Mr. FINAN. Yes, sir.

Senator MARTIN. It is a rather good brief organizational chart. I have been looking over exhibits 1 and 2 to find out what the difference is in the two. I notice that exhibit 1 covers supply and requirements that is not included in exhibit 2.

Exhibit 2, in that part, covered manpower, health and medical, production, materials, communications and transportation.

Why weren't these two exhibits merged in one?

Mr. FINAN. Sir?

Senator MARTIN. Why were not these two exhibits merged in one? Mr. FINAN. The firm wanted to give us the benefit of the analysis they made of the two alternative forms of organization; they concluded that one had merits that were superior to the other.

Senator MARTIN. They have practically the same coverage. I notice in small type on exhibit 1 they have the same headings that they have in broader squares here in exhibit 2 and I was just a little confused as to why they did a different job.

Mr. FINAN. You have the advantage of me there, Senator. one just borrowed my copy of the report, so I do not have it.

Some

Senator MARTIN. I want to ask why it is just a matter of a ruler and a pencil presentation in the same words, and I wondered why you had two alternative plans here in this way.

Does that indicate any difference in organization?

Mr. FINAN. Senator, if you will look at exhibit 1, you will notice that under program areas they have under a single officer the whole supply and requirements area, which covers manpower, production and materials, transportation, communications, health and medical. You have one layer of supervision over this tremendous area between those functions and the Director; whereas, in exhibit 2, you will note the officers responsible for each of those areas report directly to the Director. That is the major difference.

Senator MARTIN. That is the only point different from the two charts?

Mr. FINAN. It is the principal difference but that is very important.
Senator MARTIN. That is why I am bringing it out.

Mr. FINAN. Yes, sir; that is a very significant difference.
Senator MARTIN. You have not resolved that yet?
Everything else in the chart is pretty well the same.

Mr. FINAN. Well, the firm, on balance, sir, indicated that they thought that alternative B would produce a more effective organization and we are inclined to agree with them.

Senator MARTIN. Now that major point that has not been resolved yet, in exhibit 1, putting supply and requirements as one head, under which the 5 subheads appear, and over in exhibit 2, putting the 5 subheads each in a little box by himself, is that right?

Mr. FINAN. Each reporting directly to the Director of this contemplated agency; yes, sir.

Senator MARTIN. That is the only thing that you have unresolved as far as the firm outline of reorganization is concerned?

Mr. FINAN. Again let me try to make myself clear, Senator. The decision on the internal organization of this agency will be up to the new director. He could, if he chose, disregard both of these proposals and develop his own pattern.

All the Budget Bureau can do is to recommend in a situation of this kind. We do not decide.

Senator MARTIN. I am trying to get a general picture of what you had in mind when you came in here.

Mr. FINAN. Yes, sir.

Senator MARTIN. And I need to know whether this is along the lines you are thinking when you make your recommendations. Mr. FINAN. Very definitely it is, sir.

Senator MARTIN. And your thoughts are fairly well in line with the report?

Mr. FINAN. Yes, sir.

Senator MARTIN. Insofar as they are undecided on this program area, whether we will have 1 head or 5 heads, you share with them lack of resolution on that?

Mr. FINAN. No, sir, there is no lack of resolution there as far as McKinsey & Co. and the Budget Bureau are concerned.

The Bureau, as a matter of policy, when we employ a consulting firm, asks them to include in their reports alternative forms of organization that they concluded merited consideration, and to prepare for us an analysis of the various forms including the basis on which they arrived at a judgment that one was better than the other.

We do that because we want to reserve the right ourselves, and we also want to give an agency head the right to arrive at his own judgment, which in some situations may be quite at variance with the judgment of the engineering firm.

So that in this case they found two forms they thought merited serious consideration, and they covered them in their report, and then indicated which one they felt would be superior to the other and supplied us with the reasons that led them to that conclusion.

Senator MARTIN. The only positions in this new organization that will come before the Senate will be the positions of Director, Deputy Director and the three Assistant Directors, is that correct?

Mr. FINAN. That is correct, sir.

Senator MARTIN. All other organization personnel will be largely within the jurisdiction of the management of the new "Office of Defense and Civilian Mobilization?"

Mr. FINAN. They will be regular civil service personnel, Senator. Senator MARTIN. We need not make any decision on detail of organization at all in this action we have before us.

The only thing I want is a picture of about what you had in mind in the overall.

Mr. FINAN. Yes, sir.

Senator MARTIN. I am not trying to pinpoint the details of the internal organization in the action before us.

Mr. FINAN. I think that is correct.

Senator MARTIN. I think it is important for us to know what you have in mind.

There is one thing, I would like to suggest about the name of your organization. We have had trouble getting across to the civilian population just what it is all about.

Now there has been an overlap, that you describe so well in your statement, but when you call the new name of Office of Defense and Civilian Mobilization, you have a rather long name for the new organization.

26895-58- 4

Could we shorten that in some way?

Mr. FINAN. Well, this is a hard subject, Senator. It is one that invariably gives trouble, is trying to find a descriptive title for an agency that at the same time is not too complicated.

Senator MARTIN. I would like to ask you-I have not given too long a thought on this point, but as you read the title, I felt some of our people would fail to follow such a long title.

Would it be too short a title to say "Office of Nonmilitary Defense?"

I am not trying to name this organization. I am just asking for your idea.

Mr. FINAN. The principal trouble that you would have with that is that this agency has certain responsibilities that do get into the actual military defense field, and there would be a connotation there that you were taking something away.

If you recall, the Office of Defense Mobilization is currently called the Office of Defense Mobilization. If we switched to a title that said "Non-Military Defense" it would suggest a dimunition in responsibilities which is not actually contemplated here.

Senator MARTIN. The mobilization you are talking about here is the military mobilization as well as civil mobilization?

Mr. FINAN. It is total mobilization, sir. This agency has responsibility for planning and assisting the President in planning and preparing for the total civilian industrial mobilization of the country in support of our military effort, among other things.

Senator MARTIN. Is it your plan to have this new organization exercise some jurisdiction in the strictly military field other than industrial and civilian support of military?

Mr. FINAN. There is no expansion of functions here either, but under the Defense Production Act of 1950, the parts of it that are still on the books, this agency would perform key functions on which the Department of Defense would ultimately have to depend for manufactured military end items, manpower, and so on.

Senator MARTIN. Do you consider that production program as part of the military organization?

Mr. FINAN. That is a difficult question to answer, framed just that way, Senator. The military, of course, are arranging for their own production in that they are letting all of their own production

contracts.

This agency is not in that business.

Senator MARTIN. This agency would not cut into that field?

Mr. FINAN. No, sir..

Senator MARTIN. Can't we get a field clearly marked out and simply defined or labeled to get across to the people what we are creating

here?

I do not believe the people can follow too complicated a title nor can they get a very exact picture of the jurisdiction of the two organizations, the civil activities on the one hand, and the military on the other.

I was hopeful that we could create an organization that would have a clearcut nonoverlapping function and

Mr. FINAN. Well, Senator, these two agencies between them are now administering somewhere, I would estimate, in the neighborhood

of a dozen different statutes which were enacted under different times, different circumstances, and with different purposes in view.

One of our hopes would be that by consolidating responsibility for the administration of this complete complex of law in one agency we could get a central total review of it made for the first time

Senator MARTIN. You would not change the present functioning of these two agencies as they are operating under the present law?

You would not change their essential functioning. You would not create any overlap with the military more than now exists?

Mr. FINAN. No, sir; this plan neither creates new statute nor does it eliminate statutes.

Senator MARTIN. You say you had to retain some military connotation in your title. I wondered if you were encroaching at all on the military defense organization.

Mr. FINAN. That is not involved in this plan at all, sir.

To get back to your earlier point

Senator MARTIN. Can we make sure we do not create the impression that we are encroaching on the military?

Mr. FINAN. Well, we do not feel that we have created such an impression.

As I say, the title of one of the agencies affected here today is the Office of Defense Mobilization.

Senator MARTIN. When I suggested the name "Nonmilitary Defense," you said it had some military in it?

Mr. FINAN. I believe my answer was, Senator, that it could easily suggest we were eliminating any concern about the support of the military program from the responsibilities of this agency, and we would not want to do that.

But to finish my answer to another of your questions, we would hope that by centralizing total responsibility in one agency we could get an analysis made of this big complex of statutes that we are dealing with here, and equip the executive branch to lay before the Congress one of these days, perhaps, some kind of a consolidated and greatly simplified bill which could solve one of the problems you alluded to and that is the complexity of the program and the difficulty of the public comprehending it fully.

Senator MARTIN. Would the name "Office of Nonmilitary Defense" make it impossible for you to carry out the present functions of the two organizations that you are merging?

Mr. FINAN. It would not make it impossible, Senator, but it could create an erroneous impression as to the scope of the responsibility that is involved here.

Senator MARTIN. I am afraid that it is hard to convey a clearcut impression to the people with too long a title.

I am only struggling with the title.

Mr. FINAN. I understand your problem fully.

However, the President selected this particular title that is now imbedded in this reorganization plan.

Senator MARTIN. Our problem here is only that of merging the 2 agencies into 1 agency and retain the general jurisdictions of the 2 agencies which they are now exercising; is that correct?

You are not changing any functions. You are merging them.

Mr. FINAN. No, we are neither changing nor eliminating functions nor are we creating any new ones.