Special Message to the Congress Transmitting Reorganization Plan 1 Relating to the Reconstruction Finance Corporation.
To the Congress of the United States:
I transmit herewith Reorganization Plan No. 1 of 1951, prepared in accordance with the Reorganization Act of 1949.
The reorganization plan provides strengthened administration of the Reconstruction Finance Corporation by placing in a single Administrator of the Reconstruction Finance Corporation the functions of the present Board of Directors, except those that are specifically set forth and assigned to a new Loan Policy Board and to a board of review. The Administrator is thus made the executive head of the Corporation with major responsibility and authority over the administration of the Government programs carried out by the Corporation.
At the same time that this plan provides strengthened administration for the Corporation, it also provides certain additional safeguards with respect to loan policy and to specific loan applications. Under the reorganization plan, the Loan Policy Board promulgates general policies which shall govern the granting and denial of applications for financial assistance by the Corporation. The reorganization plan likewise includes new provisions for ensuring that all loan applications are handled in accordance with established policy.
In addition to providing strengthened administration of the Corporation and additional safeguards with respect to loan policy and the approval of specific loan applications, the reorganization plan provides the basis, by virtue of the composition of the Loan Policy Board, for better coordination of the Corporation's loan policies with other policies, programs and activities of the Government. The reorganization plan provides that this Board shall have five members, all ex officio. These are the Administrator of the Corporation, the Deputy Administrator, the Secretary of the Treasury, the Secretary of Commerce, and one additional member to be designated from time to time by the President from among officials of the Government who are required to be appointed by the President and confirmed by the Senate. The participation of these officials will facilitate the development of loan policies consistent with the requirements of other broad programs of the Government.
Especially important is the participation of the Secretary of Commerce who, as head of Department of Commerce, administers most of the Government programs for non-financial aids to business. Giving him a voice on the Loan Policy Board will aid in bringing under common policies the financial aids to business administered by the Corporation and the non-financial aids carried on in the Department of Commerce. Government aid to small and independent business should be particularly benefited by the participation of the Secretary of Commerce.
Specifically, the provision in the reorganization plan for a financial assistance procedure governing the processing of applications in excess of $100,000 to any borrower strengthens and gives statutory prescription to an administrative arrangement already existing in the Corporation. In handling such loans under the reorganization plan, applications will be referred for analysis and recommendation to a board of review composed of not less than five employees of the Corporation. Whenever the Administrator approves or denies an application for financial assistance on which a board of review has recommended otherwise, he must set forth, in a memorandum to be placed in the files of the Corporation the reasons for his action. This procedure is provided in order to assure that all applications for loans involving large sums are fully analyzed by the technical staff of the Corporation and that the recommendations of the staff are fully available to the Administrator when acting finally upon such applications.
The reorganization plan continues the Reconstruction Finance Corporation as a separate corporate entity in the executive branch of the Government. Those functions which are currently performed by the Corporation or any of its agencies or officers pursuant to a delegation or assignment of functions made by the President will be subject to termination or modification of any such delegation by the President.
After investigation I have found and hereby declare that each reorganization included in Reorganization Plan No. 1 of 1951 is necessary to accomplish one or more of the purposes set forth in section 2(a) of the Reorganization Act of 1949. I also have found and hereby declare that by reason of these reorganizations, it is necessary to include in the reorganization plan provisions for the appointment and compensation of the Administrator and Deputy Administrator of the Reconstruction Finance Corporation. The rates of compensation fixed for these officers are, respectively, those which I have found to prevail in respect of comparable officers of the executive branch of the Government.
The taking effect of the reorganization included in Reorganization Plan No. 1 of 1951 may not in itself result in substantial immediate savings. However, the important objective of achieving the maximum effectiveness in the administration of the Government's lending programs to aid business will be advanced. Increased effectiveness will in turn produce indirect savings. An itemization of these savings is not practicable.
The reorganization plan is especially important at this time of national emergency. It will strengthen the administration of the Reconstruction Finance Corporation and at the same time provide additional safeguards with respect to loan policy and the approval of individual loans. It will make possible the more effective coordination of the Government's general loan policies. I strongly urge the approval of the reorganization plan as a means of achieving these objectives.
HARRY S. TRUMAN
Note: Reorganization Plan 1 of 1951 is published in the U.S. Statutes at Large (65 Stat. 773) and in the 1949-1953 Compilation of Title 3 of the Code of Federal Regulations (p. 1018). It became effective May 1, 1951.
Harry S Truman, Special Message to the Congress Transmitting Reorganization Plan 1 Relating to the Reconstruction Finance Corporation. Online by Gerhard Peters and John T. Woolley, The American Presidency Project https://www.presidency.ucsb.edu/node/231395