In part one of this series, we summarized the various attempts to reorganize the federal government’s roles in transportation and public works from 1923 to 1942. Part two discussed how President Truman came extremely close to creating a Federal Transportation Agency in 1946 but declined at the last minute. Part three discussed the creation of the Hoover Commission on government reorganization in 1947 and the competing recommendations of its task forces in 1948:
As originally enacted in July 1947, the law creating the Hoover Commission required the panel to make its final report to Congress “Within ten days after the Eighty-first Congress is convened and organized,” which looked to be January 13, 1949. After commissioning task forces for study in fall 1947, the Commission didn’t do much in the first half of 1948. Once the task force reports started arriving in the second half of 1948, the Commission was still slow to make many decisions.
The reason was politics. Herbert Hoover and Franklin D. Roosevelt never stopped despising each other, and Hoover had been an outspoken opponent of the New Deal. Hoover’s biographer later wrote “Hoover’s expectation was that his commission would report after the 1948 election, by which time a Republican government might be in power and his personal objectives of unwinding some of the New Deal’s administrative structures and laying off whole corps of federal employees might be welcome.”[1]
James Rowe, Jr. had been a Roosevelt White House staffer and was now a Hoover Commission member. He later said in an oral history interview that the he and the other Democratic members of the Commission repeatedly disagreed with Hoover about going beyond organization in to areas of policy, but then reality struck:
[Hoover] was going right ahead, despite all the arguments. This was the cause of bitter discussion at every Commission meeting, and he was just overriding us until the day after Mr. Truman was reelected [and Democrats took back control of both chambers of Congress, gaining 75 seats in the House and 9 seats in the Senate]. Then he just stopped. In other words, he could read the election returns.[2]
Since the Hoover Commission was created at the behest of a Republican Congress and was chaired by the last Republican President, Truman could easily have used his huge election win as an excuse to wash his hands of the whole matter. Instead, three days after the elections, Truman’s Budget Director, James Webb, sent Truman a fascinating letter urging him to take advantage of the opportunity presented by the Hoover Commission. Webb noted that “The Republican Party has historically been against Presidents. It has not been willing to give any President either the authority or the staff facilities to discharge his Constitutional responsibilities as the Chief Executive.” But Webb went on,
Based on my relations with Mr. Hoover, as your liaison representative, I believe there is now a possibility of getting the last Republican President to urge you to accept an implementation of and organization for executive responsibility that the Republican Party has historically denied to Presidents. If that can be managed, you will undoubtedly be able to achieve — with at least a show of bipartisan agreement — a new level of Presidential leadership and effectively discharged responsibility for administration unknown in our history.
This could serve to establish a fundamental advance in the nature of the Presidency and also its relations with the Congress.[3]
A week later, on November 12, President Truman wrote to Hoover promising continued cooperation with the Commission and sending Hoover a draft public statement saying that he attached “the greatest importance” to the Hoover Commission’s work and hoped that its final report would be “a milestone in the development of a sound and economical structure and efficient procedures for the Executive Branch…”[4] Truman read the statement and the letter to the press at the start of his November 16 news conference.
Hoover’s biographer summarizes this period: “On receiving signals from Truman that he wanted the wanted the commission to proceed uninterrupted, Hoover showed his flexibility, jettisoned his dreams of eliminating New Deal agencies, and lined up with the administration.”[5]
After the elections, the Commission met more and more frequently. At the November 10 meeting, Hoover told his colleagues that:
I think we have to have a new department or at least transform the Interior Department into a Department of Works and Natural Resources. That is not a new idea. I think it first came up in the Taft Administration and I sat on a Commission in 1922 and recommended it. I recommended it since, and Mr. Roosevelt did his best to get it done and finally it eventuated into a sort of abortive collection of agencies…I should imagine that we are wasting two to five hundred million a year on public works by duplication and overlapping at the present time; and what is more, we are not getting any focusing of national policies on the subject.
So, I have taken the report on Public Works, which is all-inclusive; you might just [as] well have consolidated the government into one department, as far as I can see; but there are very valuable segments in it…[6]
After Hoover started talking about how more than one task force wanted control over the Corps of Engineers water program, Rowe suggested that Robert Moses (author of the Public Works Task Force report) come down and make his case directly to the Commission, along with the chairs of competing task forces.
In response to a question from Sen. John McClellan (D-AR), Rowe responded “Public Works wants the Engineers, Agriculture wants the Engineers, and Resources asked for the Engineers. Senator, that is the only agreement in the record, they all want the Engineers. That is the one thing in the report I start off disagreeing with.”[7]
At the November 18 meeting, there was extended discussion of whether or not to merge the Corps of Engineers with the Bureau of Reclamation, and how a merged entity might relate to federal lands agencies, which then got into whether or not Agriculture should lose the Forest Service. Commissioner Joseph Kennedy later suggested they postpone the topic of where the Corps would go and instead take up any other topic that was “not going to raise this kind of hell.”[8]
The November 22 Commission meeting saw Robert Moses, as well as the heads of the Task Forces on Natural Resources and Agriculture, Leslie Miller and H.P. Rusk, come before the Commission to argue their views. (The transcript is confusing because Rusk was the dean of the Agriculture college at the University of Illinois at the time, and the Commissioners kept calling him Dean Rusk, but he was not the foreign relations Dean Rusk, who was at the State Department at that point.)
After Miller and Rusk had each made their case before the Commission, Moses arrived and was immediately asked by Hoover about merging the Corps of Engineers with the Bureau of Reclamation. Moses responded that the function of both agencies was “primarily engineering, and belong in one place. Frankly, I feel, as do my associates, that it is a little unfortunate that the Army Engineer business has received so much publicity. Apparently, the story leaked out and copies of even preliminary drafts of that report were around. But that is water over the dam.”[9]
Moses mentioned that the Corps had a relatively small number of Army officers and utilized mostly civilian contractors. He thought that “army officers can continue to serve and be even more useful than they have been in the past, get better training, get a wider experience by contact not only with what they have been doing but with housing, airports, roads, all the features that engineering and research work that would be in a department of that sort…”[10]
One of Moses’ main arguments for a Department of Public Works was that:
…with housing, roads, airports, and research, one of the most important things of all is to anticipate that there will be cyclical depressions and to anticipate them, make plans in advance, so that we do not run into another one of these improvising WPA programs…Somewhere around $24 billion was involved directly or indirectly in Works to meet the last depression, of which about $16 billion was more or less straight government handouts, aid, underwriting, and the rest was indirect, involving institutions like the RFC…The municipalities and states just cannot meet that kind of an emergency. Municipalities have to turn to the states and the states have to turn to the Federal Government… That is one of the very important functions of a consolidated Works Department, to analyze those needs, prepare for them, work with the states and municipalities; encourage the preparation of plans, schedule the work, distinguish between what is immediate and cannot be postponed and wait until a depression comes along, and what can be postponed.[11]
After some related discussion of the federal role in public housing, Moses had an exchange with James Rowe that cut to the heart of the matter:
MR. ROWE. … I was wondering if a better way of doing it is for the major purpose of a department — in other words, you would regard your engineers as an instrument to achieve a certain end just as you regard your ending to achieve a certain end. In that ease, you would have your engineers and your financial problems for housing in a housing agency. You would have your airport work, your road work, probably in a transportation agency with your engineers and your financial problems tied up there, and of course I would make the same argument for natural resources, that your engineers are merely an instrument, I will grant, in these eases, a major instrument, to create a result. But the result should be dominated by the people who are going to be the end users…
MR. MOSES. I do not agree to that at all.
MR. ROWE. How far would you carry—
MR. MOSES. In the first place, our department is not built around that theory. Our organization is decidedly not built around it and we have indicated in the report why it is not built around that. It is strictly functional. We have given reasons why we should think that should not be done. We have given reasons why we think, for certain reasons, the people who build ought to operate.
Now, the story that that is not done in some cases, that I do not agree to either. As a matter of fact, the Department of Justice, the Attorney General’s Office of a State, corporation counsel in a city, is built around that particular theory.
MR. ROWE. I would say it is just the opposite. I spent two years in the Department of Justice and I would regard it as merely your trial lawyers. In the field of taxation, for instance, your large body of lawyers in Internal Revenue. In terms of government, most of the lawyers in government are outside the Department of Justice.[12]
At that afternoon’s session, after the witnesses had left, Hoover expressed “grave doubts” about whether there should be a Cabinet-level Department of Transportation and spoke favorably of transforming Interior into some kind of Public Works and Resources entity. When James Pollock then pointed out that their Transportation Task Force had recommended a Cabinet-level DOT, Hoover responded “I have some doubts about that because I think that that report, as I read it twice…makes a good case for coordination but does not make a good case administratively because the agencies they propose are as dissimilar as all outdoors from an administrative point of view. To put ships alongside highway and river improvement is a pretty abnormal set-up..”[13]
Rowe then suggested combining most of those transportation elements under the Commerce Department, to which Hoover sounded slightly more amenable.
Later, Dean Acheson asked Rowe if he supported combining the Corps of Engineers and the Bureau of Reclamation in a Resources Department, and when Rowe said yes, Acheson then asked what he would do with the rest of the public works agencies. Rowe responded:
It depends on where we go on the Department of Transportation. But as a general principle, I would put all construction, the function – if you are going to have airports which are to be maintained by the Civil Aeronautics Authority, I would put construction in there. With roads, I would do the same thing…In other words, I would not have a Federal Works Agency…My argument is, sir, that the function should go with construction. Put all construction together and or say construction is merely a tool, like lending or law, and let it go with the functions.”[14]
The Commission did not immediately settle these issues. On December 6, the Commission appointed a four-person Committee on Transportation, consisting of Hoover, Rep. Clarence Brown (R-OH), Joe Kennedy, and George Mead. By December 10, James Rowe had completed a 21-page draft report on transportation that generally went along with the Brookings task force report. It proposed a Cabinet-level DOT, to include Public Roads, the CAA, the CAB, the Inland Waterways Corporation, the Coast Guard, the Coast and Geodetic Survey, the Maritime Commission, and the safety and car service functions of the ICC. The DOT would also have “Approval and programming of navigational features of waterway improvements, transferred from the Corps of Engineers.” The proposal would also have given regulatory functions of the Maritime Commission to the ICC and that the ICC and CAB should be in the department and directly report to the Secretary.[15]
At the very end of his report, Rowe wrote that “An alternative to a Department of Transportation would be to group government transportation functions and agencies in the Department of Commerce. This might be justified on the grounds that (1) it would be easier to effect such a grouping since several of the agencies involved are already located in Commerce, and (2) the removal of the transportation agencies now in the Commerce Department would leave Commerce a very small department.”[16]
Rowe transmitted his draft report to the Committee on Transportation, and to the rest of the Commission, on December 13. Two days later, the Commission met to consider those recommendations. But first, according to the minutes of the meeting, “Chairman Hoover asked for the views of the Commissioners with respect to the need of verbatim transcripts of Commission meetings. After discussing the need, a majority of the Commissioners agreed that the verbatim recording of the meetings be discontinued.”[17]
On the next meeting day (December 20), at the urging of Dean Acheson, the Commission voted to reconsider its December 15 action and resume making verbatim transcripts of the sessions, so the December 15 and 20 meetings are the only ones without a transcript. Which is a pity, from the point of view of a transportation historian, because the minutes tell us that right after they voted to stop taking verbatim transcripts on December 15, the Commission did this:
The “detailed consideration of the issues” that took place on December 15, 1948, leading the Commission to decide against creation of a Department of Transportation, is forever lost to history. At a June 1949 hearing, Senator Herbert O’Conor (D-MD) asked Hoover why the Commission overruled its own Task Force, which had recommended creation of a DOT. Hoover responded:
Mr. Hoover. It was our thought that it was bad governmental policy to set up a Government department for a special industry. While these functions were related to each other, they related to other issues that they could be handled better in an existing department. The proposal was to combine the Government air, the highway, the railroad, and water transportation questions all in the Department of Commerce, excepting of course the regulatory functions which are not touched, the object, first, being to secure some coordination between these transportation services. The Commerce Department deals with commerce in other aspects than transportation, and with industry in other aspects than transportation. Therefore, we felt that the Department was the better setting for such an agency.[18]
It is also likely that Hoover personally was swayed by the argument that if a DOT were created, there wouldn’t be much left at Commerce. Hoover had turned the job of Commerce Secretary from a nothing post into a major Cabinet player by grabbing jurisdiction and authority wherever he could. Per Table 8 of the 1949 Budget, total Commerce Department spending under its existing jurisdiction in 1949 was anticipated to be $260.5 million. If the Task Force on Transportation’s recommendations were agreed to, Commerce would lose the CAA ($160.9 million), the pass-through money for the CAB ($3.6 million), and the Coast and Geodetic Survey ($10.8 million). Only an $85.2 million budget would remain, a two-thirds reduction.
Commissioner George H. Mead then wrote the first draft report of the newly renamed Committee on the Commerce Department and circulated it on December 17. The report stated that “It was the obvious intent of the Congress in creating the Department that it should embrace the Government’s interest in the development and safeguarding of Transportation.”[19]
His plan would have let Commerce keep all its existing components and would have transferred to Commerce the Public Roads Administration (from the Federal Works Agency), the Coast Guard (from the Treasury Department), the National Advisory Committee on Aeronautics, and the non-regulatory functions of the ICC, the CAB, and the Maritime Commission (as well as one non-transportation entity, the Commercial Fisheries Section of the Fish and Wildlife Service). All of the transportation-related components of the expanded Commerce Department would be organized into four modal divisions, each with a Director: Merchant Marine Activities, Aeronautics Activities, Public Roads Activities, and Road and Motor Safety. The four Directors would report to an Assistant Secretary for Transportation.
While the initial draft report recommended that the “purely regulatory transportation activities, such as regulation of competitive rates, be assigned to independent regulatory commissions.”[20] However, in a revised fourth draft of the report dated January 8, 1949, a new caveat was added: “In order that there be coordination in the development and promotional fields, the Commission recommends that in the case of determining route patterns by any agency of the government that such patterns should be approved by the Secretary of Commerce. This is intended to apply to Merchant Marine routes, Highway routes, Railway routes, and Air routes.”[21]
The full Commission met on January 12, 1949 to consider the Commerce report. (By mid-December, it had become clear that the Commission was not going to make the January 13, 1949 final reporting deadline, so Congress quickly passed, and President Truman signed into law on New Years Eve, a law (62 Stat. 1292) extending the Commission’s final reporting deadline by sixty days.) The Commission had their clerk read through the report, line by line, and while there was extended discussion of some of the nomenclature and policy, the Commission did not make any real changes in the proposed departmental structure.
However, the Committee on Independent Regulatory Agencies also had a role to play. While the Task Force on Transportation (Brookings) had recommended merging the regulatory authorities of the ICC, CAB and Maritime Commission into one Transportation Regulatory Commission to ensure common regulatory policies over railroads, trucking, air, pipeline, waterway, and ocean transportation, the Task Force on Independent Regulatory Commissions issued a contradictory report recommending the three be kept separate.
The Hoover Commission appointed a four-person Subcommittee on Regulatory Commissions – Clarence Brown, James Pollock, James Rowe, and Sen. George Aiken (R-VT). With Aiken absent and not participating, Brown and Pollock voted to combine the ICC, CAB, and USMC, in order to “make possible a consistent and balanced policy of rate and regulatory activities among competing forms of transportation…”[22]
Rowe dissented and wrote his own draft report. He emphasized that the ICC’s workload was primarily rate regulation, but that the CAB and USMC were more focused on subsidies and, in the case of the CAB, safety regulation, than rate regulation. He also said that “Work-load and other factors indicate that combined in one agency the ‘civil aviation’ and ‘maritime’ functions would become poor cousins to the massive rail-motor-domestic vessel regulation.”[23]
On February 1, the full Hoover Commission sided with Rowe and voted to overturn the subcommittee’s recommendation to combine the three transportation regulatory commissions. They sent the draft report back for rewriting.
And the most controversial proposal, to combine the Army Corps of Engineers with the Bureau of Reclamation and to consolidate other federal public works activities with them in a renamed Interior Department, was obviously going to cause waves. Hoover went to meet with President Truman on January 7, 1949. According to Hoover’s notes of the meeting:
I also spoke to the President about having all of the major construction of public works of the Government concentrated in one agency. I suggested that it should be the Department of the Interior and that it should include Flood Control, Rivers and Harbors, and Reclamation, and all of the building construction of the government…
…I further stated that there should be a Commission of Review, comprised of eminent engineers who would review all of those projects, and that this Commission should be in the Department of the Interior. I stated that there was a division of opinion in the Commission on Organization as to what Department and as to the formation of a Commission of Review. I pointed out that if it were not placed in another Department it would bring all of the promotional activities of the country about the President’s ears, and that the thing to do was to have it in the Department of the Interior where it would be once removed from the White House.
The President entirely agreed as to the constitution of this Department and said he would be glad to aid in this matter. I told him that within a matter of a week to ten days I might be calling upon him to suggest to his Cabinet Members that they support me in this. He said he would be glad to do so.[24]
The Commission formally adopted the revised Commerce Department report at their February 14 meeting, along with the revised Independent Regulatory Commissions report (with Clarence Brown formally dissenting on the latter[25]). Then, on February 16, the Commission made its final decisions on the Interior Department, voting to move the water resources functions of the Army Corps of Engineers to the reorganized Interior Department, along with public building construction work and most direct government construction activities (excepting grants-in-aid). However, the Commission also voted to retain the Interior name and not rename it Public Works or Natural Resources.
How was the Commission able to justify consolidating federal public works in Interior, yet also leaving airports at Commerce and moving Public Roads there as well? The difference is that the federal road and airport programs were (and are) grant programs, not direct construction. Indeed, the Commission’s final report on the Interior Department noted that they were proposing to move direct federal airport construction (like for the D.C.-area airports) to Interior, but leave the grants-in-aid airport construction program at Commerce.
The Commission sent its Commerce Department report to Congress on March 1. Whereas the Task Force on Transportation had recommended cutting the Commerce budget by two-thirds by transferring its transportation-related activities to a new Department of Transportation, the final Commission report called for increasing Commerce’s budget more than fourfold. To the base $260.5 million budget would be added Public Roads ($496.0 million), the Maritime Commission ($228.7 million), the Coast Guard ($109.2 million), and NACA ($49.0 million), as well as some functions of the ICC which had no specific dollar amount.
All activities under Commerce would be fall into one of two services: the Transportation Service, or the Industry and Commercial Service, as shown in this diagram from the final report.
All told, the Hoover Commission filed 19 separate reports on reorganizing various parts of the federal government between February 5 and May 2, 1949, all of which were then published as one large volume by McGraw-Hill. But President Truman would be able to pick and choose which recommendations he submitted to Congress – and Congress would have the final say, first by deciding whether or not to extend the Reorganization Act, and then by evaluating each individual reorganization plan or piece of legislation proposed by Truman.
Part five of this series, examining the Truman Administration’s responses to the Hoover Commission’s recommendations, is here.
[1] Kenneth Whyte. Hoover: An Extraordinary Life in Extraordinary Times. (New York: Knopf 2017) p. 586.
[2] Oral History Interview with James H. Rowe, conducted by Jerry N. Hess, September 30, 1969 and January 15, 1970 pp. 82-83. Retrieved online from the Harry S. Truman Presidential Library website on August 16, 2020 at https://www.trumanlibrary.gov/library/oral-histories/rowejh
[3] Letter from James E. Webb to Harry S. Truman, November 5, 1948. Original from the Webb papers in the Truman Library, reprinted in Timothy Walch and Dwight M. Miller, Herbert Hoover and Harry S. Truman: A Documentary History (Worland: High Plains Publishing, 1992) pp. 140-141.
[4] Letter from Harry S. Truman to Herbert Hoover, November 12, 1948. Original from the Hoover Library: reproduced in Walch and Miller, pp. 142-143.
[5] Whyte pp. 588-589.
[6] Transcript of the 14th meeting of the Commission on the Organization of the Executive Branch, November 10, 1948 (afternoon session), pp. 134-135. From the Commission records in the National Archives, College Park, Maryland.
[7] Ibid p. 145.
[8] Transcript of the 15th meeting of the Commission on the Organization of the Executive Branch, November 18, 1948 (afternoon session), p. 126. From the Commission records in the National Archives, College Park, Maryland.
[9] Transcript of the 15th meeting of the Commission on the Organization of the Executive Branch, November 22, 1948 p. 48. From the Commission records in the National Archives, College Park, Maryland.
[10] Ibid p. 50.
[11] Ibid p. 52-53.
[12] Ibid pp. 66-67.
[13] Ibid pp. 94-95.
[14] Ibid pp. 109-111.
[15] James Rowe, Jr.”Memorandum for the Chairman – December 13, 1948” p. 1. From the Commission records in the National Archives, College Park, Maryland.
[16] Rowe report pp. 20-21.
[17] Minutes of Official Proceedings – Commission on Organization of the Executive Branch of the Government – 19th meeting December 13, 14 and 15, 1948 p. 4. From the Commission records in the National Archives, College Park, Maryland.
[18] U.S. Senate. Committee on Expenditures in the Executive Departments. Reorganization Plans of 1949: Hearing on the Message of the President on Initial Program of Reorganization of the Executive Branch of Government, and Reorganization Plans Nos. 1, 2, 3, 4, 5, 6, and 7 of 1949. June 30, 1949 p. 24.
[19] “Commission Report on the Department of Commerce – First Draft Dec. 17-48”, p. 4. From the Commission records in the National Archives in College Park, Maryland.
[20] Ibid p. 8.
[21] “Report on Reorganization of the Department of Commerce – Draft #4, Jan. 8, 1949” p. 11. From the Commission records in the National Archives in College Park, Maryland.
[22] “Majority Recommendation for a Transport Regulatory Commission by the Subcommittee on Regulatory Agencies” p. 2. From the Commission records in the National Archives in College Park, Maryland.
[23] James Rowe, Jr. “Maintenance of Separate Regulatory Commissions for General Domestic Transport, for Overseas Shipping, and for Air Transport, Together with Single Executive Transportation Department” p. 4. From the Commission records in the National Archives in College Park, Maryland.
[24] Hoover notes of a meeting with Truman, January 7, 1949. Original in Hoover Library, reproduced in Walch and Miller, pp. 146-147.
[25] Every time we mention Clarence Brown in an article, we have to point out that he was the grandfather of actor Clancy Brown, who played the evil immortal Kurgan in the awesome 1986 movie Highlander. There can be only one.
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Pre-1960s Attempts to Create a U.S. Department of Transportation – Part 5...
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