Senator BYRNES. Mr. Gulick, what difference is there between this proposal of yours and the proposal of the committee under the Hoover administration?

Mr. GULICK. The essential difference is this, that we propose that the Executive shall be given the tools with which to do the job after you have given him the power. That is what was never done before. Senator BYRNES. We gave to President Hoover the power to merge and consolidate.

Mr. GULICK. That is right.

Senator BYRNES. And to abolish. But we did put in a provision that his actions should be sent to the Congress, and either House had the right, by resolution, to veto it. Is that correct?

Senator BYRNES. In your report, in your recommendation you do not make any such provision.

Mr. GULICK. May I address myself to that. The provision, as stated in the grant to President Hoover, proved utterly unworkabie. Nothing was done under it, practically.

Senator BYRNES. I will say this, in justice to President Hoover, that I presented that on the floor of the Senate, urging that President Hoover be given that power, but it was not a very good time to accomplish results in that this power was given to him in the summer of 1932 and we were in the midst of a campaign. He did send one order to the House, as I recall it, and the House vetoed it by resolution, which discouraged him from sending any others.

Mr. GULICK. So then, when the Economy Act was passed, that was changed and it was required that the Executive order should lie before the Congress for some period of time, 60 days if it were in session, and in that case the veto could be exercised not by an individual House of the Congress, but could be exercised by the two Houses acting concurrently, and the approval of the President. Now, that type of veto is no different from the type of veto which we forsee within the plan which we have outlined here; namely, that the Executive, after issuing the order carrying out the reorganization, must then bring up that reorganization in his next Budget. It appears right there in the material within the Budget. So that the appropriations committees of the House and Senate would have the chance there to review the reasonableness of the things that had been done and to insist on refusing to accept it, if they so desire, and that requires not the two-thirds vote as would be the case if they were done by joint action subject to Presidential veto.

Senator BARKLEY. Would the refusal of the committees of the two Houses, or jointly in their report to the Houses upon the appropriations set up in the Budget after the reorganization, would that of itself nullify the reorganization by simply refusing to appropriate money for it? I understand that the committees of either House, or both Houses, under your plan, would have no power to nullify the order of reorganization, except insofar as their refusal to appropriate money to carry it out might be a nullification.

Mr. GULICK. There would be a discussion of the problem and you would work out a compromise, and an act could be passed by Congress.

Senator BYRNES. For illustration, a bill was passed in the Senate yesterday, an independent offices appropriation bill; as it came from

the House it had an appropriation for the Central Statistical Board. We struck it out. After a conference, the Senate adopted it. Is that your idea as to how it would work out? If we wanted to abolish it, we could abolish it if the House would agree with us. on that action?

Mr. GULICK. Or you can take it up in an act. Having the order lie before the Congress for 60 days, it seems to us, was no different from the provision that we suggest here.

The CHAIRMAN. Let us follow that up a little further. As a matter of practical operation of the Government, assume that the President is given the authority to make the reorganization, which, I think, is probably the only way a reorganization ever can be made, if it is made; assume that he acts under that authority and then sends his Budget in in conformity to the reorganization. If the Congress, or if the Appropriations Committee in either House, dislikes the reorganization and expresses its opinion on the subject by refusing to make an appropriation in conformity to it, how will the Government be operated until that controversy is settled?

Assume that there is an irreconcilable conflict on the subject, as is readily conceivable, and the Congress persists in its refusal to adopt it in accordance with the Budget which comprehends the reorganization. We would then have no Budget in force, no appropriation, and your entire Government machinery would be without the ability to function for lack of funds.

Senator O'MAHONEY. And the Budget Bureau failed to recommend an appropriation for the agency which has been discontinued? The CHAIRMAN. Certainly, it would not make a recommendation for the old agency, because the old agency no longer exists. Senator O'MAHONEY. Exactly.

The CHAIRMAN. The new organization is in force.

Senator O'MAHONEY. So you have the Budget Bureau refusing on one side and the committee on the other.

The CHAIRMAN. I think that is a particularly hopeless conflict. My thought was that your plan contemplated, within certain limitations, giving the Executive the power to make the allocations; passing up to him, if you please, the buck-that is the way we sometimes express it when we find something is difficult and we want somebody else to do it-passing up to him the problem of determining what shall go in the various compartments of this new framework. My understanding of your plan was that that was final, unless the Congress should see fit to legislate further upon the subject, and that a budget presented in pursuance to the reorganization would necessarily carry with it the obligation upon the Congress to make appropriations. We frequently make appropriations in accordance with existing law where questions are raised as to whether the statute authorizing the appropriation ought really to have been passed. I can remember a hundred times, in my service in both the House and Senate, when it would be said by the Committee on Appropriations, the representatives of that organization, "We have incorporated this item in the appropriation bill for the reason that the law authorized it, and we feel that it is our duty not to legislate, not to insist upon legislation, but to follow the existing law with respect to authorizations." Now, if you depart from that plan, you will have the Government in a situation where it cannot operate.

Mr. GULICK. Your suggestion, Senator, is that the subsequent action by Congress with reference to consolidations that they do not believe in, or abolitions that they do not believe in, should be not in the appropriation act but by a separate act?

The CHAIRMAN. Well, it could not be in the appropriation act under our rules. The appropriation act, in theory at least, under our rules does not carry legislation, it simply carries the appropriation for existing legislation.

Mr. GULICK. Yes.

The CHAIRMAN. To meet the requirements of existing legislation. That is the whole theory of both Houses with respect to the authority of the Appropriations Committee.

Representative TABER. But, Senator, the Appropriations Committee can fail to bring in an appropriation.

The CHAIRMAN. Yes.

Representative TABER. If it feels that function should cease.

The CHAIRMAN. You cannot compel the Appropriations Committee of either branch of the Congress to make an appropriation that it does not want to make. The appropriating power is independent, there is no question about that. But that does not get away from the problem that I am presenting. Here you have a reorganization that is law. Your theory is that the Appropriations Committee, by refusing to respect the reorganization, could invalidate it. Now, I assume literally that is true. There is no question but what the Appropriations Committee could refuse to appropriate a dollar for any purposes it chooses.

Representative COCHRAN. Senator, on the other hand, if you had authorization on the floor of either House, it would be germane.

The CHAIRMAN. Yes; certainly. He is proceeding on the theory that the reorganization to be made by the President is not final, that the Congress, through refusing to appropriate, can veto the reorgani zation. Now, I do not subscribe to that at all, and if I did, I would not want a reorganization under those conditions because I would see coming before me the immediate possibility, not to say probability, of an impasse.

Senator BARKLEY. Senator, the Appropriations Committees of the two Houses, or the two Houses themselves, would have no authority of withholding appropriation for the reorganization, any more than they now have of withholding from any department.

The CHAIRMAN. Certainly.

Senator BARKLEY. Of course, if they exercise the power which they now have as to the different departments and refuse to make an appropriation the result would be you would have a legal reorganization put into effect and find no money to carry it out.

Senator BYRNES. Mr. Gulick cited to you a case where the effect of failing to make an appropriation has the effect of abolishing the function. It is the only case that comes to my mind along the lines you have suggested; but I think we would have to admit, as a practical matter, that what Senator Robinson and Senator Barkley have said is correct. For instance, there would be no difference between the right of the Congress now not to make an appropriation for the Central Statistical Board which is authorized by the Congress, and the failure to make an appropriation for that organization if it

should be hereafter included in the reorganization scheme by the President.

Mr. GULICK. That could be done by legislation. The reason I mentioned this, Senator Robinson, was not my thought that the Appropriations Committee, through its action, had the best remedy for dealing with what looked like an unsatisfactory piece of consolidation or coordination of activities, and the reason I referred to it was merely that I had in mind some of the recent decisions of the Supreme Court.

Take the case handed down 2 weeks ago, the Shipping Board transfer, where the Court held that since the Congress had made an appropriation for the work of the Shipping Board in the Department of Commerce subsequent to the transfer made under Executive order in accordance with the provisions of the Economy Act, that that represented an approval by the Congress.

The CHAIRMAN. That is elementary, but you do not get away from the practical problem that I presented. You have a reorganization made in conformity with law. You suggest that that reorganization, when it is budgeted, may be upset by a general refusal on the part of the Appropriations Committee to recognize it.

Mr. GULICK. No; my thought is not that it can be upset, but that it can be brought into question; that the best method of upsetting it is as Senator Byrnes suggested, through legislation, and that that is the practical result of the situation as it existed under the Economy Act.

Senator BYRD. It could be upset, could it not? There is no way we could deny Congress the right to say as to whether or not a certain department shall have appropriations in the future?

Representative TABER. But, Senator, while Congress has authority in the appropriations bill to refuse an appropriation in a recognized department, it has not the authority, under the law, to appropriate money in the appropriation bills for the situation the way it used to be before the reorganization was accomplished.

The CHAIRMAN. Appropriations are made pursuant to existing law, and no other appropriations can be made.

Representative TABER. Absolutely.

The CHAIRMAN. All right. You authorize the Executive to make the allocation. That becomes law when he carries out your authorization. Your old regime has been abolished and your new regime is in force. Your obligation and your authorization then is to appropriate for the new authorization, for the existing law, and you have no authority of law then to appropriate for the old regime. That is the very point I am making, and you must see it. While it is not a matter that is necessary to be settled at this time, it is so clear in my mind as a lawyer that I do not understand how another lawyer will question it.

When we give the President authority to put into effect this reorganization, and he acts upon that authority, that then becomes the existing law with respect to these various agencies, and the appropriations to be made in conformity with the law must be made pursuant to the reorganization. If they are made pursuant to the old organization they are made without authorization of law, because the old organization has been abolished by law. Now, that is as clearly as I can state it.

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Senator BYRD. You used the word "allocation", Senator. this bill give the President the right to allocate money?

Does

The CHAIRMAN. No; it gives him the right to allocate agencies. Senator BYRD. Suppose, for instance, we take the case of the Interstate Commerce Commission. Under this bill the President has the right to abolish it.

The CHAIRMAN. Yes.

Senator BYRD. Suppose Congress did not want the Interstate Commerce Commission abolished, could not they refuse to appropriate money for the new agency that the President sets up to take over the duties of the Interstate Commerce Commission?

The CHAIRMAN. Yes; but they would have no authority of law to reestablish the old.

Senator BYRD. They could not reestablish the old except by bill. The CHAIRMAN. That is right.

Of course, the Congress could repeal the reorganization act the day after it passes. Whatever act we report and pass we could repeal the next day, but that is another question.

Senator BARKLEY. In other words, if the President, exercising this broad general authority, made an allocation of the Interstate Commerce Commission, or a transfer of its activities into the Department of Commerce, we will say, Congress could the next day pass an act nullifying that and continue the Interstate Commerce Commission as an independent agency, of course, which would have to be done by a bill.

Senator BYRD. It must be passed over his veto.

Senator BYRNES. We might get back to that. What the Senator said is right. We would get back to it under any system of that kind. As a practical matter you cannot afford not to provide appropriations for the Interstate Commerce Commission as a division of the Department of Commerce, you would have to do it. The only way you can remedy it is by repealing it. The President could veto it, and then, if you wanted to go on, you would have to have a two-thirds vote. I do not think there is any way around it.

The CHAIRMAN. Let us go ahead with the witness. Are there any further questions to be asked Mr. Gulick?

1

Senator BYRD. I wanted to ask Mr. Gulick a little more about the duties of the Auditor General.

I understood you to say a while ago that he would not have the right to examine the legality of expenditures, only the accuracy of them?

Mr. GULICK. No, no; the legality.

Senator BYRD. Where is that right given in this bill?

The

Mr. GULICK. It is in the existing act, in those duties that are not transferred. This must be taken in connection with that. main job of the Auditor General would be to pass on the legality of the act, the accuracy of the financial records that are made, and the certification of those, just as a c. p. a. does it in a private concern, and then in cases where he thinks there is bad management he has the responsibility to report also, but not to hold it up. Senator BYRD. That is not in this proposed act. It is in parts of the old act not repealed, is it not? There is nothing here that gives the right to examine it. In fact, he is specifically restrained.