The CHAIRMAN. Your plan-that is, the plan of the President's committee provides the framework and vests in the Chief Executive the authority to make the allocations with respect to all these forms of activity?

Mr. GULICK. That is so.

The CHAIRMAN. You did not go into the subject with a view to determining just where all these activities should be settled? Mr. GULICK. That is correct.

The CHAIRMAN. That is, in what bureau they should be settled? Mr. GULICK. That is correct.

The CHAIRMAN. Your plan is to provide the general framework and bring them all within a certain number of organizations so as to make possible better administration?

Mr. GULICK. That is correct.

The CHAIRMAN. In expressing your opinion, in your answers to Senator Byrd's questions, you are expressing your opinion as to what would be the logical allocation of these services?

Mr. GULICK. What might be the logical allocation. It would depend, however, on a detailed examination. The committee, as such, has no opinion with reference to the specific location of the activities.

The CHAIRMAN. If there were to be legislation determining just where each form of activity-administrative activity-should be placed, under what supervision it should be, your committee would want to make, I assume, a study of that before you would feel, ready to pass finally upon all questions that might be asked in that particular?

Mr. GULICK. Not only that, Senator, but we would hold, on the basis of what we have seen already, that it would be utterly impossible for any body of men to sit down and within a reasonable period of months settle all of the problems of the future allocation of activities.

The CHAIRMAN. Well, how long would it require, in your opinion, your committee to reach conclusions as to those problems?

Mr. GULICK. Well, a preliminary determination might be made in 2 or 3 years of work. It is a colossal job.

The CHAIRMAN. How long would it take to reach a final conclusion?

Mr. GULICK. You never could reach a final conclusion that would be permanently satisfactory.

The CHAIRMAN. I understand; but as to the activities now in progress, as to the work now going on, you would not say it would take 2 years to work out plans of that nature?

Mr. GULICK. Well, Mr. Chairman, you take, just as an illustration, the problem as between the Department of the Interior and the Department of Agriculture on the allocation of forestry; I am satisfied that no man could reach a decision at any future time that would be at all satisfactory, without a detailed examination in the field throughout this country of the work that is being carried on in connection with the forestry work, scientific work, and administrative work. You cannot settle a problem of that sort.

The CHAIRMAN. There would probably be no unanimous concurrence of opinion on the subject after you spent years? Mr. GULICK. I imagine that is true.

The CHAIRMAN. Because the controversy has been in progress almost since the creation of the services referred to.

Mr. GULICK. That is correct.

Senator TOWNSEND. You do recommend, however, that the Department of the Interior be abolished, do you not?

Mr. GULICK. No, sir. We change the name to Department of Conservation, and we do suggest that there are some of the activities in that Department that might very well be examined to see if they should not be transferred to the Department of Public Welfare. Representative TABER. What about Indians?

Mr. GULICK. We have no opinion as to where that should ultimately be. It would be something that might be considered, however.

Representative COCHRAN. When you say it is necessary to make a field examination to finally determine just what should be done in reference to forestry and national parks, have you reached the conclusion that you cannot accept the views of the present administrative officers-that you would have to go out and get the information yourself?

↓ Mr. GULICK. The views of the administrative officers are diametrically opposed, and in that situation we are not satisfied to take the opinions of certain groups, nor are we satisfied that by just sitting and talking with them sufficient knowledge of the facts could be obtained to work out a suitable over-all plan.

Representative COCHRAN. Does not that same situation prevail in any Government agency that you seek to transfer or regroup with another agency?

Mr. GULICK. No; not necessarily. In some cases it is quite clear. Representative COCHRAN. Your opinion, then, is not in keeping with my experience. Let me ask you one more question before you get away from this. Have you given any thought at all to the Division of Intelligence, in the Bureau of Internal Revenue, as to where that should be?

Mr. GULICK. We have regarded that. We recognize that it is a problem. We have felt, however, that our duty was to provide a general framework and to see that that general framework was adequate to cover the kind of things that were being done rather than to determine where each thing should go. That would require an intimate examination of the situation.

Representative COCHRAN. But you have decided so far that, as far as the Division of Intelligence is concerned, that is a problem. Why do you reach such a conclusion?

Mr. GULICK. That it is a problem?

Representative COCHRAN. Yes.

Mr. GULICK. Because you find intelligence divisions in several departments, and it is one of the desirable elements in effective management to eliminate overlapping, duplication, the very problem that Senator Byrd's committee is at work on.

Representative COCHRAN. I am not antagonistic, I am just getting information and probably giving you some real information. Mr. GULICK. I know that.

Representative COCHRAN. It is clearly evident to me that you do not understand the operations of the Division of Intelligence or you would not make the statement that it is a problem. The Division of Intelligence of the Bureau of Internal Revenue, under an appro

priation of $660,000 a year for 6 straight years, brought $33,000,000 in additional taxes into the Bureau of Internal Revenue. It handles all the fraud investigations of income-tax violators; it likewise investigates all the employees of the Treasury Department, where there is any complaint made in reference to their efficiency or their conduct. There is no other place that it can go without absolutely crippling its activities but where it is right now, because it is tied right in with the Bureau of Internal Revenue and the Treasury just exactly like the post-office inspectors tie up with the Post Office Department.

Mr. GULICK. The only point that has been made to us is that some of its activities might not be as intimately tied in with that Department. We made no investigation of it. We were satisfied that that was not within the program which was laid before us.

Representative COCHRAN. The importance of that Division seems to me to be such that I hope when you do look into it you will go into it very thoroughly before you come to any conclusion that it should be moved from where it is at the present time. The Government will lose plenty of money if you disturb it.

Mr. GULICK. I think we will have no occasion to make any suggestion that it should be moved or it should not be moved.

Senator HARRISON. Senator Byrd, did you ask him with reference to the Coast Guard?

Senator BYRD. Yes; I did ask him that. It is my understanding that you said it would probably remain in the Treasury.

Mr. GULICK. I said, and I say again, you would have to investigate the thing to see whether it should remain. I remember Josephus Daniels had a very strong feeling that the Coast Guard should be consolidated with the Navy Department. We do not pass on those matters. Those are questions of detailed allocation which arise only after the framework is put up.

Senator BYRD. Would not you correct the testimony of yesterday, then? The question is this: You are transferring from the Comptroller General the audit control to the Treasury Department, where they will be self-auditing their accounts themselves. You said yesterday that the Treasury Department should be reduced as a spending agency. I am prepared to prove here that if your recommendations are accepted the spending in the Treasury Department will be greatly increased.

Mr. GULICK. Senator, it is not the amount of money that they spend that makes them a spending agency in the definition that I was using. The audit department, of course, has to be a spending agency. Anybody that hires anybody is spending money. The important principle to establish in the divisions that are responsible for fiscal control is that those departments shall be limited, as far as possible, to purely fiscal activities, so that extraneous activities will not be thrown in there which tend to make them spending-minded. Now, you cannot absolutely strip it down and have no spending at all. Senator BYRD. That is true.

Mr. GULICK. The glaring illustration in the Treasury Department is the Health Service.

Senator BYRD. All right. Now let us see. The budget for the Treasury Department for the present year is $2,198,656,210. Now, you propose to strike out the Public Health Service.

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Mr. GULICK. How much of that is debt?

Senator BYRD. Interest on the public debt, $896,000,000, and debt retirement, $582,000,000, should be deducted from this total.

Mr. GULICK. Leaving how much?

Senator BYRD. It leaves approximately $900,000,000. Now, you propose to take from that the Public Health Service, which is $20,753,000. The Bureau of Narcotics, you were doubtful about it, I understand. The Federal Alcohol Administration you propose to remove, $475,000. So, therefore, deducting it from the amount of approximately $900,000,000, you would deduct about $21,000,000.

Now, it would appear to me that the additional agencies that are going to be put under the Treasury Department by your plan would largely increase the total of the administrative expenses of that Department, which, under this plan, the Treasury Department would audit themselves and there would be no appeal to the Attorney General.

Mr. GULICK. The Treasury Department makes no audit under our plan.

Senator BYRD. It is the control audit.

Mr. GULICK. It is not audit. We try to distinguish sharply between "audit" and "control", and to place audit in an independent officer who will have no connection with the administration.

Senator BYRD. You do not object to the word "control", do you? Mr. GULICK. Not at all.

Senator BYRD. In addition to the figures I have given you, the Treasury Department, Procurement Division, purchase of supplies, which is added to this total, so I am told, the appropriation for that last year was $22,000,000. In that event the Treasury Department would perform the audit control for their own purchases.

Mr. GULICK. Not audit.

Senator BYRD. Well, audit control, I will connect them together. So it would total $306,000,000. Under your plan, the definition of which is given in your report to the President, the new Treasury Department will have these activities to advise the President with regard to fiscal affairs, and the Congress on revenue bills, to handle the collection of revenues, administration of credit and debt, settlement of claims, and procurement of general supplies.

Now, carrying out your idea that every single activity of the Government must be headed by some department head, it would appear to me and I want to ask you whether I am correct or not-that these new agencies would be put into the Treasury Department: the first would be the Reconstruction Finance Corporation, which has an administrative cost, according to the last Budget, of $11,945,308. Would that be in the Treasury Department under your plan?

Mr. GULICK. All of the lending agencies of the Government should be examined in the light of the work that they are doing to determine what is the best method of dealing with those agencies that are in liquidation, those agencies that are still going concerns, those agencies that are not to be continued for any length of time, and it should be determined whether it would be in the advantage of efficiency, and good administration, to tie them into presumably the Treasury Department, and if it should prove that it would be in

the advantage of efficiency, economy, and good administration then they would be tied into the Treasury Department for general super

vision.

Senator BYRD. You definitely recommend that every single agency of the Government be tied into one of these 12 departments? Mr. GULICK. That is right.

Senator BYRD. That is your recommendation; that is the basis of your reorganization plan.

Mr. GULICK. We believe that is necessary.

Senator BYRD. Where would R. F. C. go except in the Treasury Department?

Mr. GULICK. I cannot think of any other place.

Senator BYRD. Where would the Farm Credit Administration go? Mr. GULICK. It would be tied in, for general supervision, to the Treasury.

Senator BYRD. The administrative expense for that was $10,640,000.

Mr. GULICK. Senator, no one denies that if you bring the fiscal agencies of the Government together in some relation to the Treasury that there would be more spending carried on. The only point on which we seem to differ is as to whether that Department is thus turned into a division which is interested primarily in the spending of money, and whether that will cripple the effectiveness of the control which is set up under a separate division of the Treasury, which would correspond to the Comptroller General. We call it the Division of Fiscal Affairs.

Senator BYRD. My inquiry is directed along this line: Yesterday you stated in your testimony that the Treasury Department would be reduced as a spending agency. I want to prove to you, by your own admission, that under your plan the Treasury Department would be increased as a spending agency, and would then have the audit control of a larger amount of money than it has now.

Mr. GULICK. My statement of yesterday was incorrect in using loosely the term "spending agency." What I intended to say was that the Treasury would be divested of its nonfiscal functions. Senator BYRD. You have only divested it of three, though. Mr. GULICK. The rest of them seem to be fiscal. Senator BYRD. Is the Coast Guard fiscal?

Mr. GULICK. I am not certain. Probably in part. It is so claimed. Senator BYRD. There are a number that are nonfiscal. The Secret Service, is that fiscal?

Mr. GULICK. The Congressman has just explained to us from his intimate knowledge that it is not. I do not know. It is not within our field to determine these matters.

Senator BYRD. Is the Bureau of Engraving and Printing fiscal? There are quite a number. Let me complete this statement.

Now, the Farm Credit Administration, which would be grouped in the Treasury Department, spent $10,640,000. The Federal Deposit Insurance Corporation would come under the Treasury Department under your plan. It spends $2,470,000. The Home Owners' Loan would come under it, spending $29,000,000 for administration expense. The Federal Housing Administration would come under it, spending $8,500,000 for administration. The Government Print