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Mr. BURNS. It would include representatives of the leading segments in American economic society.

Mr. MCCORMACK. And I suppose sometimes into those questions might come the advice of religious leaders?

Mr. BURNS. I don't visualize a situation like that, but it might arise. Mr. MCCORMACK. I mean if a question should be involved, and sometimes there are in connection with recommendations, I suppose under those circumstances advice would be sought? That is not intended to be a trappy question.

Mr. BURNS. I would not exclude that possibility. Mr. MCCORMACK. And the representatives invited would not be persons with particularly slanted view but representative of the views of the people of America?

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Mr. BURNS. That would be one's aim, but, of course, in seeking a cross section of opinion you will inevitably be seeking or getting, as well, a balance of slanted views.

Mr. MCCORMACK. Will you repeat that again? In seeking

Mr. BURNS. In seeking a cross section of opinion, you will, let me add an additional word this time, almost inevitably be seeking a balance of slanted views. In other words, the views will represent the thinking of different segments of our society; for example, farmers, industry, labor, community leaders, and so forth.

Mr. MCCORMACK. Well, if you are careful in the selection of those it would be what I suppose would be called an advisory group. Suppose we call it that for the purpose of this hearing. If you select a representative of the different economic segments of our society you would get a pretty broad collective picture, then, but if you excluded some you are likely to get a pretty slanted view.

Mr. BURNS. Of course.

Mr. MCCORMACK. So it is your intention, you and your associates, as long as you are chairman, to try to get as representative a viewpoint for the consideration of you and your associates as you can?

Mr. BURNS. That is right.

Mr. McCORMACK. I assume that is the answer, but I would like to just get it in for the record.

Now, what is the status of your small but very important activity now? You have no associates now, have you? You are the only one now?

Mr. Burns. I am the only member of the Council at the present time.

Mr. MCCORMACK. There will be 2 more under this plan?
Mr. BURNS. Yes.

Mr. MCCORMACK. In the supplemental appropriation bill just reported out, coming up today, I remember an item of $200,000, is it Mr. BURNS. Yes. It was a very disappointing appropriation.

Mr. MCCORMACK. Yes, you asked for $300,000. It is not our purpose to go into that, and I will not embarrass you, because as to whether or not that is enough is something that on this occasion it would not be relevant to go into, with the idea that it might be a little embarrassing because some of our friends on he Appropriations Committee are sometimes sensitive, so I won't go into that.

Mrs. CHURCH. I have 1 or 2 questions, then, if I may, Dr. Burns. Mr. BURNS. Yes.

Mrs. CHURCH. One really involves a technicality. I notice that you are to appoint from among the 2 members 1 who will serve as acting chairman when you are away. That would not necessarily always be the same person, would it?

Mr. BURNS. No.

Mrs. CHURCH. There would be no attempt, then, through precedent to build up one over the other of the two advisers?

Mr. BURNS. An attempt would be made to avoid that.

Mrs. CHURCH. I think that that would be very wise.

Now, as I looked at the plan last night it seemed to me you were being offered a wealth of advice, or at least a variety of places in which to find it, and I wondered if you could outline for me the relationship, as you see it, between the Council of Economic Advisers and the Advisory Board on Economic Growth and Stability which is being formed by the heads of the departments?

Mr. BURNS. That board is essentially an advisory committee to the Council. It is designed to meet a very concrete problem in government, namely, to regularize the channels through which economic thinking, that is, thinking on economic policy, can be pooled and tested.

Now, the old Council did not have the advantage of any such governmental machinery. This had the result of restricting the influence of the old Council on economic policy. The new advisory board is designed to prevent the Council from becoming a report-writing or purely research agency.

Mrs. CHURCH. Is there such interrelationship planned that you could disregard the advice of that group if you felt it necessary? Mr. Burns. Yes, technically.

Mrs. CHURCH. Actually, what would happen?

Mr. BURNS. Well, actually it would make no sense to disregard the thinking of the important departments of the Government. After all, an attempt is being made by all of us to hammer out policy on the difficult problems facing our society.

Mrs. CHURCH. You feel, then, that there is no place for empirical decisions, on the basis of economic fact and theory?

Mr. BURNS. No; I feel that economic fact and theory must always guide us, but I also feel that the heads of economic agencies of a government such as ours have some familiarity with economic facts and economic theory and that a Council of Economic Advisers which disregarded their thinking would turn out to be a sterile and ineffective agency.

Mrs. CHURCH. What I was attempting to probe into was your own attitude toward divorcing political considerations from your decisions. I would like to feel that at least the Council of Economic Advisers could feel itself divorced from the necessity of making political decisions or expressing them or even being influenced by political policy. Mr. BURNS. Certainly, the Council of Economic Advisers would not attempt to play any role in the political process.

Mr. MCCORMACK. What do you mean by political? I think there are two meanings to it. I think if the doctor got that-Mrs. CHURCH. I mean the decisions of practical policy.

Mr. McCORMACK. I mean as far as political parties are concerned, and policy.

Mrs. CHURCH. Exactly, because after all

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Mr. MCCORMACK. How can they, in performing their duty, escape making recommendations or reports that might involve them?

Mrs. CHURCH. I was merely hoping that if the occasion arose the Council would certainly feel free to make deceisions of sound economic policy even though it might be against the policy of the party appointing him.

Would you feel so free?

Mr. BURNS. Well, I would feel perfectly free. It is perhaps easy for me, Mrs. Church. I am a registered Democrat.

Mrs. CHURCH. Well, we hope it would be just as easy for you if you were a registered Republican.

Mr. BURNS. Of course it would be. I am a professional economist and must be guided by professional standards.

Mrs. CHURCH. Dr. Burns, I do not know whether or not you know Mr. Hoffman, the chairman of the Committee on Government Operations. I think perhaps that he might like to ask some questions. The CHAIRMAN. I am thoroughly satisfied with whatever you do. Mr. MCCORMACK. Doctor, we have to make a record, and one of

the important questions is in connection with the personnel.

Can you give us any information about what personnel you expect to have or you need? Of course, what you need is one thing and what you expect to have is dependent upon what is appropriated.

Mr. BURNS. Well, my needs are fairly clear, Mr. McCormack. I need to have on this Council working with me some 6 or 8 of the top economists of this country. Whether I can secure them or not I cannot say, but I am not entirely pessimistic.

Mr. MCCORMACK. Then what about the other personnel in other classifications?

Mr. BURNS. There will be, of course, a group of statisticians; I need about a half a dozen of those, and perhaps 5 or 6 junior economists and as many secretaries.

Mr. MCCORMACK. That would be a small force at that, wouldn't it, compared to the size of the job?

Mr. BURNS. Yes. I have thought in terms of a force of 25 or 30. Mr. MCCORMACK. Well, when you get down into the lower classification would civil-service laws apply?

Mr. BURNS. As I see the matter now, I would want, certainly, the secretaries, the clerical assistants, to function under civil-service laws. I wouldn't want the top economists to come under civil-service. There is besides a twilight zone. About that zone I have no firm opinion and I should want to consult the Civil-Service Commission. Mr. MCCORMACK. Now, what will be the compensation of the Chairman?

Mr. BURNS. Under the Employment Act of 1946 the compensation of each of the three members of the Council is $16,000. However, an increase in the Chairman's salary is now under consideration. Mr. Finan, who is with me, can tell you about that.

Mr. MCCORMACK. Well, it is not an important factor in my mind, I want you to understand that. It is simply for the record I am asking these questions.

Mr. BURNS. That can be fully explained by Mr. Finan.

Mr. MCCORMACK. I have no further questions.

Mrs. CHURCH. Thank you very much, Dr. Burns.

Mr. Finan, will you identify yourself for the record? Mr. FINAN. My name is William F. Finan. I am the Assistant Director of the Bureau of the Budget for Management and Organization.

I have no prepared statement, Mrs. Church. I simply accompanied Dr. Burns in the event there were some questions about this plan which it would be more appropriate for the Bureau of the Budget to answer than it would be for Dr. Burns.

Mrs. CHURCH. Well, Mr. McCormack has raised a question about the compensation. I wonder if you would discuss that. The plan itself makes no change, but I understand there is to be a change in compensation.

Mr. FINAN. Yes. It is our opinion that in view of the additional responsibilities placed upon the Chairman by this plan it would be appropriate to increase his compensation. Currently, we are thinking along the line that it should be equated out with such officials as the Director of the Bureau of the Budget, with a salary at the rate of $17,500 a year. It will take legislation to do that, however, and up to the present time no legislation has been introduced.

Mrs. CHURCH. And it is your plan that the salary of the remaining two members would still remain at $16,000?

Mr. FINAN. That is correct.

Mrs. CHURCH. Have you a question, Mrs. St. George?

Mrs. ST. GEORGE. I was wondering, in view of the fact I think Dr. Burns intimated that the amount of money is rather low, how much is it going to cost to run this entire organization with all the economists and all the necessary clerical help? Have you any idea exactly what it will cost?

Mr. FINAN. Dr. Burns, of course, will be in exactly the same position as the head of any other agency and he will run this organization within the amount appropriated by the Congress.

Mrs. ST. GEORGE. What did they spend, for instance, in the last fiscal year?

Mr. FINAN. Last year was not a normal year. You will recall that only enough money was appropriated to operate the council up until the early spring, and the organization has been substantially liquidated for lack of funds. In normal prior years, I think almost from its inception, there was appropriated for the council approximately $300,000 a year.

Mrs. ST. GEORGE. And did that take care of all their expenses?
Mr. FINAN. It covered their total expenses.

Mrs. CHURCH. Has there been any thought of making this a continuing body; in other words, to have one member appointed for 4 years, another for 2 years, and so forth, so that you would have a body going through administrations, or is it always the plan to have it just coincidental with the term of a President?

Mr. FINAN. We consider the role of the council will be such that it is much more appropriate for the members of the council to serve at the pleasure of the President rather than having overlapping terms. Mrs. CHURCH. The thought occurred to me that there would be some value in setting up a council, a permanent council-nonpolitical-which would have the wealth of broad experience over a number of terms or years and under different economic conditions.

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Mr. FINAN. Well, I think that that kind of an arrangement would have, shall we say, the germs of very serious controversy. Just to use an exaggerated illustration, perhaps, you could bring about a situation in which the President would have 1, 2, and even 3 members of such a council who could publicly take positions or make recommendations that were extremely embarrassing.

If we are going to discuss this strictly from the point of view of theoretically sound organization-and, of course, that is my responsibility-I believe that the members of the Council of Economic Advisers should be appointed and serve in the same manner as the Director of the Bureau of the Budget, which is strictly at the will of the President.

Mrs. CHURCH. Well, I can see an interesting outcome in having a nonpolitical council. I had certainly hoped when we had a new council we would never again find a council taking an active part in politics, or being used, speaking in terms of the economic thinking of just one President, but maybe that is too idealistic a viewpoint. It seems to me that economic advice should be more or less stabilized and directed toward meeting economic changes.

Mr. FINAN. Perhaps Dr. Burns should answer that question rather than myself, but it is my understanding that this Council is intended to be as professional an organization as it is possible to organize. Mrs. CHURCH. In other words, it is to be a factfinding body, with conclusions based on the facts that it discovers, and advisory? Mr. FINAN. And advisory, that is correct.

Mrs. CHURCH. Do you have any questions, Mr. McCormack?
Mr. MCCORMACK. No questions.

Mrs. CHURCH. Thank you, Mr. Finan.

Mr. George D. Riley is the next witness.

STATEMENT OF GEORGE D. RILEY, MEMBER, NATIONAL LEGISLATIVE COMMITTEE, AMERICAN FEDERATION OF LABOR

Mrs. CHURCH. Will you identify yourself, Mr. Riley.

Mr. RILEY. Madam Chairman, my name is George D. Riley. I am a member of the national legislative committee of the American Federation of Labor.

I have a prepared statement I would like to have inserted in the record, if you will, please.

Mrs. CHURCH. Would you care to read it? I see it is brief.

Mr. RILEY. Well, it isn't provocative. I ask you to include it, and I will make a couple of informal remarks.

We are in support of Reorganization Plan No. 9 in principle and in fact. A part of our support is predicated upon the belief and upon the desire that the Chairman of the projected Council will make his confreres full and working partners; otherwise, there would be no great purpose in creating the Council if the Chairman did not consult adequately with his colleagues. I think that is one of the things the Congress saw on the preceding one and failed to appropriate because it gravitated into a one-man proposition in the final analysis.

With those remarks, I have no further comments.