The Bureau of Reclamation made a questionable apportionment. Out of an annual allowance of $11,000,000, the Bureau spent $8,000,000 on one project in the first 3 months of the fiscal year. This made it almost certain that the Bureau would run out of money quickly thereafter and by January 15 be compelled to ask for additional funds. Well, the funds did not last until January 15. By December Congress was compelled to pass a deficiency bill appropriating some $32,000,000 to carry the Bureau to the end of the fiscal year.

Mr. Webb, of the Bureau of the Budget, had written a letter to Secretary Krug, of the Interior Department, calling attention to the fact that the unbalanced apportionment was not in keeping with the whole intent of Congress and in contravention of the antideficiency law. He was unable to enforce that disciplinary action. The Bureau of Reclamation replied its operations were not affected by the antideficiency law, that they had done what they thought was proper in regard to the matters placed under their control. The Bureau obtained an opinion from its own Solicitor reinforcing the stand it took. The final result was the coercion put upon Congress to appropriate additional funds. There is a case where disciplinary control over the agency could not be enforced by Congress or by responsible executive officers.

The same thing has occurred in a number of other instances. It is quite common.

Senator FERGUSON. Along that line, the President has said that if he would see each one of the so-called policy heads of his departments for 30 minutes, it would take him 3 months to see them all. In other words there is a case where you can't really take it from the Budget to the President and have him decide that kind of question.

Mr. SMITH. That's right.

Senator FERGUSON. One department defies another department and says in effect, "Mind your own business," even though it is supposed to have supervisory power. So what are we going to do about this size?

Mr. SMITH. Senator Bricker brought up this morning the matter of the Atomic Energy Commission proposing to spend several millions of dollars on research grants despite the fact that the Congress itself and the policy of the Government had not shown any authorization of that whatever. Well, that is quite common. The same thing happened when Congress failed to pass the first Science Foundation bill in 1946. The President bypassed Congress and set up a research and development organization which began spending for research millions of dollars which were intended to be handled within the confines of the Science Foundation.

When it makes little difference to the executive departments whether Congress has legislated or not, then congressional control over agencies of the Government is either weak or nonexistent.

Senator FERGUSON. What is the answer to this bigness?

Mr. SMITH. May I continue with a few more of these evidences of lack of control. I think you have lost control over tariffs and foreign trade as a result of the reciprocal trade agreements program, and that the Federal executive department is going to lose its present control under the Reciprocal Trade Agreement Act on tariffs and foreign trade as a result of the operations of the International Trade Organization. Control over tariffs and trade is passing from Congress to the

Executive and now into the hands of an international organization over which Congress has no control except a delegate's vote.

The CHAIRMAN. Do you think that is an admission of weakness? Mr. SMITH. It could be argued both ways. It could be argued that the development falls in line with the tendency toward international operation.

The CHAIRMAN. It could be either an admission of weakness or evidence of breadth of vision.

Mr. SMITH. It is true that congressional operations in the field of tariffs were not very desirable. There was quite a bit of log rolling, dissensions, and troubles, and it was a good thing, probably, to set up the reciprocal trade agreement program. The point I make about this is not that it went that far but that it is passing from that stage on to some international body which will be able to make directives in the future which will determine whether or not any given state shall have imports and exports and of what kind.

The CHAIRMAN. During the thirties municipal and State governments surrendered their authority to the Federal Government because they, in too many cases, adopted the attitude, "We can't handle it, it is too big for us." Isn't that one of the principal reasons why the Federal Government grew to its present unwieldy proportions? It was either inability to assume the proper responsibility or else the smaller units of government took the line of least resistance and to get rid of their problems handed them over to the larger units of government.

One reason I think we have grown so big is because the country, as a result of increased speed of transportation and other improved methods of doing business, has become smaller. But it has seemed to me lately in considering what to do about this question and in thinking of means to spread responsibility for government over more people and more units back to the smaller units of government, that there has been a reluctance on the part of the people to accept the responsibility for government that we ought to have. I have been trying to think what the trouble is, whether it lies in our system of education, whether our schools are not teaching young people that they must assume responsibility when they grow up. There is a great tendency these days for a young person, rather than to take the chance of going into business for himself when he finishes college-he just wants to get a job with one of the biggest, most wealthy corporations.. It is probably outside this subject that we are on, but it is still a very disturbing situation.

Senator FERGUSON. It is the question of bigness, whether it is in business or in government.

Mr. SMITH. Yes; as a small authoritative group progressively withdraws from the people the things that are best done by the people themselves because they are closest to the problem, the people thereby become less self-reliant. It would be just the same thing in a family, if you brought up a child never to depend upon his own resources, never to do anything for himself-mother will always do it, father will always do it-when the child needs anything it is always provided. If that went on to the age of majority the result would be a psychopathic case instead of a grown-up, self-reliant son or daughter. He would be unable to fend for himself under any conditions. The strength of this country formerly used to lie in the initiative and self

reliance of the people themselves and not in transferring their worries or their troubles to some group called Congress or some group called "the bureau." It used to be when people got in a tight spot they relied upon their own work and resources. But progressively, behind the centralization that is going on not only in Congress but in the Federal Government and throughout the country, we are making our people mere onlookers in the destiny of their own lives.

Senator FERGUSON. Don't you think that people have found out that it is much easier to get an appropriation in Congress than it is to do their own work?

Mr. SMITH. Maybe that is one of the causes, one of the reasons. Now I think that also you are rapidly losing control over the Senate treaty power. Executive agreements have largely taken the place of the former constitutional treaty power. In 1940 to 1944 there were 38 treaties presented to the Senate and 256 executive agreements, which is a complete reversal of what used to take place in Congress. Even if it were all right to make the transition of power-or at least the transfer of power to the executive department because of the complexity of international business, my next contention is that we are reaching a stage in our executive power where the capacity to deal with the problems in front of them is getting beyond the Executive.

I should like to read in that connection a very short editorial which was just written by Walter Lippman (Washington Post, February 10, 1948). He is speaking about our foreign policy, the commitments we have made, the implications they have, where they are leading us. I should like to put this whole editorial in, if I may, as part of the record. This is what he says:

The common factor in all these places is that, thanks to the Truman doctrine, we are losing our freedom of action. Our clients are becoming our masters. The western Germans, the governing party in Greece, the Iranian Government, the Zionists, the Arab League, and Gen. Chiang Kai-shek have been given such unqualified support so publicly that the Truman administration is constrained to follow them and cannot lead them. We must support our clients no matter what they do because we have slammed and bolted the door behind us. They know that we cannot withdraw our support without eating our words and suffering humilitation and spectacular loss of prestige.

(The complete editorial is as follows:)

TODAY AND TOMORROW

(By Walter Lippmann)

THE COSTS OF CONTAINMENT

President Truman's foreign policy is about to cost well over 20 billion dollars a year in direct expenditures. The bill for foreign aid put in by the State Department is well over 8 billions figured on a yearly basis, and there is besides the bill for many other activities in foreign relations. The bill for the armed forces is over 10 billions, not counting the additional expenditures for the proposed strategic Air Force or anything more than a first small installment for universal military training.

The disturbing thing about these costs is not the burden they impose this year. It is that they support a foreign policy in which, as it is now conducted, this rate of expenditure will increase rather than diminish.

That is because we are operating a policy of global containment, rather than one designed to induce and compel a settlement.

For a policy of holding the line all over the world requires more and more money, more and more armaments, merely to hold the line as the situation behind the line we are holding deteriorates.

During the past year it has been deteriorating in Germany, in Greece, in the whole Middle East, and in China. The deterioration is marked by the fact that as the Truman administration has increased its commitments, its diplomatic influence on events has declined.

We have assumed the whole burden of the deficit of western Germany but our control over the destiny of Germany is rapidly evaporating. We have assumed the whole burden in Greece but the prospects of our being able to subdue the rebellion or to settle it are less favorable than when we rushed in a year ago.

The whole Middle East from Iran to Iraq to Palestine to Egypt is proving once more the old rule that when great powers intervene separately and competitively in a rich and backward region of the world, the result is anarchy and violence. And in China we are about to increase our commitments at a time when our capacity to influence the course of events is approaching zero.

The common factor in all those places is that, thanks to the Truman Doctrine, we are losing our freedom of action. Our clients are becoming our masters. The western Germans, the government party in Greece, the Iranian Government the Zionists, the Arab League, and General Chiang Kai-shek have been given such unqualified support so publicly that the Truman administration is constrained to follow them and cannot lead them. Once we declared that it was a

vital interest of the United States to make western Germany solvent as a bulwark against communism, or to make Greece prosperous as a bulwark against communism, or the Middle East, or China, we deprived ourselves of diplomatic bargaining power.

We must support our clients no matter what they do because we have slammed and bolted the door behind us. They know that we cannot withdraw our support without eating our words, and suffering humiliation and a spectacular loss of prestige.

The policy of containment has thus become what it was bound to become an ever deeper entanglement in ever more insoluble difficultues. There is only one way out of it and that is by concentrating our diplomatic effort upon a settlement at some critical point. That point may be Austria. It may be Greece. It could be the Middle East. But at some deliberately selected point the stalemate must be broken decisively by that combination of pressure and compromise which is the essence of diplomacy. The important thing is to break the stalemate somewhere, and thus to change the political currents of the world. An Austrian treaty, which resulted in the military evacuation of Austria, would do that. It might well mark the turn of the tide from another war to an eventual peace. Therefore it would be worth a considerable price.

What has to be determined by diplomatic negotiation is whether the Russians mean to stay in Austria or to leave it, in other words whether an Austrian peace treaty can be had for a price; whether Austria can be ransomed. If it can be, then the cost of the ransom will be small compared with the cost of not making peace, of maintaining the armies of occupation indefinitely, of never reaching the time when Austria is independent and no longer divided under alien rule.

The worst of the Truman foreign policy is that in order to justify the enormous and mounting costs, it has been necessary to argue ourselves into the assumption that nothing can be settled. From that it is a small step to the view that nothing ought to be settled since any settlement requires concessions and compromisesand thus to acquire the habit of not looking for, of not trying to think out, ways and means of breaking the stalemate.

This habit is easy to acquire and hard to throw off. Especially as is now the case in the State Department, the habit tends to become fixed because the few men at the top who would have to direct a policy of settlement are so busy with the complicated consequences of the policy of containment that they cannot pay serious attention to the remedy for it.

Mr. SMITH. I believe that is quite true, and it is being demonstrated right at the present moment by the President's announcement that he is going to be compelled to ask for more money in the Greek-Turkish situation. The situation has gotten beyond the executive department to control. The executive department becomes a victim of the very people it is trying beneficially to serve. With more and more of what happens abroad, Congress and the executive department will have no voice in it. Decisions will be made in Greece; they will be made in China; and the United States will have to take actions compelled by what has been developing in these areas beyond our control.

X

Government can be extended to the point where its capacity breaks down if the authority in government has no control over the objects of its operations. That is largely what is happening now. I think Walter Lippmann shows exceeding insight into precisely the position in which we are finding ourselves. By extending the range of government beyond effective control we are loading the machinery with more than it has capacity to handle.

Now, I would like to pass on and say that we are rapidly losing control over appropriations. More than two-thirds of the $40,000,000,000 budget is now a hard core of Federal obligations. Congress cannot cut down on that hard core, without raising such a storm of popular protest that it will be compelled to restore the cuts made. Flexibility of fiscal operations on the part of Congress is reduced to the extent that two-thirds of the budget cannot be touched no matter how necessary or desirable it may be to economize.

Senator FERGUSON. In other words, the old idea of Congress having the control of the purse strings is no longer a reality.

Mr. SMITH. It is no longer a reality. We have lost control over the purse strings.

I would say that that same thing is true with regard to the executive department. They, too, are losing a large degree of control over budget-making. They cannot cut down the $5,000,000,000 of interest on Government bonds. Let them try to cut down what the veterans are getting. Let them try to cut down on other Government services; there will be such a popular storm against it that the cuts would have to be restored.

What is the implication of that? It is that conditions have reached a stage where Congress and the Executive are compelled to the extent of two-thirds of the huge annual expenditures to appropriate the funds whether it is a wise thing to do or not. No freedom of action exists. I think that is a deplorable situation for Congress to be in. It is just one of the many straws tending to show that conditions are getting beyond the capacity of the machinery to handle.

You have lost accounting control. The accounts of an increasing number of Government departments are impossible to audit. That is true of the RFC. I think you yourself found out, Senator Ferguson, that the General Accounting Office reported the accounting of the Reconstruction Finance Corporation to be in a deplorable state of affairs. There were over a million-and-some-odd dollars worth of checks undeposited in a file drawer in New York City because accounting control did not exist over those checks and determine what was to be done with them. This was only a small part of the accounting deficiency reported.

Senator FERGUSON. They didn't even know where to apply them. Mr. SMITH. Yes. There is also lack of accounting control in the Maritime Commission. There are hundreds of millions, in my opinion, in the war operations of this agency that it cannot account for, and admits that it cannot account for them. That is dealing pretty fast and loose with the taxpayer's money.

The same is true of the Federal Public Housing Authority (now the Public Housing Administration.) It was Senator Aiken's committee that reported the condition in that agency. After a very earnest attempt upon the part of Price, Waterhouse & Co., a very high-grade accounting group, to audit the books of the Federal Public Housing