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President's plan. He uses a different nomenclature, but it comes to the same thing. And then the Commission recommended that Senatorial confirmation of all officials except the Postmaster General and the Director of Posts should be abolished. That the Civil Service System should be adjusted to that Department to make it a system of open examinations on merit, with proper regard to local selection of employees. That there be an entire revolution in the whole business methods of the Post Office. That there be a requirement that the Postmaster General should fix rates on subsidiary mail services (not the class services) so they would be self-supporting. And finally, that the Postmaster General should report the actual amount of subsidies for air and overseas mail, and that Congress should authorize the amounts in order to bring out into the open the drains on the postal service.

Those were four additional items in the Post Office reorganization beyond that which may be accomplished under this Presidential authority. The important part of Post Office reorganization must be accomplished by special legislation.

Senator MUNDT. I was thinking primarily about the problem of personnel. It seems to me that if we eliminate the Senatorial confirmation of postmasters, placing it entirely in the hands of the Postmaster General, we either then have a very good postal service or a very bad postal service, depending entirely upon the type of Postmaster General who is selected, and his willingness or ability to avoid political appointments. Would that not be correct?

Mr. HOOVER. The concept of the civil service is the employment of persons by open competitive examination and their selection by merit. If that were carried out faithfully, and the law is clear on that subject, it could be a good service and it could not be made political by the Postmaster General.

Senator MUNDT. It is your thought, then, that the Postmaster General would select the postmaster candidates who qualified under civil service examination and be bound to make the selections on that basis?

Mr. HoovER. I assume that you would have an examination for postmaster in a given area, and the person who received the highest marks would get the appointment. There should be some provision in the legislation that would localize these appointments because the people ought to belong to their communities. But it should not exclude promotions.

:Senator MUNDT. I mean in theory that is what is done now, of course. They hold an examination. The postmaster is selected from among the three highest ranking members. If it happens that the candidate of the party in power does not qualify, they appoint an acting postmaster and hold a second examination, and if he does not qualify they hold a third examination.

I want to find out how we can get the thing working effectively to get able and talented postmesters devoid of politics. I agree thoroughly with the objectives that you seek.

Mr. HOOVER. Senator, I was the author of that idea of three civilservice selections. The idea was that we would have examinations conducted by the civil service, and that the top three men would be eligible. The only enforcement was that the President could refuse to send up any other name to the Senate than among the three. It turned out, I think, in practice, that the political party in power always had one among the three, or selected someone else. It did have the effect of improving the quality of many postmasters, but certainly never eliminated the political phase.

Senator Mundt. In connection with-presuming this reorganization plan is carried out-in connection with the present postmasters who now serve, they would be subject to the same classifications and examinations then on reappointment, would they, as a new candidate, or would they be given some preference, a preferential status?

Mr. HOOVER. I presume that if you are setting up a complete civil service of the Post Office, they would need to stand examination for reappointment.

Senator MUNDT. Do you feel that our postal interests would be better served if there were more generally a promotion within the postal service from a local situation, a man having served perhaps as assistant postmaster or a window clerk, moving up to the postmastership, rather than have him brought in from the outside, as has been done in the past?

Mr. Hoover. We have here a great service institution where there is no profit incentive. The only incentive among employees is promotion. The political appointment of a certain stratum of important employees creates a dam against promotion of subordinate people who have qualified. Our thought was that by such means we could build up that sense of loyalty to the service and reward of promotion to those qualified, which would add to the efficiency of the service very greatly.

It is difficult to translate such proposals into dollars.

Senator MUNDT. But your objective, then, is, as I understand it, definitely to encourage the promotion of postmasters from within the ranks of the postal servants, who have been there for a period of years?

Mr. HOOVER. I should think that the result would be to promote persons to the postmasterships. It would, of course, be necessary under the legislation to provide for promotion of persons who qualified originally and showed capacity and seniority.

Senator Mundt. I agree with you.

Mr. HOOVER. But I would let an office boy in Podunk rise to postmaster in Chicago if he was an outstanding genius. I would not create a frozen dam that prevents his movement upward.

Senator MUNDT. Thank you very much.

Senator SMITH. According to my mail, we feel that the public is very much interested in the Hoover recommendations, and in the results they hope to get. Whether it is for the sake of economy or efficiency is not wholly known, but it is encouraging, I think, Mr. Hoover, and I believe you agree with me, that the public is taking enough interest in this to have their wishes known here among us who are handling these reports.

As a member of the subcommittee assigned to Reorganization Plan No. 6, I should like to ask you several questions, if I may.

Under section 1 of the reorganization plan, the United States Maritime Commission, the Chairman will be the chief executive and administrative officer. Is this in accord with the Hoover Commission recommendations for other commisions of the Government?

Mr. HOOVER. We recommended that there be a chief executive of the business administration in very much the same terms as the Chairman is constituted in the President's plan. Our recommendation was that the business side should be moved into the Department of Commerce, and not left in the Maritime Commission.

Senator Smith. Section 2 gives broad administrative authority to the Chairman with respect to hiring and firing, and so forth, reorganization or distribution of business among personnel, and organization units, and the control of funds for administrative purposes.

It seems to me that this will make the Chairman virtually a dictator with respect to the internal operations of the Commission. So far as the administration of the Commission is concerned, do you believe these functions should be vested in the Chairman?

Mr. HOOVER. We certainly recommended that all employees be placed under civil service merit requirements. I do not approve of the business of shipping being in the Commission at all. The Maritime Commission is a regulatory body. We have the astonishing situation today of a regulatory body regulating itself in connection with rates. What is more, a regulatory agency has been, by common consent, considered to be outside of the executive arm of the Government. Thus the President has no authority over the administration. The business or commercial operations of the Maritime Commission are certainly an executive function, and ought to be moved into the executive departments under the President of the United States.

Those are the reasons that moved us to recommend that these functions should be placed in the Department of Commerce. The President has chosen to make the first step of establishing some singleheaded authority to carry on its business activities, and that is a step to the good. My comment extends to the recommendation of our Commission that the service be put under a single executive and transferred to the Department of Commerce.

Senator Smith. And until we go all the way, we cannot hope for the efficiency and economy that we want from the Maritime Commission.

Mr. HOOVER. That is true. The problem involves the setting up of a transportation division in the Department of Commerce, where all transportation functions could be affiliated. I might tell you that a ship captain coming into New York City has to pass through 14 Government bureaus before he can get in, and he has to pass through 14 bureaus before he gets out. We were attempting to set up all the marine functions, so far as possible, in one place so as to minimize this enormous burden that it places on the industry.

That all involves the business operations of the Maritime Commission. The President has taken the first and simplest step of trying to get some business efficiency in that Commission. That is step No. 1.

As I have said, we would go further and put that business organization in the Department of Commerce.

Senator Smith. It could be streamlined somewhat. The ship entries and departures could be streamlined somewhat, then, if it went under Commerce, under the regular part.

Mr. Hoover. That part of maritime administration would then be associated with the other maritime activities of the Government, of which there are a great many. We propose that they all be brought together from the different departments.

Senator SMITH. That is all.

Senator SCHOEPPEL. I am interested in your suggestion on plan No. 5 relating to the civil service. You say here that again it is a very limited step, and the President's power can hardly make a dent in this question.

Would you care to elaborate on some suggestion, say one, two, three propositions that we ought to consider in order to be helpful in this respect?

Mr. HOOVER. That is in regard to the civil service?
Senator SCHOEPPEL. Yes, that is right, sir.

Mr. HOOVER. The President's plan again sets up an improved administrative situation by placing the administrative functions of the Commission in the hands of its Chairman. That is one of the great weaknesses in the Commission. On the other hand, the problem of personnel reorganization goes into the very roots of the civil service. There must be a revision of the methods of the entry, dismissal, promotion, grading, and several other matters. The civil service today is defeated by a maze of special laws and regulations controlling Government service which needs to be disentangled and revised. It was the belief of the task force which worked on personnel questions for a year that it would be possible to conduct the work of the Government with 200,000 less employees if the service be completely reorganized.

That reform is entirely beyond the powers of the President under the Reorganization Act of 1949. I am not criticizing his taking the first step of centralizing the administrative responsibilities of the Commission in the Chairman. It is a good, but small, step.

Senator SCHOEPPEL. That is all.

The CHAIRMAN. Senator Smith, you are a member of another subcommittee on reorganization planning. Did you wish to ask any questions regarding that?

Senator Smith. Unless you are going to, Mr. Chairman.

The CHAIRMAN. I should be happy to defer to you and have you ask the questions.

Senator SMITH. Thank you.

Mr. President, I am interested in the difference between the National Security Council and the National Security Resources Board. Am I right in understanding that the purpose of the National Security Council is policy formulation for meeting problems of national security and the purpose of the National Security Resources Board is to work out administrative and other aspects of the solutions to those security problems?

Mr. HOOVER. That is true.

Senator SMITH. Is it necessary to have both? Could we abolish the Board?

Mr. HOOVER. I think the problems are quite distinct. The National Security Council is really a national defense council with a large military representation, and involves agencies of the Government that are not necessarily interested in the mostly civilian questions, such as natural resources and manpower. If we were to consolidate them with this present membership we would have a tremendously large committee. It would, in my view, not function in these separate fields with the same ease with which they could at present. These are not expensive agencies, they are mostly existing officials engaged in coordination.

Senator Smith. It is not so much a matter of economy as burdening the President's office with one more responsibility. And I have wondered if we were not doing too much of that; expecting too much of the President of the United States.

Mr. Hoover. These are practically Cabinet committees and I do not think they add to his burdens. These boards are now rated as independent agencies, yet the President has the same responsibility as he would have if they were placed directly on the White House staff. We had recommended, which again goes into other fields, the creation of a special Secretary in the President's office who would coordinate the work of these different committee agencies and see they carry on their work. That, of course, is not done under this plan, and I do not believe could be done under the President's authority. There have been certain administrative difficulties in these commissions, and our recommendations in these particulars are somewhat parallel to that which the President has proposed.

Senator O'CONOR. Mr. Chairman, 'may I ask just one other question?

The CHAIRMAN. Senator O'Conor. Senator O'CONOR. In view of the questions that have been asked, Mr. Hoover, may I just go back once more to one particular phase of the plan having to do with the Public Roads Administration, the general transportation question.

In the report on Federal business enterprises, I think your Commission recommended the liquidation of certain of the corporations; for example, the Inland Waterways Corporation. Is that not correct, Mr. Hoover?

Mr. HOOVER. That is true. We followed the recommendations of I think, two or three congressional committees, and the Secretary of Commerce, and several others in that connection.

Senator O'CONOR. The point I wanted to make, there, is this. I want to ask you whether this might be confirmed: that there are certain activities, possibly, within the Department of Commerce relating to the transportation problem which actually ought to be abolished rather than extended. Do you not think so?

Mr. HOOVER. It was our recommendation that that one should be liquidated.

Senator O'CONOR. Exactly. In other words, while I felt I knew that that was your attitude, it was my thought that it would be well to point out the fact that we are not assuming that everything that is now in operation ought to be carried on indefinitely.

Mr. HOOVER. No.

Senator O'CONOR. Just one further question, if I might: In the act to which reference has been made, the Federal Property and Administrative Services Act, the Congress coordinated certain transportation functions within the General Services Administration relating to the transportation of Federal goods.

The point that I should like to have some enlightenment on from you is: In view of this development, could it not be just as well argued that although this is essentially a services activitiy, the services performed for the Department of the Interior and other agencies in the

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