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to favor to an undue degree the agencies concerned with privately financed housing and thus minimize the work of the public housing authority.
We believe, however, that there is an even greater danger in creating the permanent set-up of the National Housing Agency, contemplated in the reorganization plan, than that which may arise from the conflicting character of the agencies which would be consolidated therein.
The letter of transmittal accompanying the reorganization plan gives as the need for this set-up the meeting of “the goal of a decent home for every American.” This is a goal which is desired by everyone but we have grave doubts as to the effectiveness of the proposed set-up in reaching such goal. In endeavoring to reach this goal we believe that there would always be the danger that the hitherto sound insurance operations of the Federal Housing Administration would be weakened. A proposal in that direction is already contained in S. 1592 which would permit the insurance of mortgage loans made in amounts equal to 95 percent of the value of the properties with maturities as long as 32 years. Greater losses would be experienced on mortgages having such liberal terms and their payment out of the insurance fund would be at the detriment of those participating in the insurance fund whose mortgages were made on a sounder basis. It would be better for the economy of the country and more in the public interest if the Federal Housing Administration is restored to its former independent status with the Administrator directly responsible to Congress.
We have seen the broad authority conferred upon the Housing Expediter under the recently enacted Veterans' Emergency Housing Act, and the drastic controls which have been imposed upon all types of building construction. These controls doubtless may be necessary to meet the present housing crisis. The only excuse, however, for such controls in our democratic form of government is to meet an extreme emergency and should be limited to such emergency, as Congress has done by fixing a definite termination date in the Veterans' Emergency Housing Act. We believe, however, that there would always be the temptation to the single administrator of a permanent National Housing Agency to serk to perpetuate such controls on the theory that they were needed in order to reach the goal which was the objective of the permanent consolidation.
Because of these inherent dangers in this permanent set-up there is certain to be a loss of confidence among private financing institutions in the Federal Housing Administration and they will hesitate to submit mortgages to the Administrator for insurance. This would be unfortunate as the Federal Housing Administration has made a splendid record in encouraging sound mortgage practices and in setting up sound standards of construction, the benefit of which may be substantially lessened should the consolidation of this agency into the National Housing Agency be made permanent.
Furthermore, the Veterans Administration, which will have more to do with privately financed housing in the next 10 years than any other Government agency, is entirely left out of the reorganization plan. We are not suggesting that the guaranty or insurance of home loans under the Servicemen's Readjustment Act should be taken from the Veterans' Administration and placed in the National Housing Agency. Our point is that the reorganization plan covers only one segment of the Government's housing activities, although one might be led to believe that it was intended to consolidate all of such activities of the Government.
Other agencies of government also deal to a greater or lesser degree with housing. The Department of Commerce conducts certain research activities in connection with housing; the Reconstruction Finance Corporation, through its subsidiary Federal National Mortgage Association, discounts and purchases FHA insured mortgages; the Secretary of Agriculture, through the Farm Credit Administration and the Farm Security Administration, makes loans for the purchases of farms and the repair and improvement of farm buildings; the Board of Governors of the Federal Reserve System and the Comptroller of the Currency supervise banking institutions engaged in mortgage lending, and the Federal Deposit Insurance Corporation insures their deposits. The banking supervisory agencies are concerned with sound lending operations by the institutions under their supervision. If a coordination of the housing activities of the Government is needed, it would seem that it could better be accomplished by the establishment of an advisory board composed of the heads of the abovenamed'departments and agencies.
In conclusion, we believe that there is no need for the permanent establishments of this National Housing Agency. It will not promote efficiency and economy as, it merely adds another level of administration at the top. It
does not eliminate any functions but instead creates new positions and can only lead to a further development of Government bureaucracy. It will not meet the objectives given as the reasons for the reorganization and will instead endanger the sound operations of the agencies dealing with private enterprise that would be consolidated in one paramount agency. It carries the inherent threat of continued and extended Government control over all housing, both private and public, and both the financing and construction thereof. The goal of a decent home for every American is one which has the support of everyone, but such goal will not be reached by bringing together agencies operating in such diverse fields and placing them under a single "czar.”
The responsibility of reaching this goal rests primarily on the citizens of each community and the Federal Government at most should only supplement the activities conducted at the local level. We believe that this can best be accomplished by restoring the Federal Housing Administration and the Federal Home Loan Bank Board to their former independent status thereby enabling them to continue to develop and encourage a sound privately financed housing program. In no event should these agencies be consolidated with an agency concerned exclusively with public housing to make a permanent agency with a single individual at its head, who would have power to manage and control both private and public housing activities and subordinate one to the other. Respectfully submitted.
F. G. ADDISON, Jr.,
American Bankers Association.
PHILADELPHIA, 2, Pa., June 11, 1946. The COMMITTEE ON EXPENDITURES IN THE EXECUTIVE DEPARTMENTS,
House Office Building, Washington, D. C. DEAR SIRS : In accordance with letter of Hon. Carter Manasco, chairman of your committee, I submit the following brief in connection with the House of Representatives Concurrent Resolutions Nos. 151, 154, and 155.
This brief is filed on behalf of the Vessel Owners' and Captains' Association, of Philadelphia, which has been functioning continuously and actively since its incorporation under the laws of the State of Pennsylvania in 1868. Its membership is composed of vessel owners, chiefly owners of tugs, barges, lighters and scows, shipbuilding and ship-repair companies, ship chandlers and ship-supplies people, and oil refineries located in New Jersey, Pennsylvania, Delaware, and Maryland.
The writer has been solicitor for this association since 1906 and has been duly authorized by the officers, directors, and members of the association to submit this brief.
As persons interested in various branches of maritime business, our members have for many years been in close contact with the Bureau of Marine Inspection and Navigation which has been in existence since 1830, and for many years prior to the Presidential directive or Order 9083 of February 28, 1942, was a Bureau under the Department of Commerce. Under the administration of the Department of Commerce, the Bureau was always a civilian bureau and its duties were most efficiently administered and in accordance with the law. Because of the war situation the President transferred the functions of the Bureau to the United States Coast Guard on February 28, 1942, and since that date it has been administered by that governmental agency.
Under the administration of the Department of Commerce, the Bureau was not only efficiently but was economically administered. The local inspectors in the various departments were all men with extended service in the navigation and operation of our merchant marine. Investigations of marine casualties were thorough and painstaking.. The inspection of various water craft by these inspectors was also efficient and fairly conducted. The services rendered were satisfactory both to the Government and to the shipowner. So that from the standpoint of an efficient and economical administration of the Bureau, there was no good practical or legal reason for its transfer from the Department of Commerce to the United States Coast Guard except the war situation. The war situation having ceased to exist, there remains no reason whatsoever for its permanent administration by the United States Coast Guard, but, on the contrary, there are many reasons for not letting the Coast Guard administer it.
Section 2 of the act of Congress known as the Reorganization Act of 1945 (known as Public Law 263, 79th Cong.) requires the President from time to time to reexamine the organization of all agencies of the Government and to determine what changes therein are necessary to accomplish the six purposes stated in the act which included, inter alia, to reduce expenditures and to promote economy to the fullest extent consistent with the efficient operation of the Government and to increase the efficiency of the operations of the Government to the fullest extent practicable within the revenues.
It is evident from a reading of the act that Congress intended that the President should reexamine the organization of all the executive agencies of the Government so that the expenses of administration should be reduced without affecting the administrative efficiency of such agencies, and as stated in 4 (c) of section 2 of the act, it was the expectation of Congress that the transfers, consolidations, coordinations, and abolitions made by the President under this act should accomplish an over-all reduction of at least 25 percent in the administrative cost of the agency or agencies affected.
This brief is to be restricted to that part of plans 1, 2, and 3 which suggest the permanent transfer of the administration of the functions of the Bureau of Marine Inspection and Navigation of merchant. vessels to the United States Coast Guard.
Under plan 3, page 2, of the President's message under the heading “United States Coast Guard,” the plan is to transfer permanently the functions of this Bureau, including inspection of vessels and their equipment, the licensing and certificating of officers and seamen, and related functions designed to safeguard life and property at sea to the Coast Guard. Furthermore, page 8, part I, section 101, it is planned to transfer permanently to the Coast Guard the functions of the Bureau now in the Commerce Department in connection with the construction, repair and alteration of vessels, approval of material, equipment, appliances, classification of vessels, and inspection of vessels and their equipment together with licensing and certification of officers and crew, suspension and revocation of such licenses, and investigation of marine casualties including the promulgation and enforcement of rules as to lights, signals, speed, steering, sailing, passing, anchorage, movement, and towlines of vessels and lights and signals on bridges.
This brief is directed in objection to such a plan of transfer for the following reasons:
The purpose of the Reorganization Act is to reduce the expenses of administration of governmental agencies by at least 25 percent has not been and cannot be promoted by having the foregoing functions administered by the Coast Guard, nor is the efficient administration of such functions promoted by such transfer,
1. Since this Bureau has been under the Coast Guard its personnel has been greatly increased in number so that the number of personnel is much greater in all the local offices of the Bureau than there was in peacetime, there being about 20 additional persons in the Philadelphia office, approximately 25 additional in Baltimore, 15 in Norfolk, 34 in Mobile, where they have 34 inspectors and 12 clerks when in peacetime there were 16 inspectors and 4 or 5 clerks; in New Orleans there are 43 inspectors and 18 clerks; in Port Arthur there are 14 inspectors and 8 clerks, where they formerly had 6 inspectors and 3 clerks; in Houston, Tex., there are now 14 inspectors and 10 clerks. In Galveston there are 22 inspectors and 14 clerks, whereas in peacetime under the Department of Commerce from Lake Charles, La., to the Rio Grande district there were 8 inspectors and 4 clerks.
Furthermore, under the Coast Guard the Bureau has been loaded up with a lot of inexperienced personnel, many of them graduates of the United States Coast Guard Academy, who had no experience whatsoever on merchant-marine vessels. An inspection of the personnel would also show that the present personnel of this Bureau now under the Coast Guard, if it were returned to the Department of Commerce and made a civilian bureau, could be reduced approximately 30 percent in number and its duties properly performed by experienced personnel. Prior to February 28, 1942, when the Bureau was under the Department of Commerce, the inspectors of the Bureau were experienced masters and chief engineers of merchant vessels who were thoroughly acquainted with the requirements of vessels for their safe operation, but since the Coast Guard has taken over the Bureau many of these inspectors are absolutely unqualified either by experience or knowledge.
2. While the Bureau was a civilian agency under the Department of Commerce, the various local inspectors were not only required to have had long experience at sea on merchant vessels in order to qualify themselves to even take a civil-service examination, but in order to make themselves eligible for appointment as inspectors they were required to pass a strict civil-service examination. These absolutely necessary requirements have been abolished since the United States Coast Guard took over the Bureau.
3. As a civilian agency under the Department of Commerce, this Bureau intelligently and efficiently investigated marine accidents and disasters but under the Coast Guard such is not true. Under the Department of Commerce the same was true of the trials of licensed officers for violation of their licenses but now these trials are conducted by Coast Guard officers with no proper experience to act as quasi-judicial bodies; the hearings are conducted by young officers with practically no sea experience and none whatever on merchant vessels, and such Coast Guard officers act not only as prosecutor but as judges with the unfortunate but natural result that a great number of petty charges are preferred against licensed officers and unjust and unreasonable punishment inflicted upon them.
The further result is a large and unnecessary expense to the United States Government in the waste of time of its personnel.
4. While this agency was a civilian Bureau under the D_partment of Commerce, the examinations of the officers of ve sels for licenses or increase of their licenses were conducted by experienced local inspectors. Under the Coast Guard both the questions and answers submitted to the candidates for examination are prepared in Washington and sent to the various Bureau officers and where it formerly took two inspectors with experierce in each local office to conduct such examinations, it now takes five to six men in these offices to do the same work. 'This necessarily resuits in a waste of time and a waste of the Government's money.
Under plan 3, part I, Department of the Treasury, section 101, it is planned to give the Coast Guard the functions of approval of plans for construction, repair, and alteration of vessels; approval of materials, equipment, and appliancesi, including classification of vessels; issuance of certificates of inspection and permits for vessels for operations which may be hazardous to life and property.
Some months ago the United States Coast Guard announced that it was its intention to transfer these functions to the American Bureau of Shipping which is a classification society similar to British Lloyd's. This in itself was a confession that United States Coast Guard did not have sufficient competent, experienced merchant-vessel officers in its personnel who were qualified for such duties. And yet, although the Coast Guard admitted that it could not for that reason perform these functions, it planned to transfer them to this private corporation, American Bureau of Shipping, retaining supervision. Surely, if the Coast Guard did not have enough competent men in its personnel to perform the duties, it did not have enough competent men to supervise the work of this private corporation. Furthermore, many of these vessels to which these functions apply, were not classified vessels. Many of them were tugs, barges, and other small nondescript water craft. This American Bureau of Shipping, being a private corporation, was conducted for the purpose of making a profit and the expense of the services rendered by it must be borne by the United States Government since the Coast Guard plan to delegate the performance of its duty to that corporation. This, of course, results in further needless expense to the United States Government and in turn defeats the purpose of the Reorganization Act.
5. Our merchant marine has always been civilian owned, navigated, and operated, but since the Bureau of Marine Inspection and Navigation has been under the Coast Guard, every effort has been made to make our merchant marine a military or naval organization. The result has been a consistent friction between American vessel owners and American ship officers, who naturally resent being ordered and directed by inexperienced and unqualified Coast Guard personnel and in having their vessels inspected by Coast Guard personnel who are not qualified for that duty because of their lack of experience in navigation and operation of vessels. As a civilian agency under the Department of Commerce, these inspectors because of their wide experience, knew what was required to be done to make our merchant marine fit and sea worthy, and used sound, intelligent judgment. The Coast Guard personnel having no such qualifications are unable to do so.
6. From an economical viewpoint, and that is one of the important viewpoints to be taken under this Reorganization Act, the expense of the administration of this Bureau by the Coast Guard since February 28, 1942, has been much greater than in the administration of the Bureau under the Department of Commerce. Surely, under the provisions of the Reorganization Act of 1945, it is in itself convincing that the Bureau should be a civilian agency under the Department of Commerce.
In this connection, attention is called to the fact that prior to World War II the United States Coast Guard had one rear admiral. Now they require a full admiral, a number of other admirals, a number of commodores; and where they had 26 captains before World War II, they now have over 100 captains.
7. Since it has been demonstrated that the Coast Guard has not and cannot properly administer the functions of this Bureau, the question naturally arises Why does the Coast Guard want this power of administration? Is it anything more than a grab or reaching out for more power on the part of the United States Coast Guard? Of course, these questions are immaterial in that it has been demonstrated that the transfer of the functions of this Bureau of Marine Inspection and Navigation to the Coast Guard means vastly increased expenses and therefore defeats the whole purpose announced by Congress for the passage of the Reorganization Act of 1945.
Borrowing suggestion from Representative William A. Pittenger made to your committee at the hearing on June 6, 1946, it is suggested that your committee summon before it the experienced local inspectors of the various local inspection districts, who have done the work of administration of this Bureau during the regime of the Department of Commerce and also that of the Coast Guard, and the true facts as stated in this brief will be fully demonstrated to your committee.
For the foregoing reasons it is therefore respectfully suggested to the committee that the transfer of the administration of the Bureau of Marine Inspection and Navigation should not be given to the United States Coast Guard, but, on the contrary, it should be returned to the Department of Commerce where for so many years it was economically, efficiently and satisfactorily admiinstered. Respectfully submitted.
VESSEL OWNERS' AND CAPTAINS' ASSOCIATION
STATEMENT SUBMITTED BY LEAGUE OF WOMEN VOTERS, WASHINGTON, D. C., TO
THE HOUSE COMMITTEE ON EXPENDITURES IN THE EXECUTIVE DEPARTMENTS ON THE PRESIDENT'S REORGANIZATION PLAN I
The League of Women Voters has for many years been concerned with government in the public interest. We are perhaps the only one of the national women's organizations which has studied and become familiar with principles of public administration, and we have followed with special interest the field of housing and its adminstration.
We believe that the National Housing Agency created in February 1942 was absolutely essential in order to coordinate the activities of the 17 different agencies which had been dealing with housing problems at the start of the war. Up to this time there had been frictions and competition which seriously weakened the effectiveness of the total program. Housing is a national problem, and it is important that a unified approach be made to its solution. Each of the functions of the 17 agencies, while varying in their emphasis, had as their objective the improvement of the American housing situation. The coordination made it possible for all the housing policies of the Federal Government to form a pattern for the orderly achievement of this objective. The National Housing Agency exists for the duration of the emergency only. Unless legislation makes it permanent, the gains which unification has made possible will be discontinued.
Opponents of Federal housing functions have opposed the establishment of NHA as a single housing agency because they fear it will strengthen public housing at the expense of private housing. This issue should not be confused with the administration of housing.