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3. The bookkeeping and accounting system is designed and enforced by the comptroller.

4. The books are kept by the comptroller (except for supporting records which are kept in the departments and agencies).

5. Audit is placed in the hands of an "auditor" appointed by the legislative branch (or elected by the people), and entirely outside the executive branch.

6. The auditor makes only a postaudit of transactions and records and keeps no books. Though his audit is generally current, he has no authority to withhold payment or to make final settlement.

7. The attorney general has no routine part in the system of fiscal control, rendering opinions only on request. (In Virginia the power of the attorney general in settling disputes or claims in which the Commonwealth or a State department, institution, division, commission, board, or bureau are involved is further limited by the fact that such settlement must have the approval of the Governor.)

By these arrangements the executive is made accountable and responsible for fiscal administration.

IV. VIRGINIA REPORTS

As a further exhibit, I wish to submit three Virginia reports, as follows:

(1) Report of the Comptroller to the Governor of Virginia for the Year Ended June 30, 1936. (It is to be noted that this report was made on Sept. 29, only 3 months after the close of the fiscal year, a record made possible by the excellent system and machine accounting.)

(2) Annual Report of the Auditing Committee of the General Assembly and the Auditor of Public Accounts to the Governor of Virginia for the Period. October 16, 1933, to June 30, 1935 (audit reports are submitted separately).

(3) Opinions of the Attorney General and Report to the Governor of Virginia, from July 1, 1935, to June 30, 1936.

The volume contains 250 opinions. Not one of these overrules the comptroller. Only eight directly involve the comptroller; seven of these were requested by him. Each opinion is a legal construction of the statute similar to that furnished by the attorney general as chief legal adviser to other State and local officers. Only seven opinions are given on the request of the auditor.

On this basis it may be said that the attorney general of Virginia has no important routine part in the Virginia system of fiscal control.

The CHAIRMAN. The chairman will convene the committee on the return of Mr. Merriam, unless it appears that he is going to be absent too long. My understanding is that he will return as speedily as possible and I will notify the chairman of the House committee, who will notify the House members.

REORGANIZATION OF THE EXECUTIVE DEPARTMENTS

JOINT COMMITTEE ON GOVERNMENT ORGANIZATION,

Washington, D.C. The joint committee met, Senator Robinson presiding. The CHAIRMAN. The committee will please come to order. Mr. Brownlow and Mr. Gulick have been heard. We have Mr. Merriam with us this morning and we would like to hear him.

I should like to have Mr. Merriam, in the beginning of his statement, do what I neglected to have Mr. Brownlow and Mr. Gulick dowhat I expected to have done later-namely, state the background of his experience in studies similar to that which is now being conducted for this joint committee. Mr. Merriam, will you be good enough to proceed; and when you have given us that information, discuss the plan that the President's committee, of which you are a member, has reported.

STATEMENT OF CHARLES E. MERRIAM

Mr. MERRIAM. My experience, gentlemen, has been somewhat different from that of these other two gentlemen, although on parallel lines. I suppose you know Mr. Brownlow is the head of the Public Administration Clearing House. That is an organization that clears 15 other organizations of governing officials who are trying to work on the improvement of their traditional standards, interchanging experience, information, ideas, and so forth. These organizations are put together in what is called the P. A. C. H., the Public Administration Clearing House, of which Mr. Brownlow is the head.

Representative TABER. That is a local administration? Mr. MERRIAM. Well, some of them are local and some of them are running up and down. The Association of Public Welfare officials would run, you see, in both ways. There is the housing officials, there is the American Officials Association, the American Association of Accounting and Finance Officials, the Council of State Governments. The latter is a State organization for State officials, State legislatures,

Mr. Brownlow himself, as you know, was for a number of years Commissioner of the District of Columbia, the manager of several cities, and is, in the strictest sense of the term, an administrative expert.

Mr. Gulick is head of the National Institute of Public Administration, New York City. Mr. Gulick has been head of the organization for about 15 years. They deal with the improvement of governmental organization primarily in States and in cities. Mr. Gulick has already explained the kind of studies that he made in Massachusetts for Governor Coolidge, and in New York for Governor Smith, and in Virginia for Governor Byrd, and so on, through a long list of other States, counties, and cities.

Now, my own experience: I have been in the University of Chicago, professor of political science, for years. I was in the city council for some 6 years. The Congressman here will probably remember it. I took part in a good many investigations, inquiries, such as commissions on expenditures and State tax commission.

I was for a good many years on the executive committee of Dr. Gulick's organization, the National Institute of Public Administration. I was asked by President Taft to serve on the 1911 Efficiency Commission, but I did not go on that, nor did I accept some positions offered to me later by President Wilson in Washington, but I kept in touch from the beginning with the organization of the Budget bill which finally went into effect in 1921.

I was a member of President Hoover's Committee on Recent Social Trends. I was with Mr. Gulick and Mr. Brownlow on the Better Government Personnel Commission, which was set up with the blessing of President Roosevelt about 3 years ago, and reported about 2 years ago on the merit system or career service, not in the Federal Government primarily but in Federal, State, and local governments. But my own particular specialty has been politics and political theory. For that reason, if it is agreeable, Mr. Chairman, I would like to speak a little more about the background of this report of ours. The CHAIRMAN. Very well.

Mr. MERRIAM. The report is not merely a set of facts and data. We tried to work it out on philosophy, general principle of action. We went on the assumption that in the United States we have to deal with the fact that democratic government is under fire all over the world, and every effort should be made to improve and tighten up the efficiency of democratic institutions wherever that is reasonably possible.

We find a good many democracies going down. I myself saw the collapse of the German Republic in 1932. I did not see the Italian Republic go down, although I had a good deal of background on that, since I was there nearly a year during the war and was able to forecast some of the troubles that were going to arise.

The Austrian Republic went down. They certainly are hammering hard at France, they are hammering hard at Belgium, they are hammering hard at Switzerland. All over the western part of the European world they are pounding at the democratic governments. The charges are that a democratic government can neither decide anything quickly nor carry out any policy that is agreed upon vigorously and promptly.

Now, it has been my business for quite a number of years to combat these ideas, both here and abroad. We are not unmindful of the situation that as time drifts along and changes occur we will have to adjust our machinery to bring it down to date.

So it was with this in mind, after our preliminary conversations with the President, that the committee started out with the idea of seeing if there were ways and means by which the job of administrative management in the United States Government could be tightened up. We were not charged with the duty of considering how anything might be set up for Congress. That is outside of the refer

ence that we had. Obviously the President would not wish to set up a committee on Congress. That is a matter for Congress to do if they want to make any move.

When we look back oyer the history of our country—and that has been my job for quite a long while—we start with the conclusion which the founding fathers had, that it was their idea to set up a strong Executive. They minced no words in their attempt to establish a powerful executive branch of the Government. They had the experience, everybody knows, in the Articles of Confederation, that

of Congress, and we know that that very nearly went on the rocks.

We know that there was opposition set up against a powerful Executive, more powerful than existed in most of the States at that time. We know that there were sincere people who maintained that the liberties of the people of the United States would be utterly destroyed by the kind of a Presidency they were establishing. We know from reading over the debates in the different States where they discussed the ratification of the Constitution that one of the most commonly occurring arguments of the day was that they were setting up too powerful an Executive.

We know in the same way that there were many other timid souls that thought you could not have any kind of government over as large a territory as the United States. I mean by that the Thirteen Original States. They said we were too big for a democratic republic, that the only kind of republic would have to be a little one, like some place on the hillside in Switzerland where they could all meet together, like a town meeting, as in New England, or in the South, in very small units. There were many objections to a large area of government, a large territorial unit, and the objection of the relatively strong executive.

We tried to bring the executive management down to date. There have been two great steps in the development of the American executive. One was in the adoption of the merit system, now 50 years old. We tried to build up the principle of merit instead of the principle of patronage, and while that principle has never been fully carried out, and perhaps never may be fully carried out, nevertheless, very substantial progress was made 50 years ago, and has been made since that date.

The second big move, some of your gentlemen here present will remember, was in the establishment of the budgetary system, which was an attempt to fix responsibility for the preliminary gathering of the data on the comprehensive budget. That was made the task of the Executive, I need not remind you, with the ultimate responsibility in the hands of the Congress.

Now, it seemed to your committee that a third long step would have to be taken to bring the executive up to date on the side of what we might call administrative management. You can call it administration, you can call it management. Neither of those words is in the Constitution of the United States. But as far as that is concerned, neither are the words “political parties” in the Constitution.

Now, the reason that we were interested in management was that the United States is the country in the world undoubtedly that has made the longest step ahead in administrative management. We

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