have had a few somewhere down the line in some clerical jobs or something like that, but policy-making men were all men from the old USHA or from the National Association of Housing Officials, or from the National Public Housing Conference or organizations like that. Dr. Philipson, Keyserling, Woodbury, all of those fellows were in that class.

Mr. HENRY. That is all.

The CHAIRMAN. Are there any other questions? Thank you very much, Mr. Kirkpatrick.

Mr. CHURCH. Mr. Kirkpatrick, I want to ask you a question. With reference to Public Law 263, section 5 (a), can you express an opinion as to the legality of this plan, as to whether or not it is legal, whether or not it conflicts with Public Law 263?

Mr. KIRKPATRICK. I do not think I am qualified to express an opinion on the legality of it, sir.

Mr. CHURCH. Section 5 (a)—you have read that?

Mr. KIRKPATRICK. I have read it.

Mr. CHURCH (reading): and no reorganization under this act shall have the effect of abolishing or

transferring an executive department or all the functions thereof or establishing any new executive department.

Mr. KIRKPATRICK. It seems to me it is a new executive department, but that is only a layman's opinion. Mr. CHURCH. I do not understand you. Mr. KIRKPATRICK. I say it seems to me it does establish a new executive department. Mr. CHURCH. Therefore, it is in violation of the act? Mr. KIRKPATRICK. That is just a layman's opinion. Mr. CHURCH. However, if it does, that is your opinion? Mr. KIRKPATRICK. Yes, sir. The CHAIRMAN. You would never have a reorganization if every transfer was considered a creation of a new executive department. Mr. CHURCH. Did you say, “unless you did”? The CHAIRMAN. to you considered the creation of a new department, you could have no reorganization. Mr. CHURCH. The act says, “shall have the effect of abolishing or transferring an executive department.” The CHAIRMAN. That means Cabinet positions. Mr. CHURCH. “a department” means “a Cabinet post”? The CHAIRMAN. It refers to the Department of Justice, the Department of the Navy, and so forth. Mr. CHURCH. I understand that it is your feeling that executive departments must be Cabinet posts. [Reading:l Changing the name of any executive department or the title of its head, or designating any agency as “Department” or its head as “Secretary”; or, continuing

any agency beyond the period authorized by law for its existence or beyond the time when it would have terminated if the reorganization had not been made—

With special reference to (3), continuing any agency beyond the period authorized by law for its existence—

what is your interpretation of that? Mr. KIRKPATRICK. Again on that, I do not know about the legality of it, sir. It seems to me, it was a wartime agency, it was created as such or at least as my understanding it would now seem to make it permanent. That is my understanding and that is why I am opposed to it, sir. Mr. CHURCH. Going back to section 2 (a), section 2 (a) refers to the following: 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.

Then, paragraph (c) under section 2 says—

It is the expectation of the Congress that the transfers, considerations, co

ordinations, and abolitions under this Act shall accomplish an over-all reduction

# at least 25 per centum in the administrative costs of the agency or agencies ected.

Is it your opinion that there would be any over-all savings at all in this plan?

Mr. KIRKPATRICK. I cannot see how it would, just by making it permanent, sir. I cannot see how it would possibly make a saving.

Mr. CHURCH. In your opinion, would it be more likely to increase the costs rather than decrease them by 25 percent?

Mr. KIRKPATRICK. Just giving a layman's opinion, I would think so, sir, because I know that the tendency is for people to get out of a temporary agency, whereas they are apt to hang on pretty seriously to their jobs in a permanent agency.

Mr. CHURCH. I think it would increase them rather than decrease them. Mr. KIRKPATRICK. That would be my opinion; yes, sir.

Mr. CHURCH. Your having formerly been with these agencies, you express that opinion from that experience!

Mr. KIRKPATRICK. I would think so; yes, sir.

Mr. CHURCH. This section says something about its being the expectation of Congress to save this money, 25 percent. What is your idea of the objective of this whole thing? Does it impose further controls, further scarcities, and more jobs in order to spread out the scarcity that is created? Would you agree with me on that?

Mr. KIRKPATRICK. I would certainly agree that the objective would be to create controls because otherwise there is no reason for National Housing Agency to exist.

Mr. CHURCH. The over-all effect would be to increase controls rather than to decrease the controls that the Federal Government has on private initiative, private building, or housing? Mr. KIRKPATRICK. Yes, sir. Mr. CHURCH. Thank you. The CHAIRMAN. Thank you very much Mr. Kirkpatrick. The next witness is Mr. George D. Riley,

representing the Government Employees' Council of the American Federation of Labor.

Mr. Riley was formerly a member of the press.

STATEMENT OF GEORGE D. RILEY, REPRESENTING THE GOVERN

MENT EMPLOYEES' COUNCIL OF THE AMERICAN FEDERATION OF LABOR

Mr. Chairman and members of the committee, Government em ployees are far more than passingly interested in what is done with any agency which looks to those employees for more than 60 percent of its volume of business. The immediate reason the Government Employees' Council of the American Federation of Labor is concerned with reorganization plan No. 2 is because an agency of the central Government with which members of its unions transact such vital business has been marked for abolition.

We might be called one of those “special-interest groups” to which the Bureau of the Budget refers when it declines to hear the other side of the story on governmental reorganization. We are such a "specialinterest group"

that we have taken a pronounced stand against throwing the United States Employees' Compensation Commission into a public-welfare set-up. This Commission was never intended to provide a form of retirement, as a quasi-judicial agency, and not in the popular

concept of "public welfare.” The Employees' Compensation Commission, established in 1916, came into being through the desire of organized labor to have just such

agency of Government created. It must be said that this Commission has been one of the most successfully operated establishments of the executive branch. Even the Bureau of the Budget o: the Commission with its 500 personnel has functioned on close budgetary rations. The Bureau of the Budget tells me that the manner in which the Commission operates is one of high efficiency and that at no time has there ever been any difficulty or question over the relatively meager funds which you, as the Congress, grant this agency. . Mr. CHURCH. What is the date of that statement from the Bureau of the Budget? Mr. RILEY. It was an informal discussion, Mr. Church, and I think I can give you date, it was a week ago last Thursday, a personal discussion across the desk. The Congress set forth in title I, section 2, of the Reorganization Act of December 20, 1945, Public Law No. 263, the purposes which reorganization plans must meet to merit your approval. They are: (1) To facilitate orderly transition from war to peace. (2) To reduce expenditures and promote economy. (3) To increase efficienc of operation to the fullest extent practicable within the revenues. (4) To group, consolidate, and coordinate agencies and functions according to major purposes. (5) To reduce the number of agencies by consolidating those having similar functions. (6) To eliminate overlapping and duplication of effort. I submit that not one single intent of the six set forth by the Congress as the reasons for wiping out this small and inoffensive independent office has been met by this order abolishing the United States Employees’ Compensation Commission. The Commission admittedly is efficient. To abolish it does not promote efficiency or effect savings. As a matter of fact, the Bureau of the Budget tells us the Commission, as a part of the public-welfare agency, is going to have more money to spend, as is the entire public-welfare enterprise which is being planned as big business. So economy seems to be no part of the purpose of throwing the Commission into an agency which includes relief for the needy, the aged, widows and orphans and indigent, or financially incompetent portions of the population. No overlapping or duplication of effort is eliminated by this order, So far as this Commission is concerned because there is no other agency performing any like or related function. Thus, the entire outline as set forth by the Congress as the purpose of reorganization, so far as the United States Employees’ Compensation Commission is concerned either has been ignored or lost sight of. Reorganization plan No. 2 has missed the mark which Congress so clearly defined as the pattern for reorganization. This plan has come to you, along with two others, at a time when much confusion prevails over the entire world. You as busy lawmakers hardly have time to breathe deeply. Yet you are confronted with a set of reorganization orders, each far reaching, though not as vast as some others you are going to receive. These are mere trialballoon plans. The Congress undoubtedly would greatly prefer to have time to study these orders when there is far less of international and national importance than there is today. Though you nominally had only 60 days in which to decide yes or no on these orders, the relative time you actually will have had to consider the reorganization plans might be said to be reduced to a few days or a few hours because of the pressure of much other business. In Public Law No. 263, the Reorganization Act, you said in section 5, among other things, that no reorganization plan shall provide for, and no reorganization under this act shall have the effect of * * * (5) authorizing any agency to exercise any function which is not expressly authorized by law at the time the plan is transmitted to Congress. * * * Since the Congress intends that all acts and proposals of the execur tive branch be entirely lawful, I am suggesting particularly to those of you who are of legal bent to consider the fact that when the Bureau of the Budget says it wants your approval of an order which permits the Federal Security Administrator to set up a Board of Appeals for compensation cases that here is a wide-open violation of the Reorganization Act which says, as I have just quoted, that no agency may exercise any function which is not “expressly authorized by law at the time the plan is transmitted to Congress.” Mr. CHURCH. Are you a lawyer? - r Mr. RILEY. I am not, but I have studied law and the statements I am making here have been opolo me by a competent legal source. If I may qualify to that extent, I will. At the time this plan was composed there was no Board of Appeals in the United States Compensation Commission. Nor is there any Such Board today. If this reorganization plan is approved, the Congress in substance will be saying in the law that an agency may not perform a certain operation. And at the same time, it seems to me, it will be saying that it is quite all right to violate the law. Though the Congress did not specifically forbid creation of agencies which, according to your definition in the Reorganization Act, also includes boards, it did forbid exercise of “any function” which was not being performed at the time these orders were submitted to you. The Board of Appeals which this reorganization plan announces is an agency function and as such is forbidden under Public Law No. 263. Mr. WHITTINGTON. Pardon me; who handles those appeals now under the District of Columbia? Mr. RILEY. Rather than add to the confusion, Mr. Whittington, I would o: that the Board itself could give a better recitation of that, but I will give in my limited way what I conceive to be the operation of that Commission. Mr. WHITTINGTON. Were they not constituted as a Board of Appeals for the District of Columbia, and the other agency? Mr. RILEY. They operated as an administrative commission just as the Civil Service Commission does, for example. Mr. WHITTINGTON. There is no law that makes them a Board of Appeals? Mr. RILEY. The only operation, as I can see it, Mr. Whittington, is that they apply the facts in the case, and accept the medical, competent advice, and put it over against the law and let the edges of the pattern work in together. I see no appeals machinery in there of any sort. They do have, I am sure, no such machinery. The CHAIRMAN. Do you mean in the existing case?

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