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Special Message to the Congress Transmitting Reorganization Plan 24 of 1950.

May 09, 1950

To the Congress of the United States:

I transmit herewith Reorganization Plan No. 24 of 1950, prepared in accordance with the Reorganization Act of 1949. The plan transfers the Reconstruction Finance Corporation to the Department of Commerce. The Corporation will continue to be administered by its board of directors and officers but subject to the supervision, coordination and policy guidance of the Secretary of Commerce.

This reorganization plan is an important additional step in simplifying the organization of the Executive Branch of the Government and also in making more effective the various Government services to business. In my special message of May 5 to the Congress I stressed the necessity of assuring the most effective coordination of Government aids to small and independent businesses. For this reason, I recommended that major responsibility for these programs be placed in the Secretary of Commerce. The need for such unified leadership and coordinated direction is no less essential with respect to our general business programs.

Both the business loan program of the Reconstruction Finance Corporation and the various services to business provided by the Department of Commerce have the same major purpose--the development of American business and industry. Government aid to business may involve loans, loans insurance, economic and trade information, managerial and technical assistance or a combination of several of these different types of services. If these various services are to be of the greatest benefit to the business community, unified supervision is necessary. Vesting supervision of the Corporation in the Secretary of Commerce will promote consistent policies and coordinated administration for both the financial and nonfinancial services to business.

By grouping in one agency all the principal services to business, the plan follows a pattern of organization which has proved highly successful in the areas of agriculture and housing. Up to 1939 the Farm Credit Administration, the Commodity Credit Corporation, and the Rural Electrification Administration--all of them major agricultural financial programs--were outside the Department of Agriculture. Today, no major agricultural credit programs are outside the Department of Agriculture.

Similarly, most of the major housing programs, including those involving loans and insurance, have been grouped in the Housing and Home Finance Agency. Further, I am transmitting today Reorganization Plans Nos. 22 and 23 of 1950, which carry this policy forward by transferring the Federal National Mortgage Association and loans for factory-built homes to the housing agency.

Only in the business area do we still maintain organizational cleavage between the Government's financial and non-financial activities. The reorganization under this plan will produce benefits comparable to those we have already obtained through unified administration of our agricultural and housing programs.

While the primary purpose of the Reconstruction Finance Corporation is to make loans to business enterprises, the Corporation, even after the transfer of its housing functions, will still retain certain functions not directly related to its basic mission. These include the manufacture of synthetic rubber, production of abaca, and operation of the Texas City tin smelter, which are temporary functions. Certain of these activities, particularly rubber, are substantially related to existing programs within the Department of Commerce. It is, therefore, appropriate that they also be transferred along with the Corporation to the Department pending decision as to their ultimate disposition.

The Commission on Organization of the Executive Branch of the Government unanimously recommended that the Reconstruction Finance Corporation should be brought within the departmental structure of the Executive Branch. The Commission was not unanimous, however, in recommending the department to which the Corporation should be transferred. A majority of the Commissioners favored transfer to the Treasury Department; a minority preferred the Department of Commerce. I have given the Commission's recommendations careful study. In my judgment, the activities of the Corporation are designed primarily to aid business. This is also a basic mission of the Department of Commerce. On the other hand, the Treasury Department has no lending functions with respect to individuals or private corporations. The transfer of the Corporation to the Department of Commerce is consistent with the organization of lending activities for agriculture and housing.

The plan transfers the Reconstruction Finance Corporation as a corporate entity to the Department of Commerce. The Corporation's status within the Department of Commerce will be generally comparable to that of those thirty-five wholly-owned Government corporations which are already within departments or agencies or subject to the supervision of department heads.

After investigation I have found and hereby declare that each reorganization included in Reorganization Plan No. 24 of 1950 is necessary to accomplish one or more of the purposes set forth in section 2(a) of the Reorganization Act of 1949.

The taking effect of the reorganization included in Reorganization Plan No. 24 may not in itself result in substantial immediate savings. However, the important objective is maximum effectiveness in the administration of our programs to aid the Nation's business. Greater effectiveness in turn will produce indirect savings in terms of the quantity and quality of output in relation to expenditures. An itemization of these savings is not practicable.

The economic health and prosperity of this Nation are dependent upon the continuing growth of business and industry. It is of vital importance that the various Government services which can play a part in promoting such growth make their most effective contribution. I strongly urge acceptance of this plan as a means of accomplishing this objective.

HARRY S. TRUMAN

Note: Reorganization Plan 24 of 1950 is printed in House Document 589 (81st Cong., 2d sess.). It did not become effective.

Harry S Truman, Special Message to the Congress Transmitting Reorganization Plan 24 of 1950. Online by Gerhard Peters and John T. Woolley, The American Presidency Project https://www.presidency.ucsb.edu/node/230411

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