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Senator BARKLEY. Upon what theory do you feel that an Auditor General, who may not be a lawyer-he is not required to be one should supersede the Attorney General in the legal opinions as to the power of a certain department to do a thing!

Mr. GULICK. In the plan which we propose he does not supersede the Attorney General in determining the power of a department to proceed. We think that he should not.

Senator BARKLEY. Well, he reports to Congress a disagreement. Mr. GULICK. Yes; but under the plan that we propose, Senator,

the Auditor General will have no power to hold up the work of the Department. He reports his disagreement and raises the thing with the congressional committee so it can be aired with the public.

Senator HARRISON. Under the law the Treasury Department cannot pay a claim, if there is a conflict in the payment of taxes, over $25,000, unless they submit it to the Joint Committee on Internal Revenue Taxation and our experts work with them. Then we hear all the facts, and so forth. If they raise the question, then they have got to go through the courts to settle the proposition. Is that still your idea?

Mr. GULICK. Precisely.

Senator BYRNES. Under the existing plan, do the departments have litigation with the Comptroller General ?

Mr. GULICK. Yes, sir.
Senator BYRNES. Are there many cases?

Mr. GULICK. I do not know just how many, but there have been quite a few, certainly considerably in excess of 100. Not between the departments and the Comptroller General; I mean claimants who complained of the action of the Department.

Senator BYRNES. Will you put into the record whether the Comptroller General has ever been sustained by the courts?

Mr. GULICK. Yes.

Senator BYRNES. Either the Court of Claims or the United States Supreme Court?

Mr. GULICK. Yes.

Senator BYRNES. In any case where there was an action between the Department and the Comptroller General ?

Mr. GULICK. I am not sure about an action between the Department and the Comptroller, but in individual cases, where the private litigant brings into conflict the decision made by the Department and by the Comptroller General, there have been a great many cases of that sort, where the Government is really not a party to it; that is, the Department is not a party to it. I was recently told of a tabulation of 100 cases—there were 2 in which the Attorney General had been sustained.

Senator BYRNES. I asked that question of Mr. Brownlow following one of the hearings the other day, not having had the opportunity to ask him in the hearing-I intended to do it and he said that there was a record of 104 cases in which the Comptroller General had been sued or had brought suits, and that of the 104 cases of record he lost 100 cases and won 4. Now, I presume that Mr. Brownlow had made an investigation of that. I am sure it was he that made that statement-no; it

may be that it was the Director of the Budget. Let me leave that open as to who made the statement, and I will check up on it. I had in mind these questions and made inquiry about it. It was either the Director of the Budget or Mr. Brownlow. Refreshing my memory, I think it may have been the Director of the Budget. I asked him how many cases of litigation had occurred, and he said there were 104 cases. I asked him then the question in how many cases the Comptroller General prevailed, and he said in 4; he lost 100 of the cases.

I am pretty sure now it was Mr. Bell. Senator BYRD. Mr. Chairman, could not we get an itemized list of those cases and put them into the record ?

Representative GIFFORD. That might have been a lot of similar cases where the precedent was followed.

Senator BYRNES. It may have been. I have no information as to what the cases involved. I think it would be a very good thing, in an informative way, to have the information that Senator Byrd called for, and supplement that also with the request for a brief summary of the litigation. I am sure the Director of the Budget can supply that without a great deal of trouble.

Representative GIFFORD. Yes; I think the similarity of the decisions may imply that many of them were exactly alike.

Senator BYRNES. There may have been a number of claimants.
Representative GIFFORD. On the same issue.
Senator BYRNES. Presenting the same issue.

Representative COCHRAN. Will your committee, or officials now in the Government service, make the recommendation to the President relative to this new set-up!

Mr. GULICK. We assume that that would be done as the result of the studies of the Efficiency and Research Division of the Budget itself.

Representative COCHRAN. You are going to leave it to them?

Mr. GULICK. Our committee is certainly through. It cannot be done by outsiders; it has got to be done by people who participate intimately in the examination and who have knowledge of all of the traditions of the agencies.

Representative COCHRAN. Do you think if your committee were kept in existence and you made those investigations, along with the Research Bureau, that you could offset any recommendations they might make against a regrouping or consolidation, say, on account of personnel interests?

Mr. GULICK. That is possible.

Representative COCHRAN. In approaching the reorganization question we certainly should bear in mind that we want to improve the efficiency and that we want to simplify procedure. I am sure you will agree that cannot be done without bringing about economies.

Mr. GULICK. Certainly. That is one of the main reasons—is to bring about economies.

Representative COCHRAN. Well, could you see any objection to there being a provision in the law that would provide where there is to be a reorganization or consolidation, or transfer, or retransfer, or regrouping, that there must also be a reduction in expenditures!

Mr. GULICK. Well, I have never believed in general provisions of law that just said, “Now, you must save money." I think it has got to be translated into specific terms to be workable.

Representative CoCHRAN. My thought is, the people of the country are not only interested in reorganizing the Government, improving the efficiency, and simplifying procedure, but there is always the

question of economy; and if we do not include in the bill something that will bring about economies, do you feel that we will get any! We can reorganize I know it can be done—increase efficiency, and reduce expenditures at the same time.

The CHAIRMAN. Mr. Cochran, may I point out to you this consideration in that connection: This plan contemplates added functions to the Bureau of the Budget. It will make necessary, if it should be agreed to, an additional force in the Bureau of the Budget. It contemplates increasing expenditures in that particular. If economies are to be accomplished they are to be expected rather in the indirect result of the broader supervision, the exercise of the managerial service by the Bureau of the Budget, rather than in transferring it to any function that somebody else now performs.

Mr. GULICK. Senator, the other day, when I was discussing this with a group of business leaders in my section of the country, one of the directors of a corporation said: “Now, there is one point that you have missed in this statement, and this is the point that I, as a director of a big corporation and member of the board of directors of many corporations, feel very keenly, and that is the tremendous economy that will ensue in the time and effort of the citizen and corporations in dealing with the Government that is organized in a few departments. You know where to go and”, as he said, “you will not get the run-around.”

Senator BYRD. Is that true if you continue the same bureaus?

Mr. GULICK. I think so. The minute the bureau is transferred to a department, unless it is transferred to a semiautonomous state, where it has to stand by itself as an entity within that department, presumably it would be consolidated and worked in with the departments. Its law division would disappear in the law division of the department; its statistical division would disappear in the statistical division of the department; its other functions would similarly be divided up into the divisions.

Representative GIFFORD. I want to bring up one point, if I may. It may not be worthy of consideration, but, as Senator Harrison suggests, it would supposedly be left to the President to manipulateI do not like that word-after you build the framework, to hook one here and hook one there, as he may act upon the advice he may receive, but he is hooking up commissions and other organizations that we, the Congress, have created. In giving the President authority to carry out the will of the Congress, are we likely to go beyond the bounds of restraint here and become involved in some constitutional question as to somebody, or some department that may feel they have a constitutional right vested in them, and that we have clothed the President with too much power! I have heard it argued a great deal that the powers of the Executive should be carefully prescribed and limited by the Congress. I am wondering if there would be a question whether the limitations imposed upon the President by this act are sufficient? As you know, there have been cases where people's jobs have been abolished under color of a change. I would like to bring that up just as a thought.

The CHAIRMAN. I think I can answer the question implied in your proposition. As to executive matters, matters that are essentially executive, no rule of law is necessary to be imposed upon the Presi

dent for his action. He may be given the broadest discretion possible. Do you understand that?

As to the exercise of a function which is legislative in character the law conferring the power upon the agent, whether he be the President or anybody else, must define the rule for his conduct, and if that rule is not defined in the law it does constitute an unwarranted and unlawful attempt to delegate legislative authority.

I do not say that that question particularly arises on this report. We will discuss that later.

Representative GIFFORD. Have you any independent commission that might be disturbed, while we simply say, "Hang it up on another hook”? Would there be divided responsibility when it comes to actual determination of rights!

The CHAIRMAN. If it is a commission like the Interstate Commerce Commission, which performs a legislative function—it should be understood, and I think it is generally understood that the Interstate Commerce Commission is not an executive commission, it is essentially a legislative commission, the principal duties are legislative, although, of course, necessarily it performs many executive and some quasi-judicial functions—but the rule to govern the President's conduct, in "hanging it on the hook”, as you express it, or in "putting it in the compartment”, as others express it, should be defined in the law, in my judgment.

Representative GIFFORD. Senator Harrison suggested, we thought, the precedent. I simply want to suggest that we ought to keep in mind the limitations necessary to avoid invading constitutional questions.

The CHAIRMAN. Are there any further questions of Mr. Gulick!

Representative TABER. I have some questions, but I rather think it is pretty late, and I rather think that those questions ought to be asked after Mr. Merriam has been on.

The CHAIRMAN. Very well. Mr. Gulick, suppose Mr. Wren performs this service, gets the information called for by Mr. Byrd in that memorandum!

Mr. WREN. I would be glad to do so, sir.

The CHAIRMAN. And the information as to the number of cases that have been tried in court—well, I will say during the last incumbent's term of office.

Mr. WREN. I think that will appear in the record, as to just what you want.

The CHAIRMAN. And a summary of the decisions in the cases, as to what was involved in each case. That will require a little detail work.

Senator HARRISON, Mr. Chairman, I imagine the chairman of this committee, probably the chairman of the House group and probably the experts will be getting a good many communications inquiring about this and that, which will entail a good deal of work, so if it is thought advisable I would suggest that the chairman of this committee and the chairman of the House committee be authorized to employ such stenographic help as they need.

The CHAIRMAN. That calls for a discussion of the question raised by Mr. Taber to me personally this morning. I think you gentlemen may be excused. The committee will meet again on Tuesday, at 10 o'clock in the morning.




Washington, D. c. The joint committee met, Senator Robinson presiding.

The "CHAIRMAN. Gentlemen, the committee will please come to order.

We had hoped that Mr. Merriam might be present this morning to proceed with his statement. Mr. Merriam was here yesterday, but on account of the death of the chairman of the House group, Representative Buchanan, of Texas, no meeting was held of this committee yesterday. In the meantime Mr. Merriam was compelled to leave the city to fill an important engagement heretofore made and is, therefore, not available for the hearing this morning. He expects to return in the near future.

The chairman of the President's committee, Mr. Brownlow, has an additional statement that he will present, and we will hear him now if there be no objection.


Mr. BROWNLOW. Mr. Chairman, at a previous meeting of the committee when some questions had arisen with respect to the draft of a bill which the President's committee had prepared to give expression in the form of legislative language to the recommendations in this report, it became apparent that the draft of the bill was not selfexplanatory, and so, with the consent of the committee, we have had a new draft prepared which is here this morning, and which has been prepared by the committee in consultation with our very excellent draftsman, Mr. Hester. In most of the cases the changes that we have made here are,

in our opinion, mere clarifications of our intent or making more 'explicit the intent that we feel was implicit in the language of the other draft.

We have copies of the bill here which will be distributed, but I shall run over briefly the changes which we have made in the draft.

Senator BARKLEY. May we have those copies now to go over them with you?

Mr. BROWNLOW. Yes. In section 1 (g) we clarify the standard as. to the reorganization of regulatory agencies by providing more specifically that quasi-judicial functions shall be segregated from policydetermining, prosecution, enforcement, or other administrative or executive functions, and that after transfer the functions shall be so segregated in the receiving agency.

Senator TOWNSEND. Is that the first change made in the bill!

Mr. BROWNLOW. That is the first change made in the bill, original draft. I am going over the changes that have been made.

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