REORGANIZATION OF THE EXECUTIVE DEPARTMENTS

TUESDAY, FEBRUARY 16, 1937.

JOINT COMMITTEE ON GOVERNMENT ORGANIZATION,

Washington, D. C. The joint committee met, pursuant to call, at 10:30 a. m. in room 201, Senate Office Building, Senator Joseph T. Robinson presiding. The CHAIRMAN. The committee will come to order. It was understood at the last meeting of the joint committee that an informal conference with the members of the President's committee would be held today, to the end that the work of that committee may be more familiar to this group charged with the responsibility of reaching a decision regarding plans for reorganization.

Is it the desire of the members of the committee that a statement be made by the members of the President's committee, or is it preferable to informally interrogate them? What do you think about that, Mr. Warren?

Representative WARREN. My idea would be for them to make a statement and then if the members of the committee wish to question them, they may do so.

The CHAIRMAN. If there is no objection the Chair will request the members of the President's committee to make statements, and questions by the members of the committee will be reserved until the conclusion of the statement of each witness.

Mr. Brownlow, will you come forward, please?

STATEMENT OF LOUIS BROWNLOW, CHAIRMAN, PRESIDENT'S COMMITTEE

Mr. BROWNLOW. Perhaps it might be useful in the beginning, briefly, if I may, to review the history of the organization of this committee. It had its origin in conversations between the President and Mr. Merriam, who is a member of the committee, in the summer of 1935, and then these conversations were renewed at intervals in September, October, and in December, and at last the President asked Mr. Merriam, Mr. Gulick, and myself to undertake a survey of administrative management, or overall management in the executive branch of the Federal Government.

Before that committee actually was appointed the Senate had set up a Committee on Reorganization, of which Senator Byrd was chairman, and the President, before he actually named this committee, wrote a letter to the Speaker of the House asking that the House create a similar committee, and that committee was organized under the chairmanship of Mr. Buchanan.

The President's committee, in consultation with the Senate committee and before the House committee was set up, undertook a divi

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sion of labor which, so far as the President's committee was concerned, confined us to the terms of reference that had been given to us in our appointment by the President. Under that agreement, or understanding, the President's committee was to concern itself with the problem of administrative management from the overall point of view. We were not to make detailed studies of the operating agencies of the Government. We did not intend to go into the operations of the bureaus and divisions, nor did we do that. Our understanding was that that was to be done by the Senate and House committees, both of which employed the Brookings Institution to do the research work for them. The employment of the Brookings Institution was made first by the Senate committee, and after that, as I understand it, by the House committee.

The President was given authority to set aside for the expenses of the President's committee a sum not to exceed $100,000.

The Senate had given its committee $20,000, and the House gave its committee $10,000, and later, when the House committee was organized, the President's committee, at the request of Mr. Buchanan, assigned $10,000 of its funds to the work of the House committee, and in that way the House committee made the same amount of money available for its services, including the Brookings Institution contract, as already was done by the Senate.

I mention that at this time because if you read this report you will see that we have not gone into any analyses of the actual operating work of the various departments of the Government, except insofar as there are certain overall agencies in the Government which affect all of the work of all of the departments, divisions, and bureaus of the executive branch, and those we have described in our report as the managerial agencies.

Our report, if I might just follow it from this table of contents for a moment, falls into five points. We actually describe it in six principal chapters in the report. The central theory of the report is that of the responsibility of the executive for the execution of the laws and the administration of the appropriations that have been determined upon by the Congress. We endeavor to make suggestions as the result of our studies, our experience, and our observations, which in our opinion would improve the work undertaken by the executive department in the execution of the laws, and to that we add suggestions for improving, in our opinion, the accountability of the executive to the Congress for its work. We base our conclusions upon the theory that an efficient administrative branch of the Government is necessary for the survival of the democratic system and for the carrying into operation of the decisions made democratically under the American Constitution.

Then, we attack the problems, and there follow now the chapter headings briefly. The first one has to do with the White House itself. We think that one of the difficulties in the administration and in the management features of the administration is that the President himself has no sufficient staff to enable him to keep track of the far-flung administrative establishment. Therefore, we suggest, in addition to his regular secretarial staff which deals with the public, the Members of Congress, with the press and with all of the things that are imposed upon the President from the outside, that

he be given a small staff of administrative aides which would facilitate his work in keeping informed with respect to the administrative agencies of the Government, and who would, in turn, be able to facilitate the carrying out of the executive decisions once they are made.

The next chapter in the report has to do with personnel management. It is the opinion of the committee that management is inextricably bound up with the control of personnel; that to manage a job-and we believe that this is the universal experience both in government and in business-it is necessary to obtain the best possible men and women to do that work.

So under "Personnel management" we recommend, first, the extension of the merit system to include all except the policy-determining officers of the Government. Then we next recommend the reorganization and improvement of the administration of the personnel department. Here for the first time, although it is repeated later in the report, we express our opinion, and so far as our committee is concerned, it is an opinion which is strongly held, that, for administrative work, boards, multiple-headed agencies, are inefficient; that boards are useful, desirable, and necessary for the purpose of consultation, for advice, for quasi-judicial operations, but that, for administration, we do better with one man. Our observation, and to some extent our experience, leads us to believe that the multiple-headed agency engaged in administration consumes so much of its time and its energy in resolving questions within the board or commission itself that forthright and efficient administration is defeated.

Recognizing the problem that might be raised by the setting up of a single civil service administrator, for safeguards we have recommended that this single civil-service administrator be appointed under a merit system after a Nation-wide competition, as the result of an examination.

We also have recommended the setting up of a Civil Service Board, a lay board, not to be administrative in character but to be advisory, consultative, and to serve as the watchdog of the merit system.

We recommend that that board be composed of nonsalaried men and women who would be given a small per diem and expenses when they came to Washington, but would be compelled to hold meetings four times a year, and oftener if necessary.

That board would have two other duties aside from advice and consultation. One would be, if there was a vacancy in the position of civil-service administrator, that it would appoint a special examining board which would hold the examination and report, through the board, to the President the names of the three highest on the eligible list.

Then, also, under "Personnel" we make a recommendation for the increase of compensation of some of the higher administrative officers.

The next chapter is on "Fiscal management." This is again on the theory that administrative management is necessary for the conduct of the Government. We think that, after personnel, the most important thing in any management undertaking is the fiscal affairs.

Here we recommend briefly the improvement of the Budget office, the setting up of the Budget office as an improved and expanding research unit, and we recommend-I am going to ask Mr. Gulick later to expand this-we recommend that the accounting work be returned to the executive branch in the Treasury, and that the name of the Comptroller General be changed to Auditor General; that the office of Auditor General be set up to conduct an absolutely independent audit, and that the accountability of the executive to the Congress be sharpened and improved by the setting up of a joint committee or a special committee of the two Houses to receive continually the reports of the Auditor General.

The next chapter is on planning management-again, recurring to our central concept that management always consists of the recruitment and control of personnel, the management of the fiscal affairs, continued research into cost accounting, a proper accounting system, and an independent audit. The third feature of management is programing or planning.

Now, of course, planning is carried on by every department and bureau of the Government. Necessarily each of them has to have a program, but since there are so many and there is a lack of coordination, we recommend that a National Resources Board be created to serve as a central planning agency under the President, but which would have no administrative duties. And again there, where we recommend a board, we recommend an unpaid board; that is, a board of men who are paid a small per diem when they are actually in service, but not a full-time salaried board.

Then having attempted in this way to equip the Chief Executive with what we conceive to be the necessary three arms of managerial direction, personnel, fiscal, and planning, we have a chapter on the administrative reorganization of the executive branch, where we recommend, in brief, that the power be granted by the Congress to the Executive to make, from time to time, the allocations, the consolidations, and what not, very much along the line that was carried in the Economy Act of 1932, the Economy Act of 1933, and indeed before that time, during the war, under the Overman Act.

We believe also, as stated in this section, that for the efficient management of the executive branch it is necessary to cut down the great number of separate agencies now reporting directly to the President. It was our idea to get them all into regular departments, so that with the exception of the managerial agencies which must report directly to the President, all of the operating administrative agencies would report to the President through regular Cabinet officers.

In order to achieve that our studies led us to make the recommendation that two new departments be established, and that all of these agencies be brought within the 12 regular departments.

In a discussion of the independent regulatory commissions we also recommend that they be brought in for their administrative work, although there would continue to be, in those cases where they already have been established, the independently appointed commission or board for the quasijudicial functions.

Then the next chapter is devoted to the accountability of the Executive to the Congress which, in our opinion, should be sharpened. The machinery for making that accountability effective and timely