Mr. BENDER. Why was the Federal Securities Agency selected for the work of this Commission?

Mr. WASHINGTON. I could not answer that. That would be a question for the Bureau of the Budget.

Mr. BENDER. Of course, you are here to discuss the legal aspects of this, and nothing else, and I do not want to ask you questions that you are not particularly conversant with, but, Mr. Chairman, I feel that we are wasting a lot of time here in talking about something that does not accomplish what the reorganization plan had in mind, and that is the saving of money.

We have had no testimony from the Bureau of the Budget nor anyone else, indicating that a savings of money is effected here. Under the circumstances, I do not think that we should burden these people with coming here and talking about something that saves no money. If it does not save money, we ought to throw it out the window. We are just wasting a lot of time. Here are 50 or 60 people, spending their time and effort, playing button, button, who has the button? They don't know from nothing. It seems rather stupid to sit here and listen to these witnesses, that we have to jockey around to find out just exactly what this thing is all about. We are wasting time.

If they submit plans which will save money, that is a horse of a different color, but to come here to transfer an agency and play checkers with the departments, to me it does not make sense. Mr. RICH. Will the gentleman yield?

Mr. BENDER. Yes; I will yield.

Mr. RICH. In the first place, I would like to know who wrote this bill.

Mr. BENDER. I have tried to find out from the Bureau of the Budget and they do not know. They will not tell.

Mr. RICH. I would like to know what efficiency is going to be realized in the conduct of the affairs of the Government, and then, the question which you asked, what the economy is going to be.

Mr. BENDER. Mr. Smith was here yesterday, and he could not tell. If he does not know, who would know?

Mr. RICH. Perhaps we had better get the President down here. Mr. BENDER. I have no further questions.

Mr. WHITTINGTON. I asked the question a few minutes ago, and I stated it was my recollection of the remarks made by the Comptroller General to the effect that there were several dozens of these housing agencies. I am in error about that. I had in mind several other transportation agencies. The Comptroller General stated there were about 15 of these agencies.

That is all, Mr. Chairman.

Mr. CHURCH. Mr. Washington, will you refer to Public Law 263, page 1, section 2 (c)? You will there note the following language: it is the expectation of the Congress that the transfers, consolidations, coordinations, and abolitions under this act shall accomplish an over-all reduction of at least 25 percent in the administrative costs of the agency or agencies affected.

With that in mind, you said awhile ago you received these plans from the Bureau of the Budget and that your Department made certain suggestions or changes from a legal point of view. Have you those suggested changes with you?

Mr. WASHINGTON. No sir.

Mr. CHURCH. Can you recall what they were?

Mr. WASHINGTON. No, sir; most of them were minor changes in wording

Mr. CHURCH (interposing). Did any of them refer to this section? Mr. WASHINGTON. No; because, to our minds, that is a statement of policy on the part of Congress.

Mr. CHURCH. Will you direct your legal ability to the words "it is the expectation of Congress that at least 25 percentum in the administrative costs of the agency or agencies affected"? How do you construe those words? What do you construe them to mean in your line of thinking?

Mr. WASHINGTON. The President has a stated time within which to present reorganization plans.

Mr. CHURCH. I am directing your attention to section 2, paragraph 3, without a lot of indirect comments:

It is the expectation of the Congress that the transfers, consolidations, coordinations, and abolitions under this Act shall accomplish an over-all reduction of at least 25 percentum in the administrative costs of the agency or agencies affected.

Mr. WASHINGTON. In other words, after the entire program of reoragization has been completed, Congress expects that 25 percent reduction will have been made in cost.

Mr. CHURCH. "In the administrative costs," do you keep that in mind when you make that statement?

Mr. WASHINGTON. "Administrative costs," I assume, would be budgetary costs, the entire expense which Congress would be asked to appropriate for personnel and the like. In other words, that Congress, after this reorganization program has been completed, will expect a reduction in the appropriations to these agencies for their administratives work.

Mr. CHURCH. Does the word "expectation" as used here have any legal significance to you at all? Your assistant said No, by the nod. Mr. LEWITTES. I did not say anything. I would be glad to answer the question.

Mr. CHURCH. I want the answer from Mr. Washington, please, so the record will show answers, and not nods that mean "No," or that he should not answer.

Mr. WASHINGTON. I think the provision is clear. Congress expects a reduction of 25 percent at the conclusion of the program, in the administrative costs of the agencies which have been reorganized.

Mr. CHURCH. Must we wait years to find out whether or not there will be a saving, or can we determine that by the hearings here? What do you think about that?

Mr. WASHINGTON. I think you are entitled to consider it at the hearings here.

Mr. CHURCH. Of course, we are entitled to consider, but can we not come to that conclusion? Of course, we can consider everything. Mr. WASHINGTON. I think it is entirely possible that reorganizations will be offered later on in the program that would enable the President clearly to meet this expectation of Congress.

Mr. CHURCH. Mr. Washington, do you think that is a fair answer to my question, as a lawyer?

Mr. WASHINGTON. All I can say is this: That if this committee upon a consideration of a reorganization plan, disapproves it, it of

course has power to do so, and to consider as part of its deliberations, the question of the amount of expenditure which would be saved. But I do not think that the plan is rendered illegal if there is not an affirmative showing that a reduction of 25 percent in administrative cost will result from the particular plan which is before you.

Mr. CHURCH. None of the evidence so far indicates that it will decrease the cost. Here are three sections, section 2 (a), section 2 (b), and section 2 (c). Do you have any other comment, now, in answer to my question with reference to the saving of 25 percent?

Mr. WASHINGTON. I would say this, Mr. Congressman, that certain reorganizations of the Government might well result in an increase in expenditure, temporarily, and having in mind later reorganizations which would complete the whole pattern and bring about an over-all decrease. Now I do not know whether that is the case here or not. I do not think any particular reorganization is required to effect a 25 percent reduction in expenditures. I think that is for the whole program, rather than for any individual reorganization plan.

Mr. CHURCH. What do you mean by the whole program? Do you consider the whole program as including the matter of building homes throughout the Nation for private housing is concerned, and whether or not there should be savings there in private housing, in that activity, or are you considering merely what the section 2 (c) says, "expectation of at least a 25 percent reduction in administrative costs of the agency or agencies affected"?

Mr. WASHINGTON. I have been thinking solely of the administrative expenses of the agency itself, for personnel and other household expenses, so to speak.

Mr. CHURCH. Now can you, with those words in mind, expectation of Congress, point to anything that indicates a direct saving of 25 percent?

Mr. WASHINGTON. Again, we do not regard that as a legal question. Mr. CHURCH. Do you have facts upon which you can render an opinion; namely, your opinion of the expectation of the Congress, as written into law?

Mr. WASHINGTON. We regard that question as not going to the legality of any particular plan, and hence as not requiring our opinion on that subject in relation to any particular plan.

Mr. CHURCH. You do not bring up here to us, what was submitted to you and you do not remember what you suggested by way of changes when the plan was submitted to you by the Bureau of the Budget, so what do we get here?

Mr. WASHINGTON. I might add that our work on these plans was conducted upon the basis of conferences rather than formal submittals, except in the final stage. The procedure has been one of active cooperation, through conferences.

Mr. CHURCH. Who sat in on those conferences from your Department?

Mr. WASHINGTON. I sat in on some, also Mr. Aaron Lewittes, special assistant to the Attorney General; Mr. William O. Burtner, attorney, Department of Justice; Mr. Edward Lazowska, an attorney in the Department of Justice; Mr. William Maddrix, an attorney in the Department of Justice; and of course Mr. Tom C. Clark, the Attorney General himself, was consulted, and a number of others, who made special studies or investigations of law from time to time.

Mr. CHURCH. Then when you testified awhile ago that the Bureau of the Budget made up these plans and then the Bureau of the Budget brought them to you, you were in error, is that right?

Mr. WASHINGTON. I did not mean to convey the impression that we had not assisted the Bureau of the Budget from time to time. But the plans are not our drafting. We did not start out and draft a plan. We did not draft this plan or any of the others. It was a matter rather of our reviewing the work of others, and making suggestions and studies designed to determine the legality of every section of the plan.

Mr. CHURCH. Now, in any of those discussions, do you recall your calling to the attention of either the Bureau of the Budget or any one of those individuals attending those conferences, the necessity of complying with section 2c: "it is the expectation of Congress to save 25 percent in the administrative costs of the agency or agencies affected"? Do you recall any discussion of that kind, as coming from your Department?

Mr. WASHINGTON. We did have the general matter of economy in mind, but never did I see any actual figures of saving.

Mr. CHURCH. In fact it was often brought to your attention that perhaps efficiency rather than saving was held in the forefront, is that right? Is that the case, rather than the section 2c here; namely, 25 percent in administrative costs of the agencies?

Yesterday, the testimony aimed at efficiency, that there might be efficiency. I am calling your attention to the words of the act:

it is the expectation of the Congress that the transfers, consolidations, coordinations, and abolitions under this Act shall accomplish an over-all reduction of at least twenty-five percentum in the administrative costs of the agency or agencies affected.

Now those agencies are more than the Bureau of the Budget, they are all agencies. They are the NHA. Now will you not hazard a guess that the administrative costs of NHA would greatly increase? That seemed to be the trend of the testimony yesterday.

Mr. WASHINGTON. I am unable to offer any estimate.

Mr. CHURCH. Your Department at no time, as far as you know, advised in those conferences that that section would have to be complied with?

Mr. WASHINGTON. We advised, informally, that that section did contemplate, not as a strict legal requirement, but as a matter of policy, that these reorganizations should effect economies which would, at the end of the program, amount to at least 25 percent.

Mr. CHURCH. In other words, still the Congress does not mean what it says in the law.

Mr. WASHINGTON. It means what it says. But we cannot advise, as a matter of law, that any particular plan is rendered illegal because proof is not offered that a reduction of at least 25 percent will be obtained by that particular plan.

Mr. CHURCH. When this consolidation is effected and NHA is in full control, what hope have you then that these agencies under it could expect any help from it, if you, and the legal department, cannot advise the Agency, or the President, or the Bureau of the Budget, in the conferences you have been holding informally, any better than you have advised them as to what the words, "expectation of Congress," means in section 2c? How do you expect private industry, private

building, or any of these agencies, to get anywhere with their administration, their hope of administration, if that is what your Department has advised in the preparing of its plan?

Mr. WASHINGTON. I would add this: That it would no doubt be incumbent upon the new Agency, the National Housing Agency, to endeavor in its operations to carry out the expectations of Congress.

Mr. CHURCH. Always pointing back to the testimony you are now giving, that paragraph Cof section 2, that it was not expected, even though in the law it says that it is expected.

Mr. WASHINGTON. Section 2c is a statement of policy which should be carried out. I have no doubt that it will be carried out. But we cannot say that any particular plan is illegal, by reason of the fact that immediate savings of 25 percent are not shown.

Mr. CHURCH. That is not the question, and you know it. I have read it.

an over-all reduction of at least 25 percent in the administrative costs of the agency or agencies affected

We are going to get rid of some of them, but there is a failure here to live up to that section, to the effect that abolitions under this act shall accomplish an over-all reduction of at least 25 percent in the administrative costs of the agency or agencies so affected.

Mr. WASHINGTON. It is my recollection, Mr. Congressman, that at one stage in the consideration of this bill there was discussed a proposal to make it a legal requirement that each plan provide for a definite saving. Instead, we have a provision here which must be interpreted as allowing the President a field of discretion, so that he would not be required to establish that each of these plans would, within the sphere that they covered, accomplish a 25 percent reduction. I think that the legislative history will bear me out on that.

Mr. CHURCH. You are satisfied, then, that the way these three plans are prepared, that they do meet the requirements of your testimony here that it will not save 25 percent as expected, and that they do not have to. As attorneys, you have taken care of words to that affect in these three plans, and you have not in any way, definitely, by word at least, made certain that section 2c would be complied with. That is the substance of my conclusion of your testimony and of the testimony yesterday, and I am ready as one member to move that unless and until we receive that kind of testimony that substantiates and carries out section 2c, that we be able to pass these three resolutions, H. R. 151, 154, and 155, so that you will, as a legal department, have a chance to bring to us your legal opinion that section 2c is complied with.

Mr. WASHINGTON. May I point out this fact, also; the objectives of the Reorganization Act of 1945 are not limited to the obtaining of a reduction in expenditures. There are many other objectives.

Mr. CHURCH. We know that. That is very evident and we know that, but the other is there, is it not? That is a requirement, is it not? Mr. WASHINGTON. That is an expectation which the entire program should accomplish. However, Congress has not put it in terms of legality, though Congress could.

Mr. CHURCH. That is the opinion that you have given, and we get these three plans as the result of it apparently. Now let me ask you this, as a lawyer: If these other three documents, H. R. 151, 154, and