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We found over 100 agencies of government, 130, depending on how you count them, reporting directly to the Chief Executive.

We found that not only were there many of these agencies but in many instances, even where they were not policy determining, or quasi-judicial, that there were many-headed boards and commissions.

We found that the budget system as contemplated in 1921 had never been fully developed as a continuing agency for a study of governmental machinery, reporting to the President and to the Congress.

We found that the accounting system, from our point of view, was cross-grained and twisted and had grown up in a manner not originally contemplated.

We found large possibilities of improvement in the expansion of the merit system and in the reorganization of civil-service administration.

We found large numbers of relatively unrelated spending agencies scattered throughout the different departments and various authoritative agencies not brought together.

The plan that we propose, in principle, is what I would like to speak on very briefly, because this is a system that works in a more or less unified way, if it works at all. We, of course, are quite ready to discuss all the details that go with the minutiae inevitable in this kind of a plan, but, in general, the most important thing is the guid-ing principle of it, whether you want to do the general kind of thing that is proposed. That is what we propose can be summed up.

Summing it up over again and perhaps repeating it a little bit ; first, it is to provide the President of the United States with the necessary assistants, three, four, or five, whatever the number may be; second, it is to set up in the White House itself, using the President's language, the three agencies of management and tying them in together, the budget, personnel, and planning, as an overhead White I Touse staff: in the third place, to simplify the one-hundred-andthirty-odd agencies and put them in 12 main departments, and classity them, bring under those 12 tents, or on those 12 hooks all of the 130 agencies of the Federal Executive.

We propose atso the substitution of single-headed boards for manyheaded boards, except in cases where the boards are policy determining, or where they are quasijudicial. And we propose, finally, to set up a mechanism for the accountability of the Executive to the Congress, the Executive being the agent and the Congress being the principal

We are quite prepared to discuss the detail of these plans with you at any time. We have drawn up, not for your purposes, but for our own purposes, the draft of a bill. We drew that bill

up

in this way: We first set up certain principles and we checked them against the text of the report, to see how it would sound when we wrote it up. Having had the experience that a thing may sound well in a report but will not work out in a bill, we had a bill drafted, and we checked the bill and the text against the principles to see whether they would fit together.

Senator TOWNSEND. Is that the bill that we have before us now!

Mr. MERRIAM. That is the bill you have before you. It was only intended for our own information and for our own guidance in setting up this plan. Mr. Brownlow, Mr. Gulick, and I have had more or less experience in bill drafting and we know how many times it.

happens that what looks like a good idea, when you come to draft it just does not spell anything in legal language.

Senator TOWNSEND. You are referring to the second bill?

Mr. MERRIAM. The second bill or the first one. It was just a little modified.

Senator BARKLEY. Let me ask you a question, Doctor. The thing that sticks in the minds of a great many economists—I mean by that legislative economists—is the fact that the creation of two new departments sounds like an increase in the governmental expenses rather than a decrease. Have you figured out to any minute degree the relationship between any possible increase and any possible decrease because of the creating of these loosely formed, disjointed departments, one hundred and thirty odd into 12 departments, according to their relationship to the work in the departments, have you figured it out to determine whether it would necessarily increase the expenses or whether it might work economies !

Mr. MERRIAM. Well, unless you went into great detail that would be only a guess. Our recommendation there, you remember, Senator, was that we give the Executive the continuing power of allocating the agencies and functions.

Senator BARKLEY. I understand, but the ordinary mind, as soon as you think about increasing departments from 10 to 12, the ordinary mind conceives the idea that that would mean a lot more expenses.

Mr. MERRIAM. Not if he thinks of it the other way around, of cutting them down from 130 to 12.

Senator BARKLEY. That is what I am getting at. It does not mean necessarily the increase of governmental agencies, it might mean a decrease of agencies if they are all grouped together, consolidated and coordinated. So while 12 departments sounds like it is more expensive than 10, as a matter of fact it might be less expensive, might it not?

Mr. MERRIAM. It undoubtedly would be. Twelve, of course, is more than 10, but, on the other hand, 12 is a good deal less than 130.

Senator BARKLEY. Most people do not think about the 130, they just think of the 10 Cabinet officers, and that is the end of it.

Mr. MERRIAM. What we would like to think about it, is how the President performs the task, having to deal with 130 scattered agencies, how he is going to exercise the necessary supervision.

Senator BYRD. You do not mean the 130 are abolished, do you? They are simply grouped into 12 departments, but the same bureaus continue just as they are now?

Mr. MERRIAM. The same functions. We do not pass on what functions should be carried out. It would be the same as your Virginia bills, Senator Byrd. You do not abolish bureaus; you bring them together under a single management.

Senator BYRD. You are speaking of the possibility of a substitution of 12 for 130.

Mr. MERRIAM. Yes.

Senator BYRD. Which particular ones would you expect would be abolished? Have you gone into it?

Mr. MERRIAM. No; we have not gone into it.

Senator BYRD. It is perfectly conceivable that the same expense and probably a greater expense will occur by grouping the 130 into 12 departments, because the bureau will be there just as it is now.

Senator BARKLEY. There are certain administrative expenses that might be eliminated in, say, 20 of these different independent agencies, all of which have certain overhead expenses, if they are brought within one department, one system, and the overhead expense would probably function for all of them. In that way there might be a reduction.

Mr. MERRIAM. Well, you have got 130 already. Instead of 130, you would have 12.

Senator BYRNES. You have got 130 divisions. You would merge them into 12 departments, but you would continue the 130 subdi. visions.

Mr. MERRIAM. For instance, you might not have the local counsel for various departments.

Senator BYRNES. But you would still continue the 130 subdivisions.
Senator BYRD. You say there would not be 130 subdivisions ?
Mr. MERRIAM. No; there would not be 130 subdivisions.

Senator BYRNES. Í assume, if you have got so many independent agencies, you would transfer the personnel of some of the divisions into the regular departments. It would depend entirely on which bureaus were merged and what was then done to reduce the expenses of the department.

Mr. MERRIAM. Conceivably you might transfer them or keep them exactly where they are, but we assume, if there is a spirit and will in Congress and in the Executive to do this, that they will do it in a way in which they can make very large economies and efficiencies.

Senator BYRD. It likewise gives the President the power to create new bureaus and agencies, does it not? I see that Mr. Wallace says it is supposed to create a consumers' department devoted exclusively to representing the consumer in government. The consumer representative agency is a part of the reorganized Federal Government.

Mr. BROWNLOW. May I answer that?

Mr. MERRIAM. Let me answer that. As a matter of fact, there are three of them there now, one in Agriculture, one in Labor, and another one in Commerce. We propose to bring the three of them into the Department of Public Welfare, so, instead of having the three, you will have one.

Senator BYRD. The President has the power to create new bureaus and agencies, does he not, as well as to merge them?

Mr. MERRIAM. Yes.

Senator McNARY. Mr. Merriam, I listened to you and others as to this report that has been compiled, as to the 130 agencies. Have you a categorical list of the subdivisions of the agencies?

Mr. MERRIAM. You want us to give you the list?
Senator McNary. I would like very much to have it.

Then you take your 130 agencies and group those all in 12 divisions or departments?

The CHAIRMAN. That is just what they did not do, because they said they were not asked to do it.

Senator McNARY. I am asking him to do it. I think if you serve The Government in the capacity in which you are serving it and you

come before the committee, I think we have a right to ask you to supply the information to the committee.

I think there are very many duplications in public service and activities, and many of them ought to be destroyed. You spoke of 130, putting them in these 12 departments. I would like to have a list of these agencies, those that you think will be annihilated, those that you think will be preserved, and in what group they would naturally fall. I do not think that is asking too much; it is only asking your opinion, anyhow, in that matter.

Mr. MERRIAM. Our idea on that, Senator, was that the task of reallocation is a continuing job and must rest somewhere, and that "somewhere" better be, first, in the original studies of the Bureau of the Budget, and then in the decision of the Executive.

Senator McNARY. Could you supply a list of these various agencies about which you speak? Is there one to be found in the record ?

Mr. MERRIAM. Well, if there is not, Senator, we can supply you with one, or put it in the record. The general outline, as nearly as we came to it, is on page 34 of the report, where we set up the 12 main departments.

Senator McNARY. I have it before me, and I do not get anything out of it. It is too general. In your testimony, and that of others, you proceed upon the theory that you are going to bring about a diminution in expenditures of Government administration, but there is nothing here, nothing that can be said legally, to conclude that that is the immediate purpose of this whole reorganization scheme.

Senator TOWNSEND. That was not the underlying thought in the committee, was it, the reduction of expenses?

Mr. MERRIAM. Yes; in the long run. That is, there are different ways of getting economy. Our idea was, having taken a good look at this—this was not the first look we had on it—that such a job could not be done effectively except on the basis of a continuing study with the Bureau of the Budget. If we had that kind of arrangement now, you would begin to change it tomorrow. It would have to be readjusted and reset, as it would in any other business.

The CHAIRMAN. As experience showed desirable and necessary. Mr. MERRIAM. As experience showed desirable and necessary.

Representative TABER. Well, now, what experience showed and what situation showed that the reorganization along the lines you set up was desirable and necessary? I am trying to get the background and the basis for your idea.

Mr. MERRIAM. Our experience is that even since the Bureau of the Budget was set up in 1921, or any time during this period, you might have had an act of Congress covering that whole situation, and various attempts of that sort have been made. They have not, on the whole, been successful. The experience has been one of extreme difficulty and the practical impossibility of getting together in a general act a rearrangement of all the agencies and functions.

Representative TABER. Well, the President practically had that authority in the Economy Act of 1933, did he not?

Mr. MERRIAM. Yes; in 1932 and 1933 he had it.

Representative TABER. And in 1933 the President practically had it exclusively under his jurisdiction?

Mr. MERRIAM. He did.

Representative TABER. And there was no general reorganization brought about !

Mr. MERRIAM. No; there was not. I need not remind you, however, that the early months of 1933 was a time when the mind of the President and Congress was pretty well preoccupied.

Representative TABER. But there was a very considerable period after 1933 that this authority extended.

Mr. MERRIAM. Not long enough to do very much, Congressman. Representative TABER. How long would it take, in your judgment ? Mr. MERRIAM. Well, we thought 2 or 3 years to work that out.

Representative TABER. Now, what basis did you start with as your job of working out some kind of a report as to what ought to be done with this Government situation?

Mr. MERRIAM. I tried to explain the general background and basis.
Representative TABER. Yes.
Mr. MERRIAM. I see I haven't been effective in doing that.

Representative TABER. Were you started out with a carte blanche to act in the situation and to study it as you pleased and make such recommendations as you pleased, or were you given a definite set-up as to what you were expected to cover and what you were expected to arrive at?

Mr. MERRIAM. No; I myself made originally the first suggestion. I made that to Mr. Delano and then to the President. Will you

read that question ?

(The question of Representative Taber was read by the reporter.)

Mr. MERRIAM. We proceeded on our own system, if that is what you have in mind; without outside suggestions as to the nature and the type of inquiry or what we should or should not discuss and what we should or should not recommend. This is the work of Messrs. Brownlow, Gulick, and Merriam.

Representative TABER. What research did you make into the governmental situation?

Mr. MERRIAM. We set up our staff along last June and various men worked in different departments. Then we had a great deal of help from men in the departments, from the regular employees.

Representative TABER. What kind of employees—heads of departments or the clerical force ?

Mr. MERRIAM. Well, we talked with as many as we could-heads of departments, bureau heads, and experts in various lines, particularly on administration.

Representative TABER. I wish you would give us some kind of a picture of what assistance you had from experienced governmental administrators.

Mr. MERRIAM. Do you want to take that, Mr. Brownlow?

Mr. BROWNLOW. The staff was made up of people that were chosen because of the studies that they had made and their experience in various matters that we looked to, that we thought might come into the report. For instance, take the matter of personnel; the chief of that staff was Mr. Reeves, who had been the head of the personnel division of the Tennessee Valley Authority, and who, before he had undertaken that work, had made studies in personnel. He was assisted by various other people, some of whom had governmental experience in various levels of government, and some who were

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