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President, he is removed by the President. The question involved here, it seems to me, is an independent audit responsible to the Congress, not to the Executive.

Mr. GULICK. That is right.

Senator BYRD. I think we should keep that clearly in our minds. May I be permitted to make a statement about the plan in Virginia ? Mr. Gulick stated this plan was similar to the plan adopted in Virginia. I was Governor at that time. He was the expert that prepared the plans. I differ with him with respect to the fact that this plan is similar to the Virginia plan. The Virginia plan provided for a comptroller. He was not an executive officer in the sense that he had any expenditures in his department.

This plan provides for the Secretary of the Treasury to do the auditing. The Secretary of the Treasury spends one-third of the entire budget of the Government, including the interest on the public debt. In other words, one-third of the expenditures of the Government will be audited, and the settlement of claims made by interested officials in his own department.

In addition to that the Virginia plan provides that the Attorney General of the State, who is elected by the people and not appointed by the Governor, renders opinions, and in that event his opinions have force and effect of law, unless reversed by the courts. So there is an independent check on any decisions that the Comptroller may make at the request or under the influence of the Governor, the executive branch.

Under this plan the Secretary of the Treasury makes all the settlements of the claims, he settles the claims in his own department, because there can be no appeal from that.

Under your plan you would only appeal to the Attorney General when the head of the department complains that the Secretary of the Treasury has not done as he thought he should do with respect to the payment of the accounts. That is correct, as I understand it. So there can be no appeal from the Secretary of the Treasury-there would be nobody to take the appeal to the Attorney General. So insofar as the accounts of the Department of the Treasury are concerned, he will be sole judge, unless it is later audited by the Auditor General and reported to the Congress. After the money is spent, in that event, it is impossible to make recovery. This thing of collecting $10,000,000 or $20,000,000 from some department official is absurd. He might be sent to jail, but you cannot recover the money, unless they are wealthier than I think they are.

I just want to make one more remark, Mr. Chairman. I think the issue here is an issue of an independent audit. It is not a question of the performance of an administrative function, because if an expenditure is made illegally, in the sense that the general law is not carried out-there are many provisions of the general law, which Mr. Gulick knows with respect to contracts, which have to be advertised. Different things have to be done-I do not regard that as purely an administrative function. That is a function with respect to the Congress, it is for the Congress to say that the money is honestly and legally spent. There is a clear distinction there. The issue raised here, it seems to me, is the issue of Executive control over the auditing system of the Government.

Representative TABER. In connection with a statement that Mr. Gulick made I desire to call attention to section 211 of the proposed bill, part 3:

METHOD OF APPOINTMENT

All offices or positions in the agencies of the Government to which appointments are authorized to be made by the President alone, or by the President, by and with the advice and consent of the Senate, shall, when hereafter filled, be filled by appointment without term by the heads of the executive departments or independent agencies in or under the jurisdiction of which such offices or positions are located, except the following:

And the Auditor General is not excepted.

Mr. GULICK. It is covered somewhere else in the bill. It should be covered, if it is not covered, because that was certainly the intent. Representative TABER. That would not create an independent

agency.

Mr. BROWNLOW. It is covered in section 306.

Senator MCNARY. Does this bill cover your ideas of carrying forward your recommendations?

Mr. BROWNLOW. That is the reason it was drafted.

Senator MCNARY. The committee is unanimous in recommending this bill?

Mr. BROWNLOW. We drafted this bill, as I said, Senator, as a basis for discussion. It is our idea that the recommendations in the report are carried forward in this bill, and for convenience they were put in a legislative form here, to serve if people wanted it.

Senator BYRNES. You did not send the bill up here?
Mr. BROWNLOW. We did not send the bill up here.

Senator MCNARY. Then can each member of the committee have a copy of the bill, so that they may study it?

Mr. BROWNLOW. Yes; I will see to it that copies of the bill are sent to each member of the committee. That was not asked for until this morning.

Senator McNARY. In view of the fact that much of the discussion refers to the bill I think we should have it recorded in the record so we may be able to intelligently read this record.

Senator BYRD. I haven't seen the bill.

The CHAIRMAN. What is the pleasure of the committee? Do you wish to incorporate the tentative draft of the bill in the record? Senator MCNARY. I move that be done.

Senator BYRD. Mr. Brownlow said if anybody wanted it, he would be glad to present it to them.

Mr. BROWNLOW. The reason for that was this: We were writing a report, and sometimes you write things out and then you translate them into a legislative act, and questions are raised, you do not know whether you can do it or not, so after we got fairly well along with the report we started in getting a legislative draftsman to work at the same time on the thing, so we could see it in both forms.

The CHAIRMAN. If there is no objection the bill will be printed in the record as a part of the hearing.

Representative COCHRAN. Do you feel that this committee, in trying to reorganize the Government agencies, should also take up the question of the classification of salaries in the higher branches of the Government?

Mr. BROWNLOW. We are not suggesting what the legislative committee should do or should not do in their wisdom. We have said in the report, with respect to the service, if the Government is going to get the services of able people-you cannot go all the way in competition with private business-but we thought, as we said in the report, there should be better compensation for the people in those higher administrative positions, and since we do it in the report it is also carried into the bill.

Representative COCHRAN. Do you not think it would be more advisable for the legislative committee of the House and Senate to handle that question rather than this committee?

Mr. BROWNLOW. Perhaps it would be. We were concerned, in the drafting of the bill only in getting into bill form what was in our report. We are not presuming to advise the legislative committee on what procedure they should adopt in their consideration of the report, or this tentative bill as another facet of the report.

Representative COCHRAN. In other words, if the bill only applied to increases for the higher positions and it should reach the floor, amendments would be offered to take care of those in the lower bracket, and you would have a very hard time to keep the amendments from being tacked to the bill, so before you got through you would have a bill raising the salaries of all Government employees rather than a reorganization bill, you had better remember that.

The CHAIRMAN. You might just as well recognize the fact that the increase proposed in salaries of Cabinet officers and bureau heads, and certain other groups of important employees means an increase all down the line, and a substantial increase at that. In my judgment the Congress could not, with due regard for the entire salary system and classification system, increase a few salaries without reviewing the entire subject, and it would be unconscionable to do so. You could not say, "We will give a bureau head $15,000 a year," and then say to another man that he must work for $1,440 a year. My judgment is, and I have said that before, as you will recall, Mr. Brownlow, that it is a great mistake to confuse the question of increases in salaries with the question of reorganization.

Mr. BROWNLOW. That was the point.

The CHAIRMAN. Whenever you do it the salary question becomes the controlling consideration, by reason of the general public interest in the subject.

Mr. BROWNLOW. On the theory you just set forth, it could be treated entirely separately.

Senator BYRNES. Or forgotten.

Mr. BROWNLOW. I cannot quite say that ultimately it ought to be forgotten without stultifying ourselves.

Senator BYRNES. May I ask one question? You made a statement that in your opinion it would take 2 or 3 years to make an investigation to determine the bureaus that should be merged. Did I understand you correctly?

Mr. BROWNLOW. Yes.

Senator BYRNES. Why?

Mr. BROWNLOW. Because it would require intensive study of each of them that would be affected, and I do not think it could be done in less time. I say 3 years-perhaps 2 years—but it would take a

considerable length of time. Now, in the work that has been done in cities and States, it took 18 months or 2 years even in the State, where a much smaller establishment is necessary, for the type of survey that these services should receive.

Senator MCNARY. I haven't read the provisions of your bill; it would probably take me a day to do so, but probably it is a good bill. Have you been given carte blanche in these expenditures and in making these allocations of these bureaus and divisions of Government quite apart from the provisions established by the Congress? Mr. BROWNLOW. Those expenditures are set up and this bill follows almost exactly in the language of the Economy Act of 1932 or 1933. Senator MCNARY. The President can take from one department and place in another department any division of the Government he desires?

Mr. BROWNLOW. Yes.

Senator McNARY. Or abolish it?

Mr. BROWNLOW. Just as he had power under the old bill, with certain exceptions. It is the langauge of the other bill.

Senator O'MAHONEY. Senator McNary, in answer to your question let me read from the bill.

Senator MCNARY. Yes; I would be very glad to have it.
Senator O'MAHONEY. This is section 2:

Whenever the President, after investigation, shall find and declare that any transfer, retransfer, regrouping, coordination, consolidation, reorganization, segregation, or abolition of the whole or any part of agency, or the functions thereof, is necessary to accomplish any of the purposes set forth in section 1 of this title he may, by Executive order:

a. Transfer or retransfer, the whole or any part of any agency, or the functions thereof, to the jurisdiction and control of any other agency;

b. Establish any agency to receive the whole or any part of any other agency, or the functions thereof, and this shall include the power to establish Federal corporations and direct that such action be taken as may be necessary to effect the transfer to any such corporation of the assets and liabilities of any federally owned and controlled corporation or corporations and empower any such Federal corporation to exercise such functions as may be necessary to effectuate the purposes for which the federally owned and controlled corporation or corporations were established;

c. Regroup, coordinate, consolidate, reorganize, or segregate the whole or any part of any agency, or the functions thereof: or

d. Abolish the whole or any part of any agency, or the functions thereof, and this shall include the liquidation and dissolution of any federally owned and controlled corporation in accordance with the laws of the United States, or of any State, Territory, or possession of the United States (including the Philippine Islands), or the District of Columbia, under which such corporation was organized; and

e. Perscribe the name and functions of any agency transferred, retransferred, established, regrouped, coordinated, consolidated, reorganized, or segregated under this title, and the title, functions, tenure, and method of the appointment of its head, or of any of its officers or employees.

Senator MCNARY. Thank you. That seems to be the heart of the matter. I do not think you would need much more legislation if you carry that out. What is the need of Congress considering any other provisions of the bill?

Mr. BROWNLOW. That does affect the regrouping of the operating agencies. That does not affect the fiscal or personnel, managerial agencies, independent auditing, and the other features of the report. There are very few changes there. It follows exactly the line that Congress has twice adopted. It is just the same old bill. The

changes I haven't the original text with me-are so as to facilitate one or two things. For instance, you have got a lot of federally owned corporations that are now under State charter. This would put them under Federal charter.

Senator MCNARY. Just let me ask you this as a matter of personal enlightenment. You recommend the Departments of Conservation and Public Works. Is there a clear line of demarcation between the activities of those two organizations?

Mr. BROWNLOW. This is not a definite, clear line, as there is not between many of the groups of organizations that we have. The clarity of that line eventually, over a period of years, would be determined only after research into what are the necessary divided functions that are now in a particular bureau, and putting somebody in one and somebody in another.

Senator MCNARY. I was speaking of that, you know, just because in the last year Congress has decided upon a new venture in looking after flood control as a national problem. Formerly it was limited to the Mississippi River, maybe to the Sacramento River, where we are putting in dams, impounding the waters, holding them back. That is public work; that is conservation.

You might say the same thing in the development of power. We are now building huge dams at tremendous expense, on some navigable streams; we impound the water for reclamation, for domestic uses, or navigation. There is a lot of work going on like that.

I am interested to know whether, in your opinion, or the opinion of your associates, if there is any clear line of division between conservation and public works when you come to major projects and a great Government work of that kind?

Mr. BROWNLOW. I think it would vary with respect to the particular work. It might very well be, even in these other large things, that the Department of Public Works might be the constructing agency, and possibly another department the operating agency thereafter.

Senator MCNARY. Now, I am not arguing with you, I am just getting your view, but if you are attempting to simplify government, effecting retrenchments, what is the use of having the departments of public works and conservation?

Mr. BROWNLOW. The Department of Public Works has a direct connection with what we conceive the conservation of resources, but there are such public works as the highways, for instance, which are of a different character.

Senator MCNARY. I do not know. They lead to these projects; they lead to the national parks; they lead to our great forests. There is a very intimate connection between highway construction, public works, and conservation, as far as that goes.

Mr. BROWNLOW. Of course, in one way you can look at that very closely, when it comes to actual operation and the use of the different type of organization that you need, but sometimes there is a great difference between construction and operation, because you need a different type of organization, even when they all have one single, general, ultimate purpose.

Senator MCNARY. I do not want to take more than my time in arguing this, but did the President review this bill that you have now, that is part of our record?

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