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CONTENTS

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Message from the President of the United States transmitting 21 plans

(H. Doc. 503)--

Message from the President of the United States transmitting Reorgani-

zation Plan No. 21 of 1950 (H. Doc. 526).

Reorganization Plan No. 21 of 1950_.

Senate Resolution 265.--

Statement of-

Anderson, A. G., vice president, National Industrial Traffic League_-.

Assenheimer, Emmett, representing Southern Traffic League, South-

west Industrial Traffic League, and Texas Traffic League_.

Brewster, Hon. Owen, a United States Senator from the State of

Maine.

Conn, Donald, executive vice president, Transportation Association

of America -

Fleming, Philip B., Chairman, United States Maritime Commission.-
Idol, Edgar, representing American Trucking Association --

Kadans, Joseph, representing Baltimore chapter, Interstate Commerce

Commission Practitioners --

Lawton, Frederick J., Director, Bureau of the Budget-

Lea, Clarence F., representing Transportation Association of

America -

Macleay, Bachlan, representing Mississippi Valley Association.-

McCormick, Robert L. L., research director, Citizens Committee for

the Hoover Report-

Mellen, Grenville, Vice Chairman, United States Maritime Com-

mission

Miller, C. A., vice president and general counsel, American Short Line

Railroad Association_

Morrow, Giles, executive secretary, Freight Forwarders Institute---

O'Connor, John J., representing Isbrandtsen Co., Inc., New York, N. Y--

Ramspeck, Robert, executive vice president, Air Transport Associa-

tion of America---

Sanford, H. R., president, Shipbuilders Council of America ----
Sawyer, Hon. Charles, Secretary of Commerce_--
Souby, James M., general solicitor, Association of American Rail-

roads_-

Thompson, Chester C., president, American Waterways Operators,

Inc.

Woodward, Thomas M., Washington, D. C-----

Zeis, Paul M., chief, Transportation Division, Department of Com-

128

96
37

82

155

146

Letters, statements, memorandums, etc., submitted for the record by-

Arnold, Grant, manager, transportation bureau, Detroit Board of

Commerce, statement-
Colgan, R. A., Jr., executive vice president, National Lumber Manu-

facturers Association, letter to Hon. John L. McClellan, May 8,

1950..
Fleming, Philip B., Chairman, United States Maritime Commission,

signed also by Grenville Mellen, Vice Chairman ; Joseph K. Carson,
Jr., Commissioner; and David J. Coddaire, Commissioner, letter to

Dr. John R. Steelman, Assistant to the President, February 9, 1950_-

Grimm, Karl J., acting secretary, Baltimore chapter, Association of

Interstate Commerce Commission Practitioners, letter to Mr. Walter

L. Reynolds, chief clerk, May 8, 1950, with resolution -

61

Letters, statements, memorandums, etc.—Continued

Haddock, Hoyt S., executive secretary, CIO Maritime Committee, let- Page.

ter to Hon. John L. McClellan, May 8, 1950, with copy of letter to

President Truman, May 4, 1950_-

145

Herndon, I. M., manager, transportation department, Board of Trade

of the City of Chicago, letter to Hon. John L. McClellan, May 8,
1950, including a letter to Hon. Scott W. Lucas --

153

Hupper, Roscoe H., representing Burlingham, Veeder, Clark & Hupper,

New York City, statement-

150

Johnson, Robert L., chairman, Citizens' Committee for the Hoover Re-
port, letter to Robert L. McCormick, May 4, 1950 (exhibit A)-

89
Lea, Clarence F., representing Transportation Association of America,

letter to Hon. John L. McClellan, May 10, 1950, with statement of
Herschel A. Hollopeter, on behalf of Indiana State Chamber of Com-
merce_

147

Magnuson, Hon. Warren G., a United States Senator from the State of

Washington:

Letter to Hon. John L. McClellan, May 11, 1950, including state-

ment-

156

Letter to Hon. Charles Sawyer, Secretary of Commerce, April

5, 1950__

158

May, Capt. C. F., president, National Organization Masters, Mates, and

Pilots of America, letter to Hon. John L. McClellan, May 5, 1950,

with statement.--

144

McClellan, Hon. John L., a United States Senator from the State of

Arkansas, statement, in re opposition of Philip B. Fleming, Chair-

man, Maritime Commission, July 8, 1949_

67

McKeough, Raymond S., Commissioner, United States Maritime Com-

mission, staff digest of his memorandum to Dr. John R. Steelman,

February 10, 1950.-

118

Miles, Clarence R.,. representing Chamber of Commerce of the United

States of America, letter to Hon. John L. McClellan, May 9, 1950--- 154

Morrow, Giles, executive secretary and general counsel, Freight For-

warders Institute, statement----

126

Sawyer, Charles, Secretary of Commerce, letter to Hon. John L.

McClellan :

Government's maritime function when located in the Depart-

ment of Commerce, May 9, 1950.-

52

Federal Maritime Board and the Secretary of Commerce, May
11, 1950

56

Also letter to Hon. Warren G. Magnuson, April 14, 1950_.

158

Shriver, Glenn K., professional staff member, approved by Walter L.
Reynolds, staff director :

Staff Memorandum No. 81-2_44, in re Reorganization Plan No.
21, 1950, March 28, 1950-

11
Staff Memorandum No. 81-2-57, supplemental to Staff Memo-
randum No. 81–2–44, May 5, 1950_.

14
Taylor, Walter E., general Manager, Fruit Industries, Ltd., Wine Insti-
tute, letter to Hon. John L. McClellan, May 10, 1950_-

146

REORGANIZATION PLAN NO. 21 OF 1950

MONDAY, MAY 8, 1950

UNITED STATES SENATE, COMMITTEE ON EXPENDITURES IN THE EXECUTIVE DEPARTMENTS,

Washington, D. C. The committee met, pursuant to call, at 10:15 a. m., in room 357, Senate Office Building, Senator John L. McClellan (chairman) presiding

Present: Senators McClellan, Hoey, OʻConor, Humphrey, Smith, Schoeppel, and Benton.

Also present: Senator Owen Brewster and Walter L. Reynolds, chief clerk of the committee.

The CHAIRMAN. The committee will come to order.

We have scheduled this morning hearings on Senate Resolution 265 by Senator Brewster, in opposition to Reorganization Plan No. 21. At this point in the record I wish to insert a message from the President transmitting on March 13, 1950, 21 plans for reorganization of agencies of the executive branch of the Government, a message transmitting plan No. 21, the plan itself, followed by the resolution to which I have referred.

Also to be inserted in the record are two memorandums by the staff of this committee analyzing Reorganization Plan No. 21. (The documents referred to are as follows:)

[H. Doc. No. 503, 81st Cong., 2d sess.)

MESSAGE FROM THE PRESIDENT OF THE UNITED STATES TRANSMITTING TO THE

CONGRESS 21 PLANS FOR REORGANIZATION OF AGENCIES OF THE EXECUTIVE BRANCH, PREPARED UNDER THE AUTHORITY OF THE REORGANIZATION ACT OF 1949

To the Congress of the United States :

I am today transmitting to the Congress 21 plans for reorganization of agencies of the executive branch. These plans have been prepared under the authority of the Reorganization Act of 1949. Each is accompanied by the message required in that act.

Our ability to make such comprehensive recommendations is due in large part to the outstanding work of the Commission on Organization of the Executive Branch of the Government. The plans which I am transmitting are all designed either to put into effect specific recommendations of the Commission or to apply principles set forth by the Commission in its reports.

When these plans become effective, we shall have acted on almost half the proposals ma'le by the Commission on Organization. I expect to transmit additional plans for putting into effect other recommendations of the Commission later in the present session of Congress.

The 21 plans I am transmitting today are designed to accomplish the following purposes :

Plans 1 to 6 transfer to the heads of six departments the functions and powers now conferred by law on subordinate officials. The six Departments affected are Treasury, Justice, Interior, Agriculture, Commerce, and Labor.

1

Plans 7–13 fix responsibility for the day-to-day administration of seven regulatory boards and commissions in the chairmen of these bodies rather than in the members collectively. The agencies affected are the Interstate Commerce Commission, Federal Trade Commission, Federal Power Commission, Securities and Exchange Commission, Federal Communications Commission, National Labor Relations Board, and Civil Aeronautics Board.

Plans 14 and 19 transfer two functions to the Department of Labor from other Government agencies.

Plans 15–18 and 20 transfer certain functions to and from the General Services Administration in order to round out the organizational pattern of this agency, which was created last year.

Plan 21 transfers the functions of the Maritime Commission to the Department of Commerce, where they are reconstituted in a Federal Maritime Board and a Maritime Administrator.

The first 13 plans all have the same objective: To establish clear and direct lines of authority and responsibility for the management of the executive branch. The heads of departments and the chairmen of regulatory bodies will be made clearly responsible for the effectiveness and economy of governmental administration and will be given corresponding authority, so that the public, the Congress, and the President may hold them accountable for results in terms both of accomplishments and of cost.

The Commission on Organization placed great stress upon the establishment of clear lines of authority and responsibility. This was, in fact, the very first of its recommendations. The opening three paragraphs on the first page of its initial report reads as follows:

"In this part of its report the Commission on Organization of the Executive Branch of the Government deals with the essentials of effective organization of the executive branch. Without these essentials, all other steps are doomed to failure.

"The President, and under him his chief lieutenants, the department heads, must be held responsible and accountable to the people and the Congress for the conduct of the executive branch.

Responsibility and accountability are impossible without authority—the power to direct. The exercise of authority is impossible without a clear line of command from the top to the bottom, and a return line of responsibility and accountability from the bottom to the top."

Again, in its report on regulatory agencies, the Commission made the centering of administrative responsibility its first recommendation, writing as follows:

“Administration by a plural executive is universally regarded as inefficient. This has proved to be true in connection with these commissions We recommend that all administrative responsibility be vested in the chairman of the commission."

Through these plans, authority placed by law in subordinate officials is transferred to the heads of the six departments. In the case of the State and Post Office Departments, comparable authority was placed in the Department heads by legislation and reorganization action effected last year.

Another feature of the departmental plans is the establishment of Administrative Assistant Secretaries in each of these six Departments. These positions are established in order to provide top-level assistance to each department head in the heavy managerial responsibilities of his office. They are set up within the classified civil service for the purposes both of achieving continuity in office and of obtaining persons with the greatest experience in the specialized functions of management.

In regard to the regulatory agencies, the plans distinguish between two groups of functions necessary to the conduct of these agencies. One group includes the substantive aspects of regulation—that is, the determination of policies, the formulation and issuance of rules, and the adjudication of cases. All these functions are left in the board or commission as a whole. The other group of functions comprises the day-to-day direction and internal administration of the complex staff organiaztions which the commissions require. These responsibilities are transferred to the chairman of the agencies, to be discharged in accordance with policies which the commissions may establish. The chairman is to be designated in each agency by the President from among the commission members.

In plan No. 12 unified responsibility is once more established in the National Labor Relations Board by transferring to the Board and its Chairman the functions of the general counsel and by abolishing the statutory office of the general

counsel. This plan will bring to an end the confusion which has resulted from divided responsibility.

The changes embodied in the first 13 plans are fundamental to the sustained drive we have undertaken to increase effective and economical management of the executive branch. Only by placing in the heads of departments and agencies the authority necessary to direct and supervise the machinery of the executive branch can the maximum benefit be attained from the reorganization and reassignment of the functions which make up that branch.

The eight remaining plans propose reassignment of certain functions. They will take us further toward the goal of grouping the prograins of the Government in the smallest practicable number of departments and agencies organized according to major purpose.

Transfer of the functions of the Maritime Commission to the Department of Commerce through plan No. 21 will mark a long step forward in the integration of the many governmental programs affecting transportation. This step, again, is in accord with the recommendations of the Commission on Organization of the Executive Branch.

For more than a decade the Department has been in the process of becoming the major transportation agency of the Government. The establishment of the Civil Aeronautics Administration within the Department was the first major move in this direction. The transfer of the Weather Bureau to the Department was based in large part on that Bureau's importance to transportation. One of the reorganization plans which I transmitted to the Congress last year transferred the Bureau of Public Roads to the Department. Now, with the addition of the functions of the Maritime Commission, the Department will have jurisdiction over the major portion of the operating aspects of the programs of the Government relating to air, highway, and water transportation, as well as over the development and coordination of policies affecting the Nation's transportation system as a whole.

Plan No. 21 establishes in the Department of Commerce a three-man Federal Martime Board and a Maritime Administration under a Maritime Administrator. The award of subsidies and all regulatory functions are transferred from the present Maritime Commission to the new Board. The remaining functions of the Maritime Commission, involving ship construction and other administrative operations, are transferred to the Department of Commerce for execution through the Maritime Administration.

The plan also provides for appointment of an Under Secretary of Commerce for Transportation, who will assist the Secretary in the direction and coordination of the transportation activities now centered in the Department.

In plans Nos. 14 and 19 the Department of Labor is given two new functions: the Bureau of Employees' Compensation, transferred from the Federal Security Agency; and the responsibility for coordination of the enforcement of wagesand-hours legislation affecting Federal or federally financed contracts. These two steps will further strengthen the Denartment of Labor as the center of responsibility for governmental programs which protect the welfare of emplovees. This is the same essential purpose that underlay the transfer last year of the Bureau of Employment Security to the Department.

The remaining five plans represent a logical evolution of the responsibilities of the new General Services Administration. Two of these plans (18 and 20) transfer additional service responsibilities to the General Services Administration; and the other three (15–17) remove from it various inappropriate functions it received from the recently abolished Federal Works Agency.

In plan No. 18 the Administrator of General Services is given expander authority over the acquisition and control of Federal office space, particularly outside the District of Columbia. He is also assigned the responsibility by plan No. 20 for the preservation and publication of certain public documents, such as laws and territorial papers, now handled by the Department of State, but unrelaten to the foreign affairs mission of the Department.

Plans 15-17 transfer from the Administration six programs relating to public works, community facilities, and school aid. Alaska and Virgin Islands publicworks functions are transferred hv plan No. 15 to the Denartment of the Interior; assistance to school districts overburdened by Federal activities and certain water-pollution-control functions are assigned by plan No. 16 to the Federal Security Agency; and advance planning of non-Federal nublic works and the management and disposal of war public works are transferred to the Housing and Home Finance Agency by plan No, 17.

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