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Representative WARREN. Do you propose to place all of the independent agencies under the Cabinet head for administrative purposes?

Mr. BROWNLOW. That is our recommendation; yes, sir.

Representative WARREN. You stated a while ago that those agencies having quasi-judicial functions, their entity probably would not be disturbed.

Mr. BROWNLOW. No. The administrative work of those agencies, under our recommendation here, would be under a department. The board that heard the causes would not be under the department, except for its housekeeping functions, its budgeting, just like the Federal courts are under the Department of Justice as far as budgeting is concerned.

Representative WARREN. You mean then that the Interstate Commerce Commission would go on as it is now but it would be under a department head for budgeting and administrative purposes?

Mr. BROWNLOW. With respect to any particular one of these commissions we say that there should be further research. We agree that the administrative work that would be put under the regular departments would vary. For some of them perhaps you would put a very great deal of the administrative work under the department. I do not know, because we have not examined it, but it is conceivable that under this theory the Interstate Commerce Commission, its safety work probably, and maybe its accounting, would go over to the department, but that would have to be set up separately, after examination, with respect to each department.

Representative WARREN. The Federal Trade Commission would come in the same class, would it not?

Mr. BROWNLOW. Yes; the Federal Trade Commission presents the same problem. Again we have made no particular study of that. That presents also a slightly different picture, because in the case of the Federal Trade Commission its own agents make investigations. Cases come to the Commission. The Commission tries them by the adversary method, and then when the decision is made the decision is enforced by the same Commission as against not only the parties in interest but against all others, and there is some resultant confusion.

Representative WARREN. How about the Power Commission? Mr. BROWNLOW. Again, Mr. Warren, we have made no particular study of these things, except insofar as to say that we believe that in bringing them together under all of their housekeeping functions we would eliminate some of the delay incident to their work, depending upon whether some of them are mostly administrative or mostly quasi judicial, and that would have to be determined in respect to each particular department.

Senator O'MAHONEY. Did you make a study with respect to any agency?

Mr. BROWNLOW. No, sir; not a detailed, intensive study, only from the overhead management point of view.

Senator O'MAHONEY. So this recommendation about the transfer of the housekeeping functions, as you refer to them, is based upon an opinion that it might result in a saving?

Mr. BROWNLOW. No, sir. We think it would. It is based upon the central theory of the report, that there are three coordinate branches

of the Government of the United States, and that if we go on as we have been going for the past 50 years, creating an ever increasing number of independent agencies that report neither to the President nor the Congress, that you build up an irresponsible fourth branch of the Government, and at least for all of them the housekeeping and bugetary functions ought to be brought clearly into the executive department. We have done that for the courts, we think it ought to be done for the commissions.

Representative TABER. Now, this is what it would result in: Your bugetary functions would be transferred from the budget officer of the Interstate Commerce Commission, for instance, to a department. Likewise there would be myriads of other commissions transferred in the same way, and you would superimpose an extra overhead between the Budget and the Commission, and that department would do just like all the other departments do. We have made a close study of their appropriations. They juggle the appropriations around to suit their own needs rather than the needs of the commissions. You might better have the commissions deal directly with the Budget and have better and closer control over them.

Mr. BROWNLOW. I only answer that with my opinion that it would be very much easier for the Appropriations Committee and the Bureau of the Budget to deal with all of these channels through 12 departments than through the hundreds.

Representative GIFFORD. Mr. Brownlow, you made a suggestion that the investigations were now carried on by the Interstate Commerce Commission, and others by their own appointees, and then they sit in judgment on their own investigator's reports. Does that mean that some of the departments ought to furnish the investigation to members of the independent commissions to sit as a court? Do you think they could be fair in their judgment?

Mr. BROWNLOW. In a great many instances. I do not think it is. so much a question that they are fair in their judgments. Of course we have got that in our so-called legislative courts, although it is. slightly different, it is true. The Bureau of Internal Revenue does the investigating with respect to income taxes, but you have got the Board of Tax Appeals.

Representative GIFFORD. May I bring up the F. C. C., which is a rather new one. We hope we have some initiating policy there. You want to have some outside department determine the investigating feature of it and then they simply sit as a court on policy and have no initiative?

Mr. BROWNLOW. No, sir; I am sorry if I have given that impress sion. In no case would it be outside. It would be a different unit within that same organization. Your F. C. C., or any of these things, would not be reduced, as we tried to say here, to the level of a mere bureau of a department, but would have a semi-autonomous status in the department, but they would report to the President/ through the department head.

Representative GIFFORD. Have you studied the F. C. C., Mr. Brownlow?

Mr. BROWNLOW. No, sir; not in detail.

Representative GIFFORD. You did not look into it?

Mr. BROWNLOW. We look at this from the point of view of general' management, not the particular operation.

Representative GIFFORD. I want to get a bird's eye view of the whole report, and learn if it is in harmony with the administration. Do you regard this as an administration report?

Mr. BROWNLOW. No, sir; except to the extent that the President, after the report was made, expressed his views in his message to the Congress. We worked quite independently, sir.

Representative GIFFORD. Will you tell me if the number of assistants mentioned in this report was suggested by the administration? Mr. BROWNLOW. No, sir; it was suggested by this committee. Representative GIFFORD. And approved by him?

Mr. BROWNLOW. They were approved by him, I assume.

Representative GIFFORD. Was this report rewritten to conform to the wishes of the administration?

Mr. BROWNLOW. You mean the President?

Representative GIFFORD, I would like to know if this is an administration report, if it was received favorably by the administration. Mr. BROWNLOW. The President, in his message to the Congress, has made a statement about the report. We were appointed. We did not see the President. We had a staff, we got a great many reports, we talked to a great many people in and out of the Government, we got a great mass of reports, some of which we used. We had no communication with the President of the United States whatsoever from the time this thing was begun until it was practically in its completed form. We had two or three conversations with him. One immediately before he went to Buenos Aires and three or four after the work was done.

Representative GIFFORD. The question I am asking, do you consider that this has the approval of the administration?

Mr. BROWNLOW. I do not want to undertake to speak for the President of the United States without authority. He has already spoken to the Congress in his message.

Representative GIFFORD. I have one more question and then I am done. Of course, your whole report certainly leans to giving more power to the administration. You believe it ought to be done. Was that the underlying thought that you had?

Mr. BROWNLOW. We believe that the Chief Executive should be given more authority over the management of the executive branch, in order to make that authority more nearly commensurate with his responsibility, a responsibility clearly set out in the Constitution, clearly set out in the laws, and even more clearly in the tradition and popular estimation.

Now, we believe, as we have said here, that the law should be made by the Congress, after democratic discussion, but once the laws are made by the Congress that the execution should pass to the executive branch.

Representative GIFFORD. You recall there is a chapter on his being held to accountability. To whom?

Mr. BROWNLOW. The accountability?

Representative GIFFORD. Yes.

Mr. BROWNLOW. To the Congress, for the manner in which he has has executed the law.

Representative COCHRAN. Under the terms of your bill, Mr. Brownlow, would the President have the power to place an independent agency in a department, abolish the commission that might be con

trolling it, and appoint an assistant secretary to handle the work of the present commission? For instance, would he have the power to take the Federal Trade Commission and put it in the Department of Commerce, abolish the position of commissioners, and appoint an assistant secretary to look after the work of the Federal Trade Commission?

Mr. BROWNLOW. I could not answer that question technically. Representative COCHRAN. I am talking to you about the proposed.

bill.

Mr. BROWNLOW. I do not know whether it goes to that extent, but I think it does.

Representative COCHRAN. It does, in my opinion. It gives the President that power?

Mr. BROWNLOW. It would give him that power. In the case of some agencies perhaps that would be a power he would recognize. Of course, all this power would be exercised with due regard to responsibility. In the case of some very small agency perhaps it might go to the extent of putting the whole thing under his department. Even now, we have these regulatory functions under departments, Mr. Cochran, and they seem, so far as we are able to discover, to work about as well as in any other way.

Representative COCHRAN. I am not talking about the merits now, I am talking about the power in the proposed bill. In your set-up you provide for practically the abolition of the Comptroller General and the General Accounting Office, you provide that the settlement of claims shall go to the paying agency, the Treasury Department. Mr. BROWNLOW. Mr. Gulick, will you answer that?

Mr. GULICK. I have not heard the completed question. He has not finished his question.

Representative COCHRAN. You provide that the settlement of claims shall be transferred to the Treasury Department?

Mr. GULICK. That is correct.

Representative COCHRAN. That is the paying agency, and it is going to settle the claims.

Mr. GULICK. We provide that they shall settle the claims in the Treasury. The actual expenditure will be made in the spending department. The administrative audit will be conducted in the Treasury, in a single office, instead of in the offices of six auditors, as we had been doing up until 1921; that the audit will be made after the expenditure has been incurred under an independent auditor, the Auditor General.

Representative COCHRAN. Now, take for instance the case where the audit is going to be made after the money is paid. Assume that the Auditor General, or whatever you are going to call him, finds that the money was illegally spent and he reports that to the Congress; is the Congress going to be the collecting agency and get the money back? Who is going to get it back?

Mr. GULICK. It will be just as we did up to 1921.

Representative COCHRAN. You will have an auditor for each department? That is what we had in 1921.

Mr. GULICK. First, the Treasury will make the audit and if they have to go to court over it it will be handled by the law department of the Government.

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Representative COCHRAN. The report of the Comptroller General says that he has collected and placed into the Treasury, I think, some $65,000,000 that was illegally spent. You say the Treasury Department will get that money back?

Mr. GULICK. Yes.

Representative COCHRAN. The accounting records are going to be kept with the Auditor General?

Mr. GULICK. The accounting records will be kept in the Treasury. The auditor will be, under the plan which we suggest, precisely what the auditor is in any big business concern, where you have an independent check-out of the administration from the outside. by an individual who has no conceivable part in the machinery of administration. It was the feeling, I think, of many at the time that the Budget Accounting Act was enacted that that was the objective which was sought in that act. I remember that the testimony shows that many of those who testified at that time said that. this will work satisfactorily, provided we do not get mixed up between audit and control, but as things have worked out that office has developed more and more on the side of control.

Representative COCHRAN. Is it not a fact, when you speak of control, that the disbursing officer, under the terms of the act, goes to the Comptroller General and asks the Comptroller General, "Am I permitted, under the provisions of this law, to spend this money for this purpose?" The Comptroller General does not take control; he simply says, "Yes", or "No." If the law is not worded so it will permit the expenditure the Comptroller General will say so.

Mr. GULICK. I think, in practice, what has been developed in the Comptroller General's office is actually control, and many of the administrators will testify to that. Their methods of operation will indicate that that is the fact, that every department in Washington now mainains a diplomatic agency with a large crew of men that spend their time going over to the accounting office to get a prior decision. So, you have a department head making the decision; then you have the Comptroller General making the decision as to going ahead on a given proposition.

Representative COCHRAN. Congress set up the Accounting Office under the Comptroller General. It was set up as an agency of the Congress, not as an agency of the executive branch of the Government.

Mr. GULICK. That is right.

Representative COCHRAN. Therefore, your agency abolishes the agency of the Congress.

Mr. GULICK. No. There are a great many matters of accounting which are just as technical as you find matters in law, or in medicine. One of the highly technical problems in accounting is the relationship of audit and control. Every auditor and every commercial accountant, C. P. A., will agree that you cannot mix control and audit without utterly destroying audit in the process.

Just to put it in very simple terms, the man who inspects goods that are woven at a loom, to see whether the goods should pass and should be sent out, cannot stand beside the weaver and give him advice as to how to lay on the threads. The minute he does that he has participated in the weaving of the goods, and then he cannot come along later and inspect it.

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