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quite hopeful that these would bring about large savings but I am afraid there have been no such savings as we expected.

While we may have reaped some benefits in the form of more efficient operation, of some of the departments, nonetheless, I think that our giving more power to the chairmen of the various quasi-judicial bodies and regulatory agencies was an error. Because of the appointive power in the President, the Chief Executive has been able to dominate the Commission due to this increased power lodged in the chairmen.

Moreover, I regret my activities in the committee and on the floor of the House in getting adopted the section of the Reorganization Act of 1949, that gives the President the right to send down to the Congress plans for reorganizing the executive boards and bureaus subject to veto by either House of the Congress. In my opinion, this was a colossal mistake. In the first place, it violated the whole theory of the separation of powers upon which our Government is based. It reversed the legislative process and was simply another relinquishment to the Chief Executive of the powers and responsibilities of the Congress. I am truly alarmed at how far this delegation of legislative powers and duties to the Chief Executive has gone. The former chairman of this committee, the gentleman from Michigan, warned us about what we were doing but I must say that I did not fully realize the fundamental principles involved and the violation of this principle that this reorganization plan entailed. I admit my sin against the Congress, I repent and ask the forgiveness of the gentleman from Michigan and others who warned us of the error we were about to make in this respect. It was an error and at the first opportunity, I will do my best to recapture for the Congress not only this surrendered power but others that I could name and that have come on to such an alarming extent. If it continues, the Congress will be merely a rubber stamp for the executive department and whatever powers we have not surrendered supinely to the Chief Executive, the United States Supreme Court will usurp if it follows its present trend. It is an alarming situation.

I need not go into detail as to my reasons for opposing Reorganization Plan No. 2, but I will, with the consent of the committee, introduce into the record a letter from the Stephens Federal Savings & Loan Association of Toccoa, Ga., which sets out un six points their objection to this plan. I am introducing also a letter from Mr. J. M. Sink, Jr., president of the Federal Home Loan Bank of Greensboro, N. C., and a resolution adopted by that bank in opposition to the plan.

It is my hope that this committee will approve the resolution disapproving Reorganization Plan No. 2. I will be glad to help on the floor of the House to get adopted the resolution you are considering.

STEPHENS FEDERAL SAVINGS & LOAN ASSOCIATION,

Toccoa, Ga., June 5, 1956. Re Reorganization Plan No. 2. Hon. HENDERSON LANHAM,

House Office Building, Washington, D. C. HONORABLE SIR: We wish to voice herewith our opposition to Reorganization Plan No. 2, and to solicit your aid in defeating same.

This plan to establish the Federal Savings and Loan Insurance Corporation as an independent agency was not a recommendation of the savings and loan business, and the business was not consulted in the draftig of it.

We feel that the plan should be rejected for the following reasons :

1. The operating costs of the separate agency will have to be borne by member associations, thereby increasing operating cost of these mutual associations.

2. The Insurance Corporation, being concerned only with the insurance fund, would have no responsibility for the general progress of the savings and loan business.

3. Supervision and examination could, and probably would, be doubled.

4. Make it necessary to deal with two governmental agencies thereby making for duplication, confusion, and delay in important decisions.

5. No economy claim can be made since it would establish two agencies in the place of one.

6. The congressional committees which deal with the Federal Home Loan Bank Board and the Insurance Corporation were not consulted on the plan and have never recommended a separation of the Insurance Corporation from the Board.

We do therefore pray that you give your earnest consideration to the plan as submitted to Congress, and trust that you will add your voice in an effort to defeat it, as we believe it detrimental to the purposes for which our business was founded. Yours very truly,

W. T. BLASINGAME, Executive Vice President.

FEDERAL HOME LOAN BANK OF GREENSBORO,

Greensboro, N. C., June 22, 1956. Hon. HENDERSON LOVELACE LANHAM, Member of Congress, House of Representatives,

Washington, D. C. MY DEAR MR. LANHAM : As you know, the Federal Home Loan Bank of Greensboro is a reserve credit institution which serves 549 member savings and loan associations, 76 of which are located in Georgia. The bank's directors have studied Reorganization Plan No. 2 which was submitted to the Congress of the United States on May 17, 1956. Individually and collectively, they have expressed their opinions that the plan is not in the best interests of the Federal Government, the more than 3 million savers and borrowers served by the savings and loan associations in the fourth Federal home loan bank district, and the savings and loan business.

We are enclosing a copy of a resolution adopted by the bank's board of directors on June 18, 1956, which we hope you will consider in your deliberations on Reorganization Plan No. 2. You will notice that the bank's directors commend and approve the position in opposition to the plan which has been taken by the Federal Savings and Loan Advisory Council and the national savings and loan trade organizations. Yours very truly,

J. M. SINK, Jr., President.

RESOLUTION OF FEDERAL HOME LOAN BANK OF GREENSBORO, GREENSBORO, N. C.

Whereas Reorganization Plan No. 2, heretofore submitted to the Congress of the United States, provides for a drastic change in the organization and operation of the Federal agencies by separating the Federal Savings and Loan Insurance Corporation from the Federal Home Loan Bank Board; and

Whereas the Federal Savings and Loan Advisory Council has adopted a resolution urging the rejection of said Reorganization Plan No. 2; and

Whereas the savings and loan national trade organizations have taken prompt and vigorous action to alert the savings and loan business and the Congress to the dangers and weaknesses of Reorganization Plan No. 2, and have adopted a program of opposition to the plan: Now, therefore, be it

Resolved, That the board of directors of the Federal Home Loan Bank of Greensboro commend and approve the actions of the Federal Savings and Loan Advisory Council and the savings and loan national trade organizations in opposing Reorganization Plan No. 2 and' in urging the Congress of the United States to reject said plan; and be it further

Resolved, That a copy of this resolution be forwarded to the Members of Congress from the fourth Federal home loan bank district, to the members of the Federal home Loan Bank of Greensboro, to the chairman of the Federal Savings and Loan Advisory Council, and to the executive officers of the savings and loan national trade organizations.

STATEMENT OF FRANK MULLER, JR., BALTIMORE, MD., CHAIRMAN, FEDERAL SAVINGS

AND LOAN ADVISORY COUNCIL AND PRESIDENT, LIBERTY FEDERAL SAVINGS & LOAN ASSOCIATION

As Chairman of the Federal Savings and Loan Advisory Council, a statutory body created by the Congress in 1935, I appreciate the opportunity afforded me by the chairman of the committee to submit a statement in support of House Resolution 541, introduced by Representative Fascell. The resolution would disapprove Reorganization Plan No. 2 of 1956. This plan proposes to remove the Federal Savings and Loan Insurance Corporation from the jurisdiction of

the Federal Home Loan Bank Board and would set up an additional agency in charge of the Corporation to report directly to the President. The Federal Home Loan Bank Board would supposedly retain the other functions now assigned to it by statute and would continue to report to Congress as it is now required to do.

Summarizing briefly, if Reorganization Plan No. 2 is not disapproved, there will be authorized two independent agencies to perform the same functions now coordinated under the jurisdiction of the Federal Home Loan Bank Board. One of these agencies would be responsible to the Congress, the other to the executive branch.

Although the Federal Savings and Loan Advisory Council presumably was established for the purpose of studying and analyzing proposals such as are embodied in Reorganization Plan No. 2 of 1956 and making recommendations thereon, in this instance such a procedure was not followed. In fact, there was no intimation that such a drastic move was contemplated until the plan was formally presented to the Congress.

The Federal Savings and Loan Advisory Council has been functioning under congressional authority and blessing for 21 years. It is required to and has met regularly twice a year or oftener. At these semiannual meetings the Council has considered any and all suggestions for strengthening and improving the Federal Home Loan Bank System in all of its operations including those of the Federal Savings and Loan Insurance Corporation. In its deliberations the Council considered suggestions originating with the savings and loan business, the Federal Home Loan Bank Board or its department heads, other Government agencies and the public. Over the years, the Council has proposed many constructive ideas to the Federal Home Loan Bank Board and to the savings and loan business. During the time I have had the privilege of serving as a member of the Council, these suggestions were in every case graciously received and studied, and sincere efforts made to implement them.

The last meeting of the Federal Savings and Loan Advisory Council was held on May 24 and 25 of this year. At that time a most careful and thorough study was made of the provisions of the Reorganization Plan No. 2 of 1956. The Council membership includes savings and loan executives, public interest directors of district Federal home loan banks (who represent other businesses and professions), the president of the national association of supervisors of State-chartered savings and loan associations, and executives of both national and State savings and loan trade associations. It was the considered judgment of the Council, representing all of the areas of interest enumerated above, that the proposed Reorganization Plan No. 2 of 1956 is an unstudied and ill-timed suggestion. Its adoption would bring about fundamental and undesirable changes in the operation and supervision of the savings and loan business. These changes would be disadvantageous, confusing and costly and would not result in additional protection or benefit to the public.

As a result of the reasoning and conclusions which I have described, the Federal Savings and Loan Advisory Council voted unanimously a resolution of disapproval, copy of which is hereto attached.

I strongly support House Resolution 541 and ask the cor mittee to report it favorably.

FEDERAL SAVINGS AND LOAN ADVISORY COUNCIL Whereas the Federal Savings and Loan Advisory Council was created by Congress under section 8 (a) of the Federal Home Loan Bank Act to confer with the Federal Home Loan Bank Board and the Board of Trustees of the Federal Savings and Loan Insurance Corporation on matters affecting the Federal home loan banks and their members; and

Whereas the 17 members of the Council, elected and appointed from each of the 11 regional Federal home loan bank districts throughout the Nation, were given no notice of Reorganization Plan No. 2 until it was made public a few days before the Council's meeting of May 24–25 and the Council had absolutely no opportunity to study the proposal or offer its considered advice thereon; and

Whereas Reorganization Plan No. 2 provides for a drastic change in the organization and operation of the Federal agencies by senarating the Federal Savings and Loan Insurance Corporation from the Federal Home Loan Bank Board ; and

Whereas such separation of the agencies would result in increased cost, needless and conflicting dunlication of supervision and inject partisanship into a newly created indenendent agency; and

Whereas the Advisory Council and the national trade associations are currently conducting intensive studies designed to seek a Federal home loan bank

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system of maximum effectiveness to the savers and homeowners of the Nation : Now, therefore, be it

Resolved, That the Federal Savings and Loan Advisory Council strongly urges the rejection of Reorganization Plan No. 2; and be it further

Resolved, That a copy of this resolution be transmitted to the President of the United States and to Members of Congress for their consideration and action, and to the Nation's 6,000 savings and loan associations whose business is so vitally affected by this abrupt act.

I hereby certify that the above is a true and correct copy of a resolution adopted by the Federal Savings and Loan Advisory Council at Washington, D.C., on May 25, 1956.

LACY BOGGESS, Seoretary, Federal Savings and Loan Advisory Council.

MEMBERSHIP LIST, FEDERAL SAVINGS AND LOAN ADVISORY COUNCIL, FOR CALENDAR

YEAR 1956

Walter H. Dreier, Evansville, Ind. Harold A. Fitzgerald, Pontiac, Mich.
Allen H. Generes, New Orleans, La. Lacy Boggess, Fort Worth, Tex.
Forest J. Henney, Topeka, Kans.

Walter Gehrke, Detroit, Mich.
James E. Bent, Hartford, Conn.

Myron H. Fox, Chicago, Ill. Everett C. Sherbourne, Elizabeth, N. J. C. R. Mitchell, Kansas City, Mo. Francis E. McGill, Philadelphia, Pa. Gail Whitcomb, Houston, Tex. Frank Muller, Jr., Baltimore, Md. Mrs. Gladys Forsyth, Lincoln, Nebr. W. B. Furgerson, Louisville, Ky. Gerrit Vander Ende, Tacoma, Wash. Carl F. Distelhorst, Orlando, Fla.

(Letters, resolutions, etc., received by the subcommittee follow :)

HOUSE OF REPRESENTATIVES,

Washington, D. C., June 13, 1956. Hon. WILLIAM L. DAWSON, Chairman, House Committee on Government Operations,

House Office Building, Washington 25, D. C. DEAR MR. CHAIRMAN : For your information and consideration, I am enclosing a copy of a letter I have received from the Highland Federal Savings & Loan Association opposing the Reorganization Plan No. 2 and giving their reasons why. With kindest regards, I am Sincerely yours,

JAMES P. S. DEVEREUX,

Member of Congress.

HIGHLAND FEDERAL SAVINGS & LOAN ASSUCIATION,

Baltimore, Md., June 11, 1956. Hon. JAMES P. S. DEVEREUX, Member of Congress, Second Congressional District, Maryland,

House Office Building, Washington, D. C. DEAR CONGRESSMAN DEVEREUX; The board of directors of this association, by unanimous vote, adopted a resolution whereby the Highland Federal Savings & Loan Association has concurred in the resolution of the Federal Savings and Loan Advisory Council, previously forwarded you by said council, opposing the passage of Reorganization Plan No. 2.

We feel that building associations who are members of both the Federal Home Loan Bank System and the Federal Savings and Loan Insurance Corporation should not be put to the additional expense of supporting these Corporations as separate entities, particularly in view of the fact that we have for so many years operated in a most satisfactorily and efficient manner under the old system. We feel that the passage of this act would result in needless increased cost of operation as well as conflicting duplication of supervision for the insured building and loan associations of this country.

We respectfully urge you to use every facility at your command to bring about the defeat of this needless piece of legislation. Very truly yours,

WILLIAM SINGLE, Jr.,
Executive Vice President.

HOUSE OF REPRESENTATIVES,

Washington, D. C., June 13, 1956. Hon. WILLIAM J. DAWSON, Chairman, Government Operations Committee,

House of Representatives, Washington, D. C. MY DEAR MR. CHAIRMAN: For your information and the information of your committee, I am enclosing herewith self-explanatory letter I received from T. Russell McGrath, president of the First Federal Savings and Loan Association of Providence, voicing opposition to President Eisenhower's Reorganization Plan No. 2, of 1956.

Your serious consideration of the points made by Mr. McGrath and your advice as to what might be expected of your committee on the subject will be appreciated. Sincerely yours,

AIME J. FORAND,
Member of Congress.

FIRST FEDERAL SAVINGS AND LOAN ASSOCIATION OF PROVIDENCE,

Providence, R. I., June 7, 1956. Hon. AIME J. FORAND,

House Office Building, Washington, D. C. DEAR AIME: Under date of May 17, President Eisenhower transmitted Reorganization Plan No. 2 of 1956 to the Congress. This plan, unless vetoed by either House or Congress within 60 days, will establish the Federal Savings and Loan Insurance Corporation as an independent agency, “subject to the direction and control of the President of the United States," its affairs to be administered by a three-man board of trustees, appointed by the President, one of whom shall be the Chairman of the Federal Home Loan Bank Board.

I have been directed by the board of First Federal Savings and Loan Association of Providence to request your cooperation in defeating this plan for the following reasons:

1. Associations that are members of both the Bank System and the Insurance Corporation and all Federal associations would have to deal with two governmental agencies, a circumstance which would result in duplication, confusion, and delay in decisions on important matters.

2. The Insurance Corporation, being solely concerned with the insurance fund and having no responsibility for the general progress or advancement of the savings and loan business, would be strongly inclined to veto any freedom of management or liberalization or relaxation of regulations. The incentive to control salaries, dividends, pensions, advertising, and other management functions would be very strong.

3. The operating costs of both the Insurance Corporation and the Board are borne by member associations. The plan would thus increase operating expenses to the savings and loan business.

4. Supervision and examination could be doubled as both the Board and the Insurance Corporation would have their respective legal obligations to determine the soundness of associations.

5. In spite of the fact that member associations own the bank system and shortly will own all of the capital of the Insurance Corporation, they were not consulted in any way prior to the attempt to separate the agencies.

I feel that the following disadvantages may be of particular interest to you:

1. The congressional committees which deal with the Federal Home Loan Bank Board and the Insurance Corporation and the savings and loan business were not consulted on the plan and have never recommended a separation of the Corporation from the Board.

2. The plan injects an unfortunate partisanship into the agency by failing to require bipartisanship on the board of trustees of the Corporation. Unlike the Bank Board and most Government boards, all 3 trustees could be from 1 political party.

3. The plan fails to provide for any term of office for the trustees.

4. The congressional philosophy of reorganization plans is that they are to result in savings and greater efficiency in Government. Whatever the possible merits of the plan are, it is impossible for it to claim “economy," since it would establish two agencies in the place of the present one.

5. Although the letter accompanying the plan states that it follows a recommendation of the Hoover Comission, the Hoover report merely recommended that

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