matters are very controversial, no matter what committees are on the floor. We have to jealously regard the jurisdiction of our committee and protect the jurisdiction of other committees. All I know is what you said that it had been referred to the Ways and Means Committee. Mr. HOFFMAN. This committee hasn't a great deal of jurisdiction any more, as you very well know. We are losing it all. Mr. MCCORMACK. I won't agree with you. Mr. CURTIS. Will you yield?

Mr. HOFFMAN. Yes, sir.

Mr. CURTIS. If that is so, what committee will compare two alternative plans?

The CHAIRMAN. There are no alternatives.

Mr. CURTIS. There would be. Would any committee consider both?

Mr. McCORMACK. The gentleman from Michigan said the bill was referred to the Ways and Means Committee.

Mr. HOFFMAN. I said it probably will be. It hasn't been. It was introduced today.

Mr. McCORMACK. The inference was it was referred to the Committee on Ways and Means. I don't know what it is.

Mr. CURTIS. Mr. McCormack, mine is a simple question. Here is the President's plan for reorganizing the Bureau of Internal Revenue. Here is apparently another plan which some committee will consider the relative merits of. If we cannot ask those questions here, will any committee do that?

Mr. McCORMACK. I don't know what is in the bill that the gentleman from Michigan referred to.

Mr. CURTIS. I have read it. It is a reorganization of the Bureau of Internal Revenue.

Mr. McCORMACK. I don't know, but it is a matter which will be referred to a committee. He said it was referred to the Ways and Means Committee. Then he said it might be. There are two different situations there. If it was referred, then any request should come from the Ways and Means Committee."

Mr. CURTIS. The answer to my question would be that there is no committee that couldn't consider all alternative plans of this nature. Mr. HOLIFIELD. Mr. Chairman, a point of order.

The CHAIRMAN. It seems to me any bill that is referred to any other committee is not within the province of this committee to ask a report on. Whether the bill has been or will be referred to another committee certainly we cannot ask for a report on that bill. If it is reported to this committee, we will get a report on it.

I would like to call attention to the fact that the law gave the President the power to send down a plan because Congress delegated its power to the President to pass necessary legislation to reorganize the executive branch of the Government because Congress failed to do it. Congress may or may not act upon the bill that may go to the Ways and Means Committee or may come to this committee, but under the law giving the President the power to reorganize by plan, it provides that within 60 days it becomes law unless a petition of disapproval is filed and the Congress votes upon that petition of disapproval, disapproving the plan. A plan sent down by the President is before this committee. A petition has been filed of disapproval. We have met

to pass upon whether or not we are going to support the petition of disapproval or whether we will support the plan.

We cannot take into consideration action upon some bill that is not before this committee or is before some other committee.

Mr. HOFFMAN. Then, Mr. Chairman, may I ask this?

Mr. CHAIRMAN. Yes, Mr. Hoffman.

Mr. HOFFMAN. It being the duty of this committee to pass upon the plan sent down by the President and witnesses appearing in support of that plan, is it not the privilege of any member of the committee to ask the witness what they think of an alternative proposal, either by section or as a whole and compare the proposed plan with other bills or practices?

The CHAIRMAN. The alternative proposal you referred to is a matter going before another committee and is not before this committee. If it has been assigned to any other committee of Congress, that group of Congressmen will give to that bill the consideration that is due. Mr. HOFFMAN. No doubt about that.

The CHAIRMAN. The President's plan is before us. You cannot amend this plan. The law is specific. We drew the law giving the President the power to do it and it is before us. The other may not be acted upon in your lifetime or mine. But this is before us to be acted upon now.

Mr. HOFFMAN. Does that foreclose any questions of comparison by any witness that may appear?

The CHAIRMAN. I do not think we will ask for a report from a witness before us on a bill before another committee.

Mr. HOFFMAN. Conceding that our request asking for a report is out of order, I can take the bill apart tonight and come in with a dozen or 50 questions with reference to specific provisions carried in that bill and ask whether that provision is in this bill, whether it is a desirable proposal. I was trying to shorten it up. I wanted to be helpful. You have had the Republican members here when there was hardly a handful of the Democrats. We go over and give you a quorum, but when we try to get at the merits of alternative proposals then we have no time.

The CHAIRMAN. I have never, in the conduct of this committee, sought to draw any advantage from either Democrat or Republican. I have tried to present the matter here, as a Congressman, to do a job for the benefit of the country.

Mr. HOFFMAN. I think you are right.

The CHAIRMAN. Will you proceed with your testimony?
Mr. HOFFMAN. He will be back tomorrow?

The CHAIRMAN. I don't think so.

Mr. HOFFMAN. I want to ask him questions about this bill. The CHAIRMAN. I told you at the beginning of the meeting that we will try to be through with him tomorrow morning because he must go before another committee of Congress tomorrow. They waived their rights to him today.

Mr. HOFFMAN. But we gave them another witness in exchange. The CHAIRMAN. Are there any other questions?

Mr. HOFFMAN. He would have been through long ago if you had let me ask him the question.

Mr. HOLIFIELD. I have no questions.

The CHAIRMAN. Mrs. Harden.

Mrs. HARDEN. Mr. Dunlap, in 1951, there were 57,000 employees working for the Internal Revenue Department; is that correct? Mr. DUNLAP. There were what, madam?

Mrs. HARDEN. Fifty-seven thousand employees in 1951 working for the Internal Revenue Department.

Mr. DUNLAP. Approximately that; yes, ma'am.

Mrs. HARDEN. If this reorganization plan is adopted, will it decrease the number of personnel?

Mr. DUNLAP. No, ma'am.

I don't think we can consider the plan on that basis because even before the plan is adopted, as we now stand, and being faced with the necessity of continuing operations during the immediate future, we are asking the Congress for a considerable number of additional people. The economies of the plan will fall, I think, in the combination of our offices that I have described, but how much that would result in the long run, over the long picture, in accomplishing it, would depend upon the tax laws as they change from year to year.

I cannot see that this year we can operate on less personnel. In fact, we are asking for more.

Mrs. HARDEN. The people whom I represent are particularly interested in reorganization, but they are very eager for some evidence of economy as a result of that, in personnel and dollarwise.

Mr. DUNLAP. May I inject this, then, into the proceedings. We estimate that we will operate during this coming fiscal year at one of the lowest figures in history, forty-four one hundredths of 1 percent of the dollars we handle. I think we have to think about the economy in the Bureau on the basis of the percentage of our cost of operations over what we bring in rather than on the number of people who are involved.

Mrs. HARDEN. I asked the question of Mr. Snyder Friday and did not receive a satisfactory answer and I appreciate your views on this subject.

us.

Mr. DUNLAP. I have thought for years that our costs in the Bureau should be judged more on the basis of the percentage of what it costs That should be the scale rather than how many people it takes to enforce it, because in some years, as the laws are simplified-for instance when the last excess profits tax went out, our number of employees dropped-as new laws come in, they must go up.

Do you follow what I am saying?

Mrs. HARDEN. Yes, I do.

Mr. Snyder also stated that he had taken a step to create a committee of highly qualified men to direct management improvement studies within the revenue services and he submitted the list of names of that committee. I note that you are vice chairman of that committee.

Mr. DUNLAP. Something is wrong, Mrs. Harden. You mean automatically, when I became Commissioner this past year? I hadn't been on that committee before.

Mrs. HARDEN. The second name on the list is John B. Dunlap, Commissioner of Internal Revenue, vice chairman.

Mr. DUNLAP. That is since I became Commissioner.

Mrs. HARDEN. I should like to ask you, Mr. Dunlap, when did this committee make its recommendation?

Mr. DUNLAP. That committee was a continuing operation from the time it was appointed.

Mr. HARDEN. When was that?

Mr. DUNLAP. If I can give you an example of how they worked, I mentioned task forces that I had sat on a while ago.

Mrs. HARDEN. Do you mean September 1949? I believe you stated you sat with a task force at that time. Was that the committee?

Mr. DUNLAP. Under the direction of that committee. I was not a member of the committee. But, as this management engineer plan came into being, the report was turned in by the engineers, and then this committee appointed different groups to study each provision of that plan and render a report on what they thought should be done about it. I sat on two or three of those subcommittees and I met with the committee, itself, on two or three occasions. It was a continuous operation. It just took the Bureau's operations step by step and the improvements we have made up to now have been guided and analyzed by that committee all the way through.

Mrs. HARDEN. This report submitted to me says:

Names of the members of the Treasury Department's committee to direct management studies in the Bureau of Internal Revenue.

The second name on the list is yours. not a member of this committee?

Did you just state you were

Mr. DUNLAP. I did not at the time. I was talking about the then Commissioner of Internal Revenue. He was the vice chairman of the committee. I have succeeded to his place since my appointment. Mr. HOLIFIELD. When were you appointed?

Mr. DUNLAP. August 1.

Mrs. HARDEN. Then was it in 1949-do I understand-that you made these recommendations?

Mr. DUNLAP. It was in 1949 that I sat on a task force appointed to study a portion of this plan; yes, ma'am.

Mrs. HARDEN. Then the outside management firm was called to make an independent survey, I believe, and submitted recommendations in 1949 after working about 6 months. I couldn't understand why you waited 3 years before a plan was submitted to Congress.

Mr. DUNLAP. May I make this explanation. Maybe it will clarify it and maybe it won't. Let me say at the outset that we could take no chances with the collection of the internal revenue. That job has to be done and done successfully, otherwise, you know what would happen. As you adopt a step in the Internal Revenue and before you adopt it, you must be certain that it is going to work. In other words, if it doesn't work, then both the taxpayers and the revenues have suffered. So from the inception of the management committee there, various improvements have been instituted step by step until we come to the point where we now find ourselves. We feel that we have gone as far as we should without congressional knowledge. We now come to the point where to go any further and we think we have done a fine job this far-but to go any further and complete this plan, we now must have your knowledge of everything that is going on.

It is too big for us to undertake it as we have undertaken the other administrative changes that we have made.

Mrs. HARDEN. What percent of the taxpayers failed to file their income-tax returns?

Mr. DUNLAP. Well, I don't know that I could give you those figures. It would be strictly guessing, but I would say that they are a very small percentage of this country who do not voluntarily file their returns very small percentage. Income-tax returns.

Mrs. HARDEN. This morning I asked Mr. Lawton this question, and he suggested that I refer it to you. Under this plan, will the deputy collectors be permitted to make inspections and tax settlements without the consent of the district commissioner?

Mr. DUNLAP. Would you like to have the chart back, so I can show you where that would happen?

Mrs. HARDEN. Can you answer the question without that?

Mr. DUNLAP. Yes, ma'am, I can. Deputy collectors do not have that authority now. A deputy collector can only make an examination and if the taxpayer agrees with his findings and signs a consent, only then is an assessment made. If the taxpayer does not agree with the deputy collector, then the taxpayer has the full right of appeal clear up to the top of the agency, which, under this plan, would be known as the district commissioner. No agent or deputy collector can arbitrarily make an assessment today.

Mrs. HARDEN. That is under this present procedure?

Mr. DUNLAP. Yes.

Mrs. HARDEN. Under the new plan?

Mr. DUNLAP. He still could not. He would still have all the rights of appeal that he has now.

Mrs. HARDEN. Thank you.
That is all, Mr. Chairman.
The CHAIRMAN. Mr. Lanham.
Mr. LANHAM. No questions.

Mr. HOLIFIELD. May I direct a question to the witness?

The CHAIRMAN. Mr. Holifield.

Mr. HOLIFIELD. Mr. Commissioner, I think there is confusion in regard to sending up Presidential plans. The basic Reorganization Act of 1949 gave the President the right to send up plans. He could not send up plans until 1949 because he had no authority to send up plans such as this plan No. 1. Before that it was the responsibility of the Congress to legislate reorganization. In the Eightieth Congress, on March 9, 1948, the Canfield committee made recommendations which are contained in this plan, but the record shows that the Eightieth Congress did not pass the legislation, neither did the Eighty-first nor the Eighty-second Congress. So the responsibility for reorganization is a joint responsibility, since 1949, of the Congress and of the executive branch. Now that the President has set up this plan he has discharged that part of his responsibility that we charged him with under the basic Reorganization Act of 1949.

So it leaves the record in a confused state when we say it has taken 4 or 5 years to bring this plan up. It has only taken since June 1949. to bring this plan before Congress.

Mr. CURTIS. Is that a question or a statement?

Mr. HOLIFIELD. That is a statement for clarification of the record because there were several questions that implied that it took 4 or 5 years.

Mr. CURTIS. We can make statements for the record in executive session. We all have questions to ask the witness. We are all here to ask the witness questions.

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