Senator SMITH. That is all.

Senator SCHOEPPEL. I am interested in your suggestion on plan No. 5 relating to the civil service. You say here that again it is a very limited step, and the President's power can hardly make a dent in this question.

Would you care to elaborate on some suggestion, say one, two, three propositions that we ought to consider in order to be helpful in this respect?

Mr. HOOVER. That is in regard to the civil service?

Senator SCHOEPPEL. Yes, that is right, sir.

Mr. HOOVER. The President's plan again sets up an improved administrative situation by placing the administrative functions of the Commission in the hands of its Chairman. That is one of the great weaknesses in the Commission. On the other hand, the problem of personnel reorganization goes into the very roots of the civil service. There must be a revision of the methods of the entry, dismissal, promotion, grading, and several other matters. The civil service today is defeated by a maze of special laws and regulations controlling Government service which needs to be disentangled and revised. It was the belief of the task force which worked on personnel questions. for a year that it would be possible to conduct the work of the Government with 200,000 less employees if the service be completely reorganized.

That reform is entirely beyond the powers of the President under the Reorganization Act of 1949. I am not criticizing his taking the first step of centralizing the administrative responsibilities of the Commission in the Chairman. It is a good, but small, step.

Senator SCHOEPPEL. That is all.

The CHAIRMAN. Senator Smith, you are a member of another subcommittee on reorganization planning. Did you wish to ask any questions regarding that?

Senator SMITH. Unless you are going to, Mr. Chairman.

The CHAIRMAN. I should be happy to defer to you and have you ask the questions.

Senator SMITH. Thank you.

Mr. President, I am interested in the difference between the National Security Council and the National Security Resources Board. Am I right in understanding that the purpose of the National Security Council is policy formulation for meeting problems of national security and the purpose of the National Security Resources Board is to work out administrative and other aspects of the solutions to those security problems?

Mr. HOOVER. That is true.

Senator SMITH. Is it necessary to have both? Could we abolish the Board?

Mr. HOOVER. I think the problems are quite distinct. The National Security Council is really a national defense council with a large military representation, and involves agencies of the Government that are not necessarily interested in the mostly civilian questions, such as natural resources and manpower. If we were to consolidate them with this present membership we would have a tremendously large committee. It would, in my view, not function in these separate fields with the same ease with which they could at present. These are not

expensive agencies, they are mostly existing officials engaged in coordination.

Senator SMITH. It is not so much a matter of economy as burdening the President's office with one more responsibility. And I have wondered if we were not doing too much of that; expecting too much of the President of the United States.

Mr. HOOVER. These are practically Cabinet committees and I do not think they add to his burdens. These boards are now rated as independent agencies, yet the President has the same responsibility as he would have if they were placed directly on the White House staff. We had recommended, which again goes into other fields, the creation of a special Secretary in the President's office who would coordinate the work of these different committee agencies and see they carry on their work. That, of course, is not done under this plan, and I do not believe could be done under the President's authority. There have been certain administrative difficulties in these commissions, and our recommendations in these particulars are somewhat parallel to that which the President has proposed.

Senator O'CONOR. Mr. Chairman, may I ask just one other question?

The CHAIRMAN. Senator O'Conor.

Senator O'CONOR. In view of the questions that have been asked, Mr. Hoover, may I just go back once more to one particular phase of the plan having to do with the Public Roads Administration, the general transportation question.

In the report on Federal business enterprises, I think your Commission recommended the liquidation of certain of the corporations; for example, the Inland Waterways Corporation. Is that not correct, Mr. Hoover?

Mr. HOOVER. That is true. We followed the recommendations of, I think, two or three congressional committees, and the Secretary of Commerce, and several others in that connection.

Senator O'CONOR. The point I wanted to make, there, is this. I want to ask you whether this might be confirmed: that there are certain activities, possibly, within the Department of Commerce relating to the transportation problem which actually ought to be abolished rather than extended. Do you not think so?

Mr. HOOVER. It was our recommendation that that one should be liquidated.

Senator O'CONOR. Exactly. In other words, while I felt I knew that that was your attitude, it was my thought that it would be well to point out the fact that we are not assuming that everything that is now in operation ought to be carried on indefinitely.

Mr. HOOVER. No.

Senator O'CONOR. Just one further question, if I might: In the act to which reference has been made, the Federal Property and Administrative Services Act, the Congress coordinated certain transportation functions within the General Services Administration relating to the transportation of Federal goods.

The point that I should like to have some enlightenment on from you is: In view of this development, could it not be just as well argued that although this is essentially a services activitiy, the services performed for the Department of the Interior and other agencies in the

construction of roads in the national parks and forests are as closely related to the activities of the Public Roads Administration as they would be if transferred to the Department of Commerce?

Mr. HOOVER. I would approach the problem from a little different angle. We were confronted with the fact that the country has an enormous transportation system in four divisions that have lacked coordination for all these years. The Government has a powerful influence in these matters, through its various subsidies, controls of safety, and its various regulatory bodies, and so forth. Those agencies determine much of the competitive relationship between forms of transportation. We felt that coordination was greatly needed in the public interest. Moreover, these transportation agencies are scattered over the Government. They duplicate and overlap.

One can argue for putting the Public Roads in the Department of Interior, or various other departments, but we considered that this question of coordination of the whole transportation system of the country was the dominant question.

Senator O'CONOR. Thank you very much.

Senator MUNDT. Mr. Chairman, I have a question.

The CHAIRMAN. Senator Mundt.

Senator MUNDT. I was discussing this with you, Mr. Hoover, in a conference sometime ago, when we had many fewer proposals before us than now, and you said that in terms of savings to the American taxpayer, the biggest single step that this Congress could take would be to pass the reorganization bill for the armed services, which sets up a new system of coordinated accounting and bookkeeping. And I wonder, now that we have substantially more of the picture before us, whether you would still say that the passage of that single bill might do more than any other single step to save money to the American taxpayers.

Mr. HOOVER. That agency involves one-third or rather more than one-third of the entire expenditures of the Government, and for this reason stands out as the most important of all of them. Also, it is an area of great wastes. The Senate approved the introduction of our new proposals on accounting and budgeting into that department, and I hope it will be supported by the House.

I am very anxious for the Congress to enact the reforms in accounting and budgeting in all departments. It would make for a very considerable saving everywhere.

Senator LONG. I have one further question.

The CHAIRMAN. Senator Long.

Senator LONG. Mr. Hoover, insofar as the President has authority to send down these reorganization plans, do you think it would be preferable for the reorganization to be accomplished by Presidential plans rather than by legislation passed through Congress?

Mr. HOOVER. Well, I have a little difficulty in answering that question, because of my anxiety that we make progress as rapidly as possible. If these plans were to suspend action on the fundamental legislative problems involved, that would be unfortunate. On the other hand, the fundamental legislative problems are going to require a lot of congressional time. These preliminary steps are, I think, an advantage.

Senator LONG. I should like to ask just one further question. There is a statement in the President's message on which I should like your

opinion, if you have had occasion to think it over. He stated this in his transmittal message:

The approval of a reorganization plan or the enactment of a statute dealing with organizational and administrative arrangements does not automatically produce efficiency and economy or reduce expenditures. Only the curtailment or abolition of Government programs can be expected to result in substantial immediate savings.

Are you in accord with that thinking?

Mr. HOOVER. I don't think I would like to start a dispute with the President on this occasion, whether I had an opinion one way or the other.

The CHAIRMAN. Senator McCarthy.

Senator MCCARTHY. I know that there is another committee waiting for you, Mr. Hoover, so I shall make this very brief.

In connection with Reorganization Plan No. 6, which is the one that disturbs me more than any other, our committee has been investigating the Maritime Commission, as you know, and I believe we agree wholeheartedly with the finding of your Commission as to the Maritime Commission. I am very much disturbed that the Hoover Commission report was not followed, to the extent of taking practically everything from the Maritime Commission except its regulatory functions. I do rot want to comment adversely on some of the things the President is doing, in view of the fact that he is at least taking one step forward.

Let me ask you this: Is there any reason as of today why the President could not have followed the Hoover Commission recommendation in submitting the Reorganization Plan No. 6? In other words, is there any reason why he should restrict himself to this one small step forward? Could he not have gone all the way?

Mr. HOOVER. I imagine the President was impressed with the fact that our Commission was proposing to set up a consolidation of all the transportation services of the Government, and that this was only one of those items, and preferred to wait until he could see his way clear to approve the whole Commission's idea of a consolidated transportation division in the Department of Commerce.

Senator MCCARTHY. Just one other question, in connection with what Senator Long was asking you. Am I correct in this: That there is no conflict whatsoever between the President's reorganization plans and the 19 pieces of legislation which we have introduced, the 19 pieces that try to carry out the Hoover Commission recommendations; and in effect if we are to have reorganization it must be done through three channels? No. 1 would be through Presidential reorganization plans. There are certain things which we cannot do; certain things which he can, of course, do much easier and better than the Congress can do them by legislation. There are certain other things that the Congress must do, and most of those things are embodied in the 19 bills now in the hopper.

And then there is a third channel, which is the action on the part of the Department heads. So if we are going to put into effect the majority of the Hoover Commission recommendations and save the 3 or 4 billion dollars, we must have action along three lines: No. 1, firm, positive action by the President in sending down his plans; No. 2, action by the Congress in passing the 19 pieces of legislation in the

hopper now; and No. 3, complete cooperation from the Department heads. Is that correct?

Mr. HOOVER. That is true.

The CHAIRMAN. We have with us this morning Senator Anderson. He is not a member of the committee, but he is certainly welcome. We are glad to have you, Senator. You may ask any questions you wish.

Senator ANDERSON. No, Mr. Chairman, I come here just as one of the citizens interested in the Hoover reports and anxious to support them in every way that I possibly can. I therefore was anxious to hear the testimony of President Hoover.

I want to ask only one question. There have been a great many questions that have arisen over differences in methods of procedure in the Public Welfare Department, or any other department; and you and I, President Hoover, do not agree with all the recommendations as to the Agriculture Department, for example. Do you think it is important that we have complete agreement on every detail? Or is it better that we have agreement that we are going to get something done and done quickly?

Mr. HOOVER. You might put it this way, Senator: That in any plan of organization or reorganization there are certain dominant questions that are involved, and there are then secondary questions, and there are then tertiary questions. If we could get agreement on the dominant questions, we could disagree and compromise on the secondary and tertiary questions, in the hope that the Republic will live for another 500 years, and that we can perfect them. The CHAIRMAN. Any other questions?

Mr. Hoover, on behalf of the committee, I wish to thank you for your very able discussion of these plans. And may I say to you that as other plans are submitted by the President, we shall invite you again to come down and discuss them with us.

Mr. HOOVER. Well, now, I was in hopes that you gentlemen would have a little time off for this summer. You will give me a little time

off this summer, will you?

The CHAIRMAN. Yes, sir.

The committee will stand in recess.

(Whereupon, at 11:30 a. m., the committee recessed, subject to the call of the Chair.)

(The text of the Reorganization Act of 1949-Public Law 109, 81st Cong., 1st sess.--is as follows:)

[PUBLIC LAW 109-81ST CONGRESS]

[CHAPTER 226-1ST SESSION]

[H. R. 2361]

AN ACT To provide for the reorganization of Government agencies, and for other purposes Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

TITLE I

SHORT TITLE

SECTION 1. This Act may be cited as the "Reorganization Act of 1949".

NEED FOR REORGANIZATIONS

SEC. 2. (a) The President shall examine and from time to time reexamine the organization of all agencies of the Government and shall determine what changes therein are necessary to accomplish the following purposes: