of course, he is right that when you have acts of Congress that are loosely drawn and that are ambiguous, it gives an opening for extravagance and inefficiency.

Not only that, but a great part of the wasteful expenditures by the executive departments are due to acts of Congress which were fine at the time they were passed but the need for which has really lapsed. There has been no attempt to review those acts, and they still go on making payments under them.

I think this flight-pay proposition that Senator Cain referred to in his speech on the floor of the Senate is a case in point. Aviation is nothing like as dangerous as it used to be, and I think the whole flight-pay question is one that can be very profitably reviewed.

Then, you have this fact-that it is not going to do much good to bring reports up here once a year or once a month unless the departments are reorganized within themselves and among themselves on the basis of modern management-unless each department is so organized that the head man actually knows what is going on inside his department. And, there are a great many of them who do not have the slightest idea.

The reason why some of these outlandish things happen is because the head man does not know what is going on, and as long as you have your management responsibility and your fiscal responsibility running at cross purposes, the head man is not going to know.

That is why I am convinced that one of the first things we must do is install methods of modern management in the Government and get rid of this cross-purpose system that we have at the present time. Now, we have recently been required to make a blindfold guess on what the budget estimates are going to be, and I do not think anybody in the Senate enjoyed having to make that guess, because we were either bound to make it too small or too high. And, we do not ever want to be in that position again.

I realize that the staffs of the appropriate committees of Congress are going to be much better informed next year than they were last. And, whether this resolution is enacted or not, we are going to be better posted next year than we are at the present time.

But, there are a great many things that the staffs of these committees cannot properly do and that they cannot do as efficiently as this bill of mine can do it.

Here we have had 16 years of expanding emergency government, and the last 4 years were years at war. We had one reorganization bill when I was first here, and we have had no reorganization of any kind since the end of hostilities. This is the time for a general overhauling, for going through the whole thing with a fine-tooth comb and throwing the light into all the dark places, and then setting up a system to keep yourself current on a day-to-day basis.

(Discussion off the record.)

Senator THYE. Mr. Chairman, I think that is most important for the record. I think you are speaking words there that should be part of the record.

Senator FERGUSON. Is there any real reason why it should be off the record?

Senator LODGE. I do think it is very important, and if you want to have it on the record all right, but I think it might be better not to.

Senator MCCARTHY. I frankly think, Senator, you are expressing some very good thoughts. This record will be reviewed, and I think they should be on the record for the benefit of other people who read it. Senator THYE. You know, Senator Lodge, everyone outside Government thinks the Government functions in a manner that not even a penny can be in error but that somebody is going to be prosecuted. That is the method often exercised in States. When we come into governmental operation, we find officials and employees in error, and instead of positive prosecution there is legislative action that will erase the error by allowing the expenditure as an expenditure that was the inevitable.

The CHAIRMAN. Senator Lodge, do not feel that what you are about to say would create ill will between committees.

Senator LODGE. I think I can rephrase it. The point I am trying to make is this.

The CHAIRMAN. And, we will have it on the record.

Senator LODGE. Yes.

The CHAIRMAN. And, after this hearing, you may, of course, revise your remarks.

Senator LODGE. Thank you.

The CHAIRMAN. And, if there is something that you have said that perhaps you think should not appear in a permanent record, I am sure the committee has no objection to your deleting it.

Senator LODGE. Thank you very much.

Well, the point I am trying to make is this: that it is obviously impossible for this committee or this commission to study the whole structure of the government without giving some attention to the question of personnel. I believe that we need to bring along and start training policy-making officials as well as clerical officials. We have been thinking too much of the clerical side without giving due attention to the fact that we have to have men who are trained as policy makers too.

I believe that our civil service still partakes a little of—I am talking about the civil-service system and not about the people in it-the atmosphere it had 50 years ago of being a protest against the spoils system. Of course, I am against the spoils system. Of course, we all are. There is no question of that ever coming back. But, we are told, as I have been told authoritatively by people in the Government, that in starting to reduce personnel here they are going to have to lay off people with an "excellent" rating ahead of other people whose rating is only "fair.'

Senator FERGUSON. I wonder if I could interrupt?
Senator LODGE. Do you get that point I made?

Senator FERGUSON. Yes. But, I wonder if we have abolished the spoils system? Whether we have not taken care of it by the increase in the number we have hired and were able to hire them all? not think there is something to that?

Senator LODGE. That we have done that?

Do you

Senator FERGUSON. That we have not taken care of the spoils system at all; we have just increased the number of people that we hired so that we are able to take care of all of them.

Senator LODGE. Well, I certainly think it is a very serious thing when the Government has the policy, as I understand it has at the present time, of laying off people whose rating is "excellent" and

retaining people whose rating is only "fair". I understand that is the current policy, and it shows to what extent the thinking has gotten away from the idea of service to the Government and service to the American people.

Senator ROBERTSON. May I ask a question? In the regular establishments of the Government or in the independent agencies? Senator LODGE. This information came to me from one of the regular Government establishments.

Senator ROBERTSON. I think we would have to keep in mind the difference between regular establishments of government and independent agencies. I understood you to say the executive branch of Government was spending more than $6,000,000,000 a year, which was more than the total budget in 1932. But, it is my recollection that in the current budget the regular estimates of the regular establishments of the Government only get $1,900,000,000; that they have, out of a possible 3,000,000 employees, less than a million of them; and that in the proposed budget the regular establishments of the Government get less than $1,900,000,000 and less than $900,000,000 of that is for salaries. And, if so, we are then dealing with independent agencies, many of which were created during the war and will automatically terminate when we say that the emergency is over.

Then, we have other agencies such as the RFC, the REA, the Farm Home Administration, that involves the question of policy, and the Congress in any event has to pass on whether we want an agency lending money to business, an agency lending money to rural cooperatives, lending money for equipment and seed to farmers, and things of that kind.

Senator HICKENLOOPER. Apropos of that particular situation, I have been interested in the last 6 weeks-I have not had much time to devote to it but I have had some information and have been interested in the matter, and have taken it up with the Civil Service Committee, the policy that I have been informed has been in effect in the last 2 or 3 months. It is the blanketing into civil service literally by the hundreds each day of temporary employees who have not subjected themselves to examination, who came here as an emergency war activity but who this spring have been coming into civil service under some sort of permission of some kind apparently contained in the law and are "blanketed" into civil service, giving them a permanent

status.

They come either from some of the independent agencies or they come from some of the temporary agencies of Government, but, nevertheless, they are acquiring a permanent status.

That is contrary, in my judgment, to the intent of the law we wrote last year, last spring, in which we set up an orderly quarterly specified reduction in the number of Federal employees. There is quite a scramble now going on to make reductions at various places, but only just recently has that reduction been noticeable.

We ordered that it begin last fall and provided for a certain definite number of reductions in employees each quarter until a maximum number would be reached-as I recall it, at the end of this fiscal year.

We seem to have great difficulty in getting the agencies and the people responsible for that to do the job that the law clearly says they should have begun to do vigorously last fall.

Senator LODGE. I quite agree, and I think that is a subject that needs to be gone into.

But, we have strayed a little by the way.

Senator BRICKER. Have you given consideration to, or would this bill reach, the practice that we have heard about in recent weeks and which I have observed out in the field, particularly in my home State, of fixing the salary of the head of the department upon the number of employees that are under him, being an incentive to build up a department for one's own selfish purposes? As his salary goes up, his grade increases with the number of employees he has.

We had recently in Columbus a case where I had a man come to my office and say to me that he had been begged to stay on and had stayed an extra year before he found out that his staying there meant a higher grade for the head of the department he was in, and therefore an increased salary.

Would this bill go to that practice?

Senator LODGE. Oh, yes. I think if we had a commission such as I propose that is certainly one of the things they would look into. This tendency toward empire building is strong enough in human nature anyway, and when you have a situation such as you described it creates very strong temptations indeed.

Now, Mr. Chairman, I am reaching the conclusion of my statement, and I am going to deal with the question of why having a commission of this kind is the best way to approach this problem.

I would like to read an excerpt from a letter which I received from a most able man who has a great many contacts throughout the Nation with people who are students of efficiency in government. He happens to be a citizen of Massachusetts, Mr. Norman MacDonald. I would like to have the full letter placed in the record but I want to read an excerpt from it here.

The CHAIRMAN. You may.

Senator LODGE [reading]:

While of course you do not need to be convinced afresh, permit me to say that I am strongly of the opinion that such an instrumentality as you propose is the best, if not the only feasible approach to this gigantic problem. I make this point only because I can foresee the argument being raised that S. 164 would merely set up outside_Congress an agency to do only what the Committees on Expenditures in the Executive Departments may well undertake to do within Congress.

I submit that such an argument has small validity, if any at all. There seems to me to be the widest imaginable variance between the legislative responsibilities of these two committees and the broad field of inquiry and recommendation open to a Commission on Organization of the Executive Branch with members representing the Congress, the Executive, and the public. The great and most valuable public service to be rendered by the committee of which the distin-, guished Senator from Vermont is chairman seems to me to be, first, to participate in such an inquiry, and then to shape such legislative action as may appear to be indicated when the facts are discovered and a report presented.

To put it another way, many thoughtful Americans are sharply conscious that even now conscientious Members of Congress are bearing all too heavy a burden in the field of legislation itself, and that in terms of results achieved it is seldom wise to saddle willing and sincere legislators with a heavy, year-round work load beyond their normal obligations to their constituencies and to the country.

Please accept my assurance that if widespread public support of the idea advanced in S. 164 and its companion House bill is not now sufficiently manifest, it is only because the general attention is riveted on the budget debate.

I would like to have this whole letter published.

The CHAIRMAN. Without objection, the entire letter will be inserted in the record.

(The letter referred to is as follows:)

MASSACHUSETTS FEDERATION OF TAXPAYERS ASSOCIATIONS, INC.,
Boston 8, February 25, 1947.

Hon. HENRY CABOT LODGE, Jr.

Senate Office Building, Washington, D. C.

DEAR SENATOR LODGE: I have been reading with close attention the extended Senate debate on the matter of the legislative budget as reported in the Congressional Record. This historic discussion has not alone produced argument at a remarkably high level, but to one observer at least it has pointed over and over again to the imperative need for early action upon S. 164 filed by you last month. This note is to urge you to press with every means at your command for this legislation.

I know that I speak for citizen organizations across the country in saying that in our present difficult situation nothing is more needed to produce stable appropriation, tax and debt policy than a total reconsideration of the structure and function of the executive branch of the Federal Government.

While of course you do not need to be convinced afresh, permit me to say that I am strongly of the opinion that such an instrumentality as you propose is the best, if not the only feasible approach to this gigantic problem. I make this point only because I can foresee the argument being raised that S. 164 would merely set up outside Congress an agency to do only what the Committees on Expenditures in the Executive Departments may well undertake to do within Congress.

I submit that such an argument has small validity, if any at all. There seems to me to be the widest imaginable variance between the legislative responsibilities of these two committees and the broad field of inquiry and recommendation open to a Commission on Organization of the Executive Branch with members representing the Congress, the Executive, and the public. The great and most valuable public service to be rendered by the committee of which the distinguished Senator from Vermont is chairman seems to me to be, first, to participate in such an inquiry, and then to shape such legislative action as may appear to be indicated when the facts are discovered and a report presented. To put it another way, many thoughtful Americans are sharply conscious that even now conscientious Members of Congress are bearing all too heavy a burden in the field of legislation itself, and that in terms of results achieved it is seldom wise to saddle willing and sincere legislators with a heavy, year-round work load beyond their normal obligations to their constituencies and to the country.

Please accept my assurance that if widespread public support of the idea advanced in S. 164 and its companion House bill is not now sufficiently manifest, it is only because the general attention is rivetted on the budget debate. In this connection I think it is fair to suggest that taxpayers generally will not be satisfied with a budget cut in the dimensions of $4,500,000,000 and that they will quickly be brought to see what you have already pointed out-that the only hope of ultimate reduction of $10,000,000,000 or more from the $37,500,000,000 base can only come through the means you have suggested.

This organization of your fellow citizens hopes you will move at once so that the contemplated study may begin well within the current fiscal year.

Sincerely yours,

NORMAN MACDONALD,
Executive Director.

Senator LODGE. Now, I come to this point that Senator McCarthy raised and which was raised by a member of the staff as to why this could not be better done by a committee of Congress. I think maybe if the committees of Congress, if the Members, had nothing else to do and did not have their constituencies to attend to and did not have to be on the floor and did not have to inform themselves on a host of other issues outside of this one, that they would do just as good a job. But, I know from my experience here, which goes back to 1937 as a Senator and long before that as a newspaper man here, that there simply is not the time for a Senator and a member of the House to give to this matter.