and function which cannot be fully justified as a necessary operation of Government.

We hope, too, that we shall not have to carry wartime activities over a long period of years, such as for example, the United States Spruce Production Corporation created in 1917 to secure spruce production in World War I and which was not liquidated and its expenditures stopped until we were well into World War II.

Our Federal Government has grown to the scope wherein it touches in greater or lesser degree every condition and every endeavor of our social and economic life. Its personnel and its activites extend to every State and every Territory and today spreads to numerous foreign countries. The Congress must, therefore, take a look at what it has created either by direct action or by default and determine if this is what it wants to have continued.

There is no need to go into statistics or itemization here. The pages of the Congressional Record bear testimony to the recognition of this need which we are talking about as the Members of Congress have expressed it themselves. Numerous reports of committees of Congress have testified to the need and have presented volumes of testimony and data on where many of the reorganization problems lie and how they may be solved.

There is clear evidence that during the last several years Members of the Congress have felt and expressed mounting concern over the extent to which the Federal Government has extended and expanded its control over the daily lives of the people. Indeed, there are many reasons by an examination of this greatly expanded Government becomes a most pressing need and commands the attention of the Congress and the citizens of the country.

Last year the Congress adopted the Congressional Reorganization Act. In doing so it rose in stature in the eyes of thoughtful people and although the path of reorganization has not been easy there is no question but that its action was a highly significant step in demonstrating its acceptance of its constitutional obligation to control the public purse.

The legislaive budget-a provision of the Reorganization Act— although it has had its difficulties during the present session, is in our opinion one of the most important devices toward effective fiscal controls to be adopted by Congress.

Although the House and Senate differed on the budget ceiling, we have observed that there was more real consideration and debate on basic fiscal matters under its provisions than has been seen in congressional Halls in many decades.

Great credit is due to the Appropriations Committees of both the Senate and the House for their ceaseless efforts under the leadership of Representative Taber and Senator Bridges to achieve economy in Federal spending. We recognize the fact that this was the first year of operation under the Reorganization Act and that budget deliberation had to be started without the background of data and information which would hereafter be produced by the technical staffs of the committees.

Under such circumstances paring the budget might appear to be arbitrary in some cases but it was demonstrated that economies could be effected and that even greater and more valid economies could be

effected upon full and complete study of every function and activity. If our Federal Government is to be the example of democracy to the rest of the world which many say that it must, it has to operate its every service and function no matter how minute at highest efficiency. It has been said that we must pay a price for democracy in inefficiency If so, and I see no reason to admit that to be true, it at least behooves us to see to it that the price which we do pay is not too high and is within the means of our economy.

The uncertainties which we face today are perhaps as great if not greater than any in our history and in addition to our internal and world-wide problems our democracy as a system of government is on trial It is on trial because of our dominate position in world affairs and whether we can meet those external responsibilities is in nowise assured unless we can demonstrate that we can drastically reduce and efficiently manage the scope and cost of our internal affairs. Therefore, we must put these in order. There can be no temporizing with this most fundamental obligation to our economic and governmental security.

There have been prior attempts to effect reorganization of executive departments. In most instances only combinations of functions or activities were effected when we should have had consolidation with consequent elimination of unnecessary functions and activities. Structural reorganization without reduction of function or scope will not effect large savings in expenditure. Nor will mere shuffling of functions or services or agencies within the structure of the Federal Government accomplish the objective of either efficiency or economy.

Testimony has been submitted on previous occasions by authoritative sources within the Federal Government to show that there is excessive overlapping of function and activity extending to various bureaus and departments. Labor relations, for example, is spread around Government departments without apparent rhyme or reason. Although the Government owns about one-fifth of the entire land area of the United States there is no real coordination of its effective use and new areas are purchased by some departments while land owned by others is declared surplus and lies unused. In the field of public welfare there are numerous bureaus and agencies each concerned with vocational rehabilitation and education with several others interested in nutrition programs and still others dealing with juvenile delinquency and dependent children. These and many other problems of similar nature should be the point of study and attack by the Commission proposed under H. R. 775.

We hope that if this bill is enacted it will give the Commission power not only to examine the structure of the Federal Government but to explore thoroughly the conditions of its management, its administrative procedures, and its functions as related to those of the State and local governments and to the needs of the American people.

This Government has grown big. As compared with what it represented in size only a few years ago it now staggers the imagination and almost defies individual understanding of its scope and activities. Pressure groups of one kind and another have driven the Congress into adopting activities and programs which have, regardless of the claims of their proponents, proved to be of doubt ful value or necessity to the general public welfare.

Once inaugurated, we observe that the bureaus and the agencies of Government exert the utmost effort to keep them in existence. Some activities have grown so large as to almost defy legislative curtailment or elimination.

All of these things raise many questions, questions for which answers must and can be found through a competent, vigorous, searching inquiry by a study commission, working in conjunction with other committees of Congress.

We feel that the purposes and objectives of the Commission to be established under H. R. 775 need not in any way replace or usurp any of the functions of the Congress. It can, however, supplement them to an effective degree. The Committee on Expenditures in the Executive Departments, for example, as well as the Committees on Appropriations will have time-consuming and arduous duties to meet the demands of their committee hearings, conferences, and other matters pertaining to their respective legislation.

Time, in effecting these changes and these economies, is highly important. We cannot afford to extend any unnecessary costs of government further into the peacetime era. There is too much evidence of the need for conserving our resources and for reducing the cost of government to the point where a leveling off from the ascending curve of individual incomes will permit us to carry the essential, the necessary, and the unavoidable burden of government which our way of life demands.

The CHAIRMAN. Are there any questions of Mr. Atkins? If not, thank you, Mr. Atkins.

Our next witness is Mr. Walter D. Fuller, president, the Curtis Publishing Co., and president, National Publishers Association, Inc.

STATEMENT OF WALTER D. FULLER, PRESIDENT, CURTIS PUBLISHING CO., AND PRESIDENT, NATIONAL PUBLISHERS ASSOCIATION, INC.

Mr. FULLER. I appear in support of H. R. 775.

I have spent most of my adult business life in the analysis and synthesis of business methods and in the construction of business organizations.

I believe that the passage and proper implementation of H. R. 775 can greatly improve the operation of the executive branch of the Government, can improve the opportunity and working conditions of employees, and can substantially reduce costs and expenses.

I assume that such a commission will determine the productive units in the executive branch, will then properly define them, analyze the purpose and accomplishment of each unit, and place against such an analysis the results secured and the cost. This comparison should readily afford evidence as to whether the unit activity should be maintained, increased, decreased, consolidated, or abolished.

I assume further that the efficiency of operation will be compared with the best industrial practice and that, if necessary, steps will be taken to improve both methods and equipment in order to expand opportunity and earnings of employees and to lower cost of operation.

I understand that the current annual pay-roll expense of the executive bianch is about $6,250,000,000, which is a large increase over the

1933 figure of $929,909,000. I believe that both because of this increase and because of the existence of a commission making an orderly survey that costs can be reduced very substantially while at the same time advancing the opportunities of retained employees.

The CHAIRMAN. Are there any questions of Mr. Fuller? If not, thank you, Mr. Fuller.

Our next witness is Mr. John W. Hanes, former Under Secretary of the Treasury.

STATEMENT OF JOHN W. HANES, FORMER UNDER SECRETARY OF THE TREASURY, OF NEW YORK

Mr. HANES. I am happy to be able to place in the record a short statement of my views upon H. R. 775.

If there is any one fact that the Eightieth Congress has thoroughly established, it is the difficulty of uprooting Government spending after it has succeeded in entrenching itself in the various Federal executive agencies. Few bureaucrats have the slightest interest in economy; they are always for bigger appropriations.

For these reasons I favor H. R. 775 and its realistic approach to the consolidation of Federal agencies and to the elimination of waste, inefficiency, and overlapping functions within the administrative branches of the Federal Government.

Like Congress itself, this vast machine centered in the White House needs to be streamlined and modernized.

Many attempts have been made at reorganizing the executive departments and the independent agencies. Congress has usually frowned upon all such efforts as tending to concentrate still further, rather than curtail or decentralize, the power of the Presidency. We can shrink these over-swollen governmental functions only when the President himself is prepared to set the example.

The inclusion of private citizens or taxpayers within the mixed Commission established by H. R. 774 is a step in the right direction. Such a group is bound to be more economy-minded than Members of Congress or party leaders, all of whom are likely to have a stake in the creation of jobs or in spending as either advances party interest.

The real task today before the American people is to shrink big Government nearer to the size of the public's pocketbook. We must insist that the era of easy, lush spending is nearing its end.

The CHAIRMAN. Are there any questions of Mr. Hanes? If not, thank you, Mr. Hanes.

Our next witness is Mr. Jacob France, chairman of the board of Mid-Continent Petroleum Corp., and chairman of the board of the Equitable Trust Co. of Baltimore, Md.

STATEMENT OF JACOB FRANCE, CHAIRMAN OF THE MID-CONTI NENT PETROLEUM CORP., AND CHAIRMAN OF THE BOARD OF THE EQUITABLE TRUST CO. OF BALTIMORE, MD.

Mr. FRANCE. I have never had any experience in administering the affairs of a public office, either Government, State, or municipal.

My business experience is based entirely on what I have gained from a number of corporations over a period of more than 30 years and I

am now and have been actively associated in managing the affairs of several corporations.

In looking back over the years I am of the opinion that a most thorough examination should be made of every department of a business for the purpose of strengthening same. This means consolidation of some departments, elimination or abandonment of others.

An executive, unless he is keenly alert, courageous, and quick on the trigger, is apt, when difficult problems arise, to form another department or committee and in this way there are frequently too many departments or committees. These conflict with one another, overlap and duplicate. In a period of prosperity a department, due to mental laziness, indifference, or complacency of the department head, becomes overmanned and cluttered up with inefficient employees.

In a period of poor business, department heads frequently feel sorry for the employees and keep them on the pay roll although they are not needed, and thus only add to a bad situation.

I am a great believer in bringing in young men; they are aggressive, industrious, have new ideas, are not afraid to try new things, and have the confidence of the young. In every department there should be young men coming on to take the place of the heads of the departments.

The duty of an executive is to make money for his company. That is the standard or measure of success. He can only do this if he has an efficient organization. Costs must be kept down to the very lowest point, machinery must be kept rolling and geared to the highest point of operation at all times.

There must be harmony; there must be no deadwood; there must be no conflict of interest or clashing of duties or duplication thereof. The jurisdiction and duties of every department should be clearly and definitely outlined. The duties of the head of every department should be clearly and definitely outlined. The duties of the head of every department should be clearly and definitely defined, so that one department does not conflict with another.

Every department should be working on a budget and the budget should never be exceeded without the consent of the chief executive. These things, I believe, which are essential to prosperity and success in business, apply or pertain to the administration of Government, be it Federal, State, or municipal.

I believe there should be a housecleaning of public offices just the same as we have in business and it should take place at certain and stated intervals. There are many departments or bureaus that could be eliminated entirely, much duplication could be avoided, bureaus or departments could be consolidated, and the cost of Government in this way greatly reduced.

The duties of every department should be clearly outlined and defined.

The duties of every department chief should be clearly outlined and defined.

The cost of operating or running each department should be limited to the lowest stated amount consistent with the efficient performance of the duties of such department or bureau, and this can only be had through a budget system which should not, under any circumstances, be exceeded without the consent of a superior officer.