STATUS OF THE HOOVER REPORT 1949-1953 VOLUME ONE

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP86B00269R000300010013-3
• Release Decision: RIFPUB
• Original Classification: K
• Document Page Count: 13
• Document Creation Date: December 15, 2016
• Document Release Date: June 30, 2003
• Sequence Number: 13
• Publication Date: January 1, 1953
• Content Type: REPORT

A Citizen's Guide to the Progress of Federal Reorganization
From Creation of the Original Commission on Organization
of the Executive Branch of the Government
to the End of the First Session of the 83d Congress
CONTENTS
VOLUME ONE
What the Citizen Wants to Know ... (Background, Findings and Results of the
Hoover Commission) ...................... ...
3
The Task Ahead (The Second Hoover Commission and Its Assignment)
.11
That the Citizen Can Do............ .
......... ..........
.13
Highlights in the History of Reorganization.
.14
VOLUME TWO
Action on Recommendations of the Hoover Commission (A Statistical Analysis of
Each of Its Reports and the Disposition to Date of Each Recommendation) .... .. ..
3
Reconciliation of the Estimates of the Number of Recommendations
.38
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WHAT THE CITIZEN WANTS TO KNOW
Background, Findings, and Results of the Hoover Commission Report
The Commission on Organization of the Executive
Branch of the Government, now known as the
Hoover Commission, was established by unanimous
vote of the Congress under the Lodge-Brown Act,
(Public Law 162 of the 80th Congress) on July 7,
1947. The duties assigned the Commission included:
"1. Limiting expenditures to the lowest
amount consistent with the efficient per-
formance of essential services, activities,
and functions.
"2. Eliminating duplication and overlapping
of services, activities, and functions.
"3. Consolidating services, activities, and
functions of a similar nature."
PAST STUDIES OF GOVERNMENT
ORGANIZATION AND WHY
THEY FAILED.
While the Hoover Commission's effort was the
largest and most successful in our history, it was not
the first. Similar studies had been undertaken by in-
dependent investigative bodies since the early days of
the Republic. Since 1900, in fact, no less than eight
reorganization studies had been conducted. Some ac-
complishments resulted from their work but none of
them could be termed successful. Most outstanding
was the Taft Commission of 1912 to which the im-
portant Budgeting and Accounting Act of 1921 may
be attributed.
There were three principal reasons why these
earlier endeavors at Federal Reorganization largely
ended in defeat: (1) some of the Commissions were
partisan in the political sense (2) some were com-
pletely Congressional in composition, so that their
findings were not accepted in the Executive Branch
and (3) similarly, some had been purely Executive
Branch studies and had failed of approval by the
Congress. These deficiencies rendered every such re-
port easy prey to the fourth, and most formidable,
obstacle to reorganization-the inherent opposition of
bureaucratic "pressure groups" with a vested interest
in the status quo.
APPOINTMENTS TO THE COMMISSION.
With these factors in mind, Representative Clarence
Brown drafted the Lodge-Brown Bill so as to make
the new Commission clearly bi-partisan and fully
representative of the Congress, the Executive Branch,
and the public. Specifically the Act provided for ap-
pointment of an equal number of Democrats and
Republicans, as Commission Members by:
1. The President. Harry S. Truman was author-
ized to appoint two officials of the Executive
Branch and two private citizens, namely:
JAMES V. FORRESTAL, then Secretary of Defense
(Democrat)
ARTHUR S. FLEMMING, then Member, U. S. Civil
Service Commission (Republican)
DEAN G. ACHESON, then a private citizen and
subsequently Secretary of State (Democrat)
GEORGE H. MEAD, Chairman of the Board,
Mead Corporation (Republican)
2. The President Pro Tempore of the Senate.
Senator Arthur Vandenberg was authorized to ap-
point two Senators and two private citizens, namely:
Senator JOHN L. MCCLELLAN (Democrat-
Arkansas)
Senator GEORGE D. AIKEN (Republican-
Vermont)
JOSEPH P. KENNEDY, former Ambassador to
Great Britain (Democrat)
Dr. JAMES K. POLLOCK, Chairman of the
Political Science Department of the University
of Michigan (Republican)
3. The Speaker of the House of Representa-
tives. Representative Joseph Martin was author-
ized to appoint two Members of Congress and
two private citizens, namely:
Representative CARTER MANASCO (Democrat-
Alabama)
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Representative CLARENCE J. BROWN
(Republican-Ohio)
JAMES H. ROWE, JR., former Administrative
Assistant to President Roosevelt (Democrat)
HERBERT HOOVER, former President of the
United States (Republican)
Thus the Commission was equally composed of
Democrats and Republicans with two from the Senate,
two from the House, two from the Executive Branch,
and six from private life.
The first meeting of the Commission was held at
the White House in September, 1947. President
Truman presided until the Commission selected its
own officials. Former President Herbert Hoover was
elected Chairman and Mr. Acheson Vice Chairman.
As Executive Director, the Commission chose Mr.
Sidney. A. Mitchell. Appropriations of about $1.9
millions were obtained from the Congress to finance
the studies. (Incidentally, the Commission "practiced
what it preached. When it finished its work, it re-
turned a small cash surplus to the Treasury-a pro-
cedure with no known precedent in the official Wash-
ington of the previous two decades.).
FORMING TASK FORCES OF EXPERTS.
The Commission began by enlisting 24 expert re-
search groups which it called "Task Forces" to explore
almost every major field of govermental activity.
Serving on them were over 300 outstanding experts in
the various technical fields studied, most of whom
accepted no compensation. On the average the com-
pilation of their reports required about one year.
In utilizing the Task Forces, the Commission fol-
lowed a new technique in research. Once these
groups were organized, they were given general
"guide lines" and instructed to proceed independently
upon their researches.
HOW THE TASK FORCES WORKED.
The Task Force on the National Security Organi-
zation illustrates this principle. Direction of the sur-
vey was undertaken by Ferdinand Eberstadt, former
Vice Chairman of the War Production Board and a
principal assistant to Secretary Forrestal in drafting
the Unification Act of 1947. Mr. Ebcrstadt served as
Chairman of a 14-man Committee of experts
including:
Dr. RAYMQND B. ALLEN, then President of the
University of Washington
Mr. THOMAS ARCHER, Vice President, General
Motors Corporation
Mr. HANSON W. BALDWIN, Military Commentator,
The New York Times
Mr. CHESTER I. BARNARD, President,
The Rockefeller Foundation
Dr. CHARLES W. COLE, President,
Amherst College
Mr. JOHN COWLES, President,
The Minneapolis Star-Tribune
Mr. JAMES KNOWLSON, President,
The Stewart-Warner Corporation
Mr. JOHN J. MCCLOY, then President of the
"World Bank"
Dr. FREDERICK A. MIDDLEBUSH,
President of the University of Missouri
Mr. ROBERT P. PATTERSON,
former Secretary of War
Rear ADMIRAL LEWIS L. STRAUSS,
Member, the Atomic Energy Commission
Mr. CARLTOI' WARD, JR. Chairman,
Fairchild Engine and Airplane Corporation
Gen. ROBERT E. WooD, Chairman,
Scars, Roebuck and Company
Military advisors and consultants to the Commit-
tee included the following officers on inactive or re-
tired status:
Lt. Gen. JAMES H. DOOLITTLE
Lt. Gen. IRA C. EAKER
General of the Army DWIGHT D. EISENHOWER
Col. OVETA CULP HOBBY
Admiral BEN MOREELL
Gen. CARL SPAATZ
Admiral JOHN H. TOWERS
The Ebcrstadt Committee engaged a staff of 24,
heard 245 witnesses, held approximately 30 full meet-
ings, and prepared a four-volume report covering
every organizational aspect of our National Defense
Establishment.
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HOW THE COMMISSION WORKED.
Upon completion of the Task Force reports, each
was considered carefully by the Commission. While
these 24 reports were used in the preparation of the
Commission's own reports to the Congress, the Com-
mission did not consider itself bound by the recom-
mendations of the Task Forces. Its task was, rather,
to resolve them into what Chairman Hoover termed
"an orderly pattern of government." Unstinting in its
labors, the Commission often met three, and some-
times four, full days a week as the Reports neared
completion.
Throughout the research period, the Commission
.worked in obscurity. To avoid involvement in poli-
tics, its findings were kept secret until after the Presi-
dential election of 1948. Some of the reports of the
Task Forces were made public in late November and
December of 1948. No formal action was taken, how-
ever, until January 13, 1949. Then the Commission
sent to the 81st Congress a Message requesting that
a Reorganization Act be enacted.
THE COMMISSION'S FIRST FORMAL RELEASE.
In this initial Message, the Commission urged that
the President be given power to submit Reorganiza-
tion Plans to Congress with these words:
"The nation is paying heavily for a lack of
order, a lack of clear lines of authority and
responsibility, and a lack of effective organ-
ization in the Executive Branch."
This led to enactment, four months later, of the
Reorganization Act of 1949, widely recognized as the
strongest and most workable reorganization tool ever
placed in the hands of a President by the Congress.
(See Page 8).
On February 7, 1949, the Commission submitted
to Congress its findings on General Management of
the Executive Branch, the first of its 19 reports. Soon
it was sending a rapid series of reports, roughly two
per week, forward to Congress, with its Concluding
Report, transmitted in May of the same year.
The official Commission reports alone amounted
to over 1,000 pages of text. With them were sub-
mitted the 24 Task Force Reports and a vast deal of
unpublished supplemental studies. All told, the Com-
mission produced 5,000,000 words, by far the most
thorough study of government ever undertaken by
man.
In the reports, 273 recommendations were made,
requiring over 300 specific actions for accomplishment
by Congress or the Executive Branch through one of
three methods:
35 per cent called for administrative action.
These required no law. The President and Depart-
ment heads have always had authority to make cer-
tain changes, if they will. For example, modern
mechanized accounting machines can be installed
in place of antiquated handwritten ledgers without
legislative authorization.
25 per cent called for Presidential "Plan".
The Reorganization Act of 1949 (described on
Page 8) enables the President to submit to Con-
gress plans for realigning agencies and functions.
40 per cent called for new legislation. To get
real reforms in the long-established big depart-
ments of government, sweeping changes in law are
usually required. A great body of law already sur-
rounds the operation of such Deparments as the
Post Office and Agriculture. To take another type
of action, in budgeting and accounting it was
necessary specifically to repeal a total of 106 laws,
all badly tangled. One important law, for example,
dated back to 1844-with amendments in 1865,
1871, and 1921.
BASIC CONCLUSIONS: OVERLAPPING,
DUPLICATION, WASTE, NEAR-CHAOS.
The 19 Reports made it clear that the organization
of the Executive Branch was nearing chaos. There
were too many agencies. Lines of authority were
tangled. Responsibility had not been properly affixed.
Duplication of endeavor was widespread. Appalling
waste was the result. In fact, this ramshackle struc-
ture of 1812 Departments, Boards, Bureaus, and other
units had become so large and so complex that it
almost defied intelligent analysis.
The status of the Commission's recommendations
are set forth in Volume Two. Following are a few of
the more dramatic facts (as of 1948) which brought
the Commission's message home to citizens:
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? General Management. Sixty-five major agen-
cies, some of them bigger than General Motors, re-
ported directly to the President. If he gave but one
hour a week to the supervision of each, he would
work a 65-hour week with little time left for prob-
lems of policy or affairs of state.
? Personnel. Federal turnover averaged 26% per
year; some 500,000 employees left their jobs annually.
Yet in one case the Government had expended over
$500,000 in a fruitless effort to fire a single employee.
? General Services. The civilian agencies were
spending over $10 in clerical work on a simple pur-
chase order. Yet half of these orders-1,500,000 a year
-were for sums of less than $10.
? Post Office. The basic organization of this
Department had not been changed since 1836; the
average age of 10,000 postal vehicles was over 15
years; it was costing the Government 2 1h cents to
print and deliver a penny post card; the Post Office's
books were maintained by another agency of the
Government 500 miles from Washington in Ashe-
ville, North Carolina.
? Foreign Affairs. While the State Depart-
ment was charged with conducting foreign affairs,
45 other agencies were engaging in foreign activities.
Appropriations for the Department in 1948 were 12
times as large as they had been 10 years before.
? Agriculture. One Missouri farmer received con-
flicting advice on the use of fertilizer from five sepa-
rate agencies in the Department of Agriculture.
? Budgeting and Accounting. For some im-
portant types of Federal accounting, the Government
was maintaining four separate, distinct and duplica-
tive sets of books. Because of obsolete i2ws, freight
carloads of old vouchers were being shipped to
Washington for detailed audit; under modern methods,
a simple "spot check" in the field would suffice.
? National Security Organization. At the end
of World War II, Army statistics showed 25,000
tanks on hand; yet the Army could account to the
Task Force for only 16,000 tanks. Because of an arith-
metic error, one military budget item was $30 millions
higher than the amount actually requested.
. Military budgets were "padded" disgracefully. Com-
petition for appropriations among Army, Navy, and
Air Force was unbridled. In preparing the 1945 bud-
get the three services demanded sums twice as large
as the President authorized them to request.
? Veterans' Administration. The Veterans' Ad-
ministration was taking 4 times as long as private
companies to pay insurance claims to veterans' de-
pendants (and using 5 times as much manpower per
policy); VA once issued 994 pages of complicated in-
structions and directions to explain an 81h-page law.
? Commerce. The Federal Barge Lines, organized
31 years before in World War I as a temporary expe-
dient, had been operating ever since at an almost
continuous deficit.
? Treasury. Important inconsistencies often
occurred in the Treasury's own Daily Statements.
The Internal Revenue Bureau was riddled with
politics. (Congressional inquiries later revealed that
"irregularities" had occurred in 31 of the Bureau's 64
offices.)
? Regulatory Commissions. One regulatory
commission took an average of 1,008 days to handle
each of 11 major new cases.
? Labor. There were more Federal labor activi-
ties outside of the Department of Labor than in it.
? Interior. The resources agencies of the Federal
Government were building, or planning to build,
public works which could cost $52 billions; a sample
list of Army Engineers' projects showed that originally
estimated costs of $2.6 billions had increased to $5.9
billions during construction. At Hells Canyon, Idaho,
the Army Engineers and the Corps of Reclamation
had conducted separate surveys-at a cost of approxi-
mately $252,000 each-for dam sites less than two
miles apart. Their cost estimates were $75 millions
apart.
? Indian Affairs. There were 12,000 Indian
Bureau employees administering the affairs of
393,000 Indians-one Federal employee to each 32
Indians. Less than 25 percent of the 393,000 were
full-blooded Indians.
? Medical Activities. Five large, and 30 smaller,
Federal hospital systems went their separate ways
"with little knowledge of and no regard for" one
another's operations. New hospitals were sometimes
built in areas where others stood empty. Others were
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built in remote places where neither patients nor
physicians could use them.
? Business Enterprises. The Government per-
mitted many Federally-owned business enterprises to
borrow money without interest from the Treasury
and then invest the same funds in Government Bonds.
This put the Government in the position of borrow-
ing its own money and paying interest on it.
The Reconstruction Finance Corporation was mak-
ing loans to such enterprises as (a) a pet hospital,
(b) a juke box operator, (c) a snake farm, (d) a
beauty parlor, (e) an interior decorator.
AN ENTHUSIASTIC PUBLIC RESPONSE.
Whereas all its predecessors had perished quietly
in the dusty pigeonholes of Washington, the Hoover
Report met with widespread public acclaim. Citizens
were becoming increasingly conscious of the impact
of Big Government on their daily lives. This table
dramatizes the contrast wrought by less than 20 years
of depression, war, and cold war:
1931 1949
Federal Taxes Per Average Family $113 $1076
National Debt Per Capita $135 $1722
National Debt Per Average Family $527 $6716
The Hoover Report was specific and understand-
able. It pointed to the "wasted one dollar in ten" of
federal expenditures and showed ways by which, ac-
cording to task force estimates, $3 to $4 billions a
year could be saved. Throughout the country press
and public applauded the Commission and demanded
action.
OPPOSITION ARISES FROM BUREAUS AND
"PRESSURE GROUPS."
Dissenting voices soon were heard, however. These
came first from the heads of Federal agencies and
bureaus. Said one:
"The existing and long-standing organiza-
tional position ... (of this agency) ... has
been satisfactory and it is doubtful if it can
be improved upon."
This unfavorable reaction of a large part of the
bureaucracy was reflected in that of some private asso-
ciations of the sort known on Congressional Hill as
"pressure groups." While professing to favor reorgan-
ization, at least 100 of these groups entered objections
to specific recommendations of the Commission.
ORGANIZATION OF THE CITIZENS
COMMITTEE FOR THE HOOVER REPORT
In May 1949 an unprecedented new movement
took form. Good citizens, Democrats and Republi-
cans alike, from Coast to Coast, joined in the for-
mation of a voluntary, non-profit group formally
called the Citizens Committee for Reorganization of
the Executive Branch of the Government, more gen-
erally known as "The Citizens Committee for the
Hoover Report." Its purpose was public education in
support of the recommendations of the Hoover
Commission.
Dr. Robert L. Johnson, President of Temple Uni-
versity of Philadelphia, gave strong leadership to the
new Committee as National Chairman. Its Board of
Directors included outstanding Democrats and Re-
publicans and leaders of civic, business, labor, agri-
culture, education, and women's organizations.
As Commission Chairman, Mr. Hoover gave en-
couragement to the Citizens Committee and while
President, Mr. Truman wrote an official letter of en-
dorsement. Within a year some 300 state, county,
and community Citizens Committees sprang up from
Coast to Coast. The nation's press gave enthusiastic
backing to their program.
Soon, it seemed, Americans were "going back to
school" in earnest to study the long-neglected phe-
nomenon of Big Government. Through books, book-
lets, pamphlets, editorials, speeches, radio programs,
television, advertisements, and films, citizens were
becoming aroused to the need for action on the
Hoover Report. Resolutions were passed by the
thousands. At national conventions, at state-wide
meetings, in school halls and church basements,
speakers told the story of the Report in simple,
human terms.
Best of all, the Congress responded warmly to this
remarkable civic awakening. In Senate and House
generous praise of the Citizens Committee came from
leaders of both parties. Congressmen, long harassed
by organized pressures from groups seeking appropri-
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ations for special purposes, were greatly heartened by
the appearance of "a pressure group against pressure
groups" composed of citizens who asked nothing for
themselves but much for the nation.
In its four most active years, from 1949 to 1952,
the Citizens Committee compiled a remarkable
record of achievement. The greatest value of its work,
however, lay in the field of public information. Mr.
Hoover, in March 1952, told the assembled Citizens
Committees: "You have given the nation about the
widest-spread education in civil government that it
has had since the Constitution was under debate."
SIGNIFICANCE OF THE REORGANIZATION
ACT OF 1949.
In response to the first request of the Commission,
supported by the Citizens Committee, the Congress
passed the Reorganization Act of 1949 - despite
strong opposition. Previous Reorganization Acts (in
1932, 1934, 1939 and 1945) had been emasculated by
clauses "exempting" certain agencies from their pro-
visions. No Agency escaped the purview of the 1949
Act.
This Act, signed on June 20, 1949, provided that
the President could submit Reorganization Plans to
the Congress and that these Plans would have the
effect of law-unless vetoed within 60 days by one
more than half of the full membership of either the
House or the Senate.
In effect, the Act gave the legislative initiative to
the President and the veto power to the Congress, a
reversal of the usual procedure. Students of govern-
ment hailed the Act as the best of its kind to date.
Events have borne them out as this table shows:
31, 1953. In the early days of the Eisenhower Ad-
ministration the Act was renewed without change,
giving the new President the same powers as his
predecessor, until 1955.)
THE SCORE: 72 PERCENT OF
RECOMMENDATIONS ACCEPTED
In addition to the Reorganization Plans submitted
by Presidents Truman and Eisenhower over the four-
year period, there were before the Congress during
most of that time some 100 bills embodying various
recommendations of the Commission. Many of these
bills were totally neglected. Others were given hear-
ings before Congressional Committees. Nearly 200
hearings were held, in fact, on the Plans and the
bills taken together. A number of the bills finally
came to a floor vote-not always successfully. By the
end of the 1953 session, however, 58 of the bills had
been enacted as public Laws.
Thus, counting the 39 approved Presidential Plans,
there were 97 legislative enactments attributable to
the Hoover Commission's Report in the years from
1949 through 1953. These amounted to about five
percent of the total legislative output of the 81st,
82d, and 83d Congresses.
Many other Hoover Commission recommendations
were adopted by administrative action, not requiring
legislation. These are taken into account in the "score-
keeping" process which shows that of the 273 spe-
cific recommendations of the Hoover Commis-
sion, 196, or 72 percent have been adopted and
are being put into effect today.
REORGANIZATION PLANS
Submitted Disapproved Approved
1949 7 1 6
1950 27 7 20
1951 1 0 1
1952 5 3 2
1953 10 0 10
Total 50 11 39
(The expiration date of the 1949 Act was March
MAJOR LEGISLATIVE ACHIEVEMENTS
As examples of legislative action of basic impor-
tance, ten measures stand out among the gains at-
tributable to the Hoover Commission. Stated in terms
of results they are:
1. Better teamwork in the armed services was
greatly hastened by the Unification Act of 1949
and it paid off in the Korean action.
2. More efficient "housekeeping." The new Gen-
eral Services Administration combined four
previous agencies. It rapidly went about cutting
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out duplication and waste in Federal purchas-
ing, storage, inventory control, records man-
agement, and building operations.
Internal reorganization of the State Department
clarified staff responsibilities and expedited ac-
tion materially.
4. A modernized Budgeting and Accounting sys-
tem paved the way to the greatest Federal fiscal
advance in three decades.
The Labor Department was rebuilt to Cabinet
stature.
6. Modernized accounting procedures were initi-
ated in the Post Office Department, eliminating
much delay and duplication.
7. The corruption-ridden Bureau of Internal Rev-
enue was taken out of politics.
8. A new Department of Health, Education and
Welfare was established.
The Department of Agriculture was reorganized
and many of the Commission's proposals for
that department were put into effect.
10. Airline subsidies were separated from payments
for the carriage of mail.
MAJOR ADMINISTRATIVE GAINS
Legislative action was often the preface to substan-
tial management improvement in many areas of the
Executive Branch. In other cases, agency heads took
the initiative in cutting "red tape" and reducing op-
erating costs. In this process, the mere existence of
the Hoover Report served as a stimulus to economy
and efficiency. Nearly every agency reported its gains
to the Citizens Committee whose files abound today
in concrete examples of better management. Some
interesting illustrations follow:
General Services. By moving a veritable moun-
tain of records and documents into an old war plant,
the General Services Administration made office space
for 10,000 employees in Washington alone. Since
this occurred just before the Korean action, the space
was needed. Thus a substantial saving was made in
time, materials, and manpower as well as in dollars
. General Services has been whittling away at the
cost of procurement. The "ten-dollar purchase order
for the fifty-cent typewriter ribbon" is becoming a
thing of the past, thanks to simplified forms and fil-
ing procedures ... Savings of $4 millions a year were
accomplished by surveys of supply operations ... The
General Services Administrator unearthed one agency
with a 93-year supply of fluorescent light bulbs, an-
other with a 247-year supply of looseleaf binders ...
Had there been no Hoover Commission, there would
have been no GSA to make such discoveries.
Interior. In the Bureau of Land Management, a
program for speedier service was undertaken with
these results: Service complaints decreased from 300
to 30 per month ... The workload in one section was
increased from 23 applications per average employee
to 95 per employee by eliminating unnecessary steps
in handling ... In a similar study, the number of
cases closed per employee per year was raised from
50 to 250.
Department of Defense. Perhaps the greatest
gains resulting from the 1949 Unification Act were
non-monetary. The Act came just in time to facilitate
the Korean effort, an unparalled example of inter-
service teamwork both in the combat zones and be-
hind the lines. In a matter of weeks, the supply lines
were pumping men and material into Korea in a vol-
ume equal to that of the African invasion of World
War II-which took 18 months to organize ... Army,
Navy, and Air Force ships and planes quickly merged
operations, waiving command distinctions, in fast-
moving unified air and sea transport systems. These
also rushed wounded men directly back to hospitals
in Japan and the United States-and on the way they
received plasma from a unified blood bank system.
General of the Armies Douglas MacArthur said of
the early Korean operation: "I do not believe that
history records a comparable operation which ex
celled the speed and precision with which the Eighth
Army, the Far East Air Force and the Seventh Fleet
have been deployed to a distant land for immediate
commitment to major operations..." And in this
view, the top commanders of all three services con-
curred.
On the "business side" of Defense Administration,
the Hoover Report touched off a hunt for operating
economies which produced some worthwhile gains.
For example: The number of administrative vehicles
in use was reduced by 34,380 at a saving of $20 mil-
lions a year.... This released 2,136 chauffeurs for re-
assignment at an annual saving of $5 millions.... By
adopting the Navy's "incentive" system of uniform
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issuance, the Army and Air Force made savings esti-
mated at $147 millions in the first year.... Real
economies are expected from work now in progress
to standardize military supply catalogs. To cite one
example, 5,000 different listings of wrenches have
been reduced to 330.... These and scores of similar
discoveries pointed the way to the vast economies
which can be realized if they are pursued aggres-
sively, just as Korea revealed the great potentials of
unified direction if the will to hasten the process is
firmly and consistently maintained.
In other areas some exemplary cases include:
Adoption of the "program" approach in federal
budgeting. This gives a clearer picture of the end
purposes for which funds are appropriated as well as
the sums requested for specific items. The Hoover
Commission chose the Bethesda Naval Hospital as
an example of the need for this reform. The Com-
mission pointed out that the budget told how much
would be spent for bandages, medicines, and some
ten other items but nowhere did it tell how much it
would cost to run Bethesda.... Post Office account-
ing was considerably modernized. The Post'Office's
books had previously been kept by another agency
in Asheville, North Carolina, far from Washington.
... A net decrease in the Post Office budget of nearly
$40 millions a year has been made possible by author-
izing the Department to set the rates on certain spe-
cial services and make them self-supporting. These
include registered, insured, special delivery, and c.o.d.
mail.
Opinion varies as to the actual total economies
which have been made possible by the Hoover Re-
port over all. The task force reports of the Hoover
Commission, however, indicated possible savings of
approximately $3 billions a year, based on expendi-
tures then running at about $42 billions a year. The
Citizens Committee estimated that eventual annual
savings of as much as $4 billions wll be made when
the Hoover Commission recommendations so far
adopted can be fully applied. Whatever their amount,
these savings have been obscured by increases in the
budget, now running at about $72 billions, as a re-
sult of the Korean war, rearmament, and mutual
security.
"UNFINISHED BUSINESS OF THE
HOOVER COMMISSION"
No action has so far been taken on 77 of the 273
recommendations of the 1949 Hoover Report. Of
these, about 11 may be classified as obsolete. The re-
mainder are pertinent though some, of course, are
minor. Others are even more important today than
they were when the Report was issued. Chief among
these are:
1. Reducing the number of agencies reporting di-
rectly to the President.
2. Unification of federal medical services.
3. Elimination of inter-agency competition in the
field of natural resources.
4. Unification of the management of public lands.
5. Improvements in the Veterans Administration.
6. Further improvements in accounting and appro-
priations procedures.
Among other unenacted proposals of impor-
tance are these: (1) taking Postmasters, Collectors
of Customs, and U. S. Marshals out of politics;
(2)merging Civil Servants in the State Department
with the Department's Foreign Service personnel; (3)
substantive policy changes in the conduct of the na-
tion's agricultural affairs; (4) establishing an Ac-
countant General in the Treasury; (5) placing the
Federal Deposit Insurance Corporation and the Ex-
port-Import Bank in the Treasury; (6) transferring
the Bureau of Indian Affairs from the Interior De-
partment to the new Department of Health, Educa-
tion and Welfare.
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THE TASK AHEAD
The Second Hoover Commission and Its Assignment
Reorganization is a never-ending process. In any
enterprise, constant vigilance is required to guard
against waste and duplication. In government, the
task is doubly important, and doubly difficult, be-
cause the yardsticks by which a private business can
measure efficiency and economy are usually lacking.
Many said "it couldn't be done," in fact, until the
first Hoover Commission reversed the long record
of failure attending previous efforts at reorganization.
Now it is fully established that great strides can be
made when thorough, objective research is undertaken
on a bipartisan basis and when the Congress,, the
Administration, and the public agree, in the same
spirit, on a determined program of action.
As a result of'the Korean action, new problems
have arisen. Since the original Commission completed
its studies, the federal budget has virtually doubled.
Old problems have been complicated. Some of the
most important recommendations of the original
Commission remain unenacted. Today, however, the
accent is on economy and efficiency. The unchecked
growth of an overwhelming bureaucracy is no longer
regarded as inevitable.
Continuation of the reorganization process was as-
sured on July 10 of this year when President Eisen-
hower signed the Brown-Ferguson Act by which
Congress unanimously created the second Commis-
sion on Organization of the Executive- Branch of the
Government. It was doubly assured when the per-
sonnel of the new Commission was announced:
*Representative CLARENCE J. BROWN (R.-Ohio)
Honorable HERBERT BROWNELL, JR., Attorney
General of the United States
Honorable JAMES A. FARLEY, former Postmaster
General
Senator HOMER FERGUSON (R.-Mich.)
*ARTHUR S. FLEMMING, Director,. Office of De-
fense Mobilization
Representative CHET HOLFIELD (D.-Calif.)
SOLOMON C. HOLLISTER, Dean, Cornell Uni-
versity School of Civil Engineering
*Honorable HERBERT HOOVER, former President
of the United States
*Honorable JOSEPH P. KENNEDY, former Ambas-
sador to Great Britain
*Senator JOHN L. MCCLELLAN (D.-Ark.)
SIDNEY A. MITCHELL, Executive Director of the
First Hoover Commission
ROBERT G. STOREY, Dean, Southern Methodist
University School of Law
Between the new Commission and the old there is
one outstanding difference. Whereas the first Com-
mission confined itself to problems of organization
and management, the 1953 study is fully empowered
by Congress to ask not only how well a govern-
mental function is performed but whether it should
be performed at all. It has every authority to scruti-
nize an agency and determine whether or not it, is
unnecessarily competing with private enterprise. It
can question federal policies and even recommend
new policies in every area in which government
operates today.
The Commission will submit interim reports from
time to time, and will submit a comprehensive re-
port of its activities and the results of its studies to
the Congress before December 31, 1954. Its final re-
port is due not later than May 31, 1955, at which
date the Commission ceases to exist. The Final Re-
port of the Commission may propose such constitu-
tional amendments, legislative enactments and admin-
istrative actions as in its judgment are necessary to
carry out its recommendations.
INTERGOVERNMENTAL RELATIONS
COMMISSION ALSO CREATED
Of great importance also is the new Commission
on Intergovernmental Relations, created by the Taft-
Halleck Act, and also signed into law by President
Eisenhower on July 10. This Commission will be
headed by Clarence E. Manion, former Dean of the
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Notre Dame University Law School. Its member-
ship of 25 will include outstanding students of Fed-
eral-State problems. The creation of this Com-
mission was recommended by the original Hoover
Commission. The new group will address itself to
one of the knottiest problems of government today,
namely the overlapping of Federal-State functions
and expenditures. There are now more than 30 grant-
in-aid programs involving expenditures of well over
$2 billions a year. This haphazard growth has occur-
4%, .o1. N'4tif
7~ ` do
red without plan or pattern. The rights of the states
have been invaded in many cases.
The Commission on Intergovernmental Relations
is required to make its final report to the President
for transmittal to Congress not later than March 1,
1954, with recommendations for legislative action. Its
findings are expected to "dovetail" effectively with
the program of the second Commission on Organi-
zation.
CITIZENS COMMITTEE
FOR THE HOOVER REPORT
SIDNEY A. MITCHELL
Chairman
CHARLES B. COATES
Vice Chairman & General Manager
COLBY M. CHESTER
Chairman, Finance Committee
N. BAXTER JACKSON
Treasurer
KEITH M. URMY
Assistant Treasurer
Vice Chairmen
HON. JOSEPH B. ELY B. E. HUTCHINSON JULIAN S. MYRICK
NEIL PETREE WALLACE H. SAVAGE JOHN STUART
Board of Directors
NEAL Dow BECKER
HON. JAMES A. FARLEY
HERSCHEL D. NEWSOM
CHARLES DANA BENNETT
CLARENCE FRANCIS
DR. FRED D. PATTERSON
COLBY M. CHESTER
ROBERT HELLER
NEIL PETREE
CHARLES B. COATES
HORACE E. HENDERSON
STANLEY RESOR
WILLIAM E. COTTER
MRS. OSWALD B. LORD
CAPT. EDWARD V. RICKENBACKER
GEN. WILLIAM J. DONOVAN
SIDNEY A. MITCHELL
EARL 0. SHREVE
FERDINAND EBERSTADT
JOHN STUART
HON. WARREN R. AUSTIN
HON. COLGATE W. DARDEN, JR.
HON. CHARLES EDISON
HENRY FORD II
Advisory Board
HON. JOHN N. GARNER
CORD MEYER, JR.
LESSING J. ROSENWALD
DR. ROBERT G. SPROUL
ANNA LORD STRAUSS
CHARLES E. WILSON
HON. HARRY H. WOODRING
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WHAT THE CITIZEN CAN DO
In the preceding pages you have read the first
"success story" in the long history of many efforts
to reorganize the Federal Government. One failure
followed another for 50 years or more. Then came
the first Hoover Commission. Today 72 percent of
its recommendations have been adopted-against
great odds. And economies which have been esti-
mated at $4 billions a year are expected to result
from its work.
Three major factors of equal importance made
these achievements possible: (1) thorough-going and
unbiased research (2) bipartisan cooperation between
the Congress and the Executive Branch, and (3) the
whole-hearted support of public-spirited citizens of
both parties from Coast to Coast.
You, as a member of the Citizens Committee, can
take real pride in this record. By joining the fight
for "Better Government at a Better Price" you
worked to streamline the ramshackle structure of the
Executive Branch. Best of all, you helped to reverse
the trend to cynicism, frustration, and indifference
with which far too many Americans were coming to
regard the unbridled growth of Big Government.
Today there is every reason for hoping for further
achievement because:
1. The remaining major recommendations of the
Hoover Commission can be brought to realiza-
tion in 1954.
2. The second Hoover Commission, created by Con-
gress this year, will meanwhile be shaping a
Report broader in scope and more incisive than
the first. With the public behind it, this Com-
mission can make an historic new attack on
extravagant and unnecessary federal operations.
The need was never greater. Dr. Robert L. John-
son, former Chairman of the Citizens Committee,
said in 1950: "We cannot carry the burdens of the
world on one shoulder and a burden of waste on the
other.... Every dollar we waste is a gift to the ene-
mies of freedom." These words are as true today as
they were then-and even more urgent.
The call to action will soon be heard. You, as a
citizen, can meanwhile:
1. Enroll as a member of the Citizens Committee
if you have not already done so and urge your
friends to enroll. (Address: Citizens Committee
for the Hoover Report, 184 East 64th Street,
New York 21, N. Y.)
2. Inform yourself and others concerning the is-
sues; study this booklet and subsequent publi-
cations; watch for word concerning further
action on the first Hoover Report; and follow
the news of the second Commission's work.
3. Be prepared to mobilize public support for re-
organization as soon as the need arises.
A NOTE ON VOLUME II
This booklet, Volume I, "Status of the Hoover
Report" (1949-53), is designed to bring citizens
up-to-date on the overall aspects of the subject.
Volume II goes more deeply into detail con-
cerning the disposition of the 273 specific rec-
ommendations contained in the original Hoover
Commission's 19 reports to the Congress. Copies
of Volume II may be obtained without charge by
writing to: Research Department, Citizens Com-
mittee for the Hoover Report, 320 The Wash-
ington Building, Washington 5, D. C.
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HIGHLIGHTS IN THE HISTORY OF REORGANIZATION
July 7, 1947-Lodge-Brown Act, passed unanimously by
Congress and signed by President Truman, creates biparti-
san Commission on Organization of the Executive Branch
of the Government.
Sept. 29, 1947-First meeting of the Commission is held at
White House; former President Herbert Hoover is named
Chairman.
Nov. 11, 1948-Preliminary findings of Commission are
outlined by Chairman Hoover in first press conference since
beginning of research studies by "task forces."
Jan. 13, 1949-Commission sends Message to Congress
urging passage of strong Reorganization Act
Feb. 7, 1949-First of 19 Commission Reports are trans-
mitted to Congress
April 8, 1949-Voluntary, bipartisan Citizens Committee
for the Hoover Report is organized with Dr. Robert L.
Johnson, President of Temple University, as National
Chairman
June 12, 1949-Commission disbands, returning a small
surplus to the Treasury from its $1.9 millions appropriation
June 20, 1949-Congress passes Reorganization Act of 1949
July 1, 1949-General Services Act combines four previous
agencies in a new federal "housekeeping" unit.
Aug. 10, 1949-Military Unification Act of 1949, based on
Hoover Report becomes law.
Oct. 15, 1 949-Citizens Committee announces that 20 per-
cent of Hoover Commission's recommendations have been
adopted
Dec. 12, 1949-First National Reorganization Conference
is held in Washington by Citizens Committee
April 7, 1950-First of 27 Reorganization Plans in 1950
series is submitted by President Truman (of these, 20 be-
came effective); hearings are held in Congress on several
of the 100 bills embodying Commission recommendations
June 15, 1950-Citizens Committee reports that 40 percent
of Commission's recommendations have been adopted
March 15, 1951 -Sweeping "Income Tax Day" program of
20 Hoover Commission bills is introduced in Congress; 20
Senate leaders of both parties join in their sponsorship
April 30, 1951 -Reorganization of Reconstruction Finance
Corporation (the only Presidential Plan submitted in 1951)
is authorized by Congress
March 14, 1952-Sweeping reorganization of Bureau of
Internal Revenue becomes law after hot Senate debate.
May 15, 1952-Citizens Committee suspends activity to
avoid involvement in political campaigns; Dr. Johnson re-
signs as Chairman, succeeded by Morris Sayre. Committee
reports 60 percent of Commission's recommendations
adopted, predicts eventual annual economies of $4 billions
a year
June 18, 1952-Measure to take appointment of Postmasters
out of politics is defeated in Senate after bitter floor fight
July 8, 1952-Republican National Convention adopts plat-
form plank favoring further action on Hoover Report
July 22, 1952-Democratic National Convention also
adopts platform plank urging Hoover Report action.
Nov. 30, 1952-President-Elect Eisenhower designates Re-
organization Committee (Nelson Rockefeller, Milton
Eisenhower, and Arthur S. Flemming) to study all recom-
mendations on Federal Reorganization and prepare reor-
ganization program for new Administration.
Jan. 6, 1953-Citizens Committee resumes activity with
former President Hoover as Honorary Chairman and Sidney
A. Mitchell as Chairman
Feb. 11, 1953-Congress renews Reorganization Act of 1949,
extending President's powers in same form for 2 years.
April 11, 1953-Congress approves creation of Federal
Department of Health, Education, and Welfare; this was
the first of 10 Reorganization Plans submitted by the Eisen-
hower Administration, all subsequently approved by Con-
gress. Most notable gain is far-reaching reorganization of
the Department of Agriculture
July 10, 1953-President signs Brown-Ferguson Act creat-
ing new Commission on Organization similar to original
Hoover Commission but with authority broadened to in-
clude the abolition of unnecessary functions and the elimi-
nation of non-essential services competitive with private
enterprise ... President also signs Taft-Halleck Act by which
Congress creates Commission on Intergovernmental Rela-
tions (as recommended by Hoover Commission) to study
duplications and overlapping of federal and state governments
July 21, 1953-Membership on new Commission on Or-
ganization is accepted by former President Hoover
Sept. 23, 1953-Citizens Committee issues this "Status Re-
port," announcing 72 percent of original Commission's
recommendations accepted, in whole or in part; Committee
prepares for further action on remainder of first Hoover
Commission Report and more to come from the new Com-
mission.
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