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White House - Congressional Leadership Meeting, 3/18/69 (includes minutes and Hartmann notes)
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White House - Congressional Leadership Meeting, 3/18/69 (includes minutes and Hartmann notes)
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Robert T. Hartmann Papers
House of Representatives Subject Files
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U.S. Postal Service. 7/1/1971-
Banks and banking
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1969
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These documents were scanned from Box 106 of the Robert T. Hartmann Papers at the Gerald R. Ford Presidential Library.
CONGRESSIONAL LEADERSHIP AGENDA
March 18, 1969
8:30 - 8:50 a. m.
I. One-Bank Holding Company Legislation
8:50 - 9:10 a.m.
II. House Vote on Increase in the Debt Ceiling
9:10 - 9:30 a.m.
III. Consolidation of Departmental Field
Regions
FORDS i LIBRARY SERVIC
DIARY OF WHITE HOUSE LEADERSHIP
MEETINGS -- 91st CONGRESS
March 18, 1969
The President entered at 8:35 and asked Mr. Kennedy
to explain the one-bank holding company legislation.
Kennedy asked Dr. Charles Walker to do so. The
Administration bill has the unanimous support of
Treasury, Justice, Budget, Council of Economic
Advisers and the three banking agencies. He read a
Presidential Message on the Bank Holding Company
Act of 1969. The legislation intends to build upon
the 1956 Act, in which President Eisenhower took
the lead. The 1956 Act applies only to holding
companies with more than 1 bank. The 1969 Act would
apply to 1-bank holding companies of which there are
approximately 800 now. It would contain a grandfather
date of 1968 but require corporations acquired there-
after to confine themselves to financial and fiduciary
functions. Kennedy endorsed Walker's remarks and
said that it was important to check the growth of
conglomerates.
Widnall agrees with the legislation but disagrees with
the approach. He believes Treasury should send the bill
with its own message to Congress rather than have the
President message the bill to Congress. The point is
that this would confine the struggle to Patman and
Treasury rather than Patman and the President. Walker
said Patman's bill and this bill are not too far apart, but
Patman's would require complete divestiture.
RMN inquired if Congressional Leadership agreed with
Widnall. Dirksen asked if this was intended to be an
opening gun against all conglomerates and cited a case
to illustrate some of the beneficial effects that can flow
from mergers. Walker said "no." RMN said that admini-
stration policy would be devised on the basis of the effect
upon economic efficiency and the interests of the consumer.
Ford said that some legislation is bound to pass, and in
FORD
GERALD
LIBRARY
2
such case, it is not necessary for the President to make
it a personal privilege battle. He agreed with Widnall.
Bennett agrees with Treasury that the President should
send a message. Perhaps a second message could come
from Treasury. He and Sparkman will introduce the
Administration bill. Taft said that his trip home last
weekend proved that people were concerned about the
threat of conglomerates. He suggested that the message
be amended to broaden the gaugh. Rhodes agrees that
the public is concerned about the danger of business
bigness growing out of mergers. Scott suggested that
the message eliminate the word "oonglomerates" so that
it would not be interpreted as a broadside against all
mergers. Allott agreed with Taft and Rhodes.
Byrnes reported that the Rules Committee will meet this
morning and will likely issue a closed rule for debate
tomorrow on the debt ceiling increase. Ford said that
the GOP Conference in the House this afternoon will
smooth the way for the legislation. He expects 120
Republican votes.
RMN talked about the difficulty of reducing budget items
and inquired what expenditure limitation the Appropria-
tions Committee is likely to put upon appropriation bills.
Ford said that House Republicans could not gracefully
change positions on expenditure limitations which were
imposed on all bills last year. He also warned that it
would be more difficult for Republicans to justify sup-
porting a second debt ceiling increase. Dirksen said
that Proxmire will propose reducing the 10% surtax to 5%
with a $15 billion spending cut. Byrnes said that an
overall expenditure limitation was not as desirable as
a selective limitation. This is believed to be Mills's
attitude. Yet, he believes that an overall limitation would
be tactically useful when surtax extension is debated.
Mayo said that "little ceilings" are more restrictive than
an overall ceiling but did not dispute that this might be a
FORD is LIBRARY GLAVID
3
desirable discipline. Williams suggested that the Presi-
dent ask Congress specifically for an expenditure limita-
tion. He favors a general rather than a selective limita-
tion. He also feels the surtax will never be extended
unless there is a dramatic spending out first. Mayo
called attention to the fact that even an overall limitation
has little flexibility if it is punctured by specific
exceptions.
RMN said that much money can be saved by personnel
cuts. There are too many people in every agency. "If
you let personnel grow like topsy, the programs they
administer grow." He illustrated his point with the White
House photographers who are no longer around. He further
said that his European trip cost $$00,000 a week less than
similar Presidential trips simply because he insisted upon
a reduced staff.
Ford said that if the Administration expects to get Repub-
lican help in extending the suttax, it should recommend an
overall expenditure limitation. Scott said that further
savings can be made "by doubling up the duties" in
foreign embassies and installations. RMNaannounced
that Marshall Greene will be the new Assistant Secretary
for Far Eastern Affairs, and he recalled that when Greene
was Ambassador to Indonesia, he cut the staff by 75%.
Cramer suggested that ranking Republican Members on
legislative committees should be advised in advance of
major spending out proposals.
Blount unveiled a new plan to save money in the Post Office
Department. The Johnson budget shows a $200 million
surplus in the Department account. This is achieved by
subtracting $695 million in public services, adding $519
million in new revenues from ratelincreases and ignoring
the $280 million Phase III pay increase scheduled in July.
He used charts to illustrate the fact that most of the Depart-
ment's work is done in six hours with peak periods between
4
6:00 and 9:00 p.m. and between 3:00 and 6:00 a.m. If
these peaks could be leveled out over a 24-hour period,
great savings could be achieved. He will propose a new
system including a priority mail stamp. Users would pay
a premium for premium service. All other mail would be
put in the deferred-handling category and handled outside
the peak periods. This plan might be frustrated if the
Department accepts another proposal to merge first class
and air mail. For that reason, and because such a merger
would work a net revenue loss, the merger is not being
approved at this time.
Ford asked about rate increases on junk mail, pointing
out that voters feel that they are already paying more than
their share when they buy first class stamps. Blount
indicated that consideration would be given to the comment.
Wilson asked if the unions would approve a proposal which
would mean a large reduction in personnel. Blount said that
cuts would be absorbed by attrition. The Vice President
said that the union leaders are worried about the loss of
dues-paying members. Ford suggested that the timing was
bad and asked that an announcement be postponed until
after debt ceiling legislation is desposed of.
RMN said that any man who had survived a scrape with
Congress should have no difficulty grappling with the unions.
Blount replied that the "Congressional barbecue" was good
training. RMN said that we are going to make him a college
president next. Blount replied, "There are a lot of people
trying to get rid of me."
Hughes of Budget outlined the proposal to reorganize the
regional field offices of the federal agencies in accordance
with the paper dated March 18 attached hereto. Senator
Bennett asked if the plan wastto unify all agencies in each
region or just to fix identical geographical jurisdiction.
Hughes replied that it was the latter; that there would be
GERALD FORD LIBRARY
5
no central boss; rather, that Regional Councils would under-
take to coordinate the work of all agencies within the Region;
that this would be an initial step toward decentralization of
responsibility and decision-making. At this point, RMN
intervened to suggest that Members of Congress should
promptly report the names of any regional officer who is
playing partisan politics in his office. Ford recommended
that any announcement about this proposal be delayed until
after the Reorganization Act passes Congress today. Cramer
suggested that Republican Members who will the some
regional offices under the new plan should be notified in
advance.
RMN raided the question of student unrest again. He invited
comment around the table. He announced that he would meet
later today with the Attorney General and following that
meeting, would issue a press statement. Ford said that this
course is right and popular; the law is already on the books
to deny federal funds to student violaters; that the previous
Administration did not enforce the law and this Administration
will. Taft said that he raised the question at a biracial meet-
ing last week and was surprised to find that there was "no
feedback." Dirksen said that this is the worst type of anti-
social conduct and should be dealt with firmly. The Vice
President pointed out that the practice has reached the high
school and junior high school levels. Allott said that he has
an 8-minute film of what happened at the University of Colorado
which he would be glad to make available to the President;
that he was ashamed of his alma mater because it did not deal
firmly with the problem that he was convinced that the problem
is more than student unrest and is "not dissimilar to the pattern
in Hitler Germany." He said that Wolff, the German radical
who recently walked out of a Congressional hearing, should not
have been granted an American visa. Mrs. Smith said that the
emphasis should be placed on the Presidents and Trustees of
the colleges rather than the students themselves. Scott said
that as a matter of semantics, it would be well to equate student
unrest with fascism, the effort of a small minority to impose its
will on the majority at the expense of the rights of the majority.
GERALD FORD LIBRARY
6
I said that pursuant to the theme Scott has suggested,
the President might do well to explore with the Attorney
General the possibility of applying the Interstate Anti-
riot Law passed by the last Congress. The President
said that this would be discussed but that the problem
was the difficulty of assembling "hard evidence." He
used these words after I put them in his mouth. I did
not pursue the point, but I was tempted to say that this
is the same answer Ramsey Clark gave whenever anyone
suggested that he prosecute the more blatant leaders.
Civil attorneys can afford to pick and choose the cases
they try and select only those they are likely to win.
Prosecutors shouldn't claim that option. If they have the
evidence that convinces the reasonable mind beyond a
reasonable doubt, they should prosecute and run the risk
of losing a few cases. The people will respect a Justice
Department which tries and fails but not one which is
afraid to try.
The President adjourned the meeting at 10:15 a.m.
RICHARD H. POFF
FORD
FOR IMMEDIATE RELEASE
MARCH 18, 1969
OFFICE OF THE WHITE HOUSE PRESS SECRETARY
THE WHITE HOUSE
PRESS CONFERENCE
OF
SENATOR EVERETT MCKINLEY DIRKSEN.
AND CONGRESSMAN GERALD R. FORD
AT 10:34 A.M. EST
SENATOR DIRKSEN: Good morning, ladies and centlemen.
The first object of discussion this morning was the one bank
holding. That has been bouncing around for quite some time.
It is evident now, of course, that there will be legislation
in this field. There is a big interest in it, both in the
House and in the Senate.
To some extent it has been popularized by Congressman
Patman of Texas. He has introduced a bill. I believe Senator
Proxmire of Wisconsin has introduced a bill.
The Administration, of course, is very much interested.
There will be a bill and the Administration will support a
bill. I fancy that Senator Bennett and Sparkman will probably
introduce a version that can conceivably get the support of
the Administration.
It is an important thing from one economic stand-
point, certainly, and that is the concentration of power in
the whole economic and industrial and financial field today.
It has brought a sense of apprehension and alarm in a great
many quarters.
I have looked at it over a period of time, giving
a little attention to it, so we can see now that there has
been a rapid progressive increase in a number of bank holdings,
and obviously, it is going to cry for attention one day soon.
So that is one field of endeavor in which we are sure
there will be legislation in the not too distant future, and
if it is the right kind of legislation, certainly it will
have Administration support.
CONGRESSMAN FORD: Just to follow up on what
Senator Dirksen said, there is the Patman Bill and there
will be the Administration Bill in the House. In some
respects, the Administration Bill is stronger than the
Patman Bill and there are some technical differences between
the two otherwise.
I am confident the House will pass a bill, and we
will wholeheartedly endorse the Administration proposal,
because we think it is strong in important areas.
MORE
(OVER)
GERALO, FORM NEBRARY
- 2 -
There was another matter discussed. The President
is meeting with the Attorney General and with the Secretary
of HEW this afternoon on the student riot problem, and its
various ramifications.
The previous Administration did not implement the
legislation that the Congress provided during the last session
to withhold funds from those students who are involved in
campus riots. Neither did the last Administration use as
effectively as we think they should, the anti-riot legislation.
But there will be this conference today and the
President will have a statement later this week in reference
to the overall problem. It is our general impression that
these militants, small in number, are really using Facist
tactics in depriving the rest of the students the opportunity
to get an education.
I think the whole approach of the Administration
will be aimed at this Facist group that want to deprive
students of an opportunity to get an education.
SENATOR DIRKSEN: There was rather broad Leadership
participation in this subject, and the discussion went around
the table. The President is deeply interested and obviously
SO. I think there was a general feeling that the type of
demonstration that is carried on to the extreme is absolutely
anti-social in nature. If it is criminal, of course there are
criminal statutes to deal with it. Whether it is in the
category of a misdemeanor or a felony, in any event it is
crime.
But in so many cases, it is anti-social conduct,
and there has to be a deterrent for it. Now what is the
deterrent? Perhaps the withholding of these loans or
denying forebearance on these loans, or any other economic
weapon that maybe available in order to deter this
action in the extreme.
So the President has been discussing it with a
number of people, and he will be prepared to say something
on this subject a little later.
CONGRESSMAN FORD: We also discussed the ABM
proposal by the President, and there was overwhelming
support on behalf of the Leadership for the President's
program. I can say from my travels in Michigan over the
weekend that the public reaction generally, as far as I
could detect, was favorable to the President's recommendation.
SENATOR DIRKSEN: I think we ought to recognize the
fact that this morning there seemed to be virtual unanimity
on the ABM. There may be an exception or two, but virtually
there was a unanimous attitude in support of the President's
position.
I know there has been a tendency to raise the
question as to whether there will be a battle in the Senate.
Obviously it will be widely discussed, but when you think in
terms of a battle, I am not so sure it will be a battle,
because the argument is going to be pretty substantial
in behalf of this proposal.
FORD & LIBRARY GERALD
MORE
- 3 -
CONGRESSMAN FORD: In light of the fact that
tomorrow the House will consider the debt limitation legisla-
tion, we discussed in considerable depth the viewpoint of
the Administration in reference to the fiscal situation.
The Director of the Bureau of the Budget was present. He
pointed out that they are working on specific reduction
in various departments.
There is the distinct possibility that we will
have an overall ceiling on expenditures which will be very,
very helpful and beneficial in convincing the American
people that the Administration really means what it says when
they talk about trying to extricate us from the serious
financial problem we are in and the inflationary impact of
runaway Federal budget problems.
SENATOR DIRKSEN: One can hardly talk about the
public debt without thinking of the corollary things that
go with it. For instance, that means expenditure; it means
the overall budget; it means whether there will be a surplus
or a deficit.
So this whole matter was rather widely discussed
this morning. Obviously there is going to be a search
for economies wherever they can be made. It will reasonably
selective, and on the other hand, you hope it will be
substantial.
The President is receiving the full cooperation
of every department head and every agency head in this field.
You have to have cooperation in order to get it done.
In addition thereto, there has to be a cooperative
spirit on the part of Congress, because we undertook this in
the predecessor Administration when we passed that Financial
Reform Act, including a $6 billion expenditure cut, plus
the surtax.
Now both of these will be coming up again, so what
can you exorcise out of the budget? There you have the
Budget Director at your elbow, and I pretend no figure this
morning to indicate whether it will be "X" bill or "Y" bill
or "Z" bill, because it is just a little too early, and
besides the Appropriations Committee of the House, where these
bill start, is only now beginning to get its teeth into it.
But the whole economy issue will certainly not be
lost, and we will have virgorous attention not only on
Capitol Hill, but in the Executive branch and with the
departments.
GERALD FORMS
O
Congressman Ford, can I ask you about your
statement on the past Administration's failure to use the laws?
Can we infer properly from this, that the current Administration
is not considering further laws to curb student excesses on
the campus?
CONGRESSMAN FORD: I would not preclude additional
legislation, but we now have statutes which can be used; one
referring to the Department of HEW and the other referring to
the Attorney General. For that reason the President is
meeting with both, and I think you will find in the President's
message this week some real action in both areas.
MORE
(OVER)
- 4 -
0
When will the Administration's legislation
on one bank holding companies be introduced?
CONGRESSMAN FORD: I think it will be made available
for the Committee sometime this week.
O
Mr. Ford, the previous Administration took
the position, I believe, that the legislation written
providing that you could deny funds to a student convicted
of some misdemeanor, would not hold up. Are you satisfied
that it would not work?
CONGRESSMAN FORD: I think the legislation passed
by Congress will work, but you have to have a will in the
Executive Branch to make it work. I think this Administration
has the will and if there is any need for modification or
change in the law, the Administration will ask for that
authority.
SENATOR DIRKSEN: I have no reaction that the previous
Administration ever said it would not work. First of all,
you are on good legal ground. This is a benefit issued out
of the Federal Treasury, and then the Congress and Executive
comes into play, so there is no question about the right
to do it if we want to.
I think they were timid in the previous Administration
in not quite putting their hearts into it, but it has to be
done, and this Administration is going to deal with it.
0
I thought Secretary Cohen had taken the
position that it would not do the job.
SENATOR DIRKSEN: Secretary Cohen is just one. I
don't know how much of an exploration he made about it, but
we undertook to point out that we were for it, and did make
that case up on the floor and in the Finance Committee.
0
At the economic discussion this morning,
was it the consensus of the Leadership that the surtax must
be extended?
CONGRESSMAN FORD: There was no specific discussion
on this point. The emphasis was that the Administration was
going to work with the economy block in the Congress to try
to reduce extenditures; one, so that we could justify the
debt limination, and two, increase the Administration's
efforts against the inflationary impact we are faced with
right now.
GERALD FORD LIBRARY
SENATOR DIRKSEN: I will give you a personal reason
for it, without attributing it to anybody else. If the surtax
yields between $10 billion and $11 billion, and you let it die,
then there is a $10 billion or $11 billion hole in the receipt
of the Administration, so how are you going to fill up that
hole unless you find $10 billion that you can delete from
the budget to even break even, let alone be thinking in
terms of a surplus.
So it speaks for itself, and if I were speaking for
myself, you could not throw it overboard unless you find that
money elsewhere.
MORE
-5-
0
Do you think there is a chance of doing that?
SENATOR DIRKSEN: Of throwing it overboard?
O
Yes.
SENATOR DIRKSEN: Let me answer as a member of the
Senate Finance Committee. If you leave it to me, we will keep
the surtax.
O
There have been suggestions that that $10
billion or $11 billion could be obtained through raising
tax reforms.
SENATOR DIRKSEN: There has been sort, of amorphous
terms assigned here as tax reforms covering a great many things.
But as you know, tax reforms are very, very slow, and sometimes
when they talk about tax reform, they put it in the frame of
two or three years. You are dealing here with an instant
budget for a fiscal year that will begin on the first of
July, and perhaps you cannot await the reform process. You
have to have something in the duke. It has to be good, hard
information about that budget, and of course, that will be
available.
0
Congressman Ford, you mentioned a distinct
possibility, in your words, of another expenditure ceiling
in the coming year. Do you have in mind that the Administration
might propose an expenditure ceiling or that the Congress
might impose one on its own?
CONGRESSMAN FORD: It was discussed from both angles
and it was not decided whether the Administration would
recommend one or whether we, representing the Administration
in the House, would seek to impose one, but it was pointed
out that there are some benefits from an overall ceiling
rather than having individual expenditure ceilings of each
and every Appropriation Bill as they go through the House.
I think there is a very good argument that can
be made for a ceiling. I happen to personally prefer the
overall rather than the individual on each Appropriation
Bill, but no decision was made as to which avenue or which
approach would be made.
FORD i GERALD LIBRARY
0
How many billions do you have in mind? Do
you have any approximation?
CONGRESSMAN FORD: No specific figure was discussed.
I think there was a high degree of unanimity that it ought
to be a figure of somewhat less than that recommended in the
January budget, but I would not tie anybody to a specific
figure at this time.
0
Would the one bank holding company bill go
up as a Presidential message?
SENATOR DIRKSEN: Let us say that it would go up as
an Administration proposal, or Administration support, but
it could be either way, and I don't know if that is too material,
because of the importance of the subject.
THE PRESS: Thank you.
END
(AT 10:50 A.M. EST)
PERIOD - March 11 to March 17, 1969 (inclusive)
HOUSE ACTION
Wed. March 12 - Funds for Standing House Committees
By voice vote the House approved funds for 13 committees as follows:
Rules, Veterans' Affairs, Armed Services, Interior and Insular Affairs,
Judiciary, Merchant Marine and Fisheries, District of Columbia, Agriculture,
Ways and Means, Standards of Official Conduct, Select Committee on Small
Business, Science and Astronautics, Foreign Affairs.
Wed. March 12 - International Development Association
The House passed by roll call vote, 247 yeas to 150 nays, H.R. 33 to provide
for increased participation by the United States in the International
Development Association from $312 million to $480 million.
Prior to passage a motion to recommit was rejected by a roll call vote,
241 nays to 155 yeas.
Thurs. March 13 - Investigative Authority
The House by voice vote adopted resolutions giving the following standing
committees investigative authority for the 91st Congress: Post Office and
Civil Service, Government Operations.
Thurs. March 13 - Lumber Cost Investigation
The House agreed to H. Res. 306, to authorize the Committee on Banking and
Currency to conduct an investigation and study of prices of lumber and
plywood.
Thurs. March 13 - Parking Committee
The House agreed to H. Res 282, to create a select committee to regulate
parking on the House side of the Capitol.
Mon. March 17 - Consent Calendar (One Bill)
H. R. 4297 - Providing $350 thousand and extending for one year the
National Commission on Reform of Federal Criminals Laws
VORC LEBRARY
-2-
PROGRAM AHEAD
Tuesday - Suspensions (5 Bills)
S. 1058
- To extend the period within which the President may transmit
to the Congress plans for reorganization of agencies of the
Executive Branch of the Government.
H. R. 7206 - Salary Adjustment for Vice President and certain officers of
Congress.
H. R. 2669 - To amend the War Claims Act of 1948 with respect to claims of
certain nonprofit organizations.
H. R. 2171 - Relating to National Observances and Holidays.
H. R. 8438 - To extend the time for filing final reports under the
Correctional Rehabilitation Study Act of 1965 until July 31, 1969.
Wednesday and balance of week
H. R. 8508 - Establish limitation on National Debt (Subject to rule being
granted)
H. R. 515 - To amend the National Sehool Lunch Act and the Child Nutrition
Act of 1966 (Subject to a rule being granted)
agenda for WH meeting mar 18
Cramer - (1) Water Pall Control
in Committee
(GRF) aught to
this week
have another
sanking members
meetine last
Financing not
covered in bill
one
week of
(2) Environmental
fill-in
nur apr 31
EDA - Appaladia
coming up night
after Republican substated
receis
model Countryside
(3) Reaction ABM
Guest
(4) Budget Review
clausen 0 Harsha
reordering priorities
similar efforts in
other committees
Supplemental -6 6'70
(5) Pace of Legis Program
TOA
51058 (Reorg.)
Taft: 1. Labor Court idea
(Pres bill) endorsing Griffin
2. SST financing
EEERY
Crital to my district)
3. Space financing
Smith: 1. appointments
Wilson
1. need for national
Oceanog aphic agency
Ford
1. Merchant Marine Program
Martine adm
2. Student risters - HEW O Justice
FOR IMMEDIATE RELEASE
MARCH 24, 1969
Office of the White House Press Secretary
THE WHITE HOUSE
STATEMENT BY THE PRESIDENT
ON BANK HOLD COMPANIES
The Secretary of the Treasury, with my approval, has today transmitted to
the Congress proposed legislation on the further regulation of bank holding
companies.
Legislation in this area is important because there has been a disturbing
trend in the past year toward erosion of the traditional separation of powers
between the suppliers of money -- the banks -- and the users of money --
commerce and industry.
Left unchecked, the trend toward the combining of banking and business
could lead to the formation of a relatively small number of power centers
dominating the American economy. This must not be permitted to happen;
it would be bad for banking, bad for business, and bad for borrowers and
consumers,
The strength of our economic system is rooted in diversity and free
competition; the strength of our banking system depends largely on its
independence. Banking must not dominate commerce or be dominated by
it.
To protect competition and the separation of economic powers, I strongly
endorse the extension of Federal regulation to one-bank holding companies
and urge the Congress to take prompt and appropriate action.
#####
LIGHARY GERALD ? FORD
FOR RELEASE AT 11 a.m.
MARCH 27, 1969
Office of the White House Press Secretary
THE WHITE HOUSE
STATEMENT BY THE PRESIDENT
ON RESTRUCTURING OF GOVERN-
MENT SERVICE SYSTEMS
The Reorganization Act which the Congress has passed and which I am
signing today gives the President important tools in his effort to make
the machinery of government work more effectively. As a part of that
same effort, I am announcing today certain structural changes which I
am making in the systems through which the government provides impor-
tant social and economic services.
It was possible for me to take these particular actions without the authority
extended under the Reorganization Act. I announce them at this time,
however, because they provide specific illustrations of ways in which
we can make significant improvement in the quality of government by
making it operate more efficiently.
This restructuring expresses my concern that we make much greater
progress in our struggle against social problems. The best way to facilitate
such progress, I believe, is not by adding massively to the burdens
which government already bears but rather by finding better ways to
perform the work of the government.
That work is not finished when a law is passed, nor is it accomplished
when an agency in Washington is assigned to administer new legislation.
These are only preliminary steps; in the end the real work is done by
the men who implement the law in the field.
The performance of the men in the field, however, is directly linked to
the administrative structures and procedures within which they work.
It is here that the government's effectiveness too often is undermined.
The organization of federal services has often grown up piece-meal
creating gaps in some areas, duplications in others, and general inefficiencies
across the country. Each agency, for example, has its own set of
regional offices and regional boundaries; if a director of one operation is to
meet with his counterpart in another branch of the government, he often must
make an airplane trip to see him. Or consider two federal officials who
work together on poverty problems in the same neighborhood, but who work
for different Departments and, therefore, find themselves in two different
administrative regions, reporting to headquarters in two widely separated
cities.
Coordination cannot flourish under conditions such as that. Yet without real
coordination, intelligent and efficient government is impossible; money and
time are wasted and important goals are compromised.
This is why I said in the campaign last fall that "the need is not to dismantle
government but to modernize it. " The systematic reforms I announce today
are designed to help in that modernization process. I would discuss
those reforms under three headings: rationalization, coordination and
decentralization. It should be recognized, of course, that the three elements
are interdependent. Without one the others would be meaningless.
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I. The first concern is to rationalize the way our service delivery systems
are organized. I have therefore issued a directive which streamlines the
field operations of five agencies by establishing -- for the first time --
common regional boundaries and regional office locations. This instruction
affects the Department of Labor, the Department of Health, Education and
Welfare, the Department of Housing and Urban Development, the Office of
Economic Opportunity, and the Small Business Administration. The
activities of these agencies -- particularly in serving disadvantaged areas
of our society -- are closely related. Uniform boundaries and regional
office locations will help assure that they are also closely coordinated.
The eight new regions and the locations of the new regional centers are as
follows:
Region I (Boston) - Connecticut, Maine, Massachusetts, New Hampshire,
Rhode Island, and Vermont
Region II (New York City) - New York, New Jersey, Puerto Rico, and the
Virgin Islands
Region III (Philadelphia) - Delaware, District of Columbia, Kentucky,
Maryland, North Carolina, Pennsylvania, Virginia, and West Virginia
Region IV (Atlanta) - Alabama, Florida, Georgia, Mississippi, South
Carolina, and Tennessee
Region V (Chicago) - Illinois, Indiana, Minnesota, Michigan, Ohio, and
Wisconsin
Region VI (Dallas - Forth Worth) - Arkansas, Louisiana, New Mexico,
Oklahoma, and Texas
Region VII (Denver) - Colorado, Idaho, Iowa, Kansas, Missouri, Montana,
Nebraska, North Dakota, South Dakota, Utah, and Wyoming
Region VIII (San Francisco) - Alaska, Arizona, California, Guam, Hawaii,
Nevada, Oregon, and Washington
I am asking all other federal agencies to take note of these instructions, and
I am requesting that any changes in their field organization structures be
made consistent with our ultimate goal: uniform boundaries and field office
R.
locations for all social or economic programs requiring interagency or
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intergovernmental coordination.
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My directive also asks that the five Departments and agencies involved
provide high-level representation in cities where regional offices do not
exist. Such physical relocations as are required will be made over the next
eighteen months, with special efforts to minimize disruptions to the
programs, the employees, and the communities involved.
II. The second step in this reform process emphasizes coordination. It
calls for an expansion of the regional council concept from the four cities
where it presently operates (Chicago, New York, Atlanta, and San Francisco)
to all eight of the new regional centers. The regional council is a coordin-
ating body on which each of the involved agencies is represented. It offers
an excellent means through which the various arms of the federal
government can work closely together in defining problems, devising
strategies to meet them, eliminating friction and duplications, and eval-
uating results. Such councils can make it possible for the Federal
government to speak consistently and with a single voice in its dealings
with states and localities, with private organizations, and with the public.
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III. The third phase of this systematic restructuring of domestic programs
focuses on decentralization. I am asking the Director of the Bureau of the
Budget to join with the heads of nine departments and agencies in a review
of existing relationships between centralized authorities and their field
operations. Participating in the review will be the Departments of
Agriculture; Commerce; Health, Education and Welfare; Housing and Urban
Development; Labor; Transportation; Justice; the Office of Economic
Opportunity; and the Small Business Administration.
This review is designed to produce specific recommendations as to how each
agency: (1) can eliminate unnecessary steps in the delegation process;
(2) can develop organizational forms and administrative practices which will
mesh more closely with those of all other Departments; and (3) can give more
day-by-day authority to those who are at lower levels in the administrative
hierarchy. Decentralized decision-making will make for better and quicker
decisions-- it will also increase cooperation and coordination between the
Federal government on the one hand and the states and localities on the other.
Those Federal employees who deal every day with state and local officials will
be given greater decision-making responsibility.
Again, this action is a concrete manifestation of a concern I expressed during
the campaign: "Business learned long ago that decentralization was a means
to better performance. It's time government learned the same lesson. 11
Some of the reforms which I am announcing today have been urged for many
years but again and again they have been thwarted. This inertia must be
overcome. Old procedures that are inefficient, however comfortable and
familiar they may seem, must be exchanged for new systems which do the job
as it must be done.
The particular reforms I have discussed here are part of a broad and contin-
uing process of restructuring the basic service systems of government. The
reorganization of the Manpower Administration in the Department of Labor --
announced on March 13 is another example of this process. So are the
reforms which are being made in the postal system and in the Office of
Economic Opportunity.
I have established both the Urban Affairs Council and the Office of Inter-
governmental Relations in part so that the government could be better advised
on additional improvements in service systems. Further systematic
restructuring is on the way. Each reform, I believe, will have a major
impact on the quality of American government an impact which will
benefit all of our citizens in all parts of our country -- well beyond the
lifetime of this Administration.
The Federal government has been assigned many new responsibilities in the
last several decades many of which it carries and many of which it fumbles.
Many of the disappointments and frustrations of the last several years can be
blamed on the fact that administrative performance has not kept pace with
legislative promise.
This situation must be changed. The actions I announce today are important
steps toward achieving such changes. By rationalizing, coordinating, and
decentralizing the systems through which government provides important
social and economic services, we can begin at last to realize the hopes and
dreams of those who created them.
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