Secretary SAWYER. It does not, as I understand it, change in any way, as I said at the close of my statement, the mandate which we have from Congress as to how the merchant marine is to be handled.

It does, of course, put in the Secretary of Commerce certain administrative powers, and to that extent perhaps you might say it takes away from the present Commission those powers.

Senator HUMPHREY. What I want to get clear for the record, in view of Senator Brewster's questioning of Mr. Lawton, is simply this: Whether or not a reorganization plan, particularly this one, Reorganization Plan No. 21, which will permit the Secretary of Commerce to set down general policy as pertains to subsidy, can alter the final decision of the Maritime Administration in administering the public law that pertains to subsidy.

Secretary SAWYER. My opinion is that it cannot.

Senator HUMPHREY. I think that is very important, because the inference was left, it seems to me, that somehow or other the Secretary of Commerce under this reorganization plan is permitted to have what I would call the policy prerogatives for outlining the Presidential program. That does not, however, as I understand your remarks, permit the Secretary of Commerce to override the ultimate and final decision or the ultimate independence of the Maritime Commission as pertains to subsidy; is that your view?

Secretary SAWYER. He not only cannot override them, he cannot direct them in the first place. It seems to me the Senator from Maryland raised a proper point a while ago in questioning Mr. Lawton and that is just how this thing would work. I assume what would happen would be that the Secretary of Commerce and the Commission would talk over general questions of policy and if I personally were the Secretary at the time, I would certainly ask the advice of this group that was supposed to know more about it than any other group, as to what the general policy decisions would be, and the only point at which I as Secretary of Commerce would go further than that group for advice would be when dealing with matters such as national defense, which were mentioned a while ago.

Senator HUMPHREY. In view of your remarks, then, if the Board is not required under these regulatory and subsidy provisions to follow the policies of the Secretary of Commerce-I used the words "not required"-what coordination then or centralized control would the President or the Secretary have?

Secretary SAWYER. Well, I think the fear that is implied in that question, Senator, applies to many, many fields. I think we must assume that the policies would be followed. I see no reason to think they would not be. Of course, the President appoints this group. I suppose if they continually departed from the policy which we laid down, they would not get reappointed, but I know of no other way he could prevent some departure from his policies.

Senator HUMPHREY. Just this: I am very much concerned about the matter of political responsibility when it come to matters of subsidy. There has been so much talk about subsidy and what it is doing in this country and how it is undermining the moral fiber of our people and all these other things, I wonder whether or not it is your viewor let me put it this way: What is your view? Do you believe an elected polit ial such as the President of the United States

ought to have something to say about policy matters as they pertain to subsidies?

Secretary SAWYER. I think that the President should have, under the direction which he would get from Congress, power to administer the congressional policy on subsidies. I think the policy would be originally fixed by Congress. I am not trying to avoid answering your question.

Senator HUMPHREY. I think this is a fundamental problem in government. You see, I have never been one of those who felt we ought to have people scot free, administering subsidies.

Secretary SAWYER. Your question is whether or not elected officials should have the final word with reference to subsidies. My answer is "yes," but, of course, Members of Congress are elected, just as the President is.

I think one of the fundamental benefits of this plan is that it eliminates or at least it changes somewhat the authority of what is properly regarded as an independent agency, and I am completely in accord with that objective of the Hoover group, to put the organizational and operational responsibilities and lines of authority through cabinet officials or at least through a smaller number of people who report directly to the President.

Senator HUMPHREY. I imagine that this is an unfair question, but I cannot refuse to ask it.

Secretary SAWYER. It would not be unfair.

Senator HUMPHREY. Perhaps improper. I am quite concerned about the fact when I notice a large number of people with the railroad industry vitally concerned about the shipping industry. I have all kinds of transportation bulletins of recent date. Every time I talk about the St. Lawrence waterway I notice friends in the railway industry becoming excited. I see unity of purposes. Do you wish to make a comment on that?

Secretary SAWYER. No, I think I will withhold comment.

Senator HUMPHREY. I make it by inference then.

Senator O'CONOR. Have you had occasion to familiarize yourself with the experience in the Department when these particular functions were within the Department of Commerce?

Secretary SAWYER. No, I have not, Senator.

Senator O'CONOR. The word is to the effect that it did not operate so satisfactorily, as a result of which Congress set up the independent agency. You are not prepared to indicate

Secretary SAWYER. I do not feel I can comment with any authority on that activity or why it was not a success or why the change was made.

Senator O'CONOR. Mr. Secretary, coming back again to what may be the inconsistency, if there is one, which is the basis for some fears as to whether in the administration of their functions the Board would be subject to-I do think you make a distinction between "subject to" and "guided by"-and I rather gather you do not think they should be subject to the authority of the Secretary; is that right?

Secretary SAWYER. I do not think they are subject to the Secretary's authority, if "subject to" that means they must do what he orders. Senator O'CONOR. Very true. Do you think as a practical matter that the Board at one time of day would be operating under the guidance of the Secretary inthe handling of certain problems and then at

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another part of the day have independent authority which they would exercise without any thought of the Secretary's wishes or preferences in the matter?

Secretary SAWYER. I heard you ask a similar question of Mr. Lawton. My answer is, to put the question that you put, which I referred to a while ago, how a thing like this will operate from a common-sense standpoint. In view of the fact that the regulatory functions of the Commission are completely and without any argument free from any assistance or direction or guidance or anything else by the Secretary, I do not think that the question would ever arise in the minds of the Commission.

As a matter of fact, the chances are the question would not arise very frequently in their deliberations with reference to subsidies, because for the most part they would be dealing with whether or not this particular subsidy should be granted. I do not think any change of character or act would really prove to be an important matter at all. Senator O'CONOR. While you mentioned that, of course, you personally have allowed wide latitude to the operation of bureaus— and very commendably-do you think there is any danger that a Secretary some time in the future who would not be so disposed might impose such restrictions as to affect adversely the merchant marine? Secretary SAWYER. There is always a danger, Senator, that you may get a bad egg, either in administrative or elected officials, but I would say the danger is not one that needs to worry us.

Senator O'CONOR. You think there are sufficient safeguards in the appeal to the Chief Executive?

Secretary SAWYER. I think so.

Senator O'CONOR. One last topic. There has been a great deal of difference of opinion, if I might so express it, regarding the policy affecting the transfers to foreign registry of American-owned ships and the operation by American citizens of ships under foreign flag, subsidized companies included.

For example, our committee which has been giving attention to these matters, was quite concerned over the announcement by the Standard Oil Co. of the transfer of some 10 vessels, bringing the aggregate to some 80 or 90 being operated under foreign flag.

Do you think that the new Board as it would be constituted under this plan would have the authority to pass upon that question or to permit or to refuse to permit the transfers with or without approval from the Secretary?

That is to say, whether they would act independently of the Secretary.

Secretary SAWYER. I do not know. Maybe Dr. Zeis would know. Mr. ZEIS. I am not certain.

Secretary SAWYER. I will say in my opinion that is a very serious question. I encountered during the trip I took last winter over the country continued complaint and concern about that transfer, so that it is a very important matter and I should say without any doubt that the Board would consider it and also probably the Secretary of Com

merce.

Senator O'CONOR. I was wondering whether, anticipating the Board might be subject to or be guided by the Secretary's views, you had any individual views on the matter.

Secretary SAWYER. Not at the moment. It is an important subject and would take a lot of study, but I think it is deserving of study and something perhaps should be done.

Senator O'CONOR. Thank you, sir.

The CHAIRMAN. Senator Benton?

Senator BENTON. Mr. Secretary, I congratulate you on this excellent statement.

It seems that your oral testimony contradicts your written state

ment.

Secretary SAWYER. Consistency is not always a jewel in public officials.

Senator BENTON. It may become the key jewel in this particular diadem.

Secretary SAWYER. I appreciate your complimentary description of my paper.

Senator BENTON. You first write that the Commission will be subject to the general policies, then you correct in pencil to say that they will be guided by the general policies, and then you testify that the Secretary of Commerce will have no authority over these policies whatso

ever.

Secretary SAWYER. No; I didn't

Senator BENTON. Except by moral suasion or indirection, if I understood your testimony. It seems to me that your oral testimony runs counter to the objective of the Hoover Commission on its many recommendations in many areas of the Government, where we are trying to fix responsibility on a responsible executive where we can see it. And it seems to me to run counter to Mr. Lawton's testimony and, indeed, to your own written document. I would assume from listening to this same problem discussed on many other of these reorganization proposals that a key objective here is exactly as stated in your written presentation: To secure fixed responsibility where it can be seen and pinned down on a responsible officer of the President's Cabinet to wit, the Secretary of Commerce.

If there is difference of opinion among you and your staff and the Bureau of the Budget, I think this question is so important that further thought should be given to it and further written statement prepared on it. I do not like to see you in your oral testimony seemingly, to me at least, contradicting the purposes and objectives of the Hoover Commission and, indeed, those of your written statement. (The letter referred to will be found on p. 56.)

Secretary SAWYER. Well, Senator, I certainly appreciate your concern over my inconsistency, but as far as my supporting the recommendations of the Hoover Commission, at the moment that is not a matter of interest to me. What I am trying to do is explain to your committee my interpretation of the particular plan which has been presented to the Congress.

Now, you called attention to the fact that I had suggested a change from my written text.

Senator BENTON. I do not object to the change at all.

Secretary SAWYER. The change is essential, in my judgment, because the word "guided"-

Senator BENTON. I merely mention your explanation of your change.

Secretary SAWYER. I undertook to answer the Senator's question as to what I believe is meant when it said "they shall be guided by the Secretary of Commerce."

Senator BENTON. Did I understand you to say they are not called upon to follow the general policies as established by the Secretary of Commerce?

Secretary SAWYER. I said that I thought they probably would be but that there was no way in which the Secretary of Commerce could force them to do so. That is what I intended to say. I do not think there is anything inconsistent between that and the written statement. At least, I did not intend to be inconsistent.

Senator BENTON. It does not seem to me that they would, in fact, be guided by these general policies.

Secretary SAWYER. That is an argument as to what you mean by the word "guided." I think if policies were laid down, the chances are they would follow them, but if they did not follow them, I do not think the Secretary of Commerce could force them to do so legally. Senator BENTON. Who has authority to discharge the Chairman of the Commission?

Secretary SAWYER. I doubt if anyone does after he is appointed by the President. I assume he stays there until his term runs out unless he is impeached.

Senator BREWSTER. You should read the Humphrey case.

Senator HUMPHREY. No relative of mine.

Senator BREWSTER. If he is an administrator, he can be fired. If it is regulatory, he cannot. What kind of an animal he is is important. He is sort of a hybrid.

Senator BENTON. If you have any further contributions to make to clarify this point, it would be of interest to me and perhaps to other members of the committee. I had assumed that one of the objectives of this change and shift to the Department of Commerce was to subject the Maritime Commission to general policies as outlined by the Secretary of Commerce, and, indeed, to correlate it with the Defense Department, as you ably pointed out, and as I tried to bring out in my questions a little earlier to Senator Brewster, correlate it with the very tough problems of the Civil Aeronautics Administration. Do you have authority over the Chairman of the Civil Aeronautics Board?

Secretary SAWYER. The situation would be just the same here, as I understand it.

Senator BENTON. There is no reason for his being guided by your general policies?

Secretary SAWYER. No; the Board is within the Department of Commerce, but I do not undertake-well, it is not exactly the same, either. It is not the same. I am sorry. I do not undertake to guide

the CAB.

Senator BENTON. Why should there be a difference between shipping and aeronautics? Why should you have the power to guide the Chairman of the Civil Aeronautics Board but not the power to guide the Chairman of the Maritime Commission?

I

Secretary SAWYER. It is just the other way. I do not know. would not undertake to reconcile that inconsistency. As a matter of theory, I supr ere is no reason.