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. Unless 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:]

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 madeWith special reference to (3),

continuing any agency beyond the period authorized by law for its existencewhat 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, coordinations, and abolitions under this Act shall accomplish an over-all reduction of at least 25 per centum in the administrative costs of the agency or agencies affected.

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 GOVERNMENT 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 says 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 efficiency 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 reorgan

ization 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 executive 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?

Mr. RILEY. I am not, but I have studied law and the statements I am making here have been supplied 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 suggest 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. I am sure, no such machinery.

The CHAIRMAN. Do you mean in the existing case?

They do have,

Mr. RILEY. I am sure you will find this, that if, at any time, an appellant decides that he has new evidence which would support his claim, the Board will go into it again, but that is in the nature of a continuing operating, and in any sense, not receiving appeals from its own decisions.

As I get it, it has no appeals machinery today, and when you have appeals machinery, you are acquiring a new type of operation, which has not and did not at the time on the 15th of May exist when this was dated.

Mr. CHURCH. Your Commission is the same Commission where you have new hearings and where you receive new evidence.

Mr. RILEY. The only appeals machinery we have today, that I know of, and I have observed agencies working in the Government for a long time, if you find that the Commission is not conformed to law, that is the only recourse that I know of, and I understand you can go into a court with that as your premise, but that still would not change the facts in the case.

If the law has not been complied with, that is the only appeal that you have..

The court does not appear to be a Board of Appeals, in my estimation.

Mr. BARDEN. Is that not the normal course of procedure?

Mr. RILEY. That is right.

Mr. BARDEN. You try a case before a jury, the jury decides to the facts. You appeal to the Supreme Court and the Court passes upon the question of law involved, and does not offer to give another look at the facts.

I am not familiar with it, but if you have that set-up now, is that not all you would ask for?

Mr. RILEY. Yes, sir. Over some twenty-or-thirty-odd years, that seemed to be the only indicated means that there was.

Mr. BARDEN. Then there is no criticism of the present set-up? Mr. RILEY. There is none whatever. It is operating to a full degree and it is satisfactory. I know of no complaints.

Mr. BARDEN. I misunderstood you. I thought you were registering a criticism because there was none.

Mr. RILEY. You probably will have this thrown up to you shortly, the abolition of the Civil Service Commission. That was proposed in 1937 and it is just as good today as it was then.

The Civil Service Commission has a Board of Appeals and Review. If you will put that in the Labor Department, or if you put it in any other set-up, an Advisory Manpower Commission, or whatever you want to call it, and you said you wanted to have a Board of Appeals and Review, that would not be constituting a new function, because today you have a Board of Appeals and Review in the Commission itself, but you have nothing of that nature, and nothing by which the Administrator can appoint a board of appeals in a Compensation Commission today.

Those persons, as you know, in bipartisan commissions, are appointed by the President of the United States, by and with the consent of the Senate and not by Mr. McNutt or any other person who may at that time head up the FSA or the Department of Public Welfare.