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in this plan, I have found that such reorganization is necessary to accomplish one or more of the purposes of section 2 (a) of the act

- (1) To facilitate orderly transition from war to peace;
(2) To reduce expenditures and promote economy;
(3) To increase efficiency;

(4) To group, coordinate, and consolidate agencies and functions according to major purposes;

(5) To reduce the number of agencies by consolidating those having similar functions 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. The plan includes certain interagency transfers and several abolitions and changes in the internal organization of the Federal Security Agency.

The plan transfers to the Federal Security Administrator the functions of the Children's Bureau, except those relating to child labor under the Fair Labor Standards Act. These child-labor functions are transferred to the Secretary of Labor in order that they may be performed by, or in close relationship with, the Wage and Hour Division which administers the rest of the act. The plan continues the Children's Bureau within the Federal Security Agency to deal with problems of child life, but is flexible enough to enable the Administrator to gear in the Bureau's programs effectively with other activities of the Agency

The child-labor program is the only permanent program of the Children's Bureau that is properly a labor function. The other four-child welfare, crip pled children, child and maternal health, and research in problems of child life-all fall within the scope of the Federal Security Agency. The transfer of the Children's Bureau will not only close a serious gap in the work of the Agency, but it will strengthen the child-care programs by bringing them into closer association with the health, welfare, and educational activities with which they are inextricably bound up.

The promotion of the education, health, welfare, and social security of the Nation is a vast cooperative undertaking of the Federal, State, and local governments. It involves numerous grant-in-aid programs and complex intergovernmental relations. The transfer of the Children's Bureau will simplify these relations and make for better cooperation.

To illustrate, State welfare departments now depend on both the Bureau of Public Assistance in the Federal Security Agency and the Children's Bureau in the Labor Department for funds for child-care activities. Similarly, State health departments obtain grants from the Public Health Service for general public health work and from the Children's Bureau for child and maternal health activities. All of these grants involve the establishment of minimum standards and a measure of Federal supervision. The transfer of the Children's Bureau programs will make it possible to develop more consistent policies and procedures and to simplify dealings with the States. This will eliminate needless inconvenience for both parties and enable the State and Federal Governments to join more efficiently in their common objective of furthering the health and welfare of the American child.

Next, the plan transfers the vital statistics functions of the Census Bureau to the Federal Security Administrator, to be performed through the Public Health Service or other facilities of the Federal Security Agency. In every State but one the State health department is in charge of vital statistics. The work in the States is partially financed from public-health grants administered by the Public Health Service. This transfer will make the agency providing the grants also responsible for carrying on the Federal part of the vital statistics program. Furthermore, it will make for a better correlation of vital statistics with morbidity statistics, which are closely connected in nature and are already handled by the Public Health Service. In addition, the Federal Security Agency, more than any other Federal agency in peacetime, depends on vital statistics and vital records in the operation of its programs.

The plan transfers the functions of the United States Employees' Compensation Commission to the Federal Security Administrator, and provides for a threemember board of appeals to hear and finally decide appeals on claims of Government employees. By abolishing the Commission, the plan eliminates a small agency and lightens the burden on the President. The Federal Security Administrator, as the head of the Federal agency with the greatest experience in insurance administration, is in the best position to guide and further the program of the Commission.

The abolition of the Commission as an administrative body and the creation of an appeals board will provide the advantages of a single official in charge of operations while affording claimants the protection of a three-member board for the final decision of appeals on claims. This arrangement has proved both administratively efficient and satisfactory to claimants in many similar programs. It is essentially the plan used in the administration of veterans' pensions and old-age and survivors insurance and employed by many States in their workmen's compensation programs. The board of appeals created by this plan will deal only with claims of Government employees since appeals on other types of claims under the jurisdiction of the Commission-(a) longshoremen and harbor workers and (b) private employees in the District of Columbiaare heard by the Federal district courts rather than the Commission.

The reorganization plan which created the Federal Security Agency in 1939 provided that the Federal Security Administrator should direct and supervise the Social Security Board, and that he might assign administrative duties to the Chairman of the Board, rather than to the Board as a whole. Thus, it took the first step toward establishing a definite line of responsibility for the administration of social security functions in the Agency. The plan I am now submitting further clarifies these lines of responsibility by providing for the normal type of internal organization used in Federal departments and agencies.

A full-time board in charge of a group of bureaus within an agency is at best an anomaly. The Social Security Board rendered an outstanding service in launching the social-security program, and its members deserve the thanks of the Nation for this achievement. That program, however, is now firmly established and its administration needs to be tied in more fully with other programs of the Federal Security Agency. The existence of a department within a department is a serious barrier to effective integration.

In order to obtain more expeditious and effective direction for the socialsecurity program and to further the development of the Federal Security Agency, this plan transfers the functions of the Social Security Board to the Federal Security Administrator and provides for not more than two new assistant heads of the Agency for the administration of the program. Because of the additional functions transferred to the Administrator by this plan, I have found that these officers will be needed to assist him in the general management of the Agency and to head the constituent unit, or units which the Administrator will have to establish for the conduct of social-security activities.

To permit a consolidation of work for the blind, the functions of the Office of Education as to the vending-stand program for the blind are transferred to the Federal Security Administrator, in whom are vested other vocational rehabilitation functions. This transfer will permit the program to be assigned to the Office of Vocational Rehabilitation, where other vocational rehabilitation activities for the blind are now concentrated.

The office of Assistant Commissioner of Education, established by the act of May 26, 1930, is abolished. A basic reorganization of the Office of Education within the past year has made this officer the head of one of the divisions of the Office. It is, therefore, administratively desirable to abolish the post of Assistant Commissioner in conformity with the present organization of the Office.

The plan also abolishes the Federal Board of Vocational Education and its functions. The Board, established by the act of February 23, 1917, as amended, formerly had charge of the administration of the vocational-education program. Section 15 of Executive Order 6166, of June 10, 1933, issued under authority of the act of June 30, 1932 (47 Stat. 413, ch. 314), as amended, transferred the administration of the program to the Office of Education and limited the Board to acting in an advisory capacity. The Advisory Committee on Education, on the basis of it study of the vocational-education system, found that the Board was no longer needed and recommended its abolition.

To avoid possible confusion and conflict of authority, the Board of Visitors of St. Elizabeths Hospital, and its functions are abolished. The functions of the Board, as provided by section 4842 of the Revised Statutes, include supervision of the institution and the adoption of its bylaws, in addition to visiting the institution and advising the superintendent. These functions overlap the responsibilities of the Federal Security Administrator for the general supervision and direction of the hospital.

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In order to enable the Administrator more adequately to coordinate the administration of the grant-in-aid programs vested by statute in the constituent units of the Federal Security Agency, the plan provides that, insofar as practicable and consistent with the applicable legislation, he shall establish uniform standards and procedures for these programs and permit States to submit a single plan of operation for related grant-in-aid programs. Most of these programs involve the establishment of certain minimum standards on fiscal, personnel, and other aspects of administration in the States. In many cases the same State agency is operating under two or more grant-in-aid programs. Much needless inconvenience and confusion can be avoided for all concerned by unifying Federal standards and combining State plans for the operation of the programs in such cases.

After careful consideration of a number of other agencies and functions I have refrained from proposing in this plan their transfer to the Federal Security Agency. Most of these involve activities which, though related to the functions of the Federal Security Agency, are incidental to the purpose of other agencies or are connected so closely with such agencies as to make transfer undesirable, A few are activities which should probably be shifted in whole or in part to the Federal Security Agency, but I believe such shifts can best be accomplished by interagency agreement or action in connection with appropriations.

The reorganization plan here presented is a second important step in building a central agency for the administration of Federal activities primarily relating to the conservation and development of human resources; but, while this step is important in itself, I believe that a third step should soon be taken. The time is a hand when that agency should be converted into an executive department.

The size and scope of the Federal Security Agency and the importance of its functions clearly call for departmental status and a permanent place in the President's Cabinet. In number of personnel and volume of expenditures the Agency exceeds several of the existing departments. Much more important, the fundamental character cf its functions-education, health, welfare, social insurance-and their significance for the future of the country demand for it the highest level of administrative leadership and a voice in the central councils of the executive branch.

Accordingly, I shall soon recommend to the Congress that legislation be promptly enacted making the Federal Security Agency an executive department, defining its basic purpose, and authorizing the President to transfer to it such units and activities as come within that definition.

The people expect the Federal Government to meet its full responsibility for the conservation and development of the human resources of the Nation in the years that lie ahead. This reorganization plan and the legislation that I shall propose will provide the broad and firm foundation required for the accomplishment of that objective.

HARRY S. TRUMAN. THE WHITE HOUSE, May 16, 1946.

REORGANIZATION PLAN NO. 2 OF 1946

Prepared by the President and transmitted to the Senate and the House of

Representatives in Congress assembled, May 16, 1946, pursuant to the provisions of the Reorganization Act of 1945, approved December 20, 1945

FEDERAL SECURITY AGENCY AND DEPARTMENT OF LABOR

SECTION 1. Children's Bureau.-(a) The Children's Bureau in the Department of Labor, exclusive of its Industrial Division, is transferred to the Federal Security Agency. All functions of the Children's Bureau and of the Chief of the Children's Bureau except those transferred by subsection (b) of this section, all functions of the Secretary of Labor under title V of the Social Security Act (49 Stat. 620, ch, 531), as amended, and all other functions of the Secretary of Labor relating to the foregoing functions are transferred to the Federal Security Administrator and shall be performed by him or under his direction and control by such officers and employees of the Federal Security Agency as he shall designate, except that the functions authorized by section 2 of the act of April 9, 1912 (37 Stat. 79, ch. 73), as amended, and such other functions of the Federal Security Agency as the Administrator may designate shall be administered, under his direction and control, through the Children's Bureau.

(b) The functions of the Children's Bureau and of the Chief of the Children's Bureau under the Fair Labor Standards Act of 1938 (52 Stat. 1060, ch. 676), as amended, are transferred to the Secretary of Labor and shall be performed under his direction and control by such officers and employees of the Department of Labor as he shall designate.

SEC. 2. Vital statistics.-The functions of the Secretary of Commerce, the Bureau of the Census, and the Director of the Bureau of the Census, with respect to vital statistics (including statistics on births, deaths, marriages, divorces, and annulments), are transferred to the Federal Security Administrator and shall be performed under his direction and control by the United States Public Health Service or by such officers and employees of the Federal Security Agency as the Administrator shall designate.

SEC. 3. United States Employees' Compensation Commission.—The functions of the United States Employees' Compensation Commission are transferred to the Federal Security Agency and shall be performed in such manner and under such rules and regulations as the Federal Security Administrator shall prescribe. Such regulations shall provide for a board of three persons to be designated or appointed by the Federal Security Administrator with authority to bear and, subject to applicable law, make final decision on appeals taken from determinations and awards with respect to claims of employees of the Federal Government or of the District of Columbia. The United States Employees' Compensation Commission is abolished.

SEC. 4. Social Security Board.—The functions of the Social Security Board in the Federal Security Agency, together with the functions of its Chairman, are transferred to the Federal Security Administrator and shall be performed by him or under his direction and control by such officers and employees of the Federal Security Agency as he shall designate. The Social Security Board is abolished.

SEC. 5. Assistant heads of Federal Security Agency.-In addition to the existing Assistant Federal Security Administrator there shall be not to exceed two assistant heads of the Federal Security Agency, each of whom shall be appointed by the Federal Security Administrator under the classified civil service, receive a salary at the rate of $10,000 per annum, and perform such duties and head such constituent unit of the Federal Security Agency as the Administrator may provide.

SEC. 6. Functions under act of. June 20, 1936, with respect to the blind.--The functions of the Office of Education and of the Commissioner of Education under the act of June 20, 1936 (49 Stat. 1559, ch. 638), are transferred to the Federal Security Administrator and shall be performed under his direction and control by such officers and employees of the Federal Security Agency as he shall designate.

SEC. 7. Assistant Commissioner of Education. The functions of the Assistant Commissioner of Education, created by the act of May 26, 1930 (46 Stat. 384, ch. 330), are transferred to the Office of Education to be performed under the direction and control of the Commissioner of Education by such officers or employees of the Office as he may designate with the approval of the Federal Security Administrator. The Office of Assistant Commissioner of Education is abolished.

SEC. 8. Federal Board for Vocational Education.The Federal Board for Vocational Education and its functions are abolished.

SEC. 9. Board of Visitors of St. Elizabeths Hospital.—The Board of Visitors of St. Elizabeths Hospital and its functions are abolished.

SEC. 10. Coordination of grant-in-aid programs.-In order to coordinate more fully the administration of grant-in-aid programs by officers and constituent units of the Federal Security Agency, the Federal Security Administrator shall establish, insofar as practicable, (á) uniform standards and procedures relating to fiscal, personnel, and the other requirements common to two or more such programs,' and (b) standards and procedures under which a State agency participating in more than one such program may submit a single plan of operation and be subject to a single Federal fiscal and administrative review of its operation.

Sec. 11. Winding up of affairs.-Suitable measures shall be taken by the Federal Security Administrator to wind up those outstanding affairs of the agencies herein abolished which are not otherwise disposed of by this plan.

SEC. 12. Transfer of personnel, property, records, and funds.-The personnel, property, records, and unexpended balances of appropriations, allocations, and other funds (available or to be made available), which the Director of the Bureau of the Budget shall determine to relate primarily to the functions transferred hereunder, are transferred to the respective agencies concerned for use in the administration of the functions so transferred, except that all of the personnel, property, records, and funds of the Industrial Division of the Children's Bureau shall be transferred to such agency or agencies of the Department of Labor as the Secretary of Labor shall designate. Any of the personnel transferred under this plan which the transferee agency shall find to be in excess of the personnel necessary for the administration of the functions transferred to such agency shall be retransferred under existing law to other positions in the Government or separated from the service.

(H. Doc. No. 596, 79th Cong., 2d sess.) MESSAGE FROM THE PRESIDENT OF THE UNITED STATES TRANS

MITTING REORGANIZATION PLAN NO. 3 OF 1946, PREPARED IN ACCORDANCE WITH THE PROVISIONS OF THE REORGANIZATION ACT OF 1945

To the Congress of the United States:

I transmit herewith Reorganization Plan No. 3 of 1946, prepared in accordance with the provisions of the Reorganization Act of 1945.

The plan contains reorganizations affecting a number of departments and establishments. Some continue on a permanent basis changes made by Executive order under authority of the First War Powers Act. A few make adjustments in the distribution of functions among agencies. The remainder deal with problems of organization within individual agencies. All are concerned with improving and simplifying particular phases of Government administration.

Each proposal is explained in more detail under the appropriate heading below.

I have found, after investigation, that each reorganization contained in the plan is necessary to accomplish one or more of the purposes set forth in section 2 (a) of the Reorganization Act of 1945.

DEPARTMENT OF THE TREASURY The functions of the Bureau of Marine Inspection and Navigation were transferred from the Department of Commerce to the Coast Guard and the Bureau of Customs in 1942 by Executive order under the First War Powers Act. This arrangement has been proved successful by the experience of the past 4 years. Part I of the reorganization plan continues the arrangement on a permanent basis.

UNITED STATES COAST GUARD

The principal functions of the Bureau of Marine Inspection and Navigation were those of the inspection of vessels and their equipment, the licensing and certificating of officers and seamen, and related functions designed to safeguard the safety of life and property at sea. Thus these functions are related to the regular activities and general purposes of the Coast Guard. The Coast Guard administered them successfully during the tremendous expansion of wartime shipping, by virtue of improvements in organization and program, many of which ought to be continued.

The plan also transfers to the Coast Guard the functions of the collectors of customs relating to the award of numbers to undocumented vessels. These functions, too, were temporarily transferred to the Coast Guard in 1942.

BUREAU OF CUSTOMS The plan transfers to the Commissioner of Customs the functions of the Bureau of Marine Inspection and Navigation and the Secretary of Commerce, relating to the documentation of vessels, measurement of vessels, administration of tonnage tax and tolls, entry and clearance of vessels and aircraft, regulation of coastwise trade and fisheries, recording of conveyances and mortgages of vessels, and protection of steerage passengers. These functions have always been performed at the ports by the customs service, although legal responsibility for their supervision was vested in the Bureau of Marine Inspection and Navigation and the Secretary of Commerce until transferred temporarily to the Commissioner of Customs under the wartime reorganization power.

The proposed transfer will permit more efficient administration by ending divided responsibility.

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