General is now. As a matter of fact, his removal from such extensive participation at various point in the settlement we feel will make him much more effective as an agent of the legislative body.

Representative GIFFORD. I hope so. Of course, he is appointed by the President, with the consent of the Senate, for 15 years.

Mr. GULICK. Yes.

Representative GIFFORD. And he reports post-mortem examinations only.

Mr. GULICK. That is right.

Representative GIFFORD. But under the present set-up we can demand a preaudit.

Mr. GULICK. That takes place now in only about 10 percent of the actual expenditures.

Representative TABER. Would not the 10 percent be multiplied very considerably by similar cases that are affected by the decisions? Mr. GULICK. I do not know.

Representative TABER. I imagine you will find that precedents are established by these individual cases of preaudit that the disbursing officers have been required to admit. So that I imagine that would affect a vastly larger percentage.

Mr. GULICK. Of course, the disbursing officers would similarly be very keen to watch the decisions made and the exceptions taken by the auditor under the program that is suggested.

Senator BYRD. As a matter of fact, the Comptroller General has the power to and must sign all warrants, so that no money can be spent until the Comptroller General first signs the warrants. It gives him the control and an independent check that is not provided for at all in this plan.

Representative GIFFORD. I want to pursue that once more. Having this correspondence, I am asking you what kind of correspondence you would expect if you wrote a letter to the Comptroller General and asked him if he ruled on this particular case I mentioned, and if the President had the power to order the disbursement of those funds for that particular purpose. What do you suppose his answer would be?

Mr. GULICK. I think his answer would be to sustain the President. He probably would already have given an opinion in advance before the thing was done, or have acted on the matter. One of your difficulties now is that you are writing to the Comptroller General that at some time or other he already had approved this.

Representative GIFFORD. They are all trained to be in line.
Mr. GULICK. That is the trouble of bureaucracy.

Representative WARREN. Mr. Chairman, Mr. Gulick was discussing a very interesting point, I think, when he was giving excerpts from the debate over the establishment of the Comptroller Generalship. I think he ought to be permitted to continue.

The CHAIRMAN. Very well. Mr. Gulick, you may proceed.

Mr. GULICK. This was from the discussion at the time of the adoption of the Budget and Accounting Act, that small part of the debate which had to do with the Comptroller General's Office. Of course, as I said, Congressman Byrns

Representative COCHRAN (interposing). Former Speaker Byrns? Mr. GULICK. Former Speaker Byrns. He said:

Of course, it would be highly improper, I take it we will all agree. for the accounting department to be given authority to interfere with the administrative features of the various departments, but the accounting department will audit all of their expenditures. The Comptroller General will pass on the question of whether or not the departments have made their expenditures in accordance with the law. He or his department will also be looking into the departments for the purpose under this law of making suggestions to Congress and its committees in the formulation and preparation of the various appropriation bills.

Then at another point of the debate:

The gentleman understands, of course, that the Comptroller General and Assistant Comptroller General have nothing to do with the transmission of the estimates or with their formulation or presentation to Congress. The Comptroller General or Assistant Comptroller General have only to do with the auditing of accounts. In other words, as the gentleman from Icwa [Mr. Good] expressed it in the course of his remarks a few moments ago, they make a post mortem examination of the expenditures made by the Govern

ment.

Then Congressman Parrish arose and said:

Then the accounting department, which will be under the direction of the Comptroller General, will audit very carefully all the expenditures after the money has been appropriated by Congress, and while in its nature it will be a post-mortem examination, yet I feel that it will have a beneficial effect.

Congressman Madden summarized it in this fashion:

The Comptroller General has no power to take away this discretion of a Cabinet officer as to what shall be done in the discharge of his duty, but he has the power only to pass upon the legal phases of the expenditure of the appropriations, and incidentally to report any delinquencies that may be found in any department in the course of the execution of the work of the department.

Now, here is another paragraph from Representative Good, who was the chairman of the committee:

Now we propose by this plan to have one accounting department for the final audit of all accounts, and that office shall have charge not of the administrative audits, because in each department there is already an administrative examination and audit, but the auditing force that makes the final audit, and is separate and distinct from the administrative audit force, is transferred to the accounting department.

That is recognizing the difference between the administrative audit which goes on in the department and the final audit which goes on by the independent auditor.

On being asked whether the Comptroller General might direct the application of funds-that is this specific question of availability of appropriations-his answer was:

No; it does not mean that he can direct the application. He reports whether it was applied efficiently, whether it was wisely spent. He has no power to direct expenditures.

Here is Congressman Byrns again:

Now the Comptroller General, under the terms of this bill, does not expend appropriations, as was suggested by a colleague a few minutes ago. He has absolutely nothing to do with the expenditure of the appropriations made by Congress. He audits the expenditures. He acts as the auditor for Congress, to see that the appropriations made have been expended properly and honestly and in accordance with the intent of Congress as expressed in the appropriation act.

In other words, the very small amount of discussion that was given to this by those who were the members of the committee pre

sents a very clear picture that they intended to provide in the Comptroller General's Office an independent audit which would not get into the administration, which would not interfere with the responsibility of the department heads, but would be an independent post-mortem audit after the expenditures had been made.

Representative COCHRAN. Mr. Gulick

Representative GIFFORD (interposing). Mr. Cochran, I was going to use your name right there. Why take those excerpts, when you know that other excerpts show that they passed on the legality, and they approach the Comptroller General, as Mr. Cochran constantly brings out, and ask his advice as to whether they can legally expend it or not? That is the principal difference. That is really the whole difference.

Mr. GULICK. The point I am making here is that the intent of Congress, at the adoption of this act, has not been carried out in operation; that in the operation, as it has developed, the operation of that office has become manifestly unconstitutional.

Representative COCHRAN. Right at that point, can you say for the record here specifically, if you know, that the bill that was being considered when that debate was going on remained the same in the end and became the law, or do you know whether or not it was changed so that in the end the Comptroller did have the power that he has exercised? Can you state specifically for the record whether amendments were offered that resulted in giving that power to the Comptroller, that he might not have had at the time that the debate was going on?

Mr. GULICK. This debate took place in the House after the presentation of the President's veto message, when that bill came up in 1921, and it was on the Good measure which came up in the House. As you remember, the Good measure was passed through the House and in the Senate there was a Senate measure.

Representative COCHRAN. In other words, you do not know whether the present act creating the General Accounting Office was in the identical language which was being considered when this debate went on?

Mr. GULICK. No; I know it was not.

Representative COCHRAN. You might be talking about another bill entirely.

Mr. GULICK. NO; it was the identical language, but it represented the action of the House, and the only action which the House took after discussion of the general principles that were involved. Then it went to conference and it came back, and there was practically no discussion.

Representative COCHRAN. What did the Senate do?
Mr. GULICK. The Senate passed a bill.

Representative COCHRAN. With or without amendment?
Mr. GULICK. The changes were made in conference.
Representative COCHRAN. What did the conferees do?

Mr. GULICK. I cannot give you the exact changes in phraseology.
Representative COCHRAN. The conferees could have made changes?
Mr. GULICK. Yes.

Representative COCHRAN. The conferees could have made changes in that bill that would have given the Comptroller General the power that he is exercising?

Mr. GULICK. The power he is exercising comes primarily from the transfer of certain sections of the Dockery Act, which were carried, in part, by implication, and they were powers which were not being exercised by the Treasury under section 8 of the Dockery Act at the time the transfer was made. But there were powers which, under a prior interpretation, have made possible the extension of the powers of the Comptroller's office.

The Comptroller sits in an arbitrarily powerful position. If he decides to interpret his powers broadly he can take over virtually the whole control of the administration. If he construes his powers very narrowly as did the Comptroller in the Treasury Department under the Dockery Act

Representative TABER (interposing). Are you familiar with the Budget Act, Mr. Gulick? I would like to have you point out to me the part of the Budget Act which gives the Comptroller General the authority to take over the whole administrative function of the Government.

Mr. GULICK. He does it under the general powers of settlement. It is not here; there is no specific authorization which authorizes the Comptroller General to substitute his judgment on administrative matters, but he has the right to hold up settlement and to embarrass the administration in carrying out the work. Then the natural thing for officers who wish to pass responsibility and find out in advance is to go and consult, get advice, and to accept his decision because of the embarrassment that he can make. Now there is no phrase in here, no paragraph in here, which authorizes the Comptroller to substitute his judgment for that of administrative officers.

Senator BYRD. There is a clause there that not only authorizes but directs the Comptroller General to see that the appropriations are legally expended, in accordance with the limitations set down by Congress. Is it your understanding, your interpretation, that the Congress were ignorant of what they were doing when they enacted that law?

Mr. GULICK. No.

Senator BYRD. You just read excerpts that you say are contrary to what the bill is.

Mr. GULICK. There was no intention on the part of Congress that that power should be utilized in the way that it has come to be used over the years.

Representative TABER. Now, can you refer to a specific instance where he has interfered with proper administration?

Mr. GULICK. Yes.

Representative TABER. Can you make a single one?

Mr. GULICK. We have scores of them.

Representative TABER. I would like to have you bring up a single one, so we can judge it.

Senator BYRNES. Mr. Gulick, may I ask you about one instance? What would you say as to this: There is a contract for the construction of a ship in a little shipyard-I remember an instance which was under my own observation, where the contract contained the usual penalty if the ship was not completed within a given time, unless conditions of weather made an exception possible, the administrative official in a department determined as to whether

conditions were such that even though the time was exceeded the amount of the contract should be paid to the citizen, and the Comptroller General says, “I disapprove that and I hold up the settlement", and in fact notifies the Treasury to hold up a refund of taxes, as I recall, or holds up the settlement on the ground that in his opinion the weather conditions were such that he should not be granted an exception, and therefore that there should be deducted from the amount of the contract to be paid to the shipbuilder so many thousands of dollars. Would that, in your opinion, involve a determination that it is an administrative function?

Mr. GULICK. Yes. It would seem to me that the man best posted to make the determination on that is the administrative officer.

Senator BYRNES. May I say that in the few years that I was out of the Congress I appeared in that case and I had to argue and present the facts as to the weather conditions, not to the Department, because the Department had approved the payment of the contract, but I discussed for 2 days weather conditions with an attorney in the office of the Comptroller General, and I wondered at that time whether it was not an unusual situation. I finally compromised, rather than to bring suit, and rather than to have the shipbuilder put in the position of antagonizing the officials from whom he might thereafter want business. I think that might suggest an instance of administrative determination.

Mr. GULICK. Yes.

Representative GIFFORD. Certainly, Mr. Gulick, if the Attorney General has the law before him, they might prove the weather conditions, the same as they might prove the weather conditions to the administrative officer.

Senator BYRNES. That is the whole question.

Representative TABER. In what respect would such an operation as that interfere with administration?

Mr. GULICK. That would be primarily an injustice to the contractor, in holding up the payment.

Representative TABER. It would be primarily a decision on the closing of the books rather than on the question of administration, would it not? That is what it would be primarily.

Mr. GULICK. No; I assume this is holding up the payment to the

contractor.

Senator BYRNES. They are not only holding up the payment to the contractor, but they deny the payment. What I suggested to the Congressman is this: Would it not be an administrative act to determine whether or not the contractor had complied with the contract? The contract provided that there could be an exception if there was an unusual weather condition; and the departmental officials, investigation with the report from the officers supervising the construction seems to me should furnish the determination.

Senator BYRD. That comes under the class of settlement of claims, not under the class of preaudit. It is just what we have been discussing, namely, the preaudit.

Senator BYRNES. It is on the question of whether or not it is not an auditing function but an administrative function, that Mr. Gulick was discussing.