Part 22

Now what a ridiculous situation that is and yet that is what has pertained from the beginning of Government. We have forty-one independent governmental departments and establishments and each of them has been going on its own way and the result has been chaos in business, absolute chaos. It is a remarkable thing that here for the first time in the history of the Government you have got together the elements to determine the proper administration of this most important matter of the care of the sick and the disabled among the veterans of the war. For the first time it is possible, by this juxtaposition, to properly consider policies to prevent duplication, to devise ways and means and it is a comment upon the terrible conditions under which the business of this Government has been transacted, and that is the first instance where you could get them all together to discuss a coordinated policy. That has been so with everything. The meeting never would have gotten together, you never could have gotten together physically in connection with this thing unless you had been ordered together by the use of the Executive power of the President of the United States. Now don’t get that out of your head,—that underneath this reorganization of government, which is not to be effected, but which has been effected in this routine business, there is the idea of force, and if the idea of force was not there we would not have gotten anywhere in connection with the securing of these results, which small as they are, represent an immense advance upon the old situation. I speak now from the standpoint of the accomplishment of these coordinating boards,—not as predicting something that is going to be done, but of the result of that which has been done during the last six months through coordinating agencies such as your Federal Board, established by the President of the United States through the use of his authority and running the routine business of the Government for the first time upon a business basis.

I make this distinction (for Mr. Burke, for instance) as some misapprehension may be had in connection with this matter of policy. The Budget Bureau, is not concerned with policy save that of economy and efficiency. We are concerned with the routine expenditure of money, of proper conduct of routine business. It is our business to see that when money is appropriated by Congress along a certain line or policy with which we have nothing to do, that that money is spent as economically and as judiciously and carefully as possible in order to secure the greatest results along the line of the policy imposed by Congress.

If Congress as a matter of policy should pass a law to put garbage on the White House steps, it becomes our duty, regrettable as it might be, to advise Congress and the Executive as to how the largest amount of garbage may be most expeditiously and economically spread on the White House steps. And that is why we are safe in demanding what is absolutely necessary, in every business, in routine matters,—a centralized authority. There is no democracy in a properly organized business so far as routine business is concerned. It is a monarchy, and if the sense of responsibility on the part of the agent to the man at the head of the corporation, who is responsible for the policy, is lost, the business goes to pieces, and, if a private business, you go into the hands of the sheriff.

The trouble is that in the past the Presidents of the United States have not done their full duty and assumed the control of the routine business organization of Government. The result is, as is always the case, with a private or public organization, that when the money is spent by parties interested alone in spending the money, the plan of the unit over which the spending head presides takes precedence over the plan of the organization as a whole.

Now that has been exactly the situation in the United States up to this time, and in dollars and cents, to say nothing of the matter of the use of facilities, there has been a waste that is incalculable in the past.

Now, for instance, take this. All this is preliminary but it is very important. Let me talk about human nature in connection with this matter of taking order,—this matter of jealousy of prerogative. I sometimes think we ought all to take a course of study in human nature. I sometimes think that while in the A. E. F. charged by the Commander-in-Chief with this same job of coordinating separated services, the independent services of the Army in connection with the unified business plan of the A. E. F., and afterwards in trying to couple up the allies in the same line of endeavor, I had a better chance than most people to see in its full majesty,—if you choose to look at it that way—that desire for absolute independence,—that willingness to subordinate practically everything on earth to hold power which is characteristic of human nature.

When you have to approach independent power, to induce voluntary surrender, I have found you might as well give it up in advance. There is nothing a man holds to like this right to exercise power, and the best illustration of that is shown by the fact that the greatest war of all ages was fought for four years without a central command. Napoleon’s 44th maxim in war was that nothing is more important in war than a unified command, under one chief. Everybody knew it, but it was not until the unnecessary loss of hundreds of thousands of lives and billions of dollars worth of material that Great Britain bent its pride and accepted that plain, common-sense provision of unified command of the allies under Foch. Not until the fourth year of the war when the allied cause faced annihilation was such a plain, common-sense provision as that for central command possible to be made for the allies, and the certainty of annihilation alone made it possible.

Now do you think it is any different in connection with the independent jurisdiction of these Government Departments, from the independent services of the Army?

They talked in the past about Interdepartmental Boards, to correct this old chaos, when they had no Executive leadership. An effort was made from time to time by Interdepartmental Boards, acting as a committee without relinquishment of the independent authority represented to undertake some of these reforms, the necessity of which everybody saw. Nothing was ever done to amount to anything. Why? They would meet together and talk and outline the situation and necessity for action until some question came up where somebody was going to lose control of something or a part of his jurisdiction by some coordinated action for the benefit of the whole Government. Then immediately the whole thing died out and nothing was accomplished practically by any Interdepartmental Board, where anything vital had to be given up by one of the independent members of it, whose jurisdiction and power would be cut down in the interest of the common plan of the Government.

When the President of the United States assumed this central control of routine business, he did what any man would do in connection with a private corporation; he called together in conference the business administration,—everybody connected with the business of the Government as head of department or independent establishment—Cabinet Officers correspond to Vice Presidents in a business corporation. Of necessity they had allowed this disgraceful system of chaos and extravagance to go on. It was not their fault any more than it is the fault of you gentlemen, who have been running along independent lines, because you were not joined together in a system operating under a central authority. We all were properly subject to the indictment of loose business methods because the President of the United States had not imposed a unified plan and system over us nor had he created the machinery by which this plan would be carried into effect, as he has since done.

In connection with surplus supplies, every department formerly was selling its supplies in the open-market, and other departments were buying the same kind of supplies in open market. In a number of cases speculators would come and buy our public sales material from one department to sell it to another department at two or three times the price. Real estate was being leased in cities right along from private owners, when the Government had vacant property to rent. This was the custom also in connection with motor transport. If any Department wanted something moved and did not have motor transport, it would go out and hire motor transportation. There was no machinery by which the empty motor trucks and idle men of the other departments could be used.

When goods were to be shipped, everybody would route them as they pleased. There was no unified central authority which could deal with the services as a whole as regards the classification of freight and the whole transportation question.

The same thing existed in the making of contracts.

The same thing existed in Government purchasing. There was competition between the Departments, the Departments themselves not being coordinated. In the Treasury Department alone we found 18 separate points of purchasing activity. Everything was run in Government business as if it was composed of 41 separate corporations. How were things changed for the better? It is all simple enough. It all depended on the President because he alone had the authority to impose the methods of coordinating and controlling this great general business, just as he is coordinating these great activities here today through this Board, presided over by his appointee, General Sawyer, a co-ordinator.

The plan which the President adopted was simple enough,—just what would be done in any business organization—without asking for any additional legislation for additional employees, but by simply taking from the body of the employees, officials of the United States, those men especially qualified by knowledge and experience to act as his agents, and then creating the machinery through which they could transmit his policy and plan of unified business to the general organization.

It is the simplest thing in the world, and the only possible objection I have ever heard was urged the other day where it was said that the detail of Army and Navy Officers for this central work by the President might not result in giving him the benefit of absolute impartiality of judgment because of their former connection with the War and Navy departments. That nonsense!

For instance, in my bank,—supposing I wanted to take a man from the Discount Department, from the Foreign Exchange Department, or the Real Estate Department,—what folly to say that I would be justly afraid that he would not be my loyal and faithful agent in the imposition of a plan for the interest of the institution as a whole because of his former connection with those departments of the bank. What folly to say that the President of the United States with all his power over personnel can not receive from men detailed for co-ordinating work the same loyalty as he would receive from men appointed from the outside to come into this complex machine. And I say now that the plan must stand or fall upon that proposition. Regarding Colonel Smither, the Chief Coordinator, or Commander Stanley, or any of these men who have been connected with the Army or Navy,—so far as this work is concerned, as agents for the President of the United States, they are as independent as if they had never been in the Army or Navy. If anybody thinks they are not, let us give him an example. We have not found anything but cooperation from the heads of these departments and the heads of these services because their personal interests lie parallel now with the unified plan of the government since the President of the United States to whom they are responsible, is behind that plan.

If the President becomes indifferent,—if he loses his eyes, and ears and fingers in matters of routine business in the shape of the Chief Coordinators of the Boards,—if he lets them drift, immediately there will come the effort from you and everybody else to pull to pieces this coordinating machinery which alone is able to impose a unified plan upon the governmental business.

Now why is it necessary for you to accept, without mental reservation, the necessity of the existence of this coordinating board under which you act and the authority of the Chief Coordinator of that board as representing the President? Let me say in connection with this that the rights of the independent departments and establishments are jealously regarded under these executive orders.

What I want to impress upon the minds of all is the necessity of these co-ordinating boards to enable you to do your work properly.

Take it in ships. In coordinating shipping transportation, you have got to have Mr. Weeks, Mr. Denby and Mr. Lasker in contact in connection with a decision involving the economical use of ships. How can anybody get them together without the authority of the President? Suppose I was expected to call them together without the authority of the President. I would go to Mr. Weeks for example and wait until the Senators were through seeing him, and then perhaps because of his personal friendship persuade him to go over with me to see Mr. Denby. When we had seen Denby how could we get the two together with Lasker? You could not get anywhere in this co-ordinating work without a delegated authority from the President to compel contact between high officials.

In connection with this great work of yours in which you spent last year three-fourths of a billion dollars, you cannot have it run right without the existence of this co-ordinating Board,—without that authority to make a bird’s-eye view of the whole situation,—without that authority to say why this building, for example, is unnecessary, because there exists a superfluity of this sort of building in another department. What’s the use of endeavoring to catalogue those activities in which there is duplication, in which you have got to have the bird’s-eye view, and would never get proper action taken, unless you have in existence this Board created by the authority of the President!

In connection with the rights of your department, for instance, there is preserved for you at all times in connection with the coordinating order of the Federal Board of Hospitalization, a right of appeal to the President of the United States. If this Coordinating Board interferes to such an extent with the plans of your unit that you think the disadvantage so great that it counterbalances the beneficial effect to the government as a whole, the right of appeal to the President is with you. But for the first time in the government, as you know, there will be presented to the President by the Chief Coordinator the interests of the government treated from the standpoint of the Coordinating Board, so that the President of the United States in making his decision on your matter has the strongest possible statement of the needs of the unit from you, and the strongest possible statement of the needs of the government as a whole from the President of the Board. But the final authority, of course, is in the President of the United States and he will exercise it. In all of these orders the right of the head of the independent unit to a proper examination, by the supreme authority, of his plan is preserved, and it has been so in connection with all of these coordinating agencies and with the Director of the Budget.

Let me tell you something as to the spirit of cooperation shown. I have never had a contest before the President with a cabinet officer or head of a department in connection with a coordinating action. I have never had one for this reason. Take in connection with the transfer of ships,—we have independent agencies for the examination of conditions. We have the right, as agents of the President, of obtaining information from any bureau chief or head of a department.

We have, through Colonel Smither’s wonderful organization of course, the means for securing essential knowledge about these things.

Regarding ships,—we asked the Navy the other day for a couple of mine sweepers for the Coast and Geodetic Survey. They refused. That was always the case in the old days. Of course, everybody looks out for the interest of his own department. Well I called over one of the Assistant Secretaries of the Navy, and gave him a bird’s-eye view of the situation.

They had 49 mine sweepers; and they were going out of commission. If they went to the Coast and Geodetic Survey, they would be kept in commission and would not deteriorate so rapidly. What is more, if they didn’t go to the Geodetic Survey, the United States would have to ask for a million dollars to build new ships.

That matter was taken back and proper attention given to it with this knowledge of the whole situation and the Secretary of the Navy joined in the request that the ships be transferred.

It was not the Secretary of the Navy who had really been responsible for the first decision. It was some fellow along down the line, without the bird’s-eye view, who has been safe for a hundred years from the eye of a central authority, thinking in terms of the whole government—doing what he believed his duty, I admit, in directing things for the best interests of his unit, but who, without the bird’s-eye view would have thrown the Government into an unnecessary expense of a million dollars.

It then developed when the Coast and Geodetic Survey people went to get the mine sweepers, that they were in process of repair; that the engines were disassembled. Now the Coast and Geodetic Survey had no appropriation available for repairing work and so the Navy said, “We won’t spend our money on those ships.”

“Why?”

“Because the President of the United States told us to be economical.”

Now supposing there had not been in existence an agency acting under the President, such as the one here presided over by General Sawyer which could see what was really involved in that action on the part of the head of that subordinate unit of the Navy. Because the Navy wanted to save a repair bill of $10,240.00 the Government would have spent unnecessarily $1,000,000 for new ships. Do not think that was an unusual case! It was almost always so in the old days.

Now nobody has been more anxious than the Secretary of the Navy to cooperate in those matters but he must have information,—and you must have the information,—to enable one to cooperate. All that was necessary for me to do was to write to the Secretary of the Navy, that unless these ships were repaired out of the Navy appropriation at a cost of $10,240 we would have had to ask for a million dollars appropriation for new ships. But what if that information had not been given?

The existence of these agencies is necessary to enable this Government to be run on a business basis. I have given you a simple illustration in connection with the ships. We transferred thirteen ships with the acquiescence of the heads of the departments concerned by simply developing the bird’s-eye view of the situation without ever taking the matter up with the President, except for the issuance of the Executive order by agreement.

The patriotic head of a unit really welcomes this system by which he is given the information which enables him to run the activities of his particular institution in the interest of the Government as a whole.

I repeat you must have that bird’s-eye view of the necessities of the Government as a whole, which alone you can secure through the authority of the President as exercised through the Coordinator of the Board you have here. It is absolutely necessary that there should be no withholding of the spirit of cooperation and loyalty to your Coordinator. There should be no feeling that your independent jurisdiction is going to be unnecessarily curtailed and interfered with. There is the right of appeal, and it is just as important to the proper functioning of the whole governmental business machine that you have courageous defense of the department unit as you have courageous defense of the policies of coordination.

There is no proper room for friction; and so far as the Budget Bureau is concerned and the coordinating agencies headed by Colonel Smithers, we have had a minimum of friction with the departments. There have been transferred over $112,000,000 dollars worth of property between these departments within the last six months. $100,000 per year is being saved in the comparatively small thing right here in the District of Motor transportation.

Anybody who stands against the principle of this thing is a man, in the first place, who is not intelligent. He is a man in the second place who is not loyal; and he is a man, in the third place, who is in danger, in view of the accomplishments of this coordinating work. What excuses are there for anyone not to give his loyal cooperation to the President of the United States, who, for the first time, has undertaken to be responsible for a correct system of routine business?

One other thing in connection with the spirit of economy:—the President of the United States has asked it. He asked it here in the first meeting of the Govt. business organization last June at which some of you were present. That request of his has received response. I find over the country that for the first time in government, economy has become fashionable, and extravagance dangerous; and all over the country, in the post office service, the Army service—in all Govt. activities. There is the spirit of loyal cooperation under the leadership of the President in the matter of economy.

We know, too, what you have been trying to do in that way in your own service is resulting in an immense saving to the Government.

What we need are men in authority to help us find out where savings can be made. We have only scratched the surface, but it is possible now, as we get the business of the Government in the proper, organized shape, to determine where the limit of economy is. We do not know yet, because our reorganization of routine business methods has not gone on long enough. We have only been in operation four or five months. It will be a year or two possibly before the extent of economies can be determined.

But in directing the prevention of duplication, etc., in the general attitude of being desirous to save, as opposed to the old attitude of being desirous to spend,—all that means that the Government of the United States can be run more economically than at present provided the President of the United States gives his attention to the business organization and he will.”

General Dawes concluded his remarks, and as he walked from the stage General Ireland made a suggestion that he say something in connection with coordination within the limits of a department itself. General Dawes then said:

“General Ireland asks that I speak about a most important matter. We cannot get general coordination among the departments unless each department is coordinated within itself. For instance, we found that in the Treasury Department there were about eighteen separate points of purchasing activity. No one man was in touch with all these agencies. The representative of the Treasury department on the coordinating board, therefore, could not speak for the eighteen agencies. Therefore, each institution must coordinate within itself in order that its representative can properly speak for it on the coordinating board, to say nothing about the desirability of coordination from the standpoint of the business of that particular department. Therefore, get your units coordinated.