May 3, 2019
In part one of this series we summarized the various attempts to reorganize the federal governments’ roles in transportation and public works from 1923 to 1962. Part two discussed how President Truman in 1946 came extremely close to creating a Federal Transportation Agency but, at the last minute, declined.
The Hoover Commission gets organized.
By mid-1947, it was clear that the new Republican majorities in the House and Senate wanted input into the reorganization of the executive branch of government. In a posthumous (and somewhat self-serving) memoir that was not published until 2013, former President Herbert Hoover wrote:
I was called in the spring of 1947 into conference by leading members of the House and Senate Committees for advice. They proposed to set up a bi-partisan Commission of 12 members, 2 Congressmen and 2 civilians to be appointed by the Speaker of the House, 2 Senators and 2 civilians by the President of the Senate, and 4 members appointed by the President. They stated that with their multitude of other duties the Congressional Committee investigations and recommendations could only be superficial. I urged that the Commission be created and President Truman approved it.
I had gone west seeking recovery from certain infections which I had acquired during the winter trip I had made at the request of President Truman where I had instigated an attack on the survivals of the Morgenthau Plan for the Allied Administration of West Germany. I was called on the telephone at the request of Congressional leaders, stating that the stumbling block to the legislation was the selection of a chairman, and that if I would agree to accept it, then the project could be consummated. They stated that President Truman also wished me to undertake it. I hesitated to take the job because of disabilities, but after a night’s consideration I stated that if they could not otherwise solve the problem, I would undertake it if: no report was called for until after the election of 1948 (so as to keep the subject out of campaign debate); and ample funds were provided.[1]
Congress passed (and President Truman signed) a law (61 Stat. 246) creating a Commission on Reorganization of the Executive Branch. The President pro Tem of the Senate named his appointees on July 7, 1947 (the day the bill was signed into law), followed by the Speaker on July 16 and President Truman on July 17:
Even though the setup ensured an even partisan split, the panel on the whole had a more conservative bent, since the Democratic legislators (Rep. Carter Manasco (D-AL) and Sen. John McClellan (D-AR)) were both Southern conservatives (i.e. New Deal skeptics), and since the Democratic non-government Senate appointee, Joseph P. Kennedy, was in most respects not especially liberal.
In terms of protecting President Truman’s interests (and the Roosevelt legacy), former Under Secretary of State Dean Acheson served as vice chairman, and James Rowe also took an active role.
The “Hoover Commission” held its first meeting on September 29, 1947 at the White House for members to be sworn in, get a pep talk from Truman, and take care of housekeeping business. Hoover was nominated for chairman of the Commission by Clarence Brown[2], which carried unanimously.
Shortly after the first meeting, Hoover sat down with Bureau of the Budget Director James Webb to develop a work plan whereby BoB would share its (extensive) institutional knowledge of the functioning of the presidency with the Commission. Webb wrote a memo to President Truman suggesting cooperation between BoB and the Commission. Truman agreed but wrote “No commitments” on the memo.[3]
Outsourcing to task forces.
At the second meeting, on October 20, the Commission adopted a work plan memo drafted by Hoover that said “it is clear that the Commission is not confined to recommending management or structural changes which improve the efficiency of performance of the executive branch but is clearly directed to exploring the boundaries of government functions in the light of their cost, their usefulness, their limitations, and their curtailment or elimination.”[4]
The memo also recommended that the Commission divide up the work of the federal government into “the principal groups of major-purpose activities and such functional problems as may extend over such groups” and then, for each group or function, appoint a task force of “eminent and experience citizens to explore and furnish the Commission with their steady judgment on what action should be taken…”[5] The Commission could then use those task force reports as a jumping-off point for its own deliberations.
Hoover’s memo had an initial list of 18 functions of government to be surveyed. His initial list included public works as a function of government, but not transportation. However, his list did separate “promotion of commerce and industry” from “regulation of commerce and industry.”
The minutes of that meeting also indicate that Hoover also suggested that the Commission get a quick start on three task forces, and that he had men in mind to head each task force – the fiscal issues task force to John Hanes, the independent agencies task force to Bernard Baruch, and the public works task force to New York planning and construction czar Robert Moses. The Commission authorized Hoover to pursue those persons.
Eight days after that meeting, Hoover received a long letter from what was, at the time, the only real “think tank” in Washington – the Brookings Institution. Hoover had reached out to Brookings to ask for further ideas for areas of study that could be undertaken by the Commission, and Brookings gave a list of eleven areas. Most of these had already been covered by Hoover’s memo, but Brookings identified three functions that Hoover had overlooked: housing, welfare, and transportation. The Brookings letter included a four-page dissection of what was wrong with federal transportation policy, which was summed up so:
At the third meeting on November 18, Hoover told his colleagues that Robert Moses had agreed to head the task force on public works and was currently working on the project. By the fourth meeting on December 1, Hoover had prepared a list of secondary issue areas, and “transportation agencies” was on that list, as had been suggested not only by Brookings but also separately by Dean Acheson and James Forrestal. Hoover had a list of prominent industrialists as possible heads for the task force, but the list ends with the word “Brookings.”
At this point, the Members of Congress on the Commission were pushing through Congress an amendment to the Commission’s organizing statute (enacted December 19) to allow the Commission to hire temporary outside consultants. Armed with that power, the Commission then outsourced both the transportation task force report and the public welfare task force report to the Brookings Institution.
The Commission later created a separate task force on independent regulatory commissions, to include the Interstate Commerce Commission, the Civil Aeronautics Board, and the U.S. Maritime Commission. By this point, Ernie Williams had left the Bureau of the Budget to go back to Columbia University as a lecturer on transportation while he worked on his PhD, but he had time to do outside consulting work and was hired, along with James McGregor Burns, to work on the regulatory agencies task force.
Later on, at the March 22 meeting, “The Commission again discussed the suggestion made at the last Commission meeting by Commissioner Pollock that a study be made of the Department of Commerce. The Chairman indicated that 79% of the budgeted costs of the Commerce Department are already being covered by the Public Works, the Transportation, the Natural Resources, the Foreign Affairs, and the Regulatory Agency studies; that the remaining 21% is made up of the Bureau of the Census, the Bureau of Standards, and a few small offices; and, therefore, a separate study of the Commerce Department does not seem to be justified.”[6]
The Commission waits.
The outsourcing of all of the initial policy work to outside task forces meant that the Commission itself did not need to hire a large investigative staff. But some staffing was, of course, required. John Steelman was Truman’s de facto White House chief of staff. According to the diary of another White House staffer, “Steelman said he had had a talk with Dean Acheson who told him he had had breakfast with Herbert …Steelman told how Hoover had mentioned the formation of the working staff for the committee and said that he did not think he needed any executive director, that he would be his own. Hoover mentioned a man whom he proposed to employ who, Acheson felt, was entirely unqualified except to answer telephones and make appointments. Hoover said that was all he would have to do. Then when the committee met, Acheson said, Hoover announced that he had employed an executive director and it was the man he had named to Acheson.”[7]
On the other hand, Acheson selected Alan L. Dean as one of his two assistants. Dean would later play a pivotal role in the creation of the U.S. Department of Transportation along with Alan Boyd under the Lyndon Johnson Administration.
Behind the scenes, there was continuing disagreement over the scope of what the Commission would be able to recommend, after the elections. Commissioner James Rowe later said in an oral history interview that “Hoover definitely thought he was going to use the Commission as a vehicle to overturn the New Deal in substance. The battle we really had in the Commission, which Acheson was very good on and if I may say so, so was I, was this: we argued that we were only to deal with procedure, reorganization, shifting of bureaus, problems of how to make the Government function. We weren’t supposed to get into the substance. That was a job for Congress and that was a job for the President. Mr. Hoover was very headstrong and he controlled the Commission. He was going right ahead, despite all the arguments.”[8]
This suspicion of Hoover began to affect the timing of the Commission’s work. Hoover wanted to delay the delivery of the reports of the various task forces until after the November elections – Hoover said it was about preventing leaks to the news media and stakeholder groups. But Rowe, in a very snarky private memo to Acheson dated April 16, 1948, suggested a different motive:
I suspect myself of being over-suspicious at times, and perhaps this is one of them, but my careful study of Mr. Hoover’s past performance indicates that he always operates this way. He will tell the task force leaders what he wants them to put in their reports and he will not give his fellow Commissioners any time to prepare adequate rebuttal material. He has done it since 1921 and he has gotten away with it. Objectively I admire the technique, but by an odd coincidence I don’t happen to be objective to this deal.[9]
The Commission decided to allow many of the task force reports to be delivered before the elections. And, because of the hands-off way in which the task forces were allowed to proceed, many of them delivered recommendations that directly contradicted the recommendations of other task forces.
Brookings recommends a Department of Transportation.
In October, the Brookings Institution submitted its report of the Task Force on Transportation, prepared by Charles Dearing and Wilfred Owen. The report opened a discussion of the federal role in transportation:
The nation’s transportation system, composed of railroad, highway, pipeline, water, and air facilities, is the product of a unique joint undertaking. Private enterprise has supplied much of the inventive genius, the production technology, and the managerial drive that has given direction and impetus to the development of the newer forms of transportation. And, until recently, the private investor has furnished the bulk of the capital required to finance experimentation, the launching of new enterprises, and their subsequent expansion. Public enterprise, on the other hand, has supplied a substantial part of the basic facilities over which private equipment has operated, and has participated in a number of other ways in the transport revolution. The federal government has gradually assumed major and controlling responsibility for both the regulation of all transport agencies and for the programming and financing of airports, airways, waterways, highways, and ocean shipping. In fact, the federal role in transportation has grown in scope and magnitude to a point where federal policy exerts a dominant influence on the future role of transportation in the national economy.[10]
The report also said that “we have observed that some of the most critical present and prospective weaknesses in the transportation system are attributable to defects in the policy and administrative organization of the national government.”[11]
Although members of the Commission disagreed as to how far they were allowed to delve into policy, the Brookings report suggested seven policy revisions:
Brookings recommended the creation of a Cabinet-level Department of Transportation, to include all of the transportation agencies currently in the Commerce Department (Civil Aeronautics Administration, Coast and Geodetic Survey, and the Inland Waterways Corporation, as well as the quasi-independent Civil Aeronautics Board) plus the Public Roads Administration (from the Federal Works Agency), the Coast Guard (from Treasury), and the water resources functions of the Army Corps of Engineers.
Brookings also recommended that the economic regulatory functions of the Interstate Commerce Commission (over rail, motor carrier, domestic water, and pipeline transportation), Maritime Commission (over ocean shipping), and Civil Aeronautics Board (over aviation) be combined into a single, independent Transport Regulatory Commission.
As shown in the organization chart above, the proposed USDOT would have four modal administrations (highway, civil aviation, railroad, and water transportation), each headed by an Assistant Secretary. The Coast Guard and the Coast and Geodetic Survey would retain their independent identities within the Department and answer to a fifth Assistant Secretary. (The Coast Guard had to retain its own structure in case it had to be transferred back to the Navy temporarily during the next war.)
But the report also recommended a strong central staff answering to the Secretary: “Success in achieving national transportation objectives will be determined in large part by the conduct of this transportation research and planning activity in the Office of the Secretary. It is the absence of such activity at the present time, and the absence of over-all direction stemming from it, which account in no small measure for the ill-advised and conflicting transportation activities now being sponsored by the federal government.”[13]
Robert Moses’ Department of Works.
In their report, Robert Moses and his Task Force on Public Works started off defensively: “We have heard the comment —which obviously comes from uninformed sources — that this task force was organized and committed in advance to some sort of governmental engineering heaven in which one group of professional men would have a department to themselves, with direct access to the President and Cabinet. Nothing could be further from the truth. We are all busy people, attempting to render a public service without bias.”[14]
Nevertheless, Moses recommended the creation of a new Department of Works that would be based on, and replace, the Interior Department. It would include a Division of Roads, Airports, Parks and Indian Affairs that would incorporate the Public Roads Administration, the airport grant program of the Civil Aeronautics Administration, the Alaska Railroad, the National Park Service, the Fish and Wildlife Service, and the Bureau of Indian Affairs.
A separate Division of Water Control and Development that would combine the Army Corps of Engineers water resources program with the Bureau of Reclamation, the Panama Canal, the Tennessee Valley Authority, and the various regional hydropower administrations. Another Division of Housing and Buildings would combine all federal public housing programs with federal building programs. The Coast and Geodetic Survey would go to the Works Division of Planning.
The Department of Works would also provide professional engineering services to other federal agencies, when needed.
Moses noted that his recommendation was simply mimicking what Congress had done in 1946 by consolidating the various committees on public works into a single Committee on Public Works in each chamber. He also relied heavily on the argument that a single national public works program, with much advance planning, was essential to fighting future recessions and depressions: “The advance planning and promotion of public works for such periods should be recognized as a continued responsibility of the Federal Government, working in cooperation with States and municipalities. It is sense less to proceed on the theory that every major slump in business and employment is an unexpected Divine visitation not to be anticipated and to be dealt with only on the basis of ineffective, wasteful, and hastily improvised emergency measures…[During the Great Depression] Because of lack of advance plans worth while projects were delayed or abandoned. The money was there, the men were ready to go to work but the blueprints were not available.”[15]
When it came to federal grants-in-aid programs (as opposed to direct federal construction activities), Moses wrote “It is difficult to conceive of a valid argument against a consolidation of public works which will bring together in one agency the officials responsible for Federal aid for highways, airports, and housing. These are not operating functions. They involve the distribution of Federal money for projects of national significance and the setting of standards which will insure uniformity, and permit taking full advantage of current technical improvements.”[16]
The Moses report also included a section entitled “The Case Against a Cabinet Department of Transportation” which said:
The allocation of highways, airports and canals, waterways, pipelines, and other facilities to a new Department of Transportation seems to us unwise and undesirable. Many of the Federal functions in this field involve regulation of private enterprise and quasi-judicial functions. For example, public highways in a Transportation Department might require a certificate of convenience and necessity for every road and Federal regulation of every individual flivver driver. Bitter controversies, delay, and confusion in road building would result with no ultimate advantage even to the railroads. The same logic applies to airport and waterway construction. Air travel and the transportation of freight by air do not seriously compete with the railroads and will not for some time. No possible advantage to the public can be secured by attempting to consolidate Federal planning and supervision in these two distinct fields merely because they are both forms of transportation.
As to waterways, it is only necessary to remember that some of our largest seaports are in fact not seaports at all but rather harbors on rivers usually reached by approach waterways. The ship canal at Houston, the Mississippi River at New Orleans, Puget Sound at Seattle, the Columbia River at Portland, and the Delaware River at Philadelphia are examples. Placing these approach rivers and canals in a department of transportation because of possible competition with the railroads would be a ridiculous piece of doctrinaire legislation. No doubt the public service aspects of rail and perhaps air-line transportation have been overshadowed by quasi-judicial regulation, but this overlooked aspect of transportation does not justify the establishment of a new and unnecessary Department of Transportation.[17]
Conflict with other task forces.
There was also a Task Force on Natural Resources, headed by former Wyoming Governor Leslie A. Miller. Its report had different plans for the Interior Department, replacing it with a Department of Natural Resources. This Department would also include the water resources activities of the Corps of Engineers (as would Brookings’ Department of Transportation and Moses’ Department of Works), to be combined with the Bureau of Reclamation and the hydropower agencies. The report noted that:
It is impossible to find any plan of departmental organization that would bring together all Federal functions closely related to river development. Such a grandiose department would have to include transportation agencies, public health agencies, and the Department of Agriculture, among others. The establishment of a Water Development Service in a Department of Natural Resources is not wholly satisfactory, but on balance it is more satisfactory than the alternatives. A department of water resources or of water and mineral resources would include too little and would leave too much for interdepartmental coordination. A combined department of agriculture and natural resources would have advantages from the standpoint of unification of resource activities, but it would be vulnerable on other grounds, notably its size, and the incongruity of many of its activities. The most inclusive combination of functions that seems feasible is the combination of water resource development and power marketing functions with public domain and forest and range programs and other natural resource development.[18]
In addition, the Task Force on Independent Regulatory Commission, headed by Robert Bowie, issued its own report that directly contradicted the Brookings transportation report. Where Brookings wanted the ICC, CAB and Maritime Commission to merge into a single Transport Regulatory Commission, Bowie’s task force recommended that the three commissions remain independent (of any Cabinet department and of each other).
However, there was some room for agreement with Brookings as far as separating regulation from other administrative functions:
Ordinarily, we believe, such operating functions should be placed in the regular departments where they may be carried out under direct executive supervision and responsibility. This is more consistent with the structure of our Government and with the position of the President as Chief Executive.
The fact that the operating functions are somewhat related to the regulatory does not seem to us a sufficient ground for deviating from this principle unless the relation is so intimate as to make their separation impracticable or to cause serious conflicts of jurisdiction.
For these reasons, our discussion of the Maritime Commission recommends a segregation of its essentially operating activities, such as shipbuilding and training programs, and their transfer to an executive department. Likewise, certain routine administrative functions of the Interstate Commerce Commission, such as safety inspection, might similarly be shifted to a department. On the same principle, the Civil Aeronautics Administration, once partly under the Civil Aeronautics Board, but now in the Department of Commerce, should be left in an executive department and not be moved back to the Board.[19]
In an internal summary[20] of the Brookings transportation report dated October 27, 1948, Hoover Commission staffer H.W. Metz made a list of the ways in which the Brookings report on transportation conflicted with the reports of other task forces. In addition to the transportation regulatory commission conflict noted above (the Independent Regulatory Commissions task forced had not yet reported) and possible conflicts with the National Security task force over the Corps of Engineers and with the Revolving Funds task force on the Inland Waterways Corporation, Metz listed the following conflicts:
How would the Hoover Commission reconcile all these contradictory task force reports, and would President Truman and Congress go along with the Commission’s recommendations? Find out in part four of this series, which you can read here…
[1] Hoover, Herbert. Crusade Years, 1933-1955: Herbert Hoover’s Lost Memoir of the New Deal Era and Its Aftermath. Stanford: Hoover Institution Press, 2013 p. 367.
[2] Again, we have to mention that Clarence Brown was the grandfather of actor Clancy Brown, who played the villainous immortal Kurgan in the epic, awesome 1986 movie Highlander. There can be only one.
[3] Memorandum, James Webb to Harry S. Truman, c. mid-October 1947, reporting on his meeting with Hoover with regards to getting assistance from the Bureau of the Budget. Papers of James Webb-Truman Library.
[4] Hoover, Herbert. Memo entitled “Memorandum of the Chairman as to the Program of the Commission.” Located in the minutes of the October 20, 1947 meeting of the Commission on Organization of the Executive Branch of Government in the National Archives in College Park. MD.
[5] Ibid.
[6] Minutes of Official Proceedings – Commission on Organization of the Executive Branch of the Government – 8th Meeting – March 22, 1948 p. 5.
[7] Diary entry, Eben Ayers, November 5, 1947, recording Dean Acheson’s and Charles Ross’ impressions of Hoover. Papers of Eben Ayers-Truman Library.
[8] Oral history interview of James H. Rowe conducted by Jerry N. Hess, September 30, 1969. Truman Library.
[9] Memorandum, James Rowe to Dean Acheson, April 16, 1948, discussing Hoover’s possible motives for inviting Acheson to dinner. Papers of Dean Acheson-Truman Library.
[10] Brookings Institution. Report to the Commission on Transportation and the National Government (October 1948). Volume I, p. i.
[11] Ibid p. ii.
[12] Ibid pp. iv-viii.
[13] Ibid p. 56.
[14] Moses, Robert. Public Works; a Report with Recommendations, prepared for the Commission on Organization of the Executive Branch of the Government. Washington: Government Printing Office 1949, p. 1.
[15] Ibid pp. 4-5.
[16] Ibid p. 15.
[17] Ibid pp. 19-20.
[18] Miller, Leslie A. Organization and policy in the field of natural resources; a report with recommendations, prepared for the Commission on Organization of the Executive Branch of the Government by Leslie A. Miller, chairman, and task force committee members and a special unit of the Legislative Reference Service of the Library of Congress. Washington: Government Printing Office, 1949 pp. 9-10.
[19] Bowie, Robert, and Owen D. Young. Task Force on Regulatory Commissions (Appendix N): A report with recommendations prepared for the Commission on Organization of the Executive Branch of the Government. Washington: Government Printing Office, 1949 p. 30.
[20] Metz. H.W. “Summary of Report on Transportation and the National Government.” Internal staff memo dated October 27, 1948 found in the files of the First Hoover Commission in the National Archives at College Park, MD.
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