Mr. BOLLING. There is no policy of these committees to pay witnesses' expenses to come to Washington. The CHAIRMAN. The chairman will settle the question of policy. I think we can take care of that and proceed with the purpose of the meeting. We will call our first witness, the distinguished Secretary of the Treasury. Out of many millions of people in this country, a few of them are called from time to time to take up the reins of Government, as provided by our Constitution, by becoming a member of the Cabinet surrounding the President; and certainly, when a citizen is so honored, any group of citizens are honored by having his presence among them. And at this time we are calling a member of the President's Cabinet, John W. Snyder, Secretary of the Treasury, who will testify on the Presidential Reorganization Plan No. 1. Secretary SNYDER. I have a prepared statement that I would like to read into the record with your permission and that of the committee. The CHAIRMAN. Does your statement identify you for the record? Secretary SNYDER. My name is John W. Snyder. The CHAIRMAN. You may proceed. Secretary SNYDER. I would like to offer for the record a chart showing the present organization and the proposed organization of the Bureau of Internal Revenue, Department of the Treasury. STATEMENT OF HON. JOHN W. SNYDER, SECRETARY OF THE TREASURY; ACCOMPANIED BY E. H. FOLEY, UNDER SECRETARY OF THE TREASURY; THOMAS J. LYNCH, GENERAL COUNSEL, TREASURY DEPARTMENT; JOHN B. DUNLAP, COMMISSIONER, BUREAU OF INTERNAL REVENUE; WILLIAM W. PARSONS, ADMINISTRATIVE ASSISTANT SECRETARY, TREASURY DEPARTMENT; AND EDWARD F. BARTELT, FISCAL ASSISTANT SECRETARY, TREASURY DEPARTMENT Secretary SNYDER. Mr. Chairman and members of the committee, I welcome this opportunity to appear before your committee on Reorganization Plan No. 1 of 1952, submitted to the Congress by the President on January 14. Since I have been Secretary of the Treasury I have devoted a great share of my efforts and taken many steps to improve the operations of the Bureau of Internal Revenue. The plan now before you represents the culmination of these efforts to keep the Bureau in pace with the Nation's growing needs. Reorganization Plan No. 1 will authorize a basically improved, streamlined organization for the Bureau of Internal Revenue. The basic purposes of the plan are to assure the integrity and improve the efficiency of the service; to bring the service into full accord with the merit system of Government employment; and to afford greater convenience and enlarged service to the taxpayer at his local level. The plan is the outgrowth of the many intensive studies of management improvement over the past few years. Those studies were conducted by groups within and without the Department. They came from congressional sources-for example, from this committee, particularly in the stimulus it gave to improved executive management through the authority and powers conferred by Reorganization Plan No. 26. I might say that the Budget and Accounting Procedures Act of 1950, which this committee took such an active part in providing for us, will assist us very much as we progress with this plan, through its authorization for improved accounting procedures. The studies came from the Committee on Ways and Means and the Appropriations Committee of this House; from the Senate Finance Committee, the Joint Committee on Internal Revenue, and the Senate Expenditures Committee. They came from the Hoover Commission on Organization of the Executive Branch of the Government; from studies by outside management-engineering firms authorized by the Congress, and lastly from the facts and analyses in the records of the King subcommittee of the House Ways and Means Committee inquiring into the administration of internalrevenue laws. The plan draws upon the best features, I believe, of those many important studies. At the outset, I want to give you the main outlines of the plan. Commissioner Dunlap and his staff assistants are prepared to give full supplemental charts and specifications. The contemplated reorganization of the Bureau involves the exercise of both existing administrative authority and the grant of additional congressional sanction through Reorganization Plan No. 1, as the President made clear in his message. But I propose now to give you the plan in its broad design, without reference at this point to existing administrative authority and necessary congressional sanction. Both areas of authority are needed. The plan as a whole cannot be effectively achieved without action on both sides. The proposed reorganization of the Bureau has four principal features: 1. To make the Bureau an outstanding career service in which all positions under the Commissioner-including specifically the officers to perform the present functions of collectors and other top supervisory officers will be filled solely in accordance with the civil-service merit system, based upon the highest standards of competence, integrity, and loyalty. I would like to read a letter I sent several days ago to the Chairman of the Civil Service Commission on this subject. Hon. ROBERT RAMSPECK, Chairman, Civil Service Commission, Washington, D. C. JANUARY 7, 1952. MY DEAR MR. CHAIRMAN: Upon my recommendation, the President has announced that he is submitting to the Congress a sweeping plan of reorganization of the Bureau of Internal Revenue. The proposed changes will materially affect the personnel policies and practices of that Bureau. A heavy burden will be placed on Treasury and Bureau officials, since the changes must be accomplished without interfering with current operations. I will appreciate any assistance you might give in order that the reorganization may be accomplished with a minimum of delay. It is my desire that the personnel of the Bureau of Internal Revenue reflect the highest standards of competence, integrity, and loyalty to the end that it will be a blue-ribbon civil-service career organization in which all of us can place genuine confidence and have justified pride. I am sure that you will join wholeheartedly with us in this effort. Sincerely yours, JOHN W. SNYDER. Chairman Ramspeck replied to that letter as follows on January 11: UNITED STATES CIVIL SERVICE COMMISSION, Washington, D. C., January 11, 1952. Hon. JOHN W. SNYDER, DEAR SECRETARY SNYDER: Thank you very much for your letter of January 7 apprising us of the material effect the proposed reorganization of the Bureau of Internal Revenue will have on existing personnel policies and practices, and requesting our assistance so that the reorganization may be accomplished with a minimum of delay. You may be assured of the Commission's complete cooperation. We will devote every possible resource to your assistance. I am very happy to say that Mr. Fordyce Luikart, Chief of our Examining and Placement Division, and Mr. James Hard, your Director of Personnel, have already started preliminary discussions relative to defining the areas of necessary changes in personnel programing and policy. The Civil Service Commission greatly appreciates this opportunity to join with you in building and maintaining a civil-service career organization to reflect the highest standards of competence, integrity, and loyalty. I would like to assure you of my deep personal interest and wholehearted support in your effort and of my confidence that our mutual objectives will be attained. Sincerely yours, ROBERT RAMSPECK, Chairman. I understand that the Civil Service Commission is now studying the most effective and practicable means by which this purpose can be accomplished. 2. The second principle feature is to provide a continuing and thorough day-to-day check on the performance and conduct of all Bureau employees by the creation of an Inspection Service which will function under the Commissioner independently of the rest of the Bureau. The nucleus of that Inspection Service was established sometime ago. Since then it has been greatly extended. Commissioner Dunlap will give you full details as to its structure and operations. But this service cannot be made fully effective except in connection with the other organizational changes involved in the plan. 3. The third principal feature is to move from Washington to the field many supervisory and operational functions of the revenue service. These functions will be performed in geographical districts, to number not more than 25, with a fully deputized district representative of the Commissioner in charge of each district. That official will be known as District Commissioner. He will have charge of all internal-revenue matters in his district, with a clear and direct line of accountability to the Commissioner in Washington. Let me emphasize that the purpose is to bring to the field many supervisory and operating functions now performed at Washington headquarters, and thus bring them closer to the taxpayer to be served. Another purpose is to bring together in one headquarters under single direction the functions of such groups as revenue agents in charge, Intelligence Division, Alcohol Tax Division, et cetera, now under separate offices and in varying field locations. 4. The fourth principal feature is that existing functions of collectors of internal revenue and some additional functions will be performed at local offices, with at least one such fully authorized local office in each State, and in more populous States more than one. The Presidentialappointed collector will be replaced by a career-service Deputy District |