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Statement About Signing the "Economy Act."

June 30, 1932

"I have signed the economy bill with but limited satisfaction.
"First, it falls far short of the economies proposed by the Cabinet and other executive officers of the Government; many items of their proposals, which were in turn recommended by committees on economy of the two Houses, failed of passage. Also the bill is so framed as to render abolition or consolidation of the most consequential commissions and bureaus impossible of consummation until some months after the next session of Congress.

"Second, it imposes unnecessary hardships on Government employees in minor matters of little consequence economically. Some of these hardships should be remedied at the next session of Congress. I believe we can administratively alleviate some of these difficulties and hardships. Every effort will be made to do so."

Note: As enacted, the "Economy Act" is Part II of Public, No. 212 (47 Stat. 399).

The furlough plan for Government employees was a prominent part of the act. On July 13, 1932, the White House issued a text of the letter to the President from the Chairman of the Council of Personnel Administration on the implementation of that plan, which follows:

The President:

As Chairman of the Council of Personnel Administration, I have the honor to submit to you the recommendations of the Council with respect to the policy and principles that should govern the application of the legislative furlough (Sec. 101 (b), Title I, Part II) and the administrative furlough (Sec. 216, Title II, Part II) provided for in the legislative appropriation act of June 30, 1932.

As to the legislative furlough, applicable to all departments and establishments--
1. The Council indorses in principle a five-day week for per diem employees and its equivalent in furloughs for salaried officials in the United States Government service.

The Federal Government should take the lead among large scale organizations in favoring a five-day work-week adapted in practical fashion to the needs of the service. The establishment of shorter working hours generally in industry would go far toward relieving the effects of the present depression, particularly in stabilizing and spreading employment and would constitute a force opposing future similar disturbances.

2. The adaptation must differ with varied Government activities so as not to impair the services rendered to the public or increase their cost.

The necessity for such variations is evident from a consideration of those departments and establishments which are charged with the responsibility of maintaining a continuous service for the direct convenience of the public, such as the Postal Service, or an uninterrupted service of a protective, law enforcement or institutional character.

3. There is also the further consideration of not imposing unnecessary hardship upon Government personnel in view of the withdrawal this fiscal year of the annual leave privilege.

In view of these conditions, it is not believed practicable to lay down any hard and fast rule regarding the legislative furlough, but rather that this should be left to the discretion of the heads of the departments and establishments, who should keep in mind the desirability of advancing the interests of a five-day week wherever it is practicable to do so.

As to the additional administrative furlough necessitated in some activities by reductions in appropriations--

4. The Council recommends herewith an Executive order covering the so-called administrative furlough.


In pursuance of the provisions of section 216 of Part II, Title II, of the Act entitled "An Act making appropriations for the Legislative Branch of the Government for the fiscal year ending June 30, 1933, and for other purposes," approved June 30, 1932, which reads as follows:

"SEC. 216. In order to keep within the appropriations made for the fiscal year 1933, the heads of the various executive departments and independent establishments of the United States Government and the municipal government of the District of Columbia are hereby authorized and directed to furlough, without pay, such employees carried on their respective rolls, such time as in their judgment is necessary to carry out said purpose without discharging such employees, the higher salaried to be furloughed first whenever possible without injury to the service: Provided, That rules and regulations shall be promulgated by the President with a view to securing uniform action by the heads of the various executive departments and independent Government establishments in the application of the provisions of this section"

the following regulations are hereby prescribed:

(1) Where an appropriation for a given activity, after deducting the amount to be impounded for compulsory furlough, is insufficient to an extent which ordinarily would require the dismissal of employees, the head of the department or establishment concerned will, in lieu of such dismissals, furlough employees, without pay, for such periods as are necessary to avoid a deficit in the appropriation and without discharging employees who are qualified to perform the class of work which is to be continued. The higher salaried employees will be furloughed first whenever possible without injury to the service. Subject to this condition, the total period of furlough under the provisions of this section will, so far as practicable and with due regard to the efficiency of the service, be uniformly distributed among the employees. This however, will not be construed as requiring the transfer of employees from one post of duty to another for the sole purpose of shortening the period of furlough of such employees.

(2) Furloughs under section 216 will be restricted to the utmost degree possible and invoked only where absolutely necessary to keep within the appropriations for the fiscal year 1933. In determining such necessity consideration will be given to all possible means of avoiding furloughs, such as the transfer of qualified employees from one appropriation roll to another, the possibility of transfer of appropriations under section 317 of the same act, and such administrative economies as may be possible in other items.
I have the honor to be
Very respectfully,
THOMAS E. CAMPBELL Chairman of the Council of Personnel Administration

Herbert Hoover, Statement About Signing the "Economy Act." Online by Gerhard Peters and John T. Woolley, The American Presidency Project https://www.presidency.ucsb.edu/node/207123

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