Page images

Mr. AMBERG. Let me finish briefly, Mr. Chairman, on the Hoover Commission.

On the Treasury Department in the Hoover Commission report, Mr. Lawton said yesterday that this plan didn't go as far as the Hoover plan. This plan has no similarity to the Hoover plan as to the Treasury Department. The Hoover plan was going to take three bureaus out of the Treasury and put three more agencies in the Treasury. All that plan does, the one before us now, is to transfer the powers of the Comptroller and these other agencies to the Secretary of the Treasury. In its recommendations they say: "In our first report we urged that good departmental administration requires the Secretary to have authority." That is administration, gentlemen. I don't think that you can properly in any way tab the Comptroller of the Currency or identify him as an administrative officer. În no sense is he an administrative officer. He is a quasi-judicial officer.

In the actual plan submitted by the Hoover Commission in regard to the Treasury Department, they did refer to the Comptroller of the Currency and they were transferring his functions to an Assistant Secretary to be created to have banking and international finance under his control. But that Assistant Secretary was to be one of the top functionaries of the Treasury's office and sit on the staff of nine recommended by the Commission.

The Hoover plan, to the extent that it may have influenced in some way the powers of the Comptroller by transferring his functions to an assistant secretary, nevertheless recognized independent status here again by making that Assistant Secretary one of the top nine officers of the new staff they propose.

I thank you, gentlemen.

The CHAIRMAN. Thank you very much.

I might say the committee has permission to continue after the convening of the Senate, and we do have one other witness here whom I think the committee will be glad to hear. If the committee members will agree to stay, we will proceed to hear him.

Mr. ROBERT L. MCCORMICK. Mr. McCormick, do you have a prepared statement?

Mr. McCORMICK. No, sir; I have not. I will speak extemporaneously.

The CHAIRMAN. You may proceed and identify yourself to the reporter.


Mr. MCCORMICK. I am Robert L. L. McCormick. I am research director of the Citizens Committee for the Hoover Report. Prior to that, I was assistant to former President Hoover on the Hoover Commission.

It offers little pleasure to me to appear today in complete opposition to the views of the American Bankers Association, because, thoughout the country, the bankers have been extremely cooperative in furthering the work of the Citizens Committee.

In our view, plan No. 1 fully accords with the Hoover Commission's recommendation for a clear line of authority as stated in its Report on General Management, and it follows specific proposals in the

Commission's report on the Treasury Department. In our view, there is no question about the matter.

The Commission found that the second greatest weakness in the executive branch was that the line of command and supervision from the President down through his department heads to every employee and the line of responsibility from each employee of the executive branch up to the President has been weakened or actually broken in many ways.

That line of responsibility still exists in constitutional theory, but has been worn away by administrative practices, by political pressures, and by detailed statutory provisions, of which the case under issue is one in point.

The Commission recommended that each department head should have authority over his own department. Recommendation No. 14 in the Report on General Management said:

Under the President, the heads of departments must hold full responsibility for the conduct of their departments. There must be a clear line of authority reaching down through every step of the organization, and no subordinate should have authority independent from that of his superior.

In recommendation 18 on general management it said:

Each department head should receive from the Congress administrative authority to organize his department and to place him in control of its administration.

This same theme is picked up in the case of the Treasury report, where the Commission says:

In our first report we urged that good departmental administration requires that the Secretary have authority from Congress to organize and control his organization and that independent authority should not be granted directly to subordinates.

In our view, the revised statutes definitely give authority to the President to direct any official in charge of one of the 1,812 bureaus of the executive branch. The President now has the authority, but it is our view that, as the Hoover Commission stated, unless these bureaus are laid cheek by jowl in large departments and in large agencies, the Government becomes virtually unmanageable.

We are particularly concerned in the case of plan No. 1: First, because it closely conforms with the Hoover report. Second, because it is the first plan. It would be unfortunate were the first plan to be knocked out as the result of the pressure from those concerned with one out of the 1,812 bureaus in the Federal Government.

In spite of the widespread support that the bankers have given our organization, we regret to see that their attitude appears to be that of "everyone but me." Fears of "the darkness which lies ahead" are fears which, if translated into the case of every other bureau of Government, could well make the Government even more unmanageable than it is today. The Congress would be creating a most unfortunate precedent were it to turn down this plan. This could open the door in the cases of the other plans.

In the case of the Justice Department plan there is a movement to put in a resolution against that plan, the same for Interior, the same for Agriculture, the same for Commerce. A disapproval resolution is already in for Labor. Also on the independent regulatory commissions there are strong movements for disapproval afoot. We feel if

this plan is turned down, the entire reorganization program of the President might well be wrecked.

Therefore, we would like to go on record strongly in favor of Plan No. 1 and to state that we will support that plan throughout the country.

That is all I had to say, sir.

The CHAIRMAN. Any questions?

Senator BENTON. I congratulate the witness on his testimony for the citizens committee.

The CHAIRMAN. I merely want to ask you one question. Because of the mere fact that Congress might disagree with the Hoover Commission recommendation, assuming the Hoover Commission so recommended, and it might disagree with the plan which the President has sent out, why do you say this would wreck the whole program?

Mr. McCORMICK. Because we think we have been under pressure on some 15 of these plans, from groups that say that they are opposed to one plan, but are in favor of every other proposal. We feel that if this plan is turned down, it might well open the door to the particular groups which are strongly in favor of turning down the other specific plans.

The CHAIRMAN. Do you think that turning down plan No. 1 in 1949 wrecked the program?

Mr. MCCORMICK. No, sir; it did not in that case. But here we have a wide variety of plans and these first six plans appear to be completely in accord with the Hoover Commission. Such conformance was not true in the case of plan 1 of last year. these plans should go through.

We feel that

The CHAIRMAN. May I ask you one other question: I am not speaking for the Congress, but assume that the constitutional majority of the Senate should feel that it wants to make certain that the Comptroller of the Currency remains in its present independent status, then would you feel the Congress was justified in rejecting the plan as submitted so that it may go back to the President and he might revise the plan and resubmit it with that one exception in it?

Mr. MCCORMICK. Sir, first of all I would certainly feel that that would be possible, but I don't think that the Comptroller is independent. I think that his independence is a fiction. It is very clear from the statute which Senator Benton read that the Comptroller's Office is in the Treasury Department. The Secretary of the Treasury now has the responsibility for appointing and promoting the staff, including the Deputy Comptrollers. I don't think the Office is independent. I don't think that any department, agency, or bureau of the executive branch can be independent of the President. The Constitution doesn't mention the Comptroller of the Currency. It doesn't mention any departments. The Constitution is very clear. It says that "the executive power shall be vested in a President of the United States of America. * * * He shall take care that the laws be faithfully executed."

Presumably he can tell the Comptroller to do anything he wants the Comptroller to do, and, provided it is within the law, the Comptroller has to do it. So I think that he is now completely under the authority of the President. The President, I think, could fire him any minute he wanted to. What we are doing is saying that 1 out of the 1,812 bureaus should be so set up that it is hard for the President

to get at it. In other words, that, in effect, there might be irresponsible bureaucracy.

The CHAIRMAN. I will ask you, then, according to that there is no independent establishment that the Congress has established in the Executive Branch of the Government. They are all subject to the direction of the President according to your statement. Is that correct?

Mr. MCCORMICK. The organizational structure has been established in many cases by Congress, but I believe that any head of an executive agency is obliged to follow the orders of the President under our Constitution.

The CHAIRMAN. In other words, do you interpret the present law that constitutes the Office of Comptroller of the Currency that whoever fills that position cannot exercise his complete independence in making his decisions, but would be bound under the Constitution and the law as it now exists to carry out any order or formulate any order that the President might dictate or direct?

Mr. McCORMICK. Provided that the President does not issue an illegal order; yes, of course.

The CHAIRMAN. If that is true, if your theory and interpretation of the present laws and powers are correct, what additional powers will be gained by Reorganization Plan No. 1?

Mr. MCCORMICK. As far as the President is concerned, no additional powers would be added by this plan except the power to move, abolish, or otherwise change this Bureau. But the problem that we are faced with is this vast mass of semiautonomous bureaus. The President now has 65 major departmental agency heads reporting to him, which makes it virtually impossible for him to manage the executive branch as it now exists, and the more independent subbureaus and bureaus that he has to administer himself makes it even more difficult. The executive branch is becoming virtually unmanageable.

The CHAIRMAN. What you are saying is that the President now has power under existing law and the Constitution to do everything that this plan will authorize to be done if the plan goes into effect, and the mere result will be that by this plan we are simply transferring powers that the President now has to do everything that the plan authorizes to be done, simply transferring those to the Secretary of the Treasury.

Mr. MCCORMICK. No, sir. My proviso was that his directive authority is clear, provided it is in accord with law. The law here specifies the structure.

The CHAIRMAN. This is not altogether pertinent to this particular plan, but while you are testifying I did want to ask you this one other question or, rather, make an observation with reference to the citizens committee.

I appreciate that the committee has undertaken to perform an excellent service to this country by trying to arouse interest and awaken the people to the need of reorganization. By reorganization I do not necessarily subscribe to every plan that might be submitted or to every recommendation made by the Commission. I think there is room for honest differences of opinion as to whether one plan or another might be best for reorganization. But I do feel in fairness to the public that this citizens committee, and I would also include the press of the Nation, should also inform the American people that this

job of reorganization and overhauling the biggest financial and the most complicated democratic institution in the world is not a onepackage job. It doesn't involve just simply the passing by Congress of a resolution saying the Hoover Commission is now law. They ought to be informed of the very delicate and highly technical and difficult task it is. Even if we undertake to carry out every recommendation of the Hoover report, it is a long tedious process at best when we take into account all of the other responsibilities that are on the Congress, and I believe your committee would be more effective and a little more helpful to the Congress if they would somehow let that information leak out to the public under their responsibility. Mr. MCCORMICK. Thank you, sir.

The CHAIRMAN. I just wanted to make that observation because so many have in mind, "Why isn't the Hoover Commission report adopted?" We face similar issues on practically every change we undertake to make, and I think the responsibility is on the Congress not to act blindly.

Mr. MCCORMICK That is quite right, sir.

The CHAIRMAN. Any commission could make mistakes. Any plan could have defects in it. I think we ought to study them carefully and I think the American people through your committee and through the press ought to be given some idea of the magnitude of the job that is upon the Congress in this reorganization attempt.

Senator Benton?

Senator BENTON. Mr. McCormick, Mr. Robert McCormick was the owner of two businesses in Chicago. I have a special interest in the adequacy of the testimony of any one named Robert McCormick. Mr. McCORMICK. I am afraid that there is no family relationship, sir.

Senator BENTON. I think you said something extremely important on the fact that the President can fire the Comptroller of the Currency. I saw my friend, Mr. Robert Fleming, shaking his head in disagreement. I would like to have that point clarified and have you restate whether you were sure you were right, because if the President can fire the Comptroller of the Currency, we certainly do have all the responsibilities now clearly upon the President in line with these dark contingencies of the future of which our witnesses this morning have been fearful.

Mr. McCORMACK. Yes, sir. First of all, as I understand the law that has grown up through custom in this country, the President has the authority to fire anybody in the executive branch provided it isn't a political firing of a civil-service employee. Second, as to reappointing an official, of course, if it is an appointment requiring Senate confirmation, the President would have to get the consent of the Senate for his new appointment.

Senator BENTON. The appointment of a new one.


Senator BENTON. But he can fire the old one. The power of the Senate would then be to refuse to appoint anybody and the office would be vacant.

Mr. McCORMICK. That is right, sir.

Senator BENTON. If that is true, then the responsibility is clearly and sharply on the administration in line with all the issues that have

« PreviousContinue »