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should have been designated an executive department" at the time of its creation; but the Reorganization Act then in effect did not permit such action. A second step was taken by Reorganization Plan No. 2 of 1946, which transferred additional related activities to the Federal Security Agency and strengthened its internal organization. Again, the Reorganization Act then in effect did not authorize the designation of the Agency as an executive department. However, I stated in my message accompanying that plan:

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but, while this step is important in itself, I believe that a third step should soon be taken. The time is at hand when that agency should be converted into an executive department."

Since then I have several times proposed that the Federal Security Agency be made an executive department.

The central purpose of the Federal Security Agency is the conservation and development of the human resources of the Nation. Plainly, as I stated in my message transmitting Reorganization Plan No. 2 of 1946:

"The size and scope of the Federal Security Agency and the importance of its functions call for departmental status and a permanent place in the President's Cabinet."

In number of personnel and volume of expenditures it now exceeds several of the existing executive departments. The range of its programs and the significance of their impact upon national development obviously entitle it to a place in the highest rank of Federal organizations.

On May 9 of this year, when it appeared probable that the reorganization legislation would not permit the establishment of a new department, I urged the Congress to enact a measure creating a Department of Welfare. Since that restriction was later eliminated from the bill and the Reorganization Act of 1949 authorizes the establishment of an executive department, I have concluded that the reorganization-plan procedure affords the simplest and most expeditious method of creating a Department of Welfare.

In order to improve the administration of the Department, the plan consolidates in the Secretary of Welfare the functions now vested in the various officers and units of the Federal Security Agency, and authorizes him to delegate their performance to appropriate officers and units of the Department. Thus, it carries out two of the cardinal recommendations of the Commission on Organization of the Executive Branch of the Government, namely, that the department heads should control and have full responsibility for the conduct of their departments and that they should have authority to organize their departments. Such authority will enable the Secretary to work out the most effective distribution of the work of the Department and will contribute both to efficiency and economy in administration and to the convenience of State agencies and the public in dealing with the Department.

After investigation I have found and hereby declare that each reorganization included in this plan is necessary to accomplish one or more of the purposes set forth in section 2 (a) of the Reorganization Act of 1949. I also have found and declare that by reason of these reorganizations it is necessary to include in the plan provisions for the appointment and compensation of a Secretary of Welfare to head the Department of Welfare and of an Under Secretary and three Assistant Secretaries to assist him in the proper performance of the heavy duties involved in the direction of the Department.

In submitting this reorganization plan, I am fully aware of the recommendations of the Commission on Organization of the Executive Branch of the Government with respect to the various units of the Federal Security Agency. Among these are proposals for certain transfers to or from other agencies. In Reorganization Plan No. 2 of 1949, which I am transmitting today, I am providing for one of the most important of these transfers. The other proposals are currently under study, but final conclusions have not yet been reached with respect to them. The establishment of the Department of Welfare will effectuate the one recommendation of the Commission on Organization of the Executive Branch of the Government for the creation of a new executive department. It will not in any wise interfere with the presentation of additional reorganization plans with respect to other recommendations of the Commission in this field or with the ability of the Congress to deal with any of them by statute.

The reorganizations included in this plan will provide for greater flexibility of internal organization, clearer responsibility, and more effective administration of the functions of the new Department. The benefits in improved service and lower

costs will flow from the administrative actions made possible by the plan rather than immediately from the plan itself. Over a period it is probable that substantial reductions in expenditures will result in comparison with those which otherwise will be necessary, but it is not practicable at this time to itemize such reductions.

The creation of a Department of Welfare represents a sound and much-needed step in the improvement of Federal organization. It provides appropriate recognition for the related and highly important functions which the Government carries on to advance the welfare of its people. I urge that the Congress allow this reorganization plan to become effective.

THE WHITE HOUSE, June 20, 1949.

HARRY S. TRUMAN.

REORGANIZATION PLAN NO. 1 OF 1949

Prepared by the President and transmitted to the Senate and the House of Representatives in Congress assembled, June 20, 1949, pursuant to the provisions of the Reorganization Act of 1949, approved June 20, 1949

Department of Welfare

SECTION 1. Department of Welfare.

The name of the Federal Security Agency is hereby changed to "Department of Welfare" and such Department is hereby constituted an executive department.

SEC. 2. Secretary of Welfare.—(a) There shall be at the head of the Department of Welfare a Secretary of Welfare, who shall be appointed by the President by and with the advice and consent of the Senate and receive compensation at the rate of $15,000 per annum or such other compensation as shall after the date of transmittal of this reorganization plan to the Congress be provided by law for the secretaries of executive departments.

(b) All of the functions of the Department of Welfare and of all officers and constituent units thereof, including all the functions of the Federal Security Administrator, are hereby consolidated in the Secretary of Welfare.

(c) The Secretary of Welfare is authorized to delegate to any officer or employee or to any bureau or other organizational unit of the Department designated by him such of his functions as he deems appropriate, except that the function of promulgating or approving regulations may be delegated only to the Under Secretary or an Assistant Secretary.

(d) Pending the initial appointment hereunder of the Secretary of Welfare, but not for a period exceeding sixty days, the Federal Security Administrator in office immediately prior to the taking of effect of the provisions of this reorganization plan shall be Acting Secretary of Welfare. He shall, while serving as Acting Secretary, receive the compensation of Secretary of Welfare.

SEC. 3. Under Secretary and Assistant Secretaries of Welfare. There shall be in the Department of Welfare an Under Secretary of Welfare and three Assistant Secretaries of Welfare who shall be appointed by the President by and with the advice and consent of the Senate and each of whom shall perform such duties as the Secretary shall direct. The Under Secretary (or, during the absence or disability of the Under Secretary or in the event of a vacancy in his office, an Assistant Secretary designated by the Secretary) shall act as Secretary during the absence or disability of the Secretary or in the event of a vacancy in the office of Secretary. The Under Secretary and the Assistant Secretaries shall each receive compensation at the rate of $10,330 per annum or such compensation as shall after the date of transmittal of this reorganization plan to the Congress be provided by law for the Under Secretaries and Assistant Secretaries, respectively, of executive depart

ments.

SEC. 4. Abolition of offices.—(a) The office of Federal Security Administrator is hereby abolished.

(b) The office of Assistant Federal Security Administrator is abolished as of the time that the first Under Secretary of Welfare is appointed, or sixty days after the taking effect of this reorganization plan, whichever shall first occur.

(c) The two offices of assistant heads of the Federal Security Agency (provided for in section 5 of Reorganization Plan No. 2 of 1946 (60 Stat. 1095)) are abolished as of the time that an Assistant Secretary of Welfare is first appointed, or sixty days after the taking effect of this reorganization plan, whichever shall first occur.

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[H. Doc., No. 223, 81st Cong. 1st sess.]

MESSAGE FROM THE PRESIDENT OF THE UNITED STATES TRANSMITTING REORGANIZATION PLAN No. 2 OF 1949, TRANSFERRING THE BUREAU OF EMPLOYMENT SECURITY, NOW IN THE FEDERAL SECURITY AGENCY, TO THE DEPARTMENT OF LABOR AND VESTING IN THE SECRETARY OF LABOR THE FUNCTIONS OF THE FEDERAL SECURITY ADMINISTRATOR

To the Congress of the United States:

I transmit herewith Reorganization Plan No. 2 of 1949, prepared in accordance with the provisions of the Reorganization Act of 1949. This plan transfers the Bureau of Employment Security, now in the Federal Security Agency, to the Department of Labor and vests in the Secretary of Labor the functions of the Federal · Security Administrator with respect to employment services and unemployment compensation, the latter of which is now more commonly referred to as unemployment insurance. The plan also transfers to the Secretary of Labor the functions of the Veterans' Placement Service Board and of its Chairman and abolishes that board. These changes are in generel accord with recommendations made by the Commission on Organization of the Executive Branch of the Covernment. After investigation, I have found and hereby declare that each reorganization included in Reorganization Plan No. 2 of 1949 is necessary to accomplish one or more of the purposes set forth in section 2 (a) of said act. The primary benefits from these reorganizations will take the form of improvements in administration and service. It is probable that a significant reduction in expenditures will result from the taking effect of the plan as compared with the current estimates and workload assumptions contained in the 1950 budget as amended, but an itemization of such savings is not possible in advance of the transfer.

One of the major needs of the executive branch is a sound and effective organization of labor functions. More than 35 years ago the Federal Government's labor functions were brought together in the Department of Labor. In recent years, however, the tendency has been to disperse such functions throughout the Government. New labor programs have been placed outside of the Department and some of its most basic functions have been transferred from the Department to other agencies.

In my judgment, this course has been fundamentally unsound and should be reversed. The labor programs of the Federal Government constitute a family of interrelated functions requiring generally similar professional training and experience, involving numerous overlapping problems, and calling for strong, unified leadership. Together they form one of the most important areas of Federal activity. It is imperative that the Labor Department be strengthened and restored to its original position as the central agency of the Government for dealing with labor problems.

BUREAU OF EMPLOYMENT SECURITY

One of the most essential steps in improving the organization of labor functions is the transfer of the Bureau of Employment Security to the Department of Labor. This Bureau administers the activities of the Federal Government with respect to employment services and unemployment insurance. These activities mainly involve the review and apportionment of grants-in-aid, approval of State plans and grants, the conduct of research and developmental activities, and the provision of advice and assistance to the State agencies which actually conduct the services.

Public employment services and unemployment insurance are companion programs inextricably interrelated both in purpose and operation. The first assists workers in finding jobs and employers in obtaining workers; the second provides cash benefits for the support of workers and their families when suitable jobs cannot be obtained. Thus, each complements the other. At the local operating level the two programs are almost invariably carried on in the same unit-the local employment office. At the State level they are administered by the same agency in nearly every State. As a result, an unusually high degree of coordination at the Federal level is essential.

There can be no question as to the basic consideration which must govern the administration of both of these programs. From the standpoint of all interested parties--the worker, the employer, and the public-the primary concern is employment. Essential as they are, unemployment benefits at a fraction of regular

wages are a poor substitute for the earnings from a steady job. In the administration of these programs, therefore, primary attention must be focused on achieving the maximum effectiveness of the employment services. On them depend the prosperity and well-being of the worker and the extent of the unemployment-compensation burden on the employer and the public.

I have long been convinced that the Department of Labor is the agency which can contribute most to the development of sound and efficient employment service. It has the understanding of employment problems and of the operation of the labor market which is essential in this field. It possesses the necessary specialists and the wealth of information on occupations, employment trends, wage rates, working conditions, labor legislation and other matters essential to employment counseling and placement.

Close working relations between the United States Employment Service and most of the agencies of the Labor Department are vital to the success of both. The Bureau of Labor Statistics has a fund of information on employment and occupations which is basic to the planning and operation of the Service. The Women's Bureau and the Child Labor Branch of the Wage and Hour Division afford expert advice on employment problems relating to women and adolescents. The Bureau of Labor Standards can assist the Service on questions of working conditions and other labor standards, and the Bureau of Apprenticeship on occupational-training problems. At the same time the various agencies of the Labor Department need the detailed current information on labor problems and the condition of the labor market which the United States Employment Service possesses.

Experience has demonstrated that unemployment insurance must be administered in close relationship with employment service and other employment programs. In many of our industrial States, and in most foreign countries, unemployment insurance is administered by the agency responsible for labor functions. Furthermore, the unemployment-insurance system has a vital stake in the effectiveness of the program for employment services, for what benefits the employment service also benefits the unemployment-insurance program.

The transfer of the Bureau of Employment Security, including the United States Employment Service and the Unemployment Insurance Service, together with the functions thereof, will give assurance that primary emphasis will be placed on the improvement of the employment services and that maximum effort will be made to provide jobs in lieu of cash benefits.

The plan also transfers to the Department of Labor the Federal Advisory Council created by the act establishing the United States Employment Service. This Council consists of outstanding representatives of labor, management, and the public who are especially familiar with employment problems.

VETERANS' PLACEMENT SERVICE BOARD

Although the Veterans' Employment Service operates through the regular employment office system, its policies are determined by the Veterans' Placement Service Board created by the Servicemen's Readjustment Act of 1944. This Board consists of the heads of three Federal agencies, only one of which administers employment services. Furthermore, the full-time director of the Service is appointed by the Chairman of this Board, who is not otherwise engaged in employment-service activity, rather than by the head of the agency within which the service is administered. Such an arrangement is cumbersome and results in an undue division of authority and responsibility.

In order to simplify the administration of the Veterans' Employment Service and assure the fullest cooperation between it and the general employment service, the plan eliminates the Veterans' Placement Service Board and transfers its functions and those of its Chairman to the Secretary of Labor. By thus concentrating responsibility for the success of the Service, the plan will make for better service to the veteran seeking employment or vocational counseling.

This plan is a major step in the rebuilding and strengthening of the Department of I abor, which I am convinced is essential to the sound and efficient organization of the executive branch of the Government. HARRY S. TRUMAN.

THE WHITE HOUSE, June 20, 1949.

REORGANIZATION PLAN NO. 2 OF 1949

Prepared by the President and transmitted to the Senate and the House of Representatives in Congress assembled, June 20, 1949, pursuant to the provisions of the Reorganization Act of 1949, approved June 20, 1949

Department of Labor

SECTION 1. Bureau of Employment Security.-The Bureau of Employment Security of the Federal Security Agency, including the United States Employment Service and the Unemployment Insurance Service, together with the functions thereof, is transferred as an organizational entity to the Department of Labor. The functions of the Federal Security Administrator with respect to employment services, unemployment compensation, and the Bureau of Employment Security, together with his functions under the Federal Unemployment Tax Act (as amended, and as affected by the provisions of Reorganization Plan No. 2 of 1946, 60 Stat. 1095, 26 U. S. C. 1600-11), are transferred to the Secretary of Labor. The functions transferred by the provisions of this section shall be performed by the Secretary of Labor or, subject to his direction and control, by such officers, agencies, and employees of the Department of Labor as he shall designate.

SEC. 2. Veterans' Placement Service Board.-The functions of the Veterans' Placement Service Board under title IV of the Servicemen's Readjustment Act of 1944 (58 Stat. 284, as amended; 38 U. S. C. 695-695f) are transferred to and shall be performed by the Secretary of Labor. The functions of the chairman of the said Veterans' Placement Service Board are transferred to the Secretary of Labor and shall be performed by the Secretary or, subject to his direction and control, by the Chief of the Veterans' Employment Service. The Veterans' Placement Service Board is abolished.

SEC. 3. Federal Advisory Council.-The Federal Advisory Council established pursuant to section 11 (a) of the act of June 6, 1933 (48 Stat. 116, as amended, 29 U. S. C. 49j (a)), is hereby transferred to the Department of Labor and shall, in addition to its duties under the aforesaid act, advise the Secretary of Labor and the Director of the Bureau of Employment Security with respect to the administration and coordination of the functions transferred by the provisions of this reorganization plan.

SEC. 4. Personnel, records, property, and funds.-There are transferred to the Department of Labor, for use in connection with the functions transferred by the provisions of this reorganization plan, the personnel, property, records, and unexpended balances of appropriations, allocations, and other funds (available or to be made available) of the Bureau of Employment Security, together with so much as the Director of the Bureau of the Budget shall determine of other personnel, property, records and unexpended balances of appropriations, allocations, and funds (available or to be made available) of the Federal Security Agency which relate to functions transferred by the provisions of this reorganization plan.

[H. Doc. No. 224, 81st Cong., 1st sess.]

MESSAGE FRON THE PRESIDENT OF THE UNITED STATES TRANSMITTING REORGANIZATION PLAN NO. 3 OF 1949. CONSTITUTING AN IMPORTANT FIRST STEP IN STRENGTHENING THE ORGANIZATION OF THE POST OFFICE DEPARTMENT To the Congress of the United States:

I transmit herewith Reorganization Plan No. 3 of 1949, prepared in accordance with the provisions of the Reorganization Act of 1949. This plan constitutes an important first step in strengthening the organization of the Post Office Department.

One of the prime essentials of good departmental administration is authority from the Congress to a department head to organize and control his department. The Commission on Organization of the Executive Branch of the Government emphasized in its first and subsequent reports that separate authorities to subordinates should be eliminated. The plan gives the Postmaster General the necessary authority to organize and control his Department by transferring to him the functions of all subordinate officers and agencies of the Post Office Department, including the functions of each Assistant Postmaster General, the Purchasing Agent, the Comptroller, and the Bureau of Accounts. The Postmaster General is authorized to delegate to subordinates designated by him such of his functions as he may deem appropriate.

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