CHAPTER VIII

THE ADMINISTRATION AND THE CIVIL

SERVICE

47. THE PRESIDENT AND THE ADMINISTRATION

The President is by the Constitution vested with the executive power and with the general enforcement of the laws. It is Congress, however, that creates and maintains the numerous administrative offices of whatever grade, and that prescribes the functions of these offices. The question has therefore arisen of the exact relationship between the President and the other officers in the national administrative system, and the extent to which he may control their conduct. This question became especially acute in connection with the relations of President Jackson to the Second United States Bank, which was established by Congress in 1816.

It was provided that government funds were to be deposited in that Bank or its branches, unless the Secretary of the Treasury should otherwise direct, in which case the reasons for removal were to be reported to Congress. A bill to recharter the Bank was passed in July, 1832, and promptly vetoed by President Jackson. Being re-elected in the campaign that followed, the President felt himself supported in his desire to crush the Bank, and in 1833, directed his Secretary of the Treasury to remove the government deposits and place them in selected state banks. Secretary McLane being opposed to the policy of removal and feeling himself, rather than the President, responsible under the act, refused to obey the President's order and was transferred to the State Department. The new Secretary of the Treasury, William J. Duane, likewise refused to remove the deposits and was summarily dismissed. Attorney General Roger B. Taney was thereupon appointed Secretary of the Treasury, and promptly carried out the President's directions, Jackson thus effectually destroying the Bank even before the expiration of its charter. The Senate refused to confirm Taney's appointment, and adopted a resolution censuring the President for what it considered his arbitrary and unlawful action; a resolution to which Jackson responded with a vigorous defense of his policy, and which was later (in 1837) expunged from the Senate journal.

[Protest of President Jackson against Senate Resolution of Cen-
sure, April 15, 1834. Richardson, Messages and Papers of the
Presidents, vol. III, pp. 83-85.]

The Congress of the United States have never passed an act imperatively directing that the public moneys shall be kept in any particular place or places. From the origin of the Government to the year 1816 the statute book was wholly silent on the subject. In 1789 a Treasurer was created, subordinate to the Secretary of the Treasury, and through him to the President. He was required to give bond safely to keep and faithfully to disburse the public moneys, without any direction as to the manner or places in which they should be kept. By reference to the practice of the Government it is found that from its first organization the Secretary of the Treasury, acting under the supervision of the President, designated the places in which the public moneys should be kept, and especially directed all transfers from place to place. This practice was continued, with the silent acquiescence of Congress, from 1789 down to 1816, and although many banks were selected and discharged, and although a portion of the moneys were first placed in the State banks, and then in the former Bank of the United States, and upon the dissolution of that were again transferred to the State banks, no legislation was thought necessary by Congress, and all the operations were originated and perfected by Executive authority. The Secretary of the Treasury, responsible to the President, and with his approbation, made contracts and arrangements in relation to the whole subject-matter, which was thus entirely committed to the direction of the President under his responsibilities to the American people and to those who were authorized to impeach and punish him for any breach of this important trust.

The act of 1816 establishing the Bank of the United States directed the deposits of public money to be made in that bank and its branches in places in which the said bank and branches thereof may be established, "unless the Secretary of the Treasury should otherwise order and direct," in which event he was required to give his reasons to Congress. This was but a continuation of his preexisting power as the head of an Executive Department to direct where the deposits should be made, with the superadded obligation of giving his reasons to Congress for making them elsewhere than in the Bank of the United States and its branches. It is not to be considered that this provision in any degree altered the relation between the Secretary of the Treasury and the President as the responsible head of the executive department, or released the latter from his constitutional obligation to "take care that the laws be faithfully executed." On the contrary, it increased his responsibilities by adding another to the long list of laws which it was his duty to carry into effect.

It would be an extraordinary result if because the person charged by law with a public duty is one of his Secretaries it were less the duty of the President to see that law faithfully executed than other laws enjoining duties upon subordinate officers or private citizens. If there be any difference, it would seem that the obligation is the stronger in relation to the former, because the neglect is in his presence and the remedy at hand.

It can not be doubted that it was the legal duty of the Secretary of the Treasury to order and direct the deposits of the public money to be made elsewhere than in the Bank of the United States whenever sufficient reasons existed for making the change. If in such a case he neglected or refused to act, he would neglect or refuse to execute the law. What would be the sworn duty of the President? Could he say that the Constitution did not bind him to see the law faithfully executed because it was one of his Secretaries and not himself upon whom the service was specially imposed? Might he not be asked whether there was any such limitation to his obligations prescribed in the Constitution? Whether he is not equally bound to take care that the laws be faithfully executed, whether they impose duties on the highest officer of State or the lowest subordinate in any of the Departments? Might he not be told that it was for the sole purpose of causing all executive officers, from the highest to the lowest, faithfully to perform the services required of them by law that the people of the United States have made him their Chief Magistrate and the Constitution has clothed him with the entire executive power of this Government? The principles implied in these questions appear too plain to need elucidation.

But here also we have a contemporaneous construction of the act which shows that it was not understood as in any way changing the relations between the President and Secretary of the Treasury, or as placing the latter out of Executive control even in relation to the deposits of the public money. Nor on that point are we left to any equivocal testimony. The documents of the Treasury Department show that the Secretary of the Treasury did apply to the President and obtained his approbation and sanction to the original transfer of the public deposits to the present Bank of the United States, and did carry the measure into effect in obedience to his decision. They also show that transfers of the public deposits from the branches of the Bank of the United States to State banks at Chillicothe, Cincinnati, and Louisville, in 1819, were made with the approbation of the President and by his authority. They show that upon all important questions appertaining to his Department, whether they related to the public deposits or other matters, it was the constant practice of the Secretary of the Treasury to obtain for his acts the approval and sanction of the President. These acts and the principles on which they were founded were known to all the departments of the Government, to Congress and the country, and until very recently appear never to have been called in question.

Thus was it settled by the Constitution, the laws, and the whole practice of the Government that the entire executive power is vested in the President of the United States; that as incident to that power the right of appointing and removing those officers who are to aid him in the execution of the laws, with such restrictions only as the Constitution prescribes, is vested in the President; that the Secretary of the Treasury is one of those officers; that the custody of the public property and money is an Executive function which, in relation to the money, has always been exercised through the Secretary of the Treasury and his subordinates; that in the performance of these duties he is subject to the supervision and control of the President, and in all important measures having relation to them consults the Chief Magistrate and obtains his approval and sanction; that the law establishing the bank did not, as it could not, change the relation between the President and the Secretary-did not release the former from his obligation to see the law faithfully executed nor the latter from the President's supervision and control; that afterwards and before the Secretary did in fact consult and obtain the sanction of the President to transfers and removals of the public deposits, and that all departments of the Government, and the nation itself, approved or acquiesced in these acts and principles as in strict conformity with our Constitution and laws.

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considerable influence over administrative policy and methods. These investigations have been especially numerous of recent years, the most notable being that by a Senate committee into the oil land leases of the Harding administration, which served to reveal the frauds in connection with such leases and ultimately to restore the congressional policy of oil conservation. It is charged by some, however, that such investigations are often of a partisan character, designed merely to annoy and hamper the executive branch, and that they are quite outside the proper jurisdiction of Congress. The discussions of the purpose and value of this practice deserve the most careful attention.

a. Letter of Secretary Mellon to President Coolidge [Congressional Record, vol. 65, pp. 6087-6088.]

Dear Mr. President:

The Secretary of the Treasury,
Washington, April 10, 1924.

On March 12, 1924, by Senate resolution 168, the Senate appointed a special committee to investigate the Bureau of Internal Revenue and suggest corrective legislation. Senator Couzens was the moving spirit of the resolution. In urging the appointment of the committee, his purpose was ostensibly to obtain information upon which to recommend to the Senate constructive reforms in law and in administration. With such a purpose I am entirely in accord.

From the line of investigation selected by Senator Couzens and by the atmosphere which he has seen fit to inject into the inquiry, it is now obvious that his sole purpose is to vent some personal grievance against me. All companies in which I have been interested have been sought out. I have aided in obtaining from them the waiver of their right to privacy and in the delivery of their income tax returns in complete detail to the committee.

This investigation has disclosed that no company in which I have been interested has received any different or better treatment than any other taxpayer. The inquiry, so far as showing that I favored my own interests, has failed completely. Any constructive purpose of the committee has now been abandoned.

At a meeting of the committee yesterday Senator Couzens carried a resolution, against the objection of the two Republican members, empowering Francis J. Heney to assume charge of the investigation and to conduct the examination of witnesses, with the understanding, expressly stated in the resolution, that neither the committee nor the Government pay Heney's com