burdens him to such an extent that his ordinary secretaries cannot be used even to the extent that Presidents formerly used them in contacts with the administrative agencies of the Government.

It is our idea that there ought to be that kind of administrative aid there. We are very certain they ought not to have any authority to act for themselves. We are very certain they ought not to be interposed between any Cabinet officer or any head of an independent agency and the President, but they would rather, as I said yesterday, facilitate those contacts. There are certain very small things for instance, there is nobody now that can decide a question about closing the Government departments in an extraordinary case, such as 105 weather or a blizzard. It takes telephoning from all of the chief clerks in the world. Nobody can decide it but the President, and the President hasn't got anybody to help him even with that type of housekeeping. Of course, what he does is detach somebody, but it is nobody's job. Particularly in the case of things coming from the departments which are special pleaders, and properly so, the President ought to have somebody he can turn the matter over to and say, "Look into this. See how it affects other things. See if it is already being done somewhere."

Senator BARKLEY. It seems to me that on matters that are not technical, routine matters, the President ought to have a group of confidential men always at his beck and call, who could make investigations instead of having to call in some outsiders who have no governmental responsibility-a sort of kitchen cabinet, and ask them to make research into a certain thing for his benefit. He ought to have a sufficient force there of that type which would be free from little, detailed, routine matters such as making appointments.

Mr. BROWNLOW. Then also he ought not to be forced for particular things to go into departments and pull a man out, interfering with the work of the department. It has been going on for the 30 years I have been around Washington, although it has increased very much in recent years.

Senator BARKLEY. That is all I wanted to ask on that.

Mr. BROWNLOW. It also would greatly facilitate, in my opinionI mention it because it is in part an answer to one question asked here yesterday, I have forgotten by whom-it would greatly facilitate the orderly preparation of business for the Cabinet meetings so that agenda could be established so you would get through with the Cabinet business that ought to come before the President and the Cabinet in very much more orderly fashion than has been done. Senator BARKLEY. Thank you.

Representative GIFFORD. With respect to Senator Byrd's question that was propounded to you yesterday, conversely, what could be done with leases and other things, contracts that might be canceled, in which the Comptroller General has claimed heretofore that we had a fee or an equity? Would you consider that? I stated the problem conversely.

Mr. GULICK. Yes; you stated it yesterday. That would proceed just as it proceeded up until 1921; namely, the lease would be canceled or not be permitted to go through, as a result of the action of the fiscal control officer. It it were a question of cancelation where there was an equity involved, it would go to the Attorney General and suit would be taken for the collection of that equity, or if there

were subsequent arrangements or dealings with the same individual it would be withheld from his payments, and so forth.

Representative GIFFORD. I would not comment on that, but I have another matter I want to bring up. I have read comments on corporate devices that has been entered into, and you have rather darkly hinted that the Comptroller General had to be gotten around, and that many things had to be done that should not need to be approved of in order to proceed. I want to ask you if you consider that the corporation devices could be done away with in this set-up?

Mr. GULICK. I cannot speak for my colleagues entirely. We came to the conclusion that there had been too free use of corporate devices. If it is a permanent thing, it would probably be better to get along without corporate devices; it does not assist the orderly transaction of business to have entities that are too far removed.

Representative GIFFORD. Have you found in your study of it that they were deliberately entered into to avoid the Comptroller General? Mr. GULICK. Not on that specific point, but they were entered into in order to avoid many of the routines of government and in order to make it possible to have an agency which would cooperate and enter into contractual relations with other agencies, in local government areas particularly, and to maintain revolving funds.

Representative GIFFORD. Now, the supervisory authorities that you recommend for these corporate devices, you say they ought to have a semiautonomous standing. What do you mean by that?

Mr. GULICK. We are conceiving a plan under which all of the activities of the Government-that is, of the executive branch-would be tied into one or the other of the 12 major divisions. Certain of these activities could be tied in just the way bureaus are now-as an intimate going part of the department. Other activities need a little greater freedom, particularly during the developmental period when they are experimenting; particularly when you are dealing with the corporate agencies you need to have a very much greater amount of freedom because they do not represent the traditional types of governmental divisions.

Representative GIFFORD. You are leading me astray on that word "semiautonomous." What do you mean?

Mr. GULICK. We mean that some agencies should have no autonomy whatsoever they should be fused into departments; other agencies should not be fused into departments but should exist with a greater freedom with reference to the preparation of their budget, with reference to handling their work, transferability of individuals, their office arrangements, and so forth

Representative GIFFORD. That does not answer my question at all. Mr. GULICK. So they would be semiautonomous.

Representative GIFFORD. I grant you that; but the semiautonomous authority of a supervisory body in an independent organization, what is it? What do you mean by the word "semiautonomous"? Should he be on the board of directors, or would you say not? In order to have a semiautonomous standing, should he be on the board of directors in this independent

Mr. GULICK. In a corporate organization they might not be on the board of directors. I should think on the whole that it is better for bureau heads, and so forth, not to be on the board of directors of organizations.

152419-37- -5

Representative GIFFORD. Then what do you mean by "semiautono

mous"?

Mr. GULICK. That means in the preparation of their budgets they would have their own section; that means that the secretary of the department would not have the same authority to give instructions to them with regard to how they shall do their work that he would have to give to the agencies which have no autonomy.

Representative GIFFORD. Take the Home Loan; you put a supervisor down there, he should have semiautonomous authority there, but he should not be on the board of directors, but he should be so intertwined that he can know what is going on?

Mr. GULICK. That is right.

Representative GIFFORD. With the idea of preventive measures? Mr. BROWNLOW. May I answer that particular question?

Representative GIFFORD. I want the word "semiautonomous" defined before I am led away from it.

Mr. BROWNLOW. I was going to do it by means of an illustration, that if the lending agencies under this arrangement were put into the United States Treasury Department, on account of the great size, on account of the great variety of their work, they would be under the Secretary of the Treasury with respect to the coordination of their borrowing, the coordination of their total amounts of lending, subject, of course, to the authority granted by Congress, the Secretary of the Treasury might name the members of the Board, but he would not fuse Farm Credit Administration and the Home Owners' Loan Corporation, one still active and one in the process of liquidation through one set of officials, because of the difference in skills that is required in the urban mortgage-loan business and the rural mortgage-loan business. So that would be semiautonomous in that he would have been tied into the department only for certain purposes of coordination, and still left independent and semiautonomous for the purpose of operations in the field.

Representative GIFFORD. That interested me because you said that the supervisory capacity should not sit beside the weaver and afterward pass on the product, and in this case it appeals to me that with the semiautonomous situation, while you are avoiding his being an actual director, he must be a participant somehow in the proceedings or else the word "semiautonomous" does not apply.

Furthermore, I want to press that corporate devices a little bit. Even within the last week we have set up one, and is it not to avoid direct appropriations and avoid civil service and avoid any auditing, practically? Is it not simply set up as an avoidance of the things that you yourself are trying to get us to do?

Mr. GULICK. I do not know the specific circumstances in the creation of this new organization.

Representative GIFFORD. You have read your own report here, have you not? I will read it to you. It is your own criticism.

Mr. GULICK. You asked with regard to this one that had just been set up

Representative GIFFORD. I did not refer to that especially.

Mr. GULICK. I think all we have are set up in order to give an agency which is more manageable in certain regards and is free from certain of the traditional requirements.

Representative GIFFORD. You are coming before this committee, trying to urge us, of course, to set the Government up as you would a corporate enterprise, with business efficiency, which perhaps we will grant cannot be done. But do you approve of the corporate devices simply because for the time they seem to be able to work more efficiently, but at the same time you agree that they are probably set up to avoid the Comptroller General, civil-service requirements, and to avoid appropriating money through the Treasury and handing back to the Treasury the amount taken in? Is it not carried now so far that the word which is sometimes used-I hate to' use the word as my own-is it not amounting almost to a conspiracy, deliberately planned, to set up these things, pleading efficiency, but for the avoidance of all these things which I mention and which you agree in your report is probable?

Mr. GULICK. Is that a question that you expect an answer from me on?

Representative GIFFORD. It is very well set out in the report. I want you to acknowledge your own report.

Mr. GULICK. You need not worry about that, sir.

Representative GIFFORD. That you do gain efficiency at times, but you do claim as an offset to that efficiency

Mr. GULICK. There must be control.

Representative TABER. Mr. Chairman

Senator BYRNES (presiding). Mr. Taber, you desire to ask some questions?

Mr. GULICK. I did not finish the statement of my answer to the Senator. With reference to the program in regard to the Auditor General, whether it represented a statement of pure theory or whether it had any foundation in experience, I want to say at this point, to complete that answer, that precisely what we recommend here, with very minor and inconsequential differences, exists in the State of Massachusetts, carried through under Calvin Coolidge. As a result of

Representative GIFFORD. I was chairman of the ways and means committee of that State when you did that.

Mr. GULICK. I remember you.

Representative GIFFORD. You would not like me to enter into anything on that?

Mr. GULICK. Second, in the State of Maine

Senator BYRNES. May I ask, has the statute remained as it was then adopted?

Mr. GULICK. As far as the audit and control goes. And in the State of Virginia, by Senator Byrd

Senator BYRD. I take exception to the State of Virginia, Mr. Chairman.

Representative GIFFORD. May I take exception to the State of Massachusetts?

Mr. GULICK. That audit is not separate under an official who is not under the executive?

Representative GIFFORD. I would not like to say.

Mr. GULICK. My position about Massachusetts is that the audit is performed as a post-audit by an official who is responsible to the legislative branch.

Representative GIFFORD. But before the money is paid.

Mr. GULICK. That control is handled from the finance department and the audit is made after the money is paid; and that in the State of Virginia the control is in the finance department under an officer who reports to the Governor; that audit is made after the expenditure by an official who is responsible to the legislative branch and is then independent of the executive; and that in the State of Maine the control is

Senator BYRD. Mr. Chairman, at that point I would like to call attention to the statement I made yesterday with respect to Virginia, which is in the record, which varies from what Mr. Gulick has just said.

Mr. GULICK. It is a matter of provision of law which the committee can go into.

Senator BYRNES. Mr. Taber, did you want to ask some questions? Representative TABER. I have a few at any time.

Senator BYRNES. May I ask are you going to pursue the inquiry that has developed as to the Comptroller General?

Representative TABER. I was going into the Comptroller General's functions some, but anyone else who wants to may go ahead. Senator BYRNES. I simply wanted to ask one questionRepresentative TABER. Go ahead.

Senator BYRNES. With reference to the illustration, I stated yesterday, Mr. Gulick, that when Congress authorized the payment of certain funds to cotton ginners there was a delay of approximately 6 months, as I recall it. Finally in order to secure the consent of the Comptroller I personally had to take the matter up once or twice. That was at the request of the Department, much in the way Senator O'Mahoney stated he had representatives in the Post Office Department to present his cause. Finally, when the Comptroller General determined what evidence it would be necessary to produce in order to secure payment, the Agriculture Department acted. occurs to me to ask this question, where the Comptroller General fixes advance procedure and the character of proof, if there is a payment of money which is questioned can you hold responsible the disbursing officer of the Department of Agriculture?

Mr. GULICK. No, sir.

Senator BYRNES. Then, if not, if the decision is the Comptroller's, how much bond does he give, so that if there is any desire to recover funds

Mr. GULICK. I have forgotten the provision of the law. It is not a large bond.

Representative TABER. Not enough to amount to anything?
Mr. GULICK. No.

Senator BYRNES. And the bonds of the disbursing officers of the Department, what do they amount to?

Mr. GULICK. They are small bonds, not large. That is, you cannot depend in government on bonds. You have to depend on judgment. Senator BYRNES. Of course, asking a question about $1,000,000, I do not suppose it would be possible either way to recover it if it was improperly paid.

Mr. GULICK. Not from bonds. Private corporations do not try that either. You have to depend upon a system or a structure of publicity and responsibility. What happens is that you wreck the career of the man who makes the blunder if he has made it with