We have other commitments. We do not want to do like we did when we took the lead in organizing the League of Nations and then ran out. We are now taking the lead in the Atlantic Charter, and there are certain commitments that go along, and if we do not carry through on those commitments we might be responsible for World War III if it ever happens.

When you add up all of the figures showing the expenditures of the taxpayers' dollar, and you eliminate those expenditures that I doubt very seriously can be reduced at the present time, there are only a very few places that money can be saved and economies practiced.

No one would suggest that we abolish the Department of Agriculture, the Department of Justice, the Department of Labor, the Department of Commerce, or the Interior Department, but if they were all abolished, and we were to abolish all of the functions of those several departments which I have enumerated, we would save less than $6,000,000,000. That is something I think that the average taxpayer does not take into consideration, when he says we can reduce the cost. of the Government by 25 or 50 percent.

I remember a few years when we eliminated from an appropriation an item for gathering statistics for certain business organizationsand I have forgotten now what they were. I had quite a few telegrams about reducing the cost of the Government, in cutting down on our sprawling bureaucracies, and yet when we recommended cutting down about $500,000 for this organization, for gathering statistics, practically every businessman in the United States wired the Congress that the item must be restored.

There are a lot of people who say that we should reduce the expenditures for the Department of Agriculture, but we immediately run into strong opposition, as all of you members of Congress know. We all want to reorganize and reduce the expenditures as long as it does not put out of existence or affect our own pet agency. I have decided, after battling this reorganization question for several years, that about the only thing that everybody agrees could be reorganized, without destroying the necessary functions of Government, would be the operations of the Washington Monument.

The field that you are discussing here today has been neglected for years. When the Government first started out we had few employees, no typewriters, no telephones, and the men used to keep the files in their own pockets. They did not have the problem of storage, of filing facilities. The Members of Congress had no offices, and no office help; they kept their files in their own pockets. As I recall the first office building was opened for Members of Congress in 1909.

The Government has multiplied, billions and billions of dollars in cost since the turn of the century. That has taken place in the memory of every member of this committee. It is not going back. But there are fields where some economies can be practiced. The field of procurement and management of property is one of those fields.

You have three bills before you today. Frankly, I have not made a careful study of these three bills. but from a hasty reading of them I do not think there is much difference in the proposed legislation. I dare say that 90 percent of the provisions of each of the three bills appears in each individual bill.

We had before this committee, in 1943, H. R. 1610; I believe it was one of the first bills presented to the Congress, prepared by the Bureau

of the Budget, dealing with the problem of Federal supply. Most of the supply activities had been allowed to build themselves up in each agency. You have already had the history of the old Procurement Division that was set up by an Executive order. H. R. 1610 made an attempt to coordinate the procurement activities of the Federal Government, and also for the first time to try to bring into one piece of legislation the management and disposal of surplus property. We held extensive hearings in the House. Of course, the war was on at that time, and we thought that it possibly would be over that year, but, unfortunately, it continued for two more years, and we built up a tremendous surplus as a result of the war effort, that it was decided to abandon, for the time being, the organization of an agency to dispose of surplus on a permanent basis and set up a Surplus Property Administrator to deal with the problem.

Everyone realized that we needed permanent legislation, but everyone was so busy they did not take the time to try to work it out.

When the so-called task force of the Hoover Commission started to make suggestions-the task force was headed by Mr. Russell Forbes, a very able man-it went into the field of Federal supply in cooperation with the Bureau of the Budget and the other executive departments affected, and made many recommendations to change our supply system. Some of the recommendations are rather harsh, but on the whole most of them are excellent. The Commission did not accept all of its recommendations. Some of the findings were rather startling.

For instance, they found out that it cost over $10 to process the purchase of a $10 item.

Mr. HOLIFIELD. Approximately $14, I believe.

Mr. MANASCo. About $14. That is not all due to the so-called bureaucratic red tape. A lot of it is the responsibility of the Congress itself, in passing restrictive laws, forcing the agencies to keep records and make records in order to prevent fraud.

A lot of people think that every person who is employed by the Federal Government has his hand in the Federal Treasury, and that if he is not carefully guarded by two or three armed men he will get away with the Treasury of the United States.

If I thought for 1 moment that were true I would say that the time has come for us to throw up our hands and let our Government collapse. I know that is not true. I think that you will find as many, if not more, sincere and honest men working in the Federal Government, doing comparable jobs with men in private industry, as you will find in private industry. Yet, practically every law governing the procurement and disposal of property is based on the assumption that the Government employees are crooks.

About 3,000,000 items are purchased annually, according to the survey, that cost $10 or less. Well, just assume, for the sake of argument, that each one of those items cost $10 to process; that is $30,000,000 that could be saved. I have confidence in the law-enforcement officers, the accounting officers of this country, and I think that if this so-called dishonesty is practiced by a few that the Department of Justice and the General Accounting Office can find those few, and it will not cost near so much of the taxpayers' money to protect us from the few frauds that would arise from time to time as it will cost

to carry on this cumbersome system of records and safeguards that we have at the present time.

Mr. HOLIFIELD. You believe it is possible to raise the limit then from $100 to some higher figure, possibly $1,000, as recommended in the report, under which you can allow contracts and purchases to be made without going through the burdensome procedure, regulation and red tape involved in the steps for the purpose of protecting the Government from fraud in the 47 percent of the purchases which double the cost.

Mr. MANASCO. I certainly do, Mr. Chairman. The Army is procuring between 5 and 6 billion dollars worth of materials annually. In 1947, I believe it was, we enacted a law, permitting the armed forces to make purchases of $1,000 or less without advertising. The civilian agencies purchase less than a billion dollars annually. If there is going to be any great deal of fraud, it looks to me like the armed forces would have the opportunity to have five times more fraud than the civilian agencies. And if it is not efficient and not good for the civilian agencies, certainly it would not be good for the armed forces. Mr. Chairman, I will not go into the report, and the findings of the so-called Hoover Commission. One of the former members of this committee, Mr. Clarence Brown, now a member of the House Rules Committee, covered that subject very thoroughly the other day.

You are considering, I assume, all of the bills that are before the committee on this particular subject. There is the so-called administration bill, H. R. 2781, which is almost like Mr. Riehlman's bill, and almost like the bill that was drafted to attempt to carry out the recommendations of the Hoover Commission.

I notice in this bill, H. R. 2781, section 102, dealing with procurement, warehousing, and related activities, but there does not seem to be included in the bill authority-and if I am wrong please correct me-for the Administrator to assign to the different departments the authority and responsibility of making purchases.

Mr. WARD. Section 106 covers that point.

Section 106-but as I say, I have not carefully studied this billMr. HOLIFIELD. Subsection (c) of section 106 is the provision under which the Administrator may redelegate his authority.

Mr. MANASCo. Yes.

Mr. HOLIFIELD (reading):

Except for the authority to issue regulations on matters of policy having application to executive agencies—

and the authority to make reorganization within the Federal Works Agency

Mr. MANASCO. I think that covers the subject. It also authorizes the Administrator to delegate to the heads of agencies the purchases of materials and equipment that are peculiar to the needs of that depart

ment.

Mr. HOLIFIELD. In fact, it continues the present practice. At the present time, as you know, the procurement of certain items are furnished to the civilian agencies.

Mr. MANASCO. Mr. Chairman, what I am about to say now in no way is a criticism of General Fleming nor anyone connected with the Federal Works Agency. Personally I think General Fleming is one of the most capable administrators that I have known in the Federal

Government. I would like to see him made head of one of the major executive departments if and when a vacancy occurs. And I am not trying to dictate to the President about his Cabinet, but I do think that he is the best qualified man that could be found anywhere for that purpose.

But I do not think—and I do not like to be placed in the position of opposing the committee bill-but I do not think it is the proper place for the Bureau of Federal Supply, or whatever you might want to call the organization that has to do with this subject, this activity, to carry out the objective that the Congress and the people want to accomplish, to put it under an administrator or under a Cabinet officer.. Mr. Mack, director of the Bureau of Federal Supply, is an able man. He has done a good job, in my estimation. He has been handicapped by restrictive legislation and a mass of regulations. In a way it is a minor bureau in a major executive department. It is impossible for him to get the ear of the Secretary of the Treasury at all times. It will be impossible for the Administrator of the Public Works Agency to get the ear of the President, because he is too busy on other matters. For that reason I think that it is most important that this agency be set up in the office of the President.

Now, the argument will probably be made that all of the executive agencies are directly under the President. That is true. He is charged with a responsibility. But you have so many responsibilities placed upon the Administrator in this bill: For instance, the surveying of departments to find out if they have any property excess to their own needs. Now if the responsible administrator goes into an executive department and starts making surveys the one involved might pick up the telephone and call the White House and say "Get this fellow out of our hair," and they will kick him out; in all probability he would be kicked out. But if that responsibility were coming from an agency on the level with the Bureau of the Budget, although that agency or bureau would like to see him kicked out, there would be very few people who would be courageous enough to go to the President and ask him to get him out, I know that while they hate it, nevertheless, they fear the Bureau of the Budget; that is, the executive agencies.

And in order to make the organization effective it is going to have to have the same level of authority that the Bureau of the Budget has. I know that that probably does not meet with the approval of a lot of people, but they admit that the present system has its weaknesses, although the agency now is under a Cabinet officer, and if you put the Administrator over it, if you put it under an administrator, then you reduce it by one more level. Whereas if you place it in the Office of the President someone might say that he does not like the regulations that are issued by the Bureau of the Budget, but no agency is going to question one of these regulations, because they feel that it carries prestige and the influence of the President himself. For that reason I think it is most important that this agency be placed on the same level with the Bureau of the Budget.

The Bureau of the Budget is a agency in our Government which does not have a Cabinet status-the Director of the Budget does not have a Cabinet status, yet he is in a more powerful position than any member of the President's Cabinet today.

We have had recommendations to transfer the Bureau of the Budget to the Treasury Department. If we did that I think we would weaken the effectiveness of the Bureau of the Budget, just as the present system of the Federal supply is weakened by its position.

There are so many, many fields where it requires the prestige of the Président to accomplish something. In this supply field I know you have a provision in here that authorizes the President to issue regulations from time to time, as he ought to, and that is good, but that does not cure it, because the Administrator cannot go to the President from day to day with the problems that are arising from day to day, and get him to look over an Executive order and sign it in order to correct some of the evils that now exist. But if this Bureau is in the Executive Office of the President those regulations will never be questioned. They will be just like the regulations of the Bureau of the Budget; they are questioned, but they are rarely ever overruled by the President.

Mr. HOLIFIELD. I can certainly see the weight of the argument you present here, Mr. Manasco. However, you have been on Capitol Hill long enough to know that we cannot always move the whole distance in legislation.

Mr. MANASCo. That is correct.

Mr. HOLIFIELD. And we feel that the first things must come first, and in this bill we are trying to pool together certain operating agencies now existing which have to do with procurement, warehousing, custody, and so forth of supplies and properties. Now it may be that we can go further than the bill that we are considering goes. We will explore the possibility certainly of going just as far as we can. Certain parts of this reorganization must be done by substantive legislation, as you know, and some parts of it can be offered to go in the reorganization plan. We are trying to get grouped together certain functions and certain authorities, as many as can be done at the present time, realizing that there are many complicated facades of Government.

Mr. MANASCO. Mr. Chairman, I think it is most important that some legislation be enacted at once, and if you cannot go as far as I suggest, I certainly urge the adoption of the bill before you. I hope that we can go further.

On page 11 of this bill

Mr. HOLIFIELD. Before you get to that, Mr. Manasco; recommendation No. 1 in this report states:

The Commission recommends that responsibility for these three internal service operations should be placed in an Office of General Services under a Director appointed by the President.

We are trying to bring together the Bureau of Federal Supply, the Public Buildings Administration, and the Federal Works Agency, into one group. As to eventual placements it may not be possible in this bill to follow through all placements.

Mr. MANASCO. Well, of course, I realize that the major part of the recommendation of the so-called Hoover Commission can be accomplished by administrative action and under reorganization plans. I doubt that the responsible agents of the President have had an opportunity to study the recommendations of the Commission and put those recommendations in a reorganization plan. Unfortunately we