CIVIL DEFENSE

Part II-Reorganization Plan No. 1 of 1958

TUESDAY, MAY 6, 1958

HOUSE OF REPRESENTATIVES,

SUBCOMMITTEE ON MILITARY OPERATIONS

OF THE COMMITTEE ON GOVERNMENT OPERATIONS,

Washington, D. C.

The subcommittee met in room 1501-B, New House Office Building, pursuant to adjournment, at 10 a. m., Hon. Chet Holifield (chairman of the subcommittee) presiding.

Present: Representatives Holifield (presiding), Fascell, Griffiths, Riehlman, Lipscomb, and Minshall.

Also present: Herbert Roback, staff administrator; Carey Brewer, senior defense specialist; and Robert McElroy, investigator.

Mr. HOLIFIELD. The subcommittee will be in order.

The Chair has been presented with a letter from the Director of the Bureau of the Budget, Mr. Stans, as follows, under date of May 6.

MY DEAR CHAIRMAN HOLIFIELD: This is in reply to your letter of May 2, 1958, inviting representatives of this Bureau to appear before your subcommittee on May 6, 1958, to present testimony on civil defense policy and reorganization plan No. 1 of 1958.

Based upon conversations which representatives of this Bureau have had with you and members of your staff, I have arranged for Mr. William F. Finan, assistant director for management and organization, to represent the Bureau at the May 6 hearings. Mr. Finan will be prepared to testify only on reorganization plan No. 1 of 1958. With regard to the matter of civil defense policy, including the issue of shelters, we believe that the Federal Civil Defense Administrator would be the most appropriate witness to express executive branch views.

I wish to assure you that either myself or the Deputy Director of the Bureau will be pleased to appear before your subcommittee at a later date to discuss reorganization plan No. 1 of 1958 should the subcommittee desire it.

Sincerely yours,

MAURICE H. STANS, Director. (The President's message and Reorganization Plan No. 1 of 1958 follow :)

[H. Doc. No. 375, 85th Cong., 2d sess.]

MESSAGE FROM THE PRESIDENT OF THE UNITED STATES, TRANSMITTING REORGANIZATION PLAN No. 1 of 1958, PROVIDING NEW ARRANGEMENTS FOR THE CONDUCT OF FEDERAL DEFENSE MOBILIZATION AND CIVIL DEFENSE FUNCTIONS

To the Congress of the United States:

I transmit herewith Reorganization Plan No. 1 of 1958, prepared in accordance with the Reorganization Act of 1949, as amended. The reorganization plan provides new arrangements for the conduct of Federal defense mobilization and civil defense functions.

In formulating Reorganization Plan No. 1, I have had the benefit of several studies made by the executive branch as well as those conducted by the Congress. The reorganization plan will overcome the major difficulties revealed by those studies and mentioned in my 1959 budget message where I made the following statement:

"The structure of Federal organization for the planning, coordination, and conduct of our nonmilitary defense programs has been reviewed, and I have concluded that the existing statutes assigning responsibilities for the central coordination and direction of these programs are out of date. The rapid technical advances of military science have led to a serious overlap among agencies carrying on these leadership and planning functions. Because the situation will continue to change and because these functions transcend the responsibility of any single department or agency, I have concluded that they should be vested in no one short of the President. I will make recommendations to the Congress on

this subject."

The principal effects of the reorganization plan are

First, it transfers to the President the functions vested by law in the Federal Civil Defense Administration and those so vested in the Office of Defense Mobilization. The result is to establish a single pattern with respect to the vesting of defense mobilization and civil defense functions. At the present time disparity exists in that civil defense functions are vested in the President only to a limited degree while a major part of the functions administered by the Office of Defense Mobilization are vested by law in the President and delegated by him to that Office. Under the plan, the broad program responsibilities for coordinating and conducting the interrelated defense mobilization and civil defense functions will be vested in the President for appropriate delegation as the rapidly changing character of the nonmilitary preparedness program warrants.

Second, the reorganization plan consolidates the Office of Defense Mobilization and the Federal Civil Defense Administration to form a new Office of Defense and Civilian Mobilization in the Executive Office of the President. I have concluded that, in many instances, the interests and activities of the Office of Defense Mobilization and the Federal Civil Defense Administration overlap to such a degree that it is not possible to work out a satisfactory division of those activities and interests between the two agencies. I have also concluded that a single civilian mobilization agency of appropriate stature and authority is needed and that such an agency will ensue from the consolidation and from the granting of suitable authority to that agency for directing and coordinating the preparedness activities of the Federal departments and agencies and for providing unified guidance and assistance to the State and local governments.

Third, the reorganization plan transfers the membership of the Director of the Office of Defense Mobilization on the National Security Council to the Director of the Office of Defense and Civilian Mobilization and also transfers the Civil Defense Advisory Council to the Office of Defense and Civilian Mobilization.

Initially, the Office of Defense and Civilian Mobilization will perform the civil defense and defense mobilization functions now performed by the Office of Defense Mobilization and the Federal Civil Defense Administration. One of its first tasks will be to advise me with respect to the actions to be taken to clarify and expand the roles of the Federal departments and agencies in carrying out nonmilitary defense preparedness functions. After such actions are taken, the direction and coordination of the civil defense and defense mobilization activities assigned to the departments and agencies will comprise a principal remaining responsibility of the Office of Defense and Civilian Mobilization.

After investigation, I have found and hereby declare that each reorganization included in Reorganization Plan No. 1 of 1958 is necessary to accomplish one or more of the purposes set forth in section 2 (a) of the Reorganization Act of 1949, as amended.

I have also found and hereby declare that it is necessary to include in the accompanying reorganization plan, by reason of reorganizations made thereby, provisions for the appointment and compensation of new officers specified in sections 2 and 3 of the plan. The rates of compensation fixed for these officers are, respectively, those which I have found to prevail in respect of comparable officers in the executive branch of the Government.

The taking effect of the reorganizations included in Reorganization Plan No. 1 of 1958 will immediately reduce the number of Federal agencies by 1 and, by providing sounder organizational arrangements for the administration of the affected functions, should promote the increased economy and effectiveness of the Federal expenditures concerned. It is, however, impracticable to itemize at this time the reduction of expenditures which it is probable will be brought about by such taking effect.

I urge that the Congress allow the reorganization plan to become effective. DWIGHT D. EISENHOWER.

THE WHITE HOUSE, April 24, 1958.

REORGANIZATION PLAN No. 1 OF 1958

Prepared by the President and transmitted to the Senate and the House of Representatives in Congress assembled, April 24, 1958, pursuant to the provisions of the Reorganization Act of 1949, approved June 20, 1949, as amended

CIVILIAN MOBILIZATION

SECTION 1. Transfer of functions to the President.-(a) There are hereby transferred to the President of the United States all functions vested by law (including reorganization plan) in the following: The Office of Defense Mobilization, the Director of the Office of Defense Mobilization, the Federal Civil Defense Administration, and the Federal Civil Defense Administrator.

(b) The President may from time to time delegate any of the functions transferred to him by subsection (a) of this section to any officer, agency, or employee of the executive branch of the Government, and may authorize such officer, agency, or employee to redelegate any of such functions delegated to him. SEC. 2. Office of Defense and Civilian Mobilization.—(a) Subject to the provisions of this reorganization plan, the Office of Defense Mobilization and the Federal Civil Defense Administration are hereby consolidated to form a new agency in the Executive Office of the President which shall be known as the Office of Defense and Civilian Mobilization, hereinafter referred to as the "Office."

(b) There shall be at the head of the Office a Director of the Office of Defense and Civilian Mobilization, who shall be appointed by the President by and with the advice and consent of the Senate and shall receive compensation at the rate now or hereafter prescribed by law for the heads of executive departments.

(c) There shall be in the Office a Deputy Director of the Office of Defense and Civilian Mobilization, who shall be appointed by the President by and with the advice and consent of the Senate, shall receive compensation at the rate now or hereafter prescribed by law for the under secretaries referred to in section 104 of the Federal Executive Pay Act of 1956 (5 U. S. C. 2203), shall perform such functions as shall be delegated or assigned to him pursuant to the provisions of this reorganization plan, and shall act as Director during the absence or disability of the Director or in the event of a vacancy in the office of Director.

(d) There shall be in the Office three Assistant Directors of the Office of Defense and Civilian Mobilization, each of whom shall be appointed by the President by and with the advice and consent of the Senate, shall receive compensation at the rate now or hereafter prescribed by law for assistant secretaries of executive departments, and shall perform such functions as shall be delegated or assigned to him pursuant to the provisions of this reorganization plan.

(e) The Office and the Director thereof shall perform such functions as the President may from time to time delegate or assign thereto. The said Director may from time to time make such provisions as he shall deem appropriate authorizing the performance by any officer, or by any agency or employee, of the Office of any function delegated or assigned to the Office or to the Director. SEC. 3. Regional directors.-There are hereby established in the Office so many new positions, not in excess of ten existing at any one time, with the title "Regional Director", as the Director of the Office shall from time to time determine. Each Regional Director shall be appointed under the classified civil service, shall be the head of a regional office of the Office of Defense and Civilian Mobilization, shall perform such functions appropriate to such regional office as

may be delegated or assigned to him pursuant to the provisions of this reor ganization plan, 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. Membership on National Security Council. The functions of the Director of the Office of Defense Mobilization with respect to being a member of the National Security Council are excluded from the scope of the provisions of section 1 (a) of this reorganization plan and are hereby transferred to the Director of the Office of Defense and Civilian Mobilization.

SEC. 5. Civil Defense Advisory Council.—The Civil Defense Advisory Council, created by section 102 (a) of the Federal Civil Defense Act (50 U. S. C. App. 2272 (a)), together with its functions, is hereby transferred to the Office of Defense and Civilian Mobilization.

SEC. 6. Abolitions.-The offices of Federal Civil Defense Administrator and Deputy Administrator provided for in section 101 of the Federal Civil Defense Act (50 U. S. C. App. 2271) and the offices of the Director of the Office of Defense Mobilization and Deputy Director of the Office of Defense Mobilization provided for in section 1 of Reorganization Plan Numbered 3 of 1953 (67 Stat. 634) are hereby abolished. The Director of the Office of Defense and Civilian Mobilization shall make such provisions as may be necessary in order to wind up any outstanding affairs of the offices abolished by this section which are not otherwise provided for in this reorganization plan.

SEC. 7. Records, property, personnel, and funds. (a) The records, property, personnel, and unexpended balances, available or to be made available, of appropriations, allocations, and other funds of the Office of Defense Mobilization and of the Federal Civil Defense Administration shall, upon the taking effect of the provisions of this reorganization plan, become records, property, personnel, and unexpended balances of the Office of Defense and Civilian Mobilization.

(b) Records, property, personnel, and unexpended balances, available or to be made available, of appropriations, allocations, and other funds of any agency (including the Office of Defense and Civilian Mobilization), relating to functions vested in or delegated or assigned to the Office of Defense Mobilization or the Federal Civil Defense Administration immediately prior to the taking effect of the provisions of this reorganization plan, may be transferred from time to time to any other agency of the Government by the Director of the Bureau of the Budget under authority of this subsection for use, subject to the provisions of the Reorganization Act of 1949, as amended, in connection with any of the said functions authorized at time of transfer under this subsection to be performed by the transferee agency.

(c) Such further measures and dispositions as the Director of the Bureau of the Budget shall determine to be necessary in connection with the provisions of subsections (a) and (b) of this section shall be carried out in such manner as he shall direct and by such agencies as he shall designate.

SEC. 8. Interim provisions.-The President may authorize any person who immediately prior to the effective date of this reorganization plan holds an office abolished by section 6 hereof to hold any office established by section 2 of this reorganization plan until the latter office is filled pursuant to the said section 2 or by recess appointment, as the case may be, but in no event for any period extending more than one-hundred-and-twenty days after the said effective date.

SEC. 9. Effective date. The provisions of this reorganization plan shall take effect at the time determined under the provisions of section 6 (a) of the Reorganization Act of 1949, as amended, or on July 1, 1958, whichever is later.

Mr. Finan, you may now come forward, if you will, please. You have a prepared statement. I suggest that you present it.

STATEMENT OF WILLIAM F. FINAN, ASSISTANT DIRECTOR FOR MANAGEMENT AND ORGANIZATION, BUREAU OF THE BUDGET; ACCOMPANIED BY FRED E. LEVI, ASSISTANT CHIEF, OFFICE OF MANAGEMENT AND ORGANIZATION, BUREAU OF THE BUDGET; AND JOHN J. CORSON, DIRECTOR, MCKINSEY & CO.

Mr. FINAN. Mr. Chairman, with your permission, I would like to have a member of my staff, Mr. Levi, join me at the table, as well as Mr. John J. Corson, who is a director of the firm of McKinsey & Co., who made the recent study that forms a great deal of the background for reorganization plan No. 1.

Mr. HOLIFIELD. We will be glad to have your associates present. Will Mr. Corson testify for his company or for the Budget Bureau? Mr. FINAN. He will testify for his company, sir, and strictly in terms of the report which he made to the Bureau. He takes responsibility for that report and we take responsibility for everything beyond it.

Mr. HOLIFIELD. For the plan?

Mr. FINAN. Yes, sir.

Mr. Chairman and members of the committee: I am pleased to have this opportunity to appear before your committee in connection with its hearings on Reorganization Plan No. 1 of 1958, which is designed to improve and strengthen Federal organization for preparing and mobilizing the Nation for nonmilitary defense activities.

The subject of organization for nonmilitary defense, or portions of it, has been studied many times, in both the legislative and executive branches, and also by interested outside groups. This committee has been responsible for one of the most far-reaching investigations of this subject; its findings were a significant part of the background leading to the reorganization plan now before you.

A major finding of this committee was that the civil defense planning activities-broadly defined-of the Office of Defense Mobilization and the Federal Civil Defense Administration should be merged. This plan will bring about the merger.

With the objective of developing solutions to the organizational problems which had been identified by the earlier studies, the Bureau of the Budget, after consulting with the Office of Defense Mobilization and the Federal Civil Defense Administration, engaged a management consulting firm to develop a detailed scheme of reorganization.

The management firm undertook an intensive study of the two agencies with the full cooperation of Mr. Gray, Governor Hoegh and their entire staffs. The results of the firm's study were made available to the two agencies, and their views were fully taken into account by the President in the preparation of Reorganization Plan No. 1 of 1958.