(2) The functions of the Board of Trustees of the Federal Savings and Loan Insurance Corporation under title IV of the National Housing Act, as amended.

(3) The functions of the Board of Directors of the Home Owners' Loan Corporation under the Home Owners' Loan Act of 1933, as amended.

(b) The functions of the Federal Housing Administrator under the National Housing Act, as amended, shall be administered by the Federal Housing Administration.

(c) The following functions shall be administered by the Federal Public Housing Authority:

(1) The functions of the Administrator of the United States Housing Authority under the United States Housing Act of 1937, as amended, and under title II of the act of June 28, 1940 (54 Stat. 676), as amended.

(2) The functions created or authorized by titles I and III, section 401, and title V of the act of October 14, 1940 (54 Stat. 1125), as amended.

(3) The functions of the War and Navy Departments with respect to defense or war housing (except that located on military or naval reservations, posts, or bases) under the act of September 9, 1940 (54 Stat. 872), as amended. (4) The functions of all agencies designated to provide temporary shelter in defense areas under the acts of March 1, 1941, May 24, 1941, and December 17, 1941 (55 Stat. 14, 55 Stat. 197, and 55 Stat. 810, respectively), insofar as such functions relate to such temporary shelter.

(5) The functions of the Federal Loan Administrator with respect to the Defense Homes Corporation (which Corporation shall continue to be an agency of the United States until its liquidation is completed and shall be administered by the Federal Public Housing Commissioner, who shall receive and hold the capital stock of said Corporation on behalf of the United States of America).

(6) The functions of the Farm Security Administration with respect to housing projects which said Administration has determined are for families not deriving their principal income from operating or working on a farm. (d) The functions to be administered by the constituent units under this section shall be deemed to be vested in the respective Commissioners, and in the administration thereof the Commissioners shall be subject to the authority of the Administrator.

(e) The provisions of this section shall be subject in all respects to the provisions of section 506 of this plan.

SEC. 506. Functions of the National Housing Administrator.-The Administrator shall have the following functions, which shall be performed by him or, subject to his authority under the provisions of this plan, through such officers and employees of the National Housing Agency as he shall designate:

(a) The functions of the Secretary of Agriculture, Secretary of War, Secretary of the Navy, Federal Loan Administrator, and the Federal Works Administrator relating to the functions vested in the National Housing Agency or any constituent unit thereof under this plan.

(b) The conduct of any research or statistical activities relating to any function of the National Housing Agency or any of its constitutent units.

(c) The determination of general policy and the making of findings with respect to the need for housing and termination of such need under titles I and III, section 401, and title V of the act of October 14, 1940 (54 Stat. 1125), as amended, the act of September 9, 1940 (54 Stat. 872), as amended (except as to housing located on military or naval reservations, posts, or bases), and the acts of March 1, 1941, May 24, 1941, and December 17, 1941 (55 Stat. 14, 55 Stat. 197, and 55 Stat. 810, respectively).

(d) The responsibility of assuring consistent execution of policy as outlined by law with respect to the program of the National Housing Agency and the constituent units thereof and of devising and applying methods and practices conducive to a unified housing program.

(e) General superintendence, direction, coordination, and control of the affairs of the National Housing Agency and its constituent units; the promulgation of such rules and regulations as the Administrator deems necessary to carry out his responsibilities under the provisions of this plan; and the review and approval, to such extent as he deems necessary, of the rules and regulations made by the Commissioners.

(f) The duty of transmitting to the Congress the annual reports of operations and activities prepared by the Commissioners as required by the second sentence of section 20 of the Federal Home Loan Bank Act, as amended, sections 5, 402

(f), and 406 (e) of the National Housing Act, as amended, and section 7 (b) of the United States Housing Act of 1937, as amended, together with such report of the programs and activities of the National Housing Agency as may be appropriate.

SEC. 507. Agencies abolished.-(a) The following agencies are abolished: (1) The office of Federal Housing Administrator.

(2) The Federal Home Loan Bank Boards, and the offices of the members thereof.

(3) The Board of Trustees of the Federal Savings and Loan Insurance Corporation, and the offices of the members thereof.

(4) The Board of Directors of the Home Owners' Loan Corporation, and the offices of the members thereof.

(5) The office of Administrator of the United States Housing Authority. (b) The United States Housing Corporation created pursuant to acts of May 16, 1918 (40 Stat. 550), and June 4, 1918 (40 Stat. 595), shall be dissolved and abolished.

(c) The Federal Home Loan Bank Commissioner shall, subject to the authority of the Administrator as defined in this plan, wind up the outstanding affairs of the United States Housing Corporation.

SEC. 508. Interim appointments.-Pending the initial appointment hereunder of any officer provided for in this part, the functions of such officer shall be temporarily performed by such officer of the existing National Housing Agency as may be designated by the President.

PART VI. FEDERAL DEPOSIT INSURANCE CORPORATION

SECTION 601. Credit union functions.-The functions of the Farm Credit Administration and the Governor thereof under the Federal Credit Union Act, as amended, together with the functions of the Secretary of Agriculture with respect thereto, are transferred to the Federal Deposit Insurance Corporation.

PART VII. RECORDS, PROPERTY, PERSONNEL, AND FUNDS

SECTION 701. Transfer of records, property, personnel, and funds.-Except as otherwise provided in sections 702 and 703 of this plan there are transferred to the respective agencies in which functions are vested pursuant to the provisions of this plan, to be used, employed, and expended in connection with such functions, respectively, or in connection with winding up the outstanding affairs of agencies abolished by this plan, (1) the records and property now being used or held in connection with such functions, (2) the personnel employed in connection with such functions, and (3) the unexpended balances of appropriations, allocations, or other funds available or to be made available for use in connection with such functions. In the case of the National Housing Agency established by part V of this plan, the transfers made under this section shall be made to the office of the Administrator or to the appropriate constituent unit of the Agency, as the case may be.

SEC. 702. Personnel transferred from Office of Inter-American Affairs.-The personnel transferred under section 701 from the Office of Inter-American Affairs to the Department of State shall be limited to such of the personnel employed under the said Office as the Secretary of State shall determine to be required by the Department of State by reason of the reorganizations provided for in part I of this plan.

SEC. 703. Disposition of certain affairs of the High Commissioner.-Disposition shall be made as determined by the Director of the Bureau of the Budget of the records, property, personnel, and unexpended balances of appropriations, allocations, or other funds (available or to be made available) of the United States High Commissioner to the Philippine Islands with a view toward (1) the use thereof by the Department of State for the purpose of winding up the affairs of the office of the United States High Commissioner to the Philippine Islands, (2) the use thereof by the official appointed by the President under section 402 of the Philippine Rehabilitation Act of 1946 in performing the functions vested in the High Commissioner by section 401 of that act, and (3) such other use and disposition thereof as may be in consonance with the provisions of the Reorganization Act of 1945 and other applicable law.

SEC. 704. Disposition of excess personnel.-Any of the personnel transferred under this plan which the transferee agency shall find to be in excess of the personnel necessary for the administration of the functions transferred to such

agency by such plan shall be retransferred under existing law to other positions in the Government or separated from the service.

SEC. 705. Dispositions by Director of the Bureau of the Budget.-Such further measures and dispositions as the Director of the Bureau of the Budget shall determine to be necessary in order to effectuate the provisions of this part or in order to wind up the outstanding affairs relating to agencies or functions abolished by this plan shall be carried out in such manner as the Director may direct and by such agencies as he may designate.

[H. Doc. No. 595, 79th Cong., 2d sess.]

MESSAGE FROM THE PRESIDENT OF THE UNITED STATES TRANSMITTING REORGANIZATION PLAN NO. 2, PREPARED IN ACCORDANCE WITH THE PROVISIONS OF SECTION 3 OF THE REORGANIZATION ACT OF 1945

To the Congress of the United States:

The fundamental strength of a nation lies within its people. Military and industrial power are evidences, not the real source of strength. Over the years the prosperity of America and its place in the world will depend on the health, the education, the ingenuity, and the integrity of its people and on their ability to work together and with other nations.

The most basic and at the same time the most difficult task of any country is the conservation and development of its human resources. Under our system of government this is a joint responsibility of the Federal, State, and local governments, but in it the Federal Government has a large and vital role to play. Through its research, advice, stimulate, and financial aid, it contributes greatly to progress and to the equalization of standards in the fields of education, health, and welfare; and in the field of social insurance it also directly administers a major segment of the program.

To meet its full responsibilities in these fields, the Federal Government requires efficient machinery for the administration of its social programs. Until 1939 the agencies in charge of these activities were scattered in many parts of the Government. In that year President Roosevelt took the first great step toward effective organization in this area when he submitted Reorganization Plan I, establishing the Federal Security Agency "to promote social and economic security, educational opportunity, and the health of the citizens of the Nation."

The time has now come for further steps to strengthen the machinery of the Federal Government for leadership and service in dealing with the social problems of the country. Several programs closely bound up with the objectives of the Federal Security Agency are still scattered in other parts of the Government. As the next step, I consider it essential to transfer these programs to the Federal Security Agency and to strengthen its internal organization and management. Broadly stated, the basic purpose of the Federal Security Agency is the conservation and development of the human resources of the Nation. Within that broad objective come the following principal functions: Child care and development, education, health, social insurance, welfare (in the sense of care of the needy and the defective), and recreation (apart from the operation of parks in the public domain).

These functions constitute a natural family of closely related services, interwoven at many points and in many ways. For example, the development of day-care centers for children has involved joint planning and service by specialists of the Children's Bureau, the Office of Education, the Public Health Service, and several other agencies. The schools are both a major consumer of public-health services and a leading vehicle for health education and for disseminating the results of research carried on by the Public Health Service. The promotion of social security involves a whole battery of activities, especially social insurance, public assistance, health, and child welfare.

In order to proceed as promptly as possible with the development of the Federal Security Agency to meet the postwar responsibilities of the Government within its field of activity, I am transmitting herewith Reorganization Plan No. 2, which I have prepared in accordance with the provisions of section 3 of the Reorganization Act of 1945 (Public Law 263, 79th Cong., 1st sess.), approved December 20, 1945; and I declare that, with respect to each reorganization made in this plan,

I have found that such reorganization is necessary to accomplish one or more of the purposes of section 2 (a) of the act

A

(1) To facilitate orderly transition from war to peace;

(2) To reduce expenditures and promote economy;

(3) To increase efficiency;

(4) To group, coordinate, and consolidate agencies and functions according to major purposes.

(5) To reduce the number of agencies by consolidating those having similar functions and to abolish such agencies or functions thereof as may not be necessary for the efficient conduct of the Government; and

(6) To eliminate overlapping and duplication of effort.

The plan includes certain interagency transfers and several abolitions and changes in the internal organization of the Federal Security Agency.

The plan transfers to the Federal Security Administrator the functions of the Children's Bureau, except those relating to child labor under the Fair Labor Standards Act. These child-labor functions are transferred to the Secretary of Labor in order that they may be performed by, or in close relationship with, the Wage and Hour Division which administers the rest of the act. The plan continues the Children's Bureau within the Federal Security Agency to deal with problems of child life, but is flexible enough to enable the Administrator to gear in the Bureau's programs effectively with other activities of the Agency. The child-labor program is the only permanent program of the Children's Bureau that is properly a labor function. The other four-child welfare, crippled children, child and maternal health, and research in problems of child life—all fall within the scope of the Federal Security Agency. The transfer of the Children's Bureau will not only close a serious gap in the work of the Agency, but it will strengthen the child-care programs by bringing them into closer association with the health, welfare, and educational activities with which they are inextricably bound up.

The promotion of the education, health, welfare, and social security of the Nation is a vast cooperative undertaking of the Federal, State, and local governments. It involves numerous grant-in-aid programs and complex intergovernmental relations. The transfer of the Children's Bureau will simplify these relations and make for better cooperation.

To illustrate, State welfare departments now depend on both the Bureau of Public Assistance in the Federal Security Agency and the Children's Bureau in the Labor Department for funds for child-care activities. Similarly, State health departments obtain grants from the Public Health Service for general public health work and from the Children's Bureau for child and maternal health activities. All of these grants involve the establishment of minimum standards and a measure of Federal supervision. The transfer of the Children's Bureau programs will make it possible to develop more consistent policies and procedures and to simplify dealings with the States. This will eliminate needless inconvenience for both parties and enable the State and Federal Governments to join more efficiently in their common objective of furthering the health and welfare of the American child.

Next, the plan transfers the vital statistics functions of the Census Bureau to the Federal Security Administrator, to be performed throught the Public Health Service or other facilities of the Federal Security Agency. In every State but one the State health department is in charge of vital statistics. The work in the States is partially financed from public-health grants administered by the Public Health Service. This transfer will make the agency providing the grants also responsible for carrying on the Federal part of the vital statistics program. Furthermore, it will make for a better correlation of vital statistics with morbidity statistics, which are closely connected in nature and are already handled by the Public Health Service. In addition, the Federal Security Agency, more than any other Federal agency in peacetime, depends on vital statistics and vital records in the operation of its programs.

The plan transfers the functions of the United States Employees Compensation Commission to the Federal Security Administrator, and provides for a threemember board of appeals to hear and finally decide appeals on claims of Government employees. By abolishing the Commission, the plan eliminates a small agency and lightens the burden on the President. The Federal Security Administrator, as the head of the Federal agency with the greatest experience in insurance administration, is in the best position to guide and further the program of the Commission.

The abolition of the Commission as an administrative body and the creation of an appeals board will provide the advantages of a single official in charge of operations while affording claimants the protection of a three-member board for the final decision of appeals on claims. This arrangement has proved both administratively efficient and satisfactory to claimants in many similar programs. It is essentially the plan used in the administration of veterans' pensions and oldage and survivors insurance and employed by many States in their workmen's compensation programs. The board of appeals created by this plan will deal only with claims of Government employees since appeals on other types of claims under the jurisdiction of the Commission-(a) longshoremen and harbor workers and (b) private employees in the District of Columbia-are heard by the Federal district courts rather than the Commission.

The reorganization plan which created the Federal Security Agency in 1939 provided that the Federal Security Administrator should direct and supervise the Social Security Board, and that he might assign administrative duties to the Chairman of the Board, rather than to the Board as a whole. Thus, it took the first step toward establishing a definite line of responsibility for the administration of social-security functions in the Agency. The plan I am now submitting further clarifies these lines of responsibility by providing for the normal type of internal organization used in Federal departments and agencies.

A full-time board in charge of a group of bureaus within an agency is at best an anomaly. The Social Security Board rendered an outstanding service in launching the social-security program, and its members deserve the thanks of the Nation for this achievement. That program, however, is now firmly established and its administration needs to be tied in more fully with other programs of the Federal Security Agency. The existence of a department within a department is a serious barrier to effective integration.

In order to obtain more expeditious and effective direction for the social-security program and to further the development of the Federal Security Agency, this plan transfers the functions of the Social Security Board to the Federal Security Administrator and provides for not more than two new assistant heads of the Agency for the administration of the program. Because of the additional functions transferred to the Administrator by this plan, I have found that these officers will be needed to assist him in the general management of the Agency and to head the constituent unit or units which the Administrator will have to establish for the conduct of social-security activities.

To permit a consolidation of work for the blind, the functions of the Office of Education as to the vending-stand program for the blind are transferred to the Federal Security Administrator, in whom are vested other vocational rehabilitation functions. This transfer will permit the program to be assigned to the Office of Vocational Rehabilitation, where other vocational rehabilitation activities for the blind are now concentrated.

The office of Assistant Commissioner of Education, established by the act of May 26, 1930, is abolished. A basic reorganization of the Office of Education within the past year has made this officer the head of one of the divisions of the Office. It is, therefore, administratively desirable to abolish the post of Assistant Commissioner in conformity with the present organization of the Office.

The plan also abolishes the Federal Board of Vocational Education and its functions. The Board, established by the act of February 23, 1917, as amended, formerly had charge of the administration of the vocational-education program. Section 15 of Executive Order 6166, of June 10, 1933, issued under authority of the act of June 30, 1932 (47 Stat. 413, ch. 314), as amended, transferred the administration of the program to the Office of Education and limited the Board to acting in an advisory capacity. The Advisory Committee on Education, on the basis of its study of the vocational-education system, found that the Board was no longer needed and recommended its abolition.

To avoid possible confusion and conflict of authority, the Board of Visitors of St. Elizabeths Hospital and its functions are abolished. The functions of the Board, as provided by section 4842 of the Revised Statutes, include supervision of the institution and the adoption of its bylaws, in addition to visiting the institution and advising the superintendent. These functions overlap the responsibilities of the Federal Security Administrator for the general supervision and direction of the hospital.

In order to enable the Administrator more adequately to coordinate the administration of the grant-in-aid programs vested by statute in the constituent units of the Federal Security Agency, the plan provides that, insofar as practicable and consistent with the applicable legislation, he shall establish uniform standards