REORGANIZATION PLAN No. 1 of 1952

Prepared by the President and transmitted to the Senate and the House of Representatives in Congress assembled, January 14, 1952, pursuant to the provisions of the Reorganization Act of 1949, approved June 20, 1949

BUREAU OF INTERNAL REVENUE

SECTION 1. Abolition of existing offices.-There are abolished the offices of Assistant Commissioner, Special Deputy Commissioner, Deputy Commissioner, Assistant General Counsel for the Bureau of Internal Revenue, Collector, and Deputy Collector, provided for in sections 3905, 3910, 3915, 3931, 3941, and 3990, respectively, of the Internal Revenue Code. The provisions of the foregoing sentence shall become effective with respect to each office abolished thereby at such time as the Secretary of the Treasury shall specify, but in no event later than December 1, 1952. The Secretary of the Treasury shall make such provisions as he shall deem necessary respecting the winding up of the affairs of any officer whose office is abolished by the provisions of this section.

SEC. 2. Establishment of new offices.—(a) New offices are hereby established in the Bureau of Internal Revenue as follows: (1) three offices each of which shall have the title of "Assistant Commissioner of Internal Revenue"; (2) so many offices, not in excess of twenty-five existing at any one time, as the Secretary of the Treasury shall from time to time determine, each of which shall have the title of "district commissioner of internal revenue"; and (3) so many other offices, not in excess of seventy existing at any one time, and with such title or titles, as the Secretary of the Treasury shall from time to time determine.

(b) There is hereby established in the Department of the Treasury a new and additional office which shall have the title "Assistant General Counsel."

SEC. 3. Appointment and compensation. Each Assistant Commissioner and district commissioner, the Assistant General Counsel, and each other officer provided for in section 2 of this reorganization plan shall be appointed by the Secretary of the Treasury under the classified civil service and shall receive compensation which shall be fixed from time to time pursuant to the classification laws, as now or hereafter amended, except that the compensation may be fixed without regard to the numerical limitations on positions set forth in section 505 of the Classification Act of 1949, as amended (5 U.S. C. 1105).

SEC. 4. Transfer of functions.-There are transferred to the Secretary of the Treasury the functions, if any, that have been vested by statute in officers, agencies, or employees of the Bureau of Internal Revenue of the Department of the Treasury since the effective date of Reorganization Plan Numbered 26 of 1950 (15. F. R. 4935).

The CHAIRMAN. I will read the resolution of disapproval, H. Res. 494: JANUARY 15, 1952.

Mr. Hoffman of Michigan submitted the following resolution, which was referred to the Committee on Expenditures in the Executive Departments:

"RESOLUTION

"Resolved, That the House of Representatives does not favor Reorganization Plan Numbered 1, transmitted to the Congress by the President on January 14, 1952."

Mr. HOFFMAN. It might be proper here to say that the resolution was introduced as a matter of form, to get a hearing.

The CHAIRMAN. Do you have any other testimony that you would like to offer, or statement that you would like to make as the proponent of the resolution, other than that at this time?

Mr. HOFFMAN. Only that we would like to have Warren Olney, professor of the University of California, Berkeley, Calif., subpenaed, and also Thomas J. Doolen.

The CHAIRMAN. You would like to have them subpenaed?

Mr. HOFFMAN. Yes, sir; I would like to have them subpenaed, and then Mr. Ford, of the Fifth Michigan District, would like to appear. The CHAIRMAN. Would these witnesses come without subpena?

Mr. HOFFMAN. I doubt it. I do not know. They probably would come, if you called them, or your clerk called them.

The CHAIRMAN. Did you notify them?

Mr. HOFFMAN. I have not.

Mr. McCORMACK. We are sitting as a full committee here and not as an investigating committee. It is only in connection with investigations that you issue a subpena, as I understand it.

Mr. HOFFMAN. They have both expressed opinions as to the need for legislation after investigations in California, and they have, I am sure from what I have read in their report, very valuable information. Mr. HOLIFIELD. I move that the matter of subpenaing witnesses be postponed for an executive session of the committee for consideration.

The CHAIRMAN. You have heard the motion. All in favor will let it be known by saying, "Aye"; opposed, "No."

Mr. HOFFMAN. No. I have no objection to having an executive session, but I do not want to miss any opportunity to present my desire to have them here.

Mr. McCORMACK. They should be here. We are glad to have them, but it is up to them to voluntarily appear.

I have never been invited to appear before a committee. I always appeared before a committee if I was wanted, in legislation.

Mr. HOFFMAN. My information is that one of these gentlemen, especially, has made extensive investigations, that he just will not because of pressure, submit his report voluntarily.

Mr. HOLIFIELD. A ruling on the question, Mr. Chairman.

The CHAIRMAN. At a hearing of this kind I do not believe it has been the custom to compel witnesses to attend by the service of subpena. Under those circumstances we will invite the witness to be present and instruct the clerk to immediately take the address and send them a communication by wire, if they do not live within the immediate community.

Mr. HOFFMAN. They will be treated as though they had been subpenaed, insofar as expenses and per diem goes?

The CHAIRMAN. That is a matter that will be determined by the chairman under the circumstances.

Mr. HOFFMAN. Of course, that position is absolutely sound if you take the further position that it is not the business of the committee to know what is going on and that Congress has no concern with reference to corruption and illegal action as it influences legislation— its interpretation and administration.

The CHAIRMAN. That is a good speech, but has nothing to do with this plan No. 1.

Mr. HOFFMAN. It goes right to the heart of the necessity of adopting something so the President himself has said, that it is necessary that we make some changes in order to eradicate, or at least lessen corruption.

The CHAIRMAN. I think everyone present knows the situation, knows the circumstances and can take into consideration the facts involved. We will move along.

First of all, I wish to state that Mr. Riehlman is not present with us due to the illness of his wife, and if possible he will join us. I would like the record to show that he is not with us for that reason.

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