51 Opening statement of Hon. Herbert R. O'Conor, a United States Senator Text of S. 1166, a bill to create a Commission to Make a Study of the Administration of Overseas Activities of the Government, and to make recommendations to the Congress with respect thereto. Analysis of S. 1166, staff memorandum, April 16, 1951. Comments of Government agencies on S. 1166, staff memorandum, May 22, Summary of Report of the Brookings Institution on the Administration of Ives, Hon. Irving M., a United States Senator from the State of New Koenig, Louis W., professor of government, New York University, Latimer, George A., manager, organization department, the California Co., New Orleans, La., former member of Task Force Staff on Foreign Affairs, Hoover Commission, specializing in interdepart- mental studies and organizational management of foreign affairs.. McCormick, Robert L. L., director of research, Citizens Committee for the Hoover Report, Washington, D. C..... Parks, Wallace J., Baltimore, Md., formerly consultant to Task Force on Foreign Affairs, Hoover Commission_. Pollock, James K., professor of political science and chairman of the Sawyer, Hon. Charles, Secretary of Commerce_ Letters, statements, etc., submitted for the record by— Gaskin, Edward A., president, local 900, Government and civic employ- Lawton, F. J., Director, Bureau of the Budget, letter to Senator McCormick, Robert L. L., director of research, Citizens Committee Letter to Walter L. Reynolds, chief clerk, Senate Committee on Expenditures, submitt ng article by Donald H. McLean___ Excerpts from the Hoover Commission reports.. Membership formula creating the Hoover Commission. McLean, Donald H., Jr., Socony-Vacuum Oil Co., Inc., New York, Letter to Senator Herbert R. O'Conor, June 8, 1951.. Memorandum on form of commission provided in S. 1166. Memorandum on need for additional research and analysis in regard to United States administration of foreign affairs and III ADMINISTRATION OF OVERSEAS ACTIVITIES OF THE GOVERNMENT THURSDAY, MAY 31, 1951 UNITED STATES SENATE, SUBCOMMITTEE ON REORGANIZATION OF THE COMMITTEE ON EXPENDITURES Washington, D. C. The subcommittee met at 10: 55 a. m., pursuant to call, in room 357, Senate Office Building, Hon. Herbert R. O'Conor (chairman of the subcommittee) presiding. Present: Senators O’Conor and Dworshak. Also present: Walter L. Reynolds, chief clerk, and Eli E. Nobleman, professional staff member. Senator O'CONOR. The open hearing on S. 1166 is now called to order. As chairman of the Subcommittee on Reorganization, I should like, at the outset of these hearings, to make a brief statement with respect to the pending bill, to create a commission to make a study of the administration of overseas activities of the Government, and to make recommendations to Congress with respect thereto, of which I am a cosponsor. On March 25, 1949, the Hoover Commission submitted to the Senate a report entitled "Administration of Overseas Affairs." This report emphasized the fact that the war and its aftermath created new and heavy operational and promotional responsibilities abroad, resulting in an annual expenditure by this Government of more than $5,000,000,000 at that time. Of this amount it was estimated that more than $1,000,000,000 was being expended annually for military government and occupation costs in 4 countries, and in excess of $4,000,000,000 a year was being devoted to support the economic recovery of 19 European countries. In addition, the United States was required to govern its trust territories, dispose of large amounts of surplus property overseas, and discharge newly acquired responsibilities of trusteeship with respect to several Japanese mandated islands. The Commission pointed out that these obligations and responsibilities had grown so rapidly that time had not permitted adequate planning for efficient administration. This had resulted in confusion, inconsistencies, and uncertainty of policy and program as well as the inefficiencies which inevitably follow as a result of improvisation and lack of over-all planning. Finally, the Commission found that the administration of overseas affairs was scattered and diffused among a number of departments and independent agencies, including the 1 Department of State, Army, Navy, and Interior, and the Executive Office of the President. The Hoover Commission concluded that the entire problem was so complex and far reaching as to require further detailed study before any definite determination could be made as to the most effective organizational arrangement to meet the problem. Accordingly, it recommended that the Congress direct that a comprehensive study be made of the entire problem of overseas operations and administration. For the purpose of effectuating the recommendation of the Hoover Commission in this all-important field, Senator John L. McClellan, chairman of this committee, in June 1949, introduced a bill (S. 2072, 81st Cong.), which was identical with the pending bill, S. 1166, and which would have established a Commission on Overseas Administration charged with the responsibility for making the comprehensive study recommended by the Hoover Commission. The bill was referred to this committee which, in turn, referred it to the Subcommittee on Relations with International Organizations of which it was my privilege to be chairman. The subcommittee, after careful study and consideration of the measure, reported it favorably to the full committee on August 5, 1949. On August 10, 1949, the bill was unanimously reported to the Senate. On August 27, 1949, the bill passed the Senate by unanimous consent and was referred, on September 2, 1949, to the House Committee on Expenditures in the Executive Departments, where no further action was taken. In commenting upon S. 2072, the Director of the Bureau of the Budget advised the chairman of this committee, that is, Senator McClellan, that he felt that the President had adequate authority under the Reorganization Act of 1949 to direct such a study without the establishment of a special commission. Subsequently, the Bureau retained the Brookings Institution to make a study of the administration of foreign affairs and overseas operations of this Government on behalf of the President, at a cost of approximately $126,000. In addition, the President commissioned former Secretary of the Army Gordon Gray to examine and report with respect to American foreign economic policies, and Mr. Nelson A. Rockefeller, as Chairman of the President's International Development Board, to examine and report with respect to problems involved in carrying out technical-assistance programs. During the 2 years which have elapsed since the passage by the Senate of S. 2072, the foreign commitments and undertakings of our Government have continued to increase at a startling rate, as a result of the introduction of large-scale overseas operating programs as major tools of American foreign policy. Multi-billion-dollar programs such as the continuation of economic aid to Europe and the Far East, and military assistance to the North Atlantic Treaty nations have increased our financial obligations to an unprecedented high. During fiscal year 1951, estimated expenditures and outlays for military and economic assistance are expected to amount to approximately $8,300,000,000. According to the President's recent message, expenditures for these purposes will total approximately $8,500,000,000 during fiscal year 1952. Thus, for two fiscal years-1951 and 1952-the American people will be called upon to furnish approximately $17,000,000,000 for foreign military and economic assistance. It would appear that if a comprehensive study was found by the Hoover Commission to be necessary in 1949, when our total foreign commitments amounted to only $5,000,000,000 annually, it would certainly be imperative at this time when our financial obligations in this area are almost twice that amount, on an annual basis. The pending bill, S. 1166, is virtually identical with the bill passed unanimously by the Senate during the Eighty-first Congress. It would establish a Commission on Overseas Administration authorized to make a study of the administration of the overseas activities of this Government, with a view to making recommendations to the Congress as to means for coordinating and integrating such activities. The Commission would be required to complete its study and report its findings and recommendations to the Congress not later than March 1, 1952, and would cease to exist on April 1, 1953. It would be composed of four Members of the Senate, appointed by the President of the Senate; four Members of the House of Representatives, appointed by the Speaker; and four persons in the executive branch of the Government, appointed by the President. Members of the Commission would serve without additional compensation by reason of such membership, but they would be paid for necessary travel and subsistence while away from their official station on the business of the Commission. When this proposed legislation was pending before the committee in the last Congress, the then Director of the Bureau of the Budget, Frank Pace, Jr., advised the chairman of the committee that it would seem that the problems presented in this area can be dealt with adequately under arrangements which can be made by the President and by the regular congressional committees. The Deputy Under Secretary of State, John E. Peurifoy, endorsed the Hoover Commission approach, however, concluding that: It is believed that such a study (as proposed by S. 2072) would be of great usefulness in developing future Government policy with respect to the type of organization most appropriate to deal with the range of activities enumerated in the report of the Commission. Agency comments on the pending bill, S. 1166, now indicate, however, that the present Director of the Budget and the Department of State oppose this bill, on the ground that the study which it would authorize under the jurisdiction of an independent Commission required to report to the Congress is unnecessary because the field of inquiry has already been covered by the Gray, Rockefeller, and Brookings Institution reports prepared during the past year under the direction of the President. An examination of the Gray report reveals that it covers only foreign economic policies and devotes only 5 out of 131 pages to the vital problem of administration. The Rockefeller report deals only with international development and devotes approximately 12 out of 120 pages to administration. Numerous efforts by the staff of this committee to obtain a copy of the Brookings report have been unsuccessful. Therefore, the committee has no knowledge with respect to its contents.1 1 Subsequently, on June 11, 1951, a summary of the conclusions contained in the report of the Brookings Institution was forwarded to the Committee on Expenditures by the Bureau of the Budget. The summary appears as appendix A, p. 71. |