leaders. In many cases, changes which are essential cannot attract the necessary legislative attention in competition with the many other matters pressing for congressional action. On the other hand, the reorganization plan affords a method by which action can be initiated and the proposal considered with a minimum consumption of legislative time.

The reorganization-plan procedure is a tested and proven means of dealing with organization problems. Twice within the last 10 years the Congress has authorized this method of reorganization for short periods. Under each of those authorizations many changes were made which added to the efficiency of the executive branch and tended to simplify its administration. The advances made during the brief life of the Reorganization Acts of 1939 and 1945 clearly indicate the desirability of permanent reorganization legislation.

Second, the new reorganization act should be comprehensive in scope; no agency or function of the executive branch should be exempted from its operation. Such exemptions prevent the President and the Congress from deriving the full benefit of the reorganization-plan procedure, primarily by precluding action on major organizational problems. A seemingly limited exemption may in fact render an entire needed reorganization affecting numerous agencies and functions wholly impractical. The proper protection against the possibility of unwise reorganization lies, not in the statutory exemption from the reorganization-plan procedure, but in the authority of Congress to reject any such plan by simple majority vote of both Houses.

Finally, let me urge early enactment. Under the reorganization procedure, reorganization plans must lie before the Congress for 60 calendar days of continuous session in order to become effective. Unless the necessary legislation is adopted in the early weeks of the session, it obviously will be impossible to make effective use of the reorganization procedure during the present session.

The proper execution of the laws demands a simple, workable method of making organizational adjustments. Without it the efficiency of the Government is impaired and the President is handicapped in performing his functions as Chief Executive. In my judgment permanent legislation to restore the reorganizationplan procedure is an essential step toward efficient and economical conduct of the public's business.

THE WHITE HOUSE, January 17, 1949.

HARRY S. TRUMAN.

[H. Doc. 37, 81st Cong., 1st sess.]

FILING OF REPORT BY COMMISSION ON ORGANIZATION OF THE EXECUTIVE BRANCH OF THE GOVERNMENT

The Honorable SAM RAYBURN,

COMMISSION ON ORGANIZATION OF THE
EXECUTIVE BRANCH OF THE GOVERNMENT,
Washington 25, D. C., January 13, 1949.

Speaker of the House of Representatives.

MY DEAR MR. SPEAKER: The necessity for reorganization of the executive branch of the Government was clearly recognized by the Congress when it created this Commission in July 1947, with the full approval of the President. Congress assigned the Commission the duty of examination and recommendation under the following statement from the act creating the Commission :

"It is hereby declared to be the policy of Congress to promote economy, efficiency, and improved service in the transaction of the public business in the departments, bureaus, agencies boards, commissions, offices, independent establishments, and instrumentalities of the executive branch of the Government by

"(1) limiting expenditures to the lowest amount consistent with the efficient performance of essential services, activities, and functions; "(2) eliminating duplication and overlapping of services, activities, and functions;

"(3) consolidating services, activities, and functions of a similar nature; "(4) abolishing services, activities, and functions not necessary to the efficient conduct of government; and

"(5) defining and limiting executive functions, services, and activities." This concern of Congress for economy and efficiency reflects the overwhelming interest of every thoughtful citizen and taxpayer in the land.

The writing and adoption of the Federal Constitution proved that a republic could deliberately analyze its political institutions and redesign its government to meet the demands of the future. The broad pattern that America then selected is sound. Today we must deal with the infinitely more complicated government of the twentieth century. In doing so, we must reorganize the executive branch to give it the simplicity of structure, the unity of purpose, and the clear line of executive authority that was originally intended under the Constitution.

As a result of depression, war, new needs for defense, and our greater responsibilities in the foreign field, the Federal Government has become the most gigantic business on earth. In less than 20 years the number of its civil employees has risen from 570,000 to over 2,100,000. The number of bureaus, sections, services, and units has increased fourfold to over 1,800. Annual expenditures have increased from about $3,600,000,000 to over $42,000,000,000. The national debt per average family has increased from about $500 to about $7,500. Such rapid growth could not take place without causing serious problems. Organizational methods, effective 20 years ago, are no longer applicable. The growth of skills and methods in private organization has long since outmoded many of the methods of the Government.

This Commission has found that the United States is paying heavily for a lack of order, a lack of clear lines of authority and responsibility, and a lack of effective organization in the executive branch. It has found that great improvements can be made in the effectiveness with which the Government can serve the people if its organization and administration is overhauled.

This Commission has been engaged in its task for the last 16 months and is reaching its conclusions only after the most painstaking research. We decided at an early date that we must have the aid of leading and experienced citizens to assist us in making findings of fact and recommendation of remedies. The Commission therefore, divided its work into functional and departmental segments; it created 24 "task forces" with authority to engage such research aid as they might require. About 300 outstanding men and women, expert and experienced in the fields to which they were assigned, have now submitted to us their findings and recommendations. Thanks are due them. They brought great talent and diligence to their work. Their findings will be found useful by the Congress and the executive branch in solution of the problems considered.

Some of the recommendations contained in the volumes of our report which we plan to file from time to time between now and the expiration of the life of the Commission, can be put into effect only by legislation. Others can be accomplished by executive action. But many of the most important can probably be accomplished only if the Congress reenacts and broadens the power to initiate reorganization plans which it had previously granted to the President under an act which expired on March 31, 1948.

The Commission recommends that such authority should be given to the President and that the power of the President to prepare and transmit plans of reorganization to the Congress should not be restricted by limitations or exemptions. Once the limiting and exempting process is begun it will end the possibility of achieving really substantial results.

But, in saying this, the Commission should not be understood as giving sweeping endorsement to any and all reorganization plans. It does believe that the safeguard against unwise reorganization plans lies both in a sound exercise of the President's discretion and in the reserved power in the Congress by concurrent resolution to disapprove any proposed plan.

Limitations or exemptions upon this power to reorganize should not be imposed other than that of congressional disapproval. They have arisen in the past chiefly in connection with the regulatory commissions. In one of its reports the Commission will discuss these regulatory commissions in detail. It will point out in each case those regulatory functions which it is believed should continue to be performed independently. The Commisson will also point out certain other functions which are of a different nature and which can be more efficiently and economically performed by purely executive officials. The inclusion in a reorganization act of provisions exempting certain agencies from its terms would prevent changes which are in accord with established principles in this field and which in no way impair the maintenance of independence and impartiality in the exercise of the great regulatory functions.

Similarly, the inclusion of general language, like that contained in section 5 (a) (6) of the Reorganization Act of 1945,1 intended to prevent the submission of any plan which imposes limitations upon the independent exercise of “quasi legislative" or "quasi judicial" functions, would, in the Commission's judgment, be unwise. The phrases are extremely vague and of uncertain meaning. Ingenious and plausible arguments can be made to apply them to a wide range of functions which should clearly be subject to reorganization procedure. Such arguments would not be matters of purely theoretical concern or legislative debates, for the validity of reorganization could be made the subject of protracted litigation by private interests resisting the acts of a reorganized agency on the ground that it was illegally constituted. It might take several years of litigation to lay down interpretations of these general phrases and even then, uncertainty would remain.

The Commission, in accordance with the act of Congress creating it, as amended, will file its report in a series of parts or volumes, the last of which will be delivered within 70 days of the organization of the Eighty-first Congress. These reports will contain its findings and recommendations. They will begin with the top organization and structure of the executive branch and proceed through the services which are common to the whole executive branch to the reorganizations recommended for particular agencies and groups of agencies.

Yours faithfully,

HERBERT HOOVER, Chairman.

The CHAIRMAN. We have called to appear before us as our first witness Mr. Frederick J. Lawton, Assistant Director of the Bureau of the Budget.

STATEMENT OF FREDERICK J. LAWTON, ASSISTANT DIRECTOR, BUREAU OF THE BUDGET

Mr. LAWTON. Mr. Chairman and gentlemen of the committee, I have reviewed the bill, H. R. 1569, introduced by your chairman, which provides for the reorganization of Government agencies and am in thorough accord with the measure.

The bill restores the reorganization plan procedure authorized by the Reorganization Acts of 1939 and 1945. As you know, this procedure provides a simplified method for revising the organization of the Government through the cooperation of the President and the Congress. Under it the President may submit to the Congress plans for the reorganization of agencies and functions of the executive branch, which become effective after 60 days unless rejected by majority vote of the two Houses. Title II of the bill, which is exactly the same as in the 1945 act, assures prompt consideration and an opportunity to bring the plan to a vote within the 60-day period. Thus, the procedure enables the Chief Executive, who has the immediate responsibility for effective administration, to initiate improvements in organization subject to review and rejection by the Congress.

I should like to discuss, first, the reasons for enacting a new reorganization law and then the principal respects in which this bill differs from the 1945 act.

1"SEC. 5. (a) No reorganization plan shall provide for, and no reorganization under this Act shall the effect of- * * (6) imposing, in connection with the exercise of

any quasi-judicial or quasi-legislative function possessed by an independent agency, any greater limitation upon the exercise of independent judgment and discretion, to the full extent authorized by law, in the carrying out of such function, than existed with respect to the exercise of such function by the agency in which it was vested prior to the taking effect of such reorganization; except that this prohibition shall not prevent the abolition of any such function;

*

WHY A REORGANIZATION ACT IS ESSENTIAL

The basic reason for this bill is the present and continuing necessity for reorganization in the executive branch. In spite of the many improvements in structure effected since the adoption of the Reorganization Act of 1939, there are still too many separate agencies reporting directly to the President and subject to supervision only by the President and the Executive Office. At present there are no fewer than 54 such agencies. Furthermore, functions often are scattered or misplaced in the administrative structure, thus creating difficult problems of coordination and interfering with efficient administration.

But it would be a mistake to suppose that permanently effective organization of the executive branch could be achieved by a single, sweeping rearrangement of agencies and functions, even if it were possible to accomplish such a change. The reorganization of the Government is not a one-time undertaking. As the President said in his message requesting new reorganization legislation: "Government is a dynamic institution. Its administrative structure cannot be static." The Congress constantly imposes new duties on the executive branch and modifies old ones as national needs demand. With these changes in program must go changes in organization if the work of the Government is to be efficiently performed. A simple, workable reorganization procedure is indispensable for keeping the administrative machine manageable and properly geared for the work assigned to it.

This fact has been amply demonstrated by the events of the last 20 years. The depression brought a whole new set of Federal problems and activities and a sudden growth of executive agencies. The Reorganization Act of 1939 and the plans submitted under it went a long way toward straightening out the existing tangled structure of the Government.

But immediately there came the defense program and then the war and with them an unprecedented expansion of Government organization and business. Under the special authority conferred by the First. War Powers Act, the President was able to adjust the organization of the Government to the changing requirements of war. With the aid of this authority and the Reorganization Act of 1945, one of the purposes of which was an orderly transition from war to peace, the war agencies were rapidly demobilized and significant improvements were made in the permanent structure of the executive branch.

Following the cessation of hostilities, a new set of international problems and changes in domestic programs began to develop. With them have come new agencies and new organizational requirements. In short, continuous change is a characteristic of twentieth century American Government. Reorganization legislation, therefore, is required both to cope with the results of years of rapid piecemeal growth of Government agencies and to adjust the organization of the executive branch to the year-to-year changes in program and in the conditions under which programs must be administered.

A second reason for reinstituting the reorganization plan procedure arises from the impracticability of dealing with many of the organizational problems of the executive branch by the regular legislative process. This has been widely recognized by congressional leaders. In fact, in reporting the bill which became the Reorganization Act of 1945, your committee stated:

* * *

One method by which the need for reorganization might be met is the enactment of a series of acts of Congress. The method has not proved workable, however, on any substantial scale.

Then, after reviewing the various alternative methods tried up to that time, the committee said:

All things considered, however, there can scarcely be doubt that the best of the above-discussed means for bringing about executive reorganization was the method embodied in the Reorganization Act of 1939.

While some notable improvements in organization have been made by legislation, few of the needed changes can command the popular interest and attention required to obtain enactment in competition with the hundreds of other matters before the Congress.

On the other hand, experience demonstrates that the reorganization plan procedure embodied in the Reorganization Acts of 1939 and 1945 does produce results. During the 4 years that these measures were operative, more than 120 changes in organization were made under this procedure. Twenty-four independent agencies were eliminated either by transfer to an executive department or major agency or by abolition. Ten bureaus were consolidated. Three major Government agencies were created, namely, the Federal Security Agency, the Federal Works Agency, and the Housing and Home Finance Agency. Each of these brought together a considerable array of related agencies which had previously been widely scattered throughout the Government. One of these, the Federal Security Agency, provided the consolidation of social welfare functions which had long been recommended.

Further, the Department of the Interior was converted from a catchall for unrelated agencies to a department for the conservation and development of natural resources. The Department of Agriculture was rounded out by the transfer to it of the Commodity Credit Corporation, the Farm Credit Administration, and the Rural Electrification Administration. Many functions and units which had been conspicuous misfits in their old locations were shifted to appropriate places in the executive structure. It would not be too much to say that more was accomplished to improve the basic organization of the executive branch in 4 years under these acts than had been achieved in the previous generation by other means.

Finally, the restoration of the reorganization plan procedure will be essential to the effectuation of many of the recommendations of the Commission on Organization of the Executive Branch of the Government. This Commission has made an intensive study of the administration of the Government, and has recommended the enactment of legislation authorizing the President to prepare and transmit reorganization plans in accordance with the procedure provided by the 1945 act. In a letter of January 13 to the presiding officers of the two Houses presenting this recommendation, the Chairman, former