Special Message to the Congress Transmitting Reorganization Plan 1 of 1957-

To the Congress of the United States:

I transmit herewith Reorganization Plan No. 1 of 1957, prepared in accordance with the Reorganization Act of 1949, as amended.

The liquidation of the assets and the winding up of the affairs of the Reconstruction Finance Corporation have been proceeding for the past several years, in accordance with law. Reorganization Plan No. 2 of 1954 expedited and simplified liquidation by transferring certain functions of the Corporation to the Export-Import Bank of Washington, the Small Business Administration and the Federal National Mortgage Association. Reorganization Plan No. 1 of 1957 transfers all present functions of the Corporation to appropriate officers and abolishes the Corporation.

First, the reorganization plan transfers to the Housing and Home Finance Administrator functions of the Corporation relating to items resulting from programs which provided assistance to states, municipalities and other public agencies in financing various public projects. Also transferred are functions relating to the liquidation of programs of financial aid for drainage and irrigation projects.

Second, the plan transfers to the Administrator of General Services functions related to the liquidation of matters arising from national defense, war and reconversion activities conducted by the Corporation preceding, during, and subsequent to World War II. Functions relating to the liquidation of the Smaller War Plants Corporation are also transferred to the Administrator.

Third, the plan transfers to the Administrator of the Small Business Administration (1) all of the Corporation's disaster loan functions which were not transferred to the Small Business Administration by Reorganization Plan No. 2 of 1954, and (2) all matters arising out of the Corporation's financial assistance programs to business enterprises except those relating to assistance to railroads, financial institutions, and insurance companies and those listed in Schedule A. The first category consists of items, such as paid loans, charged off loans and closed files, which were not embraced by Reorganization Plan No. 2 of 1954. The second category includes generally loans or other matters involving outstanding amounts under $250,000 arising under financial assistance programs to business enterprises, as well as all functions relating to paid or charged off loans, regardless of amount, under such programs.

Finally, the plan transfers to the Secretary of the Treasury all of the functions of the Corporation not otherwise transferred by the plan. Those functions relate principally to the obligations and loans listed in Schedule A, which consist generally of business loans with outstanding principal balances in excess of $250,000, and to financial assistance to railroad companies, financial institutions, and insurance companies. The Secretary of the Treasury will also receive the capital stock of the War Damage Corporation, dissolution of which is expected in the near future when one remaining lawsuit is concluded.

The functions transferred by the reorganization plan are, in general, similar to, and can appropriately be administered in conjunction with, present activities of the respective transferees.

The plan also transfers the pertinent assets of the Corporation to the respective agencies, together with the related liabilities, and by operation of law substitutes the particular transferee for the Corporation with respect to all instruments of every kind and character pertaining to the transferred functions, assets and liabilities. In order to permit the transferees to administer the transferred matters with the same flexibility of operation as obtains at present, the plan transfers to each transferee those powers, authority, rights and immunities which are now available or applicable to the Corporation for carrying out the respective functions. To the extent that it becomes necessary or desirable, therefore, the transferees will be enabled, with respect to the transferred functions, to sue and be sued, to engage private attorneys in conjunction with litigation involving the transferred functions, and to avail themselves of any other authority, powers or immunities now available to the Corporation, whether under the Reconstruction Finance Corporation Act, as amended, or otherwise. In enacting the Reconstruction Finance Corporation Liquidation Act the Congress included a provision reading "The activities engaged in by the Secretary of the Treasury as a result of the enactment of this Act shall continue to be subject to the provisions of the Government Corporation Control Act." The Government Corporation Control Act will continue to be applicable to the functions transferred by the reorganization plan.

By transferring the remaining assets and liabilities of the Reconstruction Finance Corporation to officers who conduct continuing programs involving similar functions, the plan will carry out the basic purposes not only of the Reconstruction Finance Corporation Liquidation Act but also of the Reorganization Act of 1949, as amended. The size of the Corporation's portfolio has diminished to such a point that after June 30 it should not be necessary to maintain a separate agency solely for the purpose of administering the remaining assets. The plan will make possible a more economical administration of the Corporation's functions by obviating the expense incident to maintaining a separate organization. It is not, however, practicable at this time to indicate more specifically the reduction of expenditures which it is probable will be brought about by the taking effect of reorganizations contained in the plan.

Incident to the abolition of the Corporation, the reorganization plan (1) abolishes the function of making the final report provided for in section 10 of the Reconstruction Finance Corporation Act, as amended (10 U. S.C. 609), and (2) provides for a final report to the Congress by the Secretary of the Treasury which is to reflect the affairs of the Corporation up to the date of abolition of the Corporation and is to be made not later than June 30, 1959.

After investigation I have found and hereby declare that each reorganization included in the Reorganization Plan No. 1 of 1957 is necessary to accomplish one or more of the purposes set forth in section 2 (a) of the Reorganization Act of 1949, as amended.

I recommend that the Congress allow the reorganization plan to become effective.

DWIGHT D. EISENHOWER