The Atlantic Report on the World Today: Washington

ON THE WORLD TODAY

THE resignation of Harold D. Smith as Director of the Bureau of the Budget has focused attention on the steady flow of resignations from the Federal service because of the lure of higher salaries. These resignations are now being viewed with alarm. More and more responsibilities are being put upon the government, even to the extent of ensuring full employment; on the other hand, the government is being deprived of its ablest public servants in meeting those responsibilities. That is the way to get second-rate government.

Daniel W. Bell, who was Under Secretary of the Treasury, preceded Smith into private employment on January 1. He had refused offers from private business until his personal situation gave him no option but to quit. Smith was in the same boat. Both of them — and they are two of the ablest men to resign since V-J Day — were wedded to the public service, but they could not see any hope of meeting the rising cost of living on their government pay. Both were $10,000 a year men.

The loss of Harold Smith will be felt throughout the executive branch. As Director of the Bureau of the Budget, he was both business manager and secretary to the administrative arm of the government. In other words, he was its mainspring.

Every department has to clear its budget with the Director’s office before it goes to Congress for the appropriation. The Director makes his own survey of requirements, studies all new projects, and, when advisable, changes the recommendations. His is the supervisor’s job for the President. All the departments think of the Director of the Bureau of the Budget as a tyrant.

Yet Harold Smith was respected throughout the government for his acumen and his knowledge of government practice. The trouble was that he could not be in a dozen places at once. President Roosevelt found him so valuable that he threatened to station half a dozen Marines around his person if he ever tried to resign.

As business manager Mr. Smith put a new meaning into budgeting. Formerly it was restricted to the narrow confines of government intake and outlay. Under Mr. Smith the national budget has been related to the utilization of our national resources. The transition is not yet complete, but progress has been made.

Executive efficiency

The other duty that Mr. Smith undertook — namely, the coördination of executive activities — is likewise in process of transition. Mr. Smith, of course, had not time enough to be a coördinator, but he laid the groundwork for the Cabinet Secretariat.

The coördination of executive functions is the pet reform of Secretary Forrestal. He preaches the idea to all his visitors. The British model, especially in the classic regime of Sir Maurice Hankey, is his illustration. To make government activity consistent, continuous, and efficient is the aim.

But that problem is for the future. The immediate problem is how to keep our top-flight personnel in Federal service. A member of Congress once said, “I’ll not be concerned over the salaries of government officials until people of the type of Smith of the Budget Bureau resign.” Well, Harold Smith has now resigned, and Congress will never vote enough money to get good men till the salaries of its own members have been increased.

This the La Follette-Monroney bill would do. Congressional salaries would be lifted to $15,000, which is at least the salary that the Bells and the Smiths should get. Congressmen deserve it. They have had no increase in twenty years except through minor additions to expense funds. A pay hike all around appears to be in the offing as a result not only of Smith’s going but also of the surprising progress the La Follette-Monroney bill has made. The bill, of course, would streamline Congress as well as ensure a pay raise.

Where is inflationary pressure coming from?

Those who think of inflation as hinging upon the swollen amount of savings in the hands of the public will be comforted by a survey of liquid assets put out by the Federal Reserve Board. The survey, based on careful sampling, indicates that 10 per cent of all “spending units” hold 60 per cent of the liquid assets. By “spending unit” the Board means all persons living in the same dwelling, and belonging to the same family, who pool their income to meet major expenses. By contrast, 50 per cent of all spending units hold only 3 per cent of liquid assets. These figures show a high degree of concentration of individual savings.

It follows that the mass of people cannot generate inflation out of savings, as had been thought. But is inflation, after all, a financial phenomenon? An impressive school of thought puts the emphasis on the psychological factor — that inflation is produced by lack of faith in the government rather than lack of faith in the dollar.

The survey is valuable as an indication of buying prospects. It seems to show two things: first, that the demand for capital consumer goods like refrigerators has been exaggerated; second, that a recession when we have returned to normal buying may be nearer than had been anticipated. All this is important in a particular sense for the government, because of the formal responsibility it has undertaken for “compensatory spending” whenever a slump is threatened.

Buzz-bomb from Nuremberg

Faith in the government has had a jolt in the revelation of the Jackson-Black feud in the Supreme Court. That friction existed among members of the Court had been common gossip. The difference is partly personal, partly ideological. But the blast from Nuremberg presented the country with a spectacle that caused even old-timers to blench. The trouble boils down to the personal ambitions of individual Justices.

To the new Chief Justice will fall the onerous task of developing some degree of harmony on the nation’s highest bench. Is Vinson capable of the job? It is the consensus in Washington that for this particular purpose the President could not have made a better choice. Vinson is a real judge, though not a great one. He is not learned in the law, but he is wise in human relations.

There is a native quality of administrative leadership in Vinson. This quality is fortified by his lack of any “line” of philosophy. Judging from his acts and speeches, he is a pragmatist, though his tendency may be “middle of the road” according to the Black school of thought. Most observers are confident that in his new post he will make himself a balance wheel.

This is an art in which Vinson has become adept as a result of his long record in government posts of great responsibility. Incidentally, President Truman’s sacrifice of Fred Vinson, by far his most sagacious adviser, to the Court is evidence of his understanding of the crucial need for repairing the prestige of the Court.

Congress reaches for the controls

There is no relaxation from the pressure of the special groups competing to get Congress to write legislation their way. What was done to the OPA is in that category. For students of government there was an innovation in one of the amendments voted by Congress, which would have made all decisions of the OPA subject to revision by Congress.

The prospect of having Congress become a sort of appellate court on administrative decisions is not pleasant to contemplate. Surely the function of a legislature is to lay down broad principles of government and to leave the details to the administrative arm. But the fact is that Congress seems determined to take over the reins of government. This is perhaps natural after a war during which, of necessity, there had to be strong executive government.

Even in foreign affairs the trend of Congressional government is pronounced. It is all very well to have an executive-legislative liaison in the conduct of our foreign affairs. But in present-day practice Senator Vandenberg appears almost in the role of co-Secretary of State.

Splitting the United Nations

The atomic committee of the United Nations made a mistake in raising the issue of the veto power over atomic energy. The first need is to write a charter setting up an Atomic Development Authority and giving it control of fissionable materials and the right of inspection.

Compliance or noncompliance with the charter would be obvious. Defiance of the ADA by any government — for example, by refusing to admit investigators — would be a prompt signal of atomic trouble. The nations would immediately take steps against the offender, veto or no veto. What Mr. Baruch was trying to do in raising the veto issue was to undermine the veto power on punishment which exists in the Security Council. But there again the point is academic, for a threat of war involving a great power would mean the wrecking of the United Nations.

The issues in the primaries

A fear that the Middle West is reverting to isolationism seized the Capital after the Nebraska election. Mr. Stassen had made the Nebraska primary a test of internationalism. Certainly the winner, Hugh Butler, has had one of the most isolationist records in the Senate.

But second thoughts, based on better knowledge of local conditions, indicate that local issues were decisive. It seems that Butler’s rival, Governor Griswold, had failed to push a lot of local measures in which Nebraskans are interested.

As a Lincoln newspaper said, Governor Griswold “was backing his own record as governor and some very tangible factors indigenous to Nebraska and invisible from Washington or New York.” Moreover, the tradition in Nebraska is against a Governor’s becoming a Senator. Some observers found significance in the parallel between Stassen’s test in Nebraska and Wendell Willkie’s experiment in Wisconsin. But the decisive defeat of Senator Shipstead by Governor Thye in the Minnesota primaries is an indication that the Middle West is not committed to isolationism.

Unification compromise

Unification of the armed services is gradually coming to a decision by the route of compromise. Many concessions have been made to the Navy’s point of view, which is that real unification is a problem in administration. The main concession is the withdrawal of the proposal to have one rotating Chief of Staff.

Under an interservice arrangement suggested by President Truman, the Joint Chiefs of Staff device will be retained. This is command by consent, not by order. As such it has been denounced by General Marshall, the only man who made it work. “My experience in securing directives from the Joint Chiefs of Staff,” he said in his original advocacy of unification, “leads me to believe that it will be far better to have a single Commander of Armed Forces who has all the authority and responsibility for issuing a directive.”

The main reform in the new compromise is a single department. The other reforms, of course, are significant, but the real merger will come from the habit of working together. Mr. Truman was wise in withdrawing his effort to impose his original plan of merger. No system is better than the men who operate it.

THE MOOD OF THE CAPITAL

The mood of the Capital is restive over the November elections. Observers think they detect trends, but there is no unanimity in popular thinking on anything except the anti-labor feeling that Mr. Truman has generated. This was shown in the success of Earl Warren in the primaries in California against combined liberal and labor groups.

Matching the aggressiveness on the part of organized labor is the aggressiveness on the part of nonlabor groups. A right-left bitterness is growing apace. It is a pity that it is shared in the White House, where the President, in his anger with labor leaders, is refusing to promote more constructive efforts to create understanding. All that Congressmen can do is to take stock periodically of how the struggle will affect their chances in the coming appeal to the ballot box.

The President certainly has reason to feel let down by the difficulties that organized labor leaders have made for him. Labor leaders gave an informal no-strike pledge after V-J Day. It is difficult to understand why they gave it. Prices were going up, restlessness was in the air, tiredness was the rule, union treasuries were full to bursting — all these factors made for strikes. How the President could have expected a smooth reconversion is another mystery. As a result of his disillusionment, he has become antagonistic toward the labor leaders.

Moreover, he is hurt by the way some of his appointees have been manhandled by the Senate. Again the wonder is that he expected anything different, especially in connection with his submission of Edwin Pauley’s name as Under Secretary of the Navy. Senator Tobey released the text of a Presidential letter of admonishment for the part he played in squelching Pauley’s chances. The time may come, however, when Truman will thank Tobey, for the Senator undoubtedly spared the President a good deal of embarrassment.

Pauley, though doubtless an able man, would have been a political incubus. He would always have been suspected for the part he played in connection with the tideland oil issue. The sensitiveness of the President, however, has given him myopia and more than a little touchiness. Those who know him well are not unduly concerned, saying that it does not mean he is wearing a hair shirt, and that it is a temporary situation that will wear off.