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No. 57 "Expanding Bureaucracy: A Study of an Expensive Violation of Campaign Pledges, Menacing to the Rights and Liberties of Citizens," July, 1935. American Liberty League. 400dpi TIFF G4 page images Digital Library Services, University of Kentucky Libraries Lexington, Kentucky Am_Lib_Leag_57 These pages may freely searched and displayed. Permission must be received for subsequent distribution in print or electronically. No. 57 "Expanding Bureaucracy: A Study of an Expensive Violation of Campaign Pledges, Menacing to the Rights and Liberties of Citizens," July, 1935. American Liberty League. American Liberty League. Washington, D.C. 1935. This electronic text file was created by Optical Character Recognition (OCR). No corrections have been made to the OCR-ed text and no editing has been done to the content of the original document. Encoding has been done through an automated process using the recommendations for Level 1 of the TEI in Libraries Guidelines. Digital page images are linked to the text file. iHauxiphlets Available â˜… Copies of the following pamphlets and other League literature may be obtained upon application to the League's national headquarters: Statement of Principles and Purposes American Liberty League Its Platform An Analysis of the President's Budget Message Economic Security Inflation The Thirty Hour Week The Pending Banking Bill The Holding Company Bill Price Control Yesterday, Today and Tomorrow The Labor Relations Bill How Inflation Affects the Average Family Speech by Dr. Ray Bert Westerfield The Bituminous Coal Bill Regimenting the Farmers Speech by Dr. G. W. Dyer Extension of the NRA The Farmers' Home Bill The TV A Amendments The New Deal, Its Unsound Theories and Irreconcilable Policies Speech by Ralph M. Shaw Is the Constitution for Sale? Speech by Capt. William H. Stay ton How to Meet the Issue Speech by William E. Borah The Supreme Court and the New Deal The Duty of the Church to the Social Order Speech by S. Wells Utley An Open Letter to the President By Dr. Neil Carothers The Revised AAA Amendments The Return to Democracy Speech by Jouett Shouse The President's Tax Program The American Bar The Trustee of American Institutions Speech by Albert C. Ritchie Two Amazing Years Speech by Nicholas Roosevelt Fabian Socialism in the New Deal Speech by Demarest Lloyd The People's Money Speech by Dr. Walter E. Spahr The Principles of Constitutional Democracy and the New Deal Speech by R. E. Desvemine Which Road to Take? Speech by J. Howard Pew The Blessings of Stability Speech by James W. Wadsworth Legislation by Coercion or Constitution Speech by Jouett Shouse Recovery by Statute Speech by Dr. Neil Ca-_r others mm * Jl AMERICAN LIBERTY LEAGUE NATIONAL PRESS BUILDING WASHINGTON, D. C. â˜… â˜… Expanding Bureaucracy A Study of an Expensive Violation of Campaign Pledges, Menacing to the Rights and Liberties of Citizens â˜… â˜… â˜… "We are not getting an adequate return for the money we are spending in Washington, or, to put it another way round, we are spending altogether too much money for government services which are neither practical nor necessary. In addition to this we are attempting too many functions and we need a simplification of what the Federal Government is giving to the people." Franklin D. Roosevelt, Sioux City, Iowa. September 29, 1932. AMERICAN LIBERTY LEAGUE T^lational Headquarters NATIONAL PRESS BUILDING WASHINGTON, D. C. â˜… â˜… Document No. 57 July, 1935 Expanding Bureaucracy â˜… "We are not getting an adequate return for the money we are spending in Washington, or, to put it another way round, we are spending altogether too much money for government services which are neither practical nor necessary. In addition to this I we are attempting too many functions and we need a simplification of what the Federal Government is giving to the people." Franklin D. Roosevelt, Sioux City, Iowa, September 29, 19S2. THE mushroom growth of the Federal bureaucracy during the past two years represents a violation of campaign pledges, an unjustifiable burden on the taxpayers and a menace to the liberties, rights and welfare of individual citizens and business enterprises. New jobs have been distributed as rewards for political service rather than on the basis of need or efficiency. The bureaucracy has meddled unnecessarily and with injurious consequences in affairs which under the Constitution do not concern the Federal Government. Thousands of workers have been engaged in tasks which the Supreme Court already has branded as unconstitutional, while other thousands continue in activities of doubtful validity. Money has been spent lavishly to build up new Government agencies which have been unable and will be unable to justify their existence. Profligate methods have prevailed. Fundamental theories upon which the new bureaucracy is based are unsound and were adopted in the face of the advice of the most eminent authorities. The chief statistical facts are: 1. Civil officers and employees in the Executive branch of the Federal Government increased by 148,625 between March 1, 1933, and May 31, 1935. 2. The new positions include 35,737 in the District of Columbia and 112,888 in the states. 3. Even in May, 1935, the latest month for which figures are available, there was a net increase of 2,135. 4. Further increases under the work-relief program will offset the reduction of employees of the NRA forced by the courts. 5. The annual payroll of civil employees is nearly $300,000,000 greater than at the end of the last administration. 6. The latest monthly report of the Civil Service Commission lists more than 30 new agencies created by the present administration. 2 7. Employees of the ten cabinet departments have increased by more than 50,000 since March, 1933. 8. Emergency and permanent agencies created since March, 1933, have 106,659 employees, 21,-332 of them in the District of Columbia and 85,-327 outside. 9. A net decrease of nearly 8,500 in employees of independent offices existing prior to March, 1933, is accounted for by transfers to cabinet departments or new agencies. 10. The present total of Government employees is far in excess of any in the peacetime history of the Government and is rapidly approaching the wartime record. Campaign Promises The platform adopted by the Democratic party at Chicago in 1932 contained the following plank: "We advocate an immediate and drastic reduction of governmental expenditures by abolishing useless commissions and offices, consolidating departments and bureaus, and eliminating extravagance, to accomplish a saving of not less than 25 per cent in the cost of the Federal Government." The Democratic presidential nominee repeatedly during his campaign pledged himself to carry out the party's declaration for the abolishment of useless Government offices and the elimination of extravagance. In accepting the nomination at the convention on July 2, 1932, the candidate said: "For three long years I have been going up and down this country preaching that Government; Federal and state and local costs too much. I shall not stop that preaching. As an immediate program of action we must abolish useless offices. We must eliminate actual perfunctions of government functions, in fact, that are not definitely essential to the continuance of government. We must merge, we must consolidate subdivisions of government, and, like the private citizens, give up luxuries which we can no longer afford." As the campaign advanced the Democratic presidential nominee on September 29, 1932, at Sioux City, Iowa, said: "I shall use this position of high responsibility to discuss up and down the country, in all seasons, at all times, the duty of reducing taxes, of increasing the efficiency of government, of cutting out the underbrush around our governmental structure, of getting the most public service for every dollar paid by taxation. This I pledge you, and nothing I have said in the campaign transcends in importance this covenant with the taxpayers of this country. . . . "I accuse the present administration of being the greatest spending administration in peace times in all our history, one which has piled bureau on bureau, commission on commission, and has failed to anticipate the dire needs or reduced earning power of the people. Bureaus and bureaucrats have been retained at the expense of the taxpayer. . . . "On my part, I ask you to assign me the task of reducing the annual operating expenses of the National Government." The Democratic presidential nominee dealt with bureaucracy and economy on October 19, 1932, at Pittsburgh. In that speech he said: "Now I am going to disclose to you a definite personal conclusion which I adopted the day after I was nominated in Chicago. Here it is: 'Before any man enters my cabinet, he must give me a twofold pledge of: 1. Absolute loyalty to the Democratic platform, and especially to its economy plank. 2. Complete cooperation with me, looking to economy and reorganization in his department.' "I regard reduction in Federal spending as one of the most important issues of this campaign. In my opinion it is the most direct and effective contribution that government can make to business. . . . "I have sought to make two things clear: First, that we can make savings by reorganization of existing departments, by eliminating functions, by abolishing many of the innumerable boards and commissions which over a long period of years have grown up as excrescencies on the regular system. These savings can properly be made to total many hundreds of millions of dollars a year. "Secondly, I hope that it will not be necessary to increase the present scale of taxes, . . ." Following his election and inauguration the President won widespread approval when he demanded economy legislation in a special message to the Congress on March 10, 1933. In that message he said: "Our Government's house is not in order and for many reasons no effective action has been taken to restore it to order. . . . "We must move with a direct and resolute purpose now. The members of the Congress and I are pledged to immediate economy. "I am, therefore, assuming that you and I are in complete agreement as to the urgent necessity, and my constitutional duty is to advise you as to the methods for obtaining drastic retrenchment at this time. ... "I ask that this legislation go into effect at once without even waiting for the beginning of the next fiscal year. I give you assurance that if this is done there is reasonable prospect that within a year the income of the Government will be sufficient to cover the expenditures of the Government." No Warning of Expansion Either because of lack of vision as to what would be necessary, or for some other reason, the administration, in presenting its measures to the Congress subsequent to the passage of the Economy Act, failed to give warning that a reversal of the policy of the Democratic platform was contemplated. No intimation can be found in the hearings before Congressional committees in the spring of 1933 that it was proposed, largely under general authority vested in the President, to create a host of new agencies with many thousands of employees. Dr. Rexford G. Tugwell, now Under Secretary of Agriculture and at that time Assistant Secretary of Agriculture, advised the Senate Committee on Agriculture on March 17, 1933, that the Washington administrative staff under the Agricultural Adjustment Act then being considered would probably number about 50 persons. Doctor Tugwell had had much to do with the drafting of the Act and appeared before the Committee as one who would have an important role in its administration. Under the bill, as presented to the Congress and as enacted into law, the Secretary of Agriculture was given power to appoint officers, employees and experts without limitation as to number. In connection with questions raised by Senators as to whether some restriction should be inserted Doctor Tugwell was asked his opinion as to the administrative organization which would be needed. Doctor Tugwell made the following reply: "It is rather difficult to foresee, because you would have to have a good deal of preliminary work done in the way of organization. You see you have got to organize local committees, you have got to set up cooperation with the states, provided this is done on the rental and state cooperative plan it might not be in some instances. Then you have got to have all these contacts made, you see, all the way up to Washington; then in Washington you have got to have your commodity chief, you have got to have a chairman, and you have got to have an adequate staff for them just as you would have to have a counsel and have people to do research work in prices, and so on. You would have to have a staff for these hearings, which we have provided for, and all that. I should say we would probably have 50 people here in Washington." The latest official figures show that on May 31, 1935, the Agricultural Adjustment Administration had 5,504 employees in the District of Columbia and 2,370 outside, a total of 7,874! The total in the District is more than 100 times the advance estimate of Doctor Tugwell. Official Totals The Civil Service Commission issues monthly a tabulation of the civil officers and employees in the Executive branch of the Federal Government. It includes both those who are under the classified Civil Service and those exempt from it. The military services are not included nor are the employees of the Legislative and Judicial branches. The tabulation is issued at the beginning of each month for the month which ended thirty days earlier. The tabulation issued early in July thus was for the month ended May 31. The total number of civil officers and employees in the Executive branch on May 31, 1935, was 712,112, of whom 102,539 were in the District of Columbia and 609,573 outside. The grand total showed an increase of 148,-625 from a total of 563,487 on February 28, 1933, four days before the change in administrations. The number of employees in the District of Columbia increased by 35,737 from a total of 66,802 on February 28, 1933, while the number outside the District increased by 112,888 from a total of 496,685. A footnote in the tabulation for May 31, 1935, states that the total for the Department of Agriculture does not include 34,780 special employees hired under letters of authorization. Another footnote explains that in addition to regular employees in emergency conservation work, which, according to the tabulation, total 36,369, there are military employees numbering 8,845, intermittent employees numbering 4,141 and nurses numbering 209. Also outside the tabulation are an enrolled personnel of the conservation camps numbering 329,193 and enrolled Indians numbering 6,413. If all of these groups were added, the total would be nearly 1,100,000, a figure far in excess of the wartime civilian total. Except for the period of the World War there never has been any such number of Government employees as even the total of 712,112. On June 30, 1916, the year before our entrance into the World War, there were 438,057 civil employees in the Executive branch of the Government. On November 11,1918, the date of the signing of the Armistice, the total was 917,760. By July 31, 1920, the number was reduced to 691,116. The lowest post-war total was 548,531, on June 30, 1923. Amount of Payroll The expansion in the size of the Federal bureaucracy has been accompanied by a substantial increase in the amount of the payroll. Since the latter part of 1933 the Civil Service Commission has been including in its monthly report the aggregate compensation of government employees. Between December, 1933, and May, 1935, there was an increase of nearly $28,000,000 a month in the Executive civil payroll. That means $336,000,000 per year. The total civil payroll, including Legislative and Judicial employees, was estimated in the last annual budget as $1,160,174,519 for the fiscal year 1935 recently ended, an increase of $193,880,706 over the fiscal year 1934 and an increase of $288,372,513 over the fiscal year 1933. The Legislative and Judicial officers and employees number less than 10,000, and their aggregate compensation accounts for less than $27,-000,000 of the civil payroll annual total. The 1934 and 1935 salary totals would have been greater except for the temporary salary reductions in force during those years. These reductions, provided in the Economy Act of 1933, are no longer in effect. Number of Agencies When the present administration took office, the monthly tabulation of the Civil Service Commission listed the ten cabinet departments and fewer than forty independent agencies. The most recent tabulation, that for May, 1935, lists nearly sixty independent agencies. While the net increase is about twenty, the latest list includes 31 agencies which were not in existence at the beginning of March, 1933. Some of the old agencies were absorbed by others. There will be additional new agencies in future monthly tabulations. Only a few of the new work-relief agencies created by Executive order to supervise the expenditure of the four-billion-dollar fund are included in the May report, and the building of their orginizations had only commenced. The work-relief agencies will absorb a considerable number of the workers of the NRA besides employing others. No let-up in the steady increase in the total Government payroll seems in prospect. 7 Cabinet Departments The economy drive during the months just prior to and immediately following the inauguration of the present administration resulted in very material reductions in the forces of most of the regular establishments of the Government. Payrolls were slashed all along the line. Several thousand employees lost their jobs at the end of the fiscal year on June 30, 1933. The most recent figures show that while three of the ten cabinet departments had fewer employees in May, 1935, than at the end of February, 1933, the other seven had greatly increased their totals. Employees of the ten departments numbered 544,687 on May 31, 1935, an increase of 50,428 over a total of 494,259 on February 28, 1933. The three departments showing a decrease in employees are the State Department, which has to do primarily with foreign rather than domestic affairs; the Department of Justice, which was able to curtail its staff with the repeal of prohibition, and the Post Office Department, where operations reflect business conditions. While revenues of the Post Office Department decreased 10 per cent from the fiscal year 1933 to the fiscal year 1934, the decrease in the number of employees has been less than 5 per cent. Departments showing increases are the Treasury, War, Navy, Interior, Agriculture, Commerce and Labor. Comparative totals for the ten cabinet departments are shown as follows: Increase or February, 1933 May, 1935 Decrease State ............................... 4,664 4,517 -147 Treasury ........................... 52,266 54,975 2,769 War ................................ 44,188 65,572 21,384 Justice .......................... 9,022 7,197 -1,825 Post Office.......................... 272,550 260,045 -12,505 Navy ............................... 46,879 58.499 11,620 Interior ............................ 15,018 28,200 13,182 Agriculture ......................... 26,132 37,459 11,307 Commerce .......................... 17,971 20,105 2,134 Labor........................ 5,569 8,118 2,549 TOTAL ........................ 494,259 544,687 50,428 In the above tabulation only civilian employees of the War and Navy Departments are included. The Agricultural Adjustment Administration, the only one of the important emergency agencies attached to a Cabinet Department, is omitted from the figures of the Department of Agriculture. The increase would be much greater if it were included here instead of in the list of new agencies. 8 Independent Agencies Independent agencies had a total of 69,228 employees on February 28, 1933. The total employees of these particular governmental bodies had shrunk to 60,766 on May 31, 1935. Decreases in some of the old agencies, such as the Interstate Commerce Commission and the Veterans Administration, are more than offset by increases in others, including the Government Printing Office, the Reconstruction Finance Corporation, the Federal Trade Commission, the Federal Power Commission, the Civil Service Commission and the General Accounting Office. The transfer of the old Farm Board and other farm credit agencies to the new Farm Credit Administration, the absorption of the Radio Commission by the new Communications Commission and the transfer of public building and park employees to the Interior Department are chiefly responsible for a reduction of 8,562 in the employees of old agencies outside of the Cabinet. Comparative totals of employees of major independent agencies, which continued in existence between February 28, 1933, and May 31, 1935, are as follows: February May Increase or 1933 1935 Decrease Veterans Administration......... Govt. Printing Office............ Reconstruction Finance Corp..... General Accounting Office...... Interstate Commerce Comm..... Civil Service Commission........ Smithsonian Institution.......... Federal Trade Commission...... National Advis. Comm. Aero.... Federal Reserve Board.......... Tariff Commission............... Fed. Home Loan Bank Board... Federal Power Commission...... Employees Compensation Comm. Board of Tax Appeals.......... 34,501 33,415 -1,086 4,719 5,341 622 2,177 3,447 1,270 1,969 2,682 713 2,291 1,585 -706 620 1,004 384 554 549 -5 464 528 64 308 331 23 210 330 120 306 310 4 96 297 201 54 296 242 175 264 89 140 131 -9 New Agencies Thirty-one new agencies created under the present administration have been adding to their employees at the rate of several thousand a month. Their total on May 31, 1935, was 106,-659. Some of the agencies are of a permanent character, while others are intended to exist only during the period of the emergency. The totals by no means give the complete picture as to the payrolls financed by the Government. The employees of the Federal Emergency Relief Administration as listed are fewer than 900 but there are thousands of relief workers receiving salaries from funds given by the Federal Government to the states. The number of employees of the thirty-one agencies created under the present administration, as of May 31 last, follows: Dist.ofCol. OutsideD.C. Total Emergency Conservation Work......... 1,129 35.240 36,369 Home Owners Loan Corporation...... 2,148 17,224 19,372 Tennessee Valley Authority........... 16 16,467 16,483 Agricultural Adjustment Administration 5,504 2,370 7,874 Farm Credit Administration........... 1,488 5,324 6,812 Public Works Administration.......... 2,307 4,164 6,471 National Recovery Administration..... 3,791 1,279 5,070 Federal Housing Administration....... 1,141 1,843 2,984 Federal Emergency Relief Administration .................................. 189 185 874 Federal Deposit Insurance Corporation 231 512 743 Securities and Exchange Commission.. 548 112 660 National Emergency Council........... 470 74 544 Federal Communications Commission.. 347 112 459 National Resources Board............. 157 199 356 Federal Surplus Relief Corporation.... 335 11 346 Resettlement Administration............ 192 4 198 Federal Alcohol Control Administration 190 ... 190 National Labor Relations Board....... 59 100 159 Federal Coordinator of Transportation 104 25 129 Special Adviser on Foreign Trade..... 102 ... 102 Central Statistical Board............... 94 ... 94 Commodity Credit Corporation........ 77 14 91 Textile Labor Relations Board......... 60 30 90 Rural Electrification Administration .. 64 ... 64 National Railroad Adjustment Board.. 38 38 National Archives....................... 28 ... 28 Railroad Retirement Board............ 24 ... 24 Export-Import Banks................... 12 ... 12 Federal Savings & Loan Insurance Corporation .............................. 10 ... 10 Alley Dwelling Authority.............. 9 ... 9 Steel Labor Relations Board........... 6 ... 6 Total ............................... 21,332 85,327 106.659 Only a few of the agencies were created by specific statute. Some were established by Executive order under laws providing in general terms for administrative organizations. Others were set up by Executive order under broad powers of emergency statutes. Some of the new agencies are super-commissions conceived by the Executive for the purpose of supervising others. Bureaucratic Control The new bureaucracy has sought to exert an influence over all branches of industry, agriculture and finance. The ramifications have been very far-reaching. A restraining hand has been placed on the liberties of individual citizens. The existing bureaucracy, as invariably is true, has tried to widen its activities. Only the authority of the courts has proved able to check the re- cent expansion of bureaucratic power. Expenditures for salaries have been wasteful. The creation of many new agencies has nullified the movement toward coordination and reorganization of the previously existing bureaucracy. The economy plank of the Democratic party for 1932 was based on sound principles. The arguments advanced by the Democratic presidential nominee in the 1932 campaign for the fulfillment of that pledge were good then and are doubly good today. As the candidate asserted in his Pittsburgh speech, a reduction in Federal spending is "the most direct and effective contribution that Government can make to business." Instead of saving "many hundreds of millions of dollars a year," which he said could result from a reorganization of the Government, the present administration is responsible for an increase in payrolls of nearly three hundred millions. Despite campaign pledges "bureaus and bureaucrats have been retained at the expense of the taxpayer," a phrase used aptly by the presidential nominee three years ago at Sioux City. The end of expansion is not in sight. If the public is to have confidence in the pledges of the administration in the next campaign, it is time that a start should be made on redemption of those given in 1932. Elimination of unnecessary agencies and employees with a consequent reduction in administrative costs of the Government would constitute a substantial contribution to recovery.