fair and cooperative in the future as they were during the war with the members of your organization?

Mr. EVANS. They, as a military organization, would be very objectionable to a civilian service such as the merchant marine. The merchant marine has been civilian ever since its institution back in the early days of our Nation. All of the personnel of the merchant marine are civilians and have been civilians at all times during the whole period. In each of the wars that this Nation has been engaged in the merchant marine has served with high honor, and they have served as civilians.

Mr. WHITTINGTON. What are the functions of the Coast Guard in peace now that would prevent their being as fair to your organization as they were in war, even admitting that they are a military organization, as you say?

Mr. EVANS. One of the most objectionable things would be that they would prevent a man coming in from the ranks. I speak now as ;a licensed officer on a ship. Under civilian service the service has been manned throughout by officers from the ships; in other words, ;all of the Inspection Service and in most instances even the director of the Service came from the merchant marine as a ships officer. They therefore, were very efficient and knew the ship from stem to stern.

Mr. WHITTINGTON. Was that policy reversed during the war?

Mr. EVANS. It was in that no man from the ranks was allowed to come into the Inspection Service as a civilian. That I have over the signature of the commander of the Coast Guard.

Mr. WHITTINGTON. Do you have that regulation with you?

Mr. EVANS. Yes.

Mr. WHITTINGTON. What is the date of it?

Mr. EVANS. July 1945.

Mr. WHITTINGTON. You have been under the supervision of the Coast Guard since 1942?

Mr. EVANS. Yes.

Mr. WHITTINGTON. That regulation was made in 1945?

Mr. EVANS. Prior to the issuance of this regulation there had been only a very, very few men who were allowed to take the examination. All of the personnel of the Bureau of Marine Inspection and Navigation were under the civil service and naturally had to take a civil-service examination and went in on a competitive basis. Under the Coast Guard a man went in not on what he knew but on whom he knew, and he came in there regardless of whether he was qualified or not. In many instances a man would come in with a high rank as a Coast Guard officer who knew nothing, practically nothing, about a ship and ship inspection, boilers or other equipment on a ship. We had many complaints from officers of the ships because of the lack of knowledge of the inspectors that came aboard to make an inspection of the ship. When we called it to the attention of those in charge they said, "What can we do, this is the type of men we are given? We cannot do anything else." Now, those men are not qualified for the job yet. They have a commission in the Coast Guard and are given that position to fill while men with proper qualifications are barred through the regulations of a military service. Now, the Coast Guard has made no pretense whatever of continuing this service under civil service. They have, however, stated very clearly in their policy that a civilian would

only come in through the Coast Guard Academy and through commission instead of by appointment.

The Bureau of Marine Inspection, as I stated before, has been civilian all the way down. It has been under the Department of Commerce since the Department of Commerce was instituted in 1903, but it is over 100 years old itself. It was 100 years old in 1938. Therefore, it was organized in 1838. From that time down there has been no occasion previously for any military service. During the war we manned nearly three times as many ships as we ever did in peacetime, and they were manned with civilians. No one man was drafted into the service. They were all volunteers.

How did they go into the merchant marine? They did not want to go in under military service in the Army or Navy, and yet in the merchant marine service there were just as great hazards as there were any place else, and in many respects more so, and a greater number of men, proportionately, lost their lives in the merchant marine than in any other branch of the service.

Mr. WHITTINGTON. There was a good job done during the war while you were under the Coast Guard?

Mr. EVANS. We have no complaint with that whatever. Possibly it cost 25 percent more than it would have cost under civilian service. During wartime we naturally fitted ourselves into it, but now in peacetime we feel that there is no reason whatever why the Coast Guard should continue to control the men and the ships of the merchant marine.

Mr. WHITTINGTON. Is there not now a pretty close connection between the Coast Guard and the merchant marine? Does not the Coast Guard render a service to the merchant marine?

Mr. EVANS. Are you speaking of during the war?

Mr. WHITTINGTON. I am speaking of peace as well as of war.

Mr. EVANS. During peacetime the Coast Guard has only a very limited service in connection with the merchant marine. They had only the ice patrols.

Mr. WHITTINGTON. Who does the Coast Guard work and rescue work in the event of trouble?

Mr. EVANS. They have the so-called life-saving stations along the coast, which they have had for many years.

Mr. WHITTINGTON. They are of benefit to the merchant marine? Mr. EVANS. Yes, but they were instituted in sailing ship days, in the first place, when it was quite a regular thing for a ship to go on a beach along our coast, but nowadays you very seldom hear of a crew having to be rescued by our live-saving stations.

Mr. WHITTINGTON. You may enlarge your remarks, if you like, and extend them.

Mr. CHURCH. You speak of being civilian for 100 years, and then you speak of being under the Coast Guard.

Mr. EVANS. Yes.

Mr. CHURCH. We are familiar with the Coast Guard's jurisdiction. What territory do you operate in?

Mr. EVANS. We are the merchant marine that operate in foreign trade as well as in domestic trade.

Mr. CHURCH. You go beyond what is the Coast Guard's jurisdiction. Explain that in your own way.

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Mr. EVANS. I speak of the Coast Guard's jurisdiction in peacetime. It has been enlarged because of the war. Prior to the war, as far as they ever went was the ice-patrol service, which was usually up around the Grand Banks of Newfoundland. Our merchant marine goes into all ports of the world; not only in the American ports, but we are out of reach entirely of the services of the Coast Guard and have to depend upon the services of other nations.

Mr. CHURCH. You go as far as the merchant marine or Maritime Commission would go?

Mr. EVANS. The Maritime Commission covers the merchant marine. They are in control of the merchant marine.

Mr. CHURCH. You contend that is beyond the usual activities of the Coast Guard?

Mr. EVANS. Yes.

Mr. CHURCH. The Coast Guard today going under Treasury.
Mr. EVANS. Yes.

Mr. CHURCH. Does that make a difference?

Mr. EVANS. We feel that it would make quite a difference.

Mr. CHURCH. In a way, Treasury is more civilian.

Mr. EVANS. Yes; but the Department of Commerce is where we feel it should be, where it has been all the while, and we being in commerce, foreign commerce, and being civilians, feel that is the proper place for it to remain. We feel that it should be returned to the Department of Commerce and there remain as long as we need that service.

Mr. CHURCH. Was there any supervisory control prior to the time that the Department of Commerce was established?

Mr. EVANS. Yes; it was known as the Steamboat Inspection Service and was a civilian service. I am not sure what department it was attached to. I know that it was instituted, as I said before, in 1838, and the Department of Commerce was not instituted until 1903. Í am not in a position to say where it was attached before then.

Mr. CHURCH. It has always been connected with the work of the merchant marine.

Mr. EVANS. Always.

Mr. CHURCH. Does it extend in any way beyond the merchant marine?

Mr. EVANS. All the inland services on navigable waters of the United States are under the same service, and that is naturally a part of the merchant marine as well.

Mr. WHITTINGTON. The committee will stand adjourned until 10 o'clock tomorrow morning.

(Whereupon, the committee adjourned until 10 o'clock, June 12,

1946.)

Hon. CARTER MANASCO,

NATIONAL HOUSING AGENCY, Washington, D. C., June 13, 1946.

Chairman, Committee on Expenditures in the Executive

Departments, House of Representatives, Washington, D. C. DEAR CONGRESSMAN MANASCO: I have been following with interest the testimony of various witnesses before the Committee on Expenditures in the Executive Departments, relating to the President's Reorganization Plan No. 1, dealing with a permanent National Housing Agency. While you will recognize that the responsibility for making recommendations to the Congress on reorganization matters rests entirely with the President, I feel justified in calling to the attention of the committee, of which you are chairman, a few facts bearing upon what has been said at these hearings.

First, it has been said at these hearings that the reorganization law gives the President no power to make the temporary National Housing Agency permanent, because of the prohibition against extending functions beyond the term provided by the Congress. Reorganization Plan No. 1, dealing with housing, was prepared in the office of the President and not by this agency; also, the President receives legal advice from the Attorney General, and not from this agency. Nonetheless, I think it proper for me to bring before you certain relevant facts. Reorganization Plan No. 1, as I see it, does not make any temporary agency permanent, nor does it extend any substantive functions beyond the term prescribed by the Congress. It merely consolidates a variety of existing housing units and functions under a single supervising entity called the National Housing Agency. The functions consolidated within such National Housing Agency by this plan include some permanent functions, such as the insurance of mortgages by the Federal Housing Administration, which will remain in being unless and until the Congress repeals or modifies the National Housing Act. Also, some temporary functions, such as the provision of temporary housing for veterans, is also placed within such National Housing Agency, but these temporary functions will expire when their respective statutory limits have run. Some of the witnesses at the hearings have referred to the fact that in 1942, by Executive Order 9070, President Roosevelt effectuated a consolidation of certain housing agencies and functions under the First War Powers Act, under the supervision of a National Housing Agency. This consolidation was necessarily temporary, because under the terms of the First War Powers Act it would have a fixed expiration date. But, certainly, there is nothing in the present reorganization law which prohibits President Truman from undertaking a permanent reorganization dealing with a certain subject (in this case, housing) matter simply because President Roosevelt dealt with the same subject matter under the First War Powers Act. Nor is there anything in the reorganization law which requires that President Truman defer such action on his part until the duration of what was done by President Roosevelt under the First War Powers Act has expired. Nor does the fact that Reorganization Plan No. 1 use as the same name, National Housing Agency, for the supervising entity which was used in connection with another reorganization more than 4 years ago violate any provision of law. Clearly, President Truman could have used another name in the current plan and that would not have changed its legal significance.

Second, it has been said by some of the witnesses at the hearings that the submission by the President of plan No. 1 for housing reorganization constitutes an indirect or devious method of "rushing through" this reorganization without appropriate study or notice. I cannot see how such a statement has any justification, since the plan has been submitted strictly in accord with the reorganization law which authorizes the President to do exactly what he did, and subject to the provision of the law that the plan becomes effective only if the Congress has not expressed disapproval of it within 60 days of the time of its submission. Certainly, the mere fact that a bill has passed the Senate and is pending in the House which would accomplish much the same purpose does not detract from the powers of the President under the reorganization law to submit reorganization plans to the Congress.

Third, most of the witnesses who have appeared in opposition to the reorganization plan for housing have based most of their testimony upon a disapproval of public housing. The President's reorganization plan for housing does not deal with the public housing program or expand it in any way, directly or indirectly. True, the plan places the Federal Public Housing Authority within the National Housing Agency, but the FPHA, which is a new name for the United States Housing Authority, is already a permanent agency under the United States Housing Act of 1937. No public housing beyond that already authorized by statute can be built without specific authorization by the Congress after processing by the appropriate committees having jurisdiction over this subject and after bills for this purpose have been passed by the Congress as a whole. So it seems clear to me that criticism of public housing is entirely irrelevant to Reorganization Plan No. 1.

Fourth, the argument has been made by the opponents of the reorganization plan that a single national housing agency with an administrator at the head thereof would lead to overemphasis upon public housing to the detriment of private enterprise. This argument neglects the fact, which I have already stated, that only the Congress can determine from time to time the amounts of Federal aid for public housing, just as only the Congress can determine the amounts of mortgage insurance authorized under the FHA system. The only

effect of placing the various housing organizations under the supervision of one National Housing Administrator will be to facilitate the task of the Congress in getting a complete picture of all the housing activities of the Government, which in turn will facilitate wise decisions by the Congress as to how much of the various types of Federal aids are required and desirable from time to time. Moreover, the veterans' emergency housing program, which I recommended and the President approved in February, completely refutes any claim that the National Housing Administrator would tip the scales improperly in favor of public housing. This veterans' program which, as you know, will be about all of the housing built between now and the end of 1947, consists of 2,500,000 units of housing to be built by private enterprises and only 200,000 units of publicly financed utilization of the temporary war housing store.

Fifth, the argument has been made that there has been no showing of savings to be accomplished under the proposed housing reorganization. It should be remembered, in this connection, that the housing reorganization which was accomplished in 1942 (to which I have referred) resulted in substantial savings. The pending plan, by preventing the housing agencies from falling apart again, would prevent the dissipation of these economies.

Sixth, there is a wealth of experience to justify the organization plan for housing which the President has proposed. Before the temporary housing unification of 1942, there were from 16 to 20 separate identifiable units of the Federal Government engaged in housing activities. The confusion and cross-purposes which resulted were known to every person who came to Washington to transact housing business. They were known to every mayor in every community throughout the country who was harassed by the multiplicity of housing agencies and their emissaries. They were known to businessmen and home-financing and homebuilding institutions, most of whom as of that time were urging that the Federal Government gets its housing activities in better order. Above all, they were known to the Congress, where the sentiment for the simplification and unification of the Government's housing activities was very strong, and where the temporary reorganizaion of 1942 met with almost universal approval.

Seventh, there is general agreement that the difficult war housing job was accomplished much more effectively through the unification of 1942; and I can certainly testify with all the force at my command that it would be literally impossible to conduct the veterans' housing program if the previous condition of scattered and disconnected housing activities were to be restored. As a student of efficient government and good business management, it has always struck me as curious that everybody is in principle for cutting down the proliferation of Government agencies; but when any specific plan to cut them down is proposed, it is objected to by various groups, each of which feels that it should have a separate agency of its own to pursue its interests in the Federal structure.

Eighth, there has been a nonpartisan and impartial study by two committees of the Senate over a period of more than a year and a half, which was conducted with unparalleled intensity and comprehensiveness, and which came to the unanimous conclusion that there should be a permanent consolidation of housing activities under a national housing agency in a form practically similar to that contained in reorganization plan No. 1. The two organs of the Senate which came to this conclusion were the Senate Banking and Currency Committee, and the Housing and Urban Redevelopment Subcommittee of the Senate Postwar Committee under the chairmanship of Senator Taft. I am enclosing for your convenience the two reports reflecting the considered views of these two committees. Note especially the discussion beginning on page 14 of the report of the Senate Banking and Currency Committee; and the discussion on pages 8-13 of the report of the Subcommittee on Housing and Urban Redevelopment. Also, the seventh report of the House Special Committee on Postwar Economic Policy and Planning, issued on July 3, 1945, in its recommendations on postwar housing seems clearly to contemplate a permanent national housing agency.

Finally, in view of the statements which certain witnesses before your committee have made that constituent units embraced within the National Housing Agency, in their dealings with the servicing of private home financing, would be adversely affected by the consolidation, I want to assure you that this matter has been discussed with the commissioners of the three main constituent units proposed, who would be charged with responsibilities covering every segment of the home-building and home-financing industry. These three commissioners are in agreement that a unified National Housing Agency can be conducted under the President's Reorganization Plan No. 1, in a manner beneficial to their operations in the public interest. In substantiation of this, I am including herewith a