Special Message to the Congress Transmitting Reorganization Plan 6 of 1961

To the Congress of the United States:

I transmit herewith Reorganization Plan No. 6 of 1961, prepared in accordance with the provisions of the Reorganization Act of 1949, as amended, and providing for reorganizations in the Federal Home Loan Bank Board.

Reorganization Han No. 6 of 1961 relates to my message of April 13, 1961, to the Congress regarding regulatory agencies and, in particular, to that portion of the message advocating the fixing of responsibility for the overall administration of multi-headed agencies in their chairmen. The reorganization plan also is in keeping with actions begun by President Truman, largely through reorganization plans, to strengthen the internal management of multi-headed agencies by making their chairmen, rather than the boards or commissions as a whole, responsible for day-to-day administration.

The first Commission on Organization of the Executive Branch of the Government concluded that purely executive duties can be performed far better by a single administrative official and stated: "Administration by a plural executive is universally regarded as inefficient." Also, as a matter of sound organization, the Congress and the President should be able to hold a single official rather than a group accountable for the effective management of an agency. The reorganization plan will meet both of those needs by placing responsibility and authority for the administration of the activities of the Federal Home Loan Bank Board in the Chairman of the Board. By relieving the Board of day-to-day managerial functions, the reorganization plan will significantly further the ability of the Board to deal more effectively with regulatory and policy matters before it.

Action to strengthen the management of the Federal Home Loan Bank Board and to relieve the Board of day-to-day operating responsibility is particularly needed because of the phenomenal growth of the Board's activities in recent years. By way of example, the number of institutions that are members of the Federal home loan bank system and subject to the Board's supervision has increased from 3898 in 1950 to 4552 at present. In the same period, the assets of those institutions have increased almost fivefold from $15.4 billion to $71.0 billion. In fiscal year 1950, the Board examined 2450 institutions; in fiscal 1961, about 4224 examinations will be conducted. The personnel of the Board have more than doubled in number in the last decade to handle the increased workload.

Pursuant to Reorganization Plan No. 3 of 1947, the Chairman of the Home Loan Bank Board was made the chief executive officer of the Board, and there was transferred to him the authority to appoint and direct the personnel necessary to perform the functions of the Board, the Chairman and the agencies under the Board. The Chairman's authority with respect to personnel was returned to the whole Federal Home Loan Bank Board by the Housing Amendments of 1955. The reorganization plan herewith transmitted would restore that authority of the Chairman and further increase his management functions.

Specifically, the reorganization plan will transfer to the Chairman of the Federal Home Loan Bank Board the Board's functions with respect to the overall management, functioning and organization of the agency; the appointment, removal and direction of personnel; the distribution of business among, and communication of Board policies to, such personnel; and the enforcement of policies and the general improvement of staff support. There are also transferred to the Chairman functions relating to preparation, review, presentation and justification of budget estimates and other fund authorizations and those relating to the allocation, use and expenditure of funds available for administrative expenses.

Nothing in the plan impinges upon the ability of the members of the Board to act independently with respect to substantive matters that come before them for decision, or to participate in the shaping of Board policies. In carrying out his managerial functions, the Chairman will be governed by the policies of the Board and the determinations it is authorized to make. The Board will have the authority to approve the Chairman's appointments of the heads of major administrative units, and the other members of the Board will retain their present control over the personnel in their immediate offices.

The taking effect of the reorganizations included in the accompanying reorganization plan will provide sound organizational arrangements and will make possible more economical and expeditious administration of the affected functions. It is, however, impractical to itemize at this time the reductions in expenditures which it is probable will be brought about by such taking effect.

After investigation, I have found and hereby declare that each reorganization included in the reorganization plan transmitted herewith 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.

JOHN F. KENNEDY