fortunate administration, that the general set-up that the Tennessee Valley Authority originated, might, in the course of a few years make contributions to the organized civil service which would make it worth while for the Tennessee Valley Authority to have had that freedom of exploration.

In the long run, I think there might be an approach, that is that the Federal civil service might be modified to some extent to become closer to what the Tennessee Valley Authority has.

Dr. Morgan further recalls that Mr. White, one-time member of the Civil Service Commission and who later went back to the Chicago University, had repeatedly expressed his opinion that he regarded the T. V. A. personnel, at the time he knew it, as being perhaps the best in the Government service. Dr. Morgan further stated, speaking of the time prior to his ceasing to act as a member of the Board:

In fact, various people closely connected with the Federal civil service have said that what we are doing in Tennessee Valley Authority-I am speaking of the earlier period now, when I was very closely connected with it-they have said what we were doing in the Tennessee Valley Authority was almost their ideal of what they would do.

In 1935 a commission was set up under the auspices of the Social Science Research Council, and financed from funds from one of the foundations-possibly the Spellman Foundation or the Rockefeller Foundation. The personnel of the commission included President Coffman, of the University of Minnesota; Mr. Budd, president of the Chicago, Burlington & Quincy Railway System; Mr. Charles E. Merriam, of the University of Chicago; and Mr. Day, of the Corning Glass Works; and Mr. Luther Gulick was executive secretary of the commission. That commission made a very comprehensive report in 8 or 10 volumes, in which was their general report on this subject entitled "Better Government Personnel."

Among other matters considered this commission said:

The commission of inquiry on public-service personnel desires to comment upon the problem of personnel in connection with the independent quasipublic undertakings such as the Panama Railroad and the Tennessee Valley Authority. The commission is inclined to believe that these utility undertakings should be excluded from the normal civil-service personnel system and required to establish their own career-service systems. It is believed that the personnel problem can be better handled in such cases as a part of management than as a part of government. If this should prove not to be the case, these agencies, too, could eventually be brought under civil service. Provision should be made, however, for cooperation between the independent undertakings and the governmental personnel agency, so that the undertakings may utilize the regular lists for stenographers, clerks, and similar personnel, which are the same for both types of activity. It is interesting to note that this practice is now being followed by the Tennessee Valley Authority in many employment classes, with beneficial results.

I have mentioned the provisions of the T. V. A. Act requiring that wages of employees shall not be less than the prevailing rate of pay in the locality of operations. At pages 3360 to 3396, the joint congressional committee heard and examined officials from different labor organizations. Short reference to this testimony may be permitted. Mr. M. H. Hedges, representing the International Brotherhood of Electrical Workers, and a member of the Tennessee Valley Trades and Labor Council, speaking of the collective bargaining system in force between the T. V. A. and organized labor, at page 3368 says:

Well, I have the impression, and I must say this may be personal bias, that the Tennessee Valley Authority is doing the most distinctive job from the

modern point of view. I think they are on the way of doing the most distinctive job of any Government department.

The Tennessee Valley Trades and Labor Council, the agency which effects relations with the management of the T. V. A., and for whom Mr. Hedges was speaking, is composed of the following unions: Brotherhood of Painters, Decorators and Paperhangers of America; International Brotherhood of Boiler Makers, Iron Ship Builders and Helpers of America; International Brotherhood of Blacksmiths, Drop Forgers and Helpers, International Association of Machinists: International Brotherhood of Electrical Workers; International Hod Carriers, Building and Common Laborers' Union of America; International Union of Operating Engineers; Sheet Metal Workers' International Association; International Union of Wood, Wire and Metal Lathers; Operative Plasterers and Cement Finishers' International Association; United Association of Plumbers and Steam Fitters; United Brotherhood of Carpenters and Joiners; Bricklayers, Masons and Plasterers International Union of America; International Brotherhood of Teamsters, Chauffeurs, Stablemen and Helpers; Bridge, Structural and Ornamental Ironworkers.

Mr. Gordon R. Clapp, at present general manager in the T. V. A. set-up, was, during the period of the joint committee investigation, director of personnel. When the T. V. A. civil-service merit system was first organized in 1933, the director of personnel was Mr. Floyd W. Reeves, a professor of education at the University of Chicago, on leave of absence to undertake this work for the T. V. A., and Mr. Clapp was the assistant director. In 1936 Mr. Reeves returned to his post at the University of Chicago and Mr. Clapp became director. In the academic year 1932-33 Mr. Clapp was doing graduate work at that university. Prior to that time for a period of about 5 years Mr. Clapp was on the staff of the Lawrence College of Wisconsin doing student personnel and admissions work. In 1936-37, while with the T. V. A., he served as a member of the President's Advisory Committee on Education. He holds a bachelor of arts degree and a master of arts degree. This preliminary reference to Mr. Clapp is made because in my judgment, and doubtless in the opinion of the entire committee, this witness was fair, candid and impartial in all his testimony. It has not been my privilege to listen to the testimony of anyone showing a more thorough knowledge of his subject and job, nor to one better qualified for his work in the public service.

As evidence of the thoroughness with which the investigating committee went into the subject of T. V. A. personnel organization and functioning, it may be noted that in addition to many other witnesses examined on this subject, the testimony of Mr. Clapp covers 190 pages of the committee's record.

From what has been said thus far it will be timely to quote from the investigating committee's report to Congress on the matter of personnel organization. At page 60 of the "Report of the Joint Committee Investigating the Tennessee Valley Authority" it is said:

The authority is not a Government department but a corporation, and in some of its relationships is required to show the flexibility and promptness of action which are characteristic of business organizations, and cannot be achieved by the application of Civil Service procedures relevant to regular Government departments. The authority has no easy task. Its success must depend in the future as in the past on imagination and initiative, as in private enterprise. Even more, because of its public character and responsibility, the Authority must find means to accomplish satisfactory results under limitations

of attitude and ethical behavior far more strict than those commonly expected of a private corporation.

A further consideration of great weight is the relationship between the Authority and various other organizations, public and private, elsewhere discussed in this report. The Authority has been able to cooperate with other governmental agencies, Federal, State, and local, sometimes by providing personnel or the means to be used in hiring personnel. No evidence of corrupt or inefficient use of this power has been submitted. It has served as a device for obtaining desirable results without arbitrary use of Federal power and with a maximum of democratic participation. The civil service regulations would have to be carefully limited to avoid serious interference with this form of cooperation.

* * **

The joint congressional committee also called the "relation of the Authority to labor unions a model for public business." It went on to say in its summary (pp. 56, 61):

The Authority's policy in regard to collective bargaining and labor relations generally is highly praised by the representatives of organized labor. The essence of their opinion is contained in the statement: "We thoroughly believe that collective bargaining has been brought to a pitch of excellence hitherto never achieved on any other Government enterprise."

The committee, at page 55 of its report to Congress makes further reference to this subject as follows:

The committee is impressed by the ability and standing of the men whom the Authority has been able to secure. In the last edition of Who's Who in America, 21 Authority employees are listed, and 35 more are listed in Who's Who in Engineering. Dr. Lawrence Lowell, former president of Harvard University, once said that a test of democracy is its ability to use experts. The Authority has demonstrated its ability to use men who are recognized as outstanding. Dr. White concludes that "The generally high standards of Tennessee Valley Authority employees reflects careful and intelligent work by the personnel department."

It further should be said that the investigating committee found nothing to indicate that employment in the T. V. A. had even been remotely influenced by political considerations or political recommendations.

On the whole the Tennessee Valley Authority now maintains a fully effective merit system as required by section 6 of the Tennessee Valley Authority Act. This T. V. A. merit system, outside the general civil service laws, as already stated, represents a maturely considered congressional policy.

The fact is not overlooked by me that it may be said the President has an option to include or exclude the T. V. A. from the general civil service law. This is technically true, but subsection d of section 3 of the bill specifically exempts from the provisions of the bill offices and positions in 12 different bureaus or units under Government department or independent boards or commissions. By wellrecognized rules of construction these exclusions and the failure to include the offices and employees of the T. V. A. therein, may cause the President to construe the act as a congressional direction to include the T. V. A. in the general classified service upon recommendations of the Civil Service Commission. For this reason the bill should be amended by adding the T. V. A. offices and employees as an additional paragraph to subsection d of section 3, if the committee is of the opinion the T. V. A. merit system as now in force and as now required by the T. V. A. Act should be continued.

In addition to the findings of the joint congressional committee. investigating the T. V. A., and the history of the act itself, there are other reasons why, in my opinion, no change from the existing merit system should be made.

1. The T. V. A. is a business corporation engaged in a highly competitive enterprise in the sale and wholesale distribution of electric power. This project in which the Authority's personnel is engaged is a vast and integrated regional operation comprising ultimately 11 major multi-purpose dams, four large steam generating plants, and more than 3,000 miles of transmission line. Over 100 wholesale sustomers and 375,000 ultimate consumers are dependent upon the Authority's service, which now yields an annual revenue of approximately $15,000,000. The Authority is also carrying on extensive manufacturing and experimental activities in the manufacture of concentrated plant foods. There is no Government project in the country comparable in terms of business responsibilities, complexities of administration, and scope of undertaking.

The magnitude and complexity of T. V. A. operations require flexibility and promptness of action often not readily available under the rigid rules of the general classified service.

2. The civil service rules and regulations have naturally been drafted so as to have uniform applicability throughout the nation, thus necessarily sacrificing many opportunities for developing improved procedure. The Federal service needs opportunities in limited areas for experimentation in finding the answer to the many unsolved problems in the field of governmental personnel administration. The Authority, with its recognized merit system provides an excellent opportunity to develop new methods and techniques by practical test. Many of the Authority's improved practices have been widely commended.

3. The T. V. A. Act requires that all members of the board shall be persons who profess a belief in the feasibility and wisdom of the act. A like belief should be held by employees, especially those in important posts of individual responsibility. It is not suggested by me that persons recruited from the ranks of competitive private enterprises would ever be guilty of sabotage or even conscious neglect of duty. But it is my thought that lack of sympathy with governmental operation that competes with private enterprise may lead to inharmonious conditions in some cases, and for this reason the T. V. A. board should have larger latitude in selection of employees than is allowed by the more rigid requirements of the general civil service law. Necessarily selection of technical experts, professional or otherwise, must usually come from those ranks of private industry engaged in similar enterprise, and reasonable latitude. should exist in selecting such employees. Those having the high standard of technical knowledge and experience required for many positions under the T. V. A. are already under employment, and will not usually be found in the civil service classified lists, nor will they ordinarily trouble to take the civil service examination while already in satisfactory employment. The net result will be that the cream of the technical professions will not be found in the classified lists. Undoubtedly Congress recognized this fact in requiring a separate merit system under the act creating the T. V. A.

4. From what has been said already it seems demonstrated that excellent as is the system and work of the general civil service and of the Civil Service Commission, that work is not superior to the like work under the merit system of the T. V. A. There remains to be considered the matter of expediency in making any change

in the T. V. A. set-up and law in reference to personnel at this particular time.

In its most recent annual report (June 30, 1939) the Commission has pointed out that it does not have adequate resources and that it has more than a year's work on hand in grading papers, that it is 7 months behind in investigations and 7 to 9 months behind in its appeals work, and that its field offices report 8,500 registers now at least 3 years old, and 3,000 registers 5 or more years old. The Authority's personnel department, by contrast, has geared its work to that of the Authority's various substantive programs and is carrying on its work of recruitment, classification, and employee adjustments on a current basis.

For years the Civil Service Commission has repeatedly pointed out in its annual report that it lacks adequate appropriations for its work. This situation may, of course, be remedied in the future, as it should be. Even if substantially increased appropriations should be made immediately available, however, it would require a long time before the Commission could be staffed and functioning to the degree of effectiveness necessary adequately to meet immediate problems, to say nothing of the additional problems which would be encountered by an extension of the civil service laws to hundreds of thousands of additional positions. It is only fair to assume that an agency such as the Authority would constitute a tag-end field problem to which the Commission would be expected to devote little constructive attention. Even should the Civil Service Commission have, as it undoubtedly would have, the best intentions of aiding the Authority, the pressure of more immediate departmental problems in Washington would tend to crowd the Authority's problems toward the bottom of its list of administrative priorities.

The statutory objectives of the Authority would thus be subjected not only to the risks inherent in the exercise of discretion and decision at a distance from the location of the job, but also to the hazards arising from the Commission's unfamiliarity with the details and needs of a complex business program, the inflexibility of the accumulated mass of restrictive rules and regulations, the risks of uncertain appropriations to the Commission, the dependence upon its available facilities, and its own administrative priorities under more immediate departmental pressures.

At present time there are some 600,000 civil-service employees under the jurisdiction of the Civil Service Commission.

This bill, if it becomes law, will probably add 250,000 employees to the civil-service classified rolls. The present, and proposed amendments, to the Hatch law will require the attention of the Civil Service Commission to an additional approximate 250,000.

In conclusion, there would be no gain to the cause of civil-service reform in making H. R. 960 applicable to the Authority, and to do so would be a blow both to the purposes of the Tennessee Valley Authority Act and to the cause of improvement in Federal personnel administration.

The CHAIRMAN. Thank you, Senator, for your very fine con

tribution.

Senator SCHWARTZ. Mr. Chairman, I might say a word, probably facetiously on the situation-the record may have it, however. I understand that there is some criticism on the theory that most of