The Secretary's
Report

ON APRIL 11, 1953, President Eisenhower signed legislation enacted by the 83d Congress creating the Department of Health, Education, and Welfare.

In bringing together the somewhat loosely knit units that, since 1939, had made up the Federal Security Agency the President and the Congress assured permanent and continuing representation of the Agency's programs at the highest councils of the Executive Branch of the Government.

This action was undoubtedly the single most important event of fiscal 1953 with respect to the health, education, and welfare programs of the Federal Government.

It came about as a result of Reorganization Plan No. 1 which was submitted by the President to the Congress on March 12, 1953, and represented translation into fact of action first recommended as long ago as the Administration of President Warren G. Harding.

In an historical sense, the creation of the Department may also be thought of as a landmark in a concept that runs deep in American life. It is a concept embodied in the Preamble to the Constitution, and later made explicit in the body of that great document.

The purposes of the Constitution are defined in the Preamble as "to form a more perfect Union, establish justice, insure domestic tranquility, provide for the common defense, promote the general welfare, and secure the blessings of liberty to ourselves and our posterity."

Among the duties of the Congress defined under Article I, Section 8, are the "power to lay and collect taxes, duties, imposts, and excises to pay the debts and provide for the common defense and general welfare of the United States."

It is significant to point out, however, that this concept is stated in broad terms. While affirming the responsibility of Government, it

presumes that the specific measures through which application of this broad principle would be made would be the responsibility of succeeding generations.

It is significant also to note that the establishment of each of the major units of the Department is traceable to specific periods in our history when provision for the national welfare emerged as national needs.

The Public Health Service, to take the earliest example, was established by Congress in 1798 to care for merchant seamen and help keep disease from the shores of the young Republic. As an outgrowth of the turbulent years of the Civil War, Congress founded Howard University in 1865, when there was a felt national need to establish higher education opportunities in an institution which made no distinction on admissions because of race, creed, or color. Recognition of the importance of formal education in developing well-informed and responsible citizens also gave rise to the formation of the Office of Education in 1867.

In 1906 the first Federal Food and Drug Act was passed, acknowledging the fact that in an increasingly complex economy, Americans were becoming more dependent on manufactured food products and means to ensure their safety and purity were needed. In 1912 the special importance of the problems of children and youth to the future of the Nation was signalized by the creation of the Children's Bureau. In 1935, with overwhelming bi-partisan support, the old-age insurance and public assistance programs of the Social Security Administration were authorized by the Congress.

Other significant dates in the history of the Department include: the establishment of Saint Elizabeths Hospital for mental illness in 1855; the founding of the Columbia Institution for the Deaf in 1857; the start of Federal support of the American Printing House for the Blind in 1879; and the first grants to the States to encourage the vocational rehabilitation of physically disabled civilians, in 1920. The Office of Vocational Rehabilitation was founded in 1943 to carry on an expanded program in the latter field.

The establishment of the Department of Health, Education, and Welfare is, of course, itself an example of response to new needs and challenges in our society.

As the Nation has grown and changed, the Congress has altered or expanded the responsibilities of these specialized organizations that comprise the Department. The Public Health Service, for example, now administers a very great variety of programs. Sometimes the original purpose for which these programs were established has been virtually eclipsed by the rush of events and the consequent process of amendment and improvement by Congress. Certainly their

functions and activities will continue to respond to changing circumstances, as the will of our people is made known through the Congress. Another aspect of the historical development of the programs of health, education, and welfare is noteworthy. It is the fact that, by and large, the choice of the American people for action in these fields has been through what can be described as multiple partnerships rather than exclusively through governmental action. The notable improvements that have been achieved in public health, in education, and in welfare in our history have thus been the result of the efforts, for example, of voluntary associations and private philanthropic institutions working alone or with local and State governments as well as the Federal Government for the general welfare.

This pattern of action, to which this Department whole-heartedly subscribes, is based on traditions of self-reliance and neighborliness that are part of the fabric of American life.

The present administration of the Department assumed responsibility on January 20 of 1953.

Two immediate tasks were undertaken. One was a thoroughgoing review of the basic legislation, policies and programs of the Department. The second was a comprehensive review of the organization, staffing pattern and procedures necessary to carry out the Department's varied programs.

It was necessary to ask, it was felt, whether the legislation the Department was called on to administer was sufficient for the needs of the Nation in this decade of the fifties and beyond. Furthermore, it was necessary to ask whether the Department was equipped organizationally to carry out the programs that had been entrusted to it by the Congress.

To that end initial steps were taken in setting up task forces within the Department for each of the major subdivisions to study the programs and their administration. These task forces included representatives of the Secretary's Office, the heads of the subdivisions and a staff of technicians-some from within the Government itself, others from outside Government who were able to bring to the studies objectivity and a wealth of experience.

As a first step toward improved internal administration of the Department came the establishment of a Departmental Council. This is made up of the heads of the constituent units of the Department and members of the Secretary's immediate staff. It now meets weekly to consider questions of importance concerning both the machinery of operations and matters of policy.

A thoroughgoing internal security program was ordered by the President for every agency of the Government. A new Director of Internal Security was appointed by the Department and regulations

were issued to carry out Executive Order 10450, and a staff was recruited to see that security measures, which would safeguard both the Department and the individuals concerned, were instituted and enforced.

By the close of the year covered in this report considerable progress had been made in carrying out the provisions of the Executive Order. The reorganization as a result of the establishment of the Department during the early months of 1953 had, as additional guiding principles, the need for an economy in operations which would be brought about without disruption of the many services for which the Department is responsible to the American people.

The opportunity for effecting economies in the departmental budget is considerably limited by the fact that the Federal contribution to public assistance that is for cash payments to the needy aged, the needy blind, dependent children, and the disabled-is fixed by law. Of the total budget for fiscal 1954 of $1,786,528,000 which had been recommended by the previous Administration, $1,340,000,000, or 75 percent, was made up of these "uncontrollable" items.

It was possible, however, to achieve a sizeable reduction in the onequarter of the Department's budget that represented "controllable" expenses. Whereas the previous Administration had requested Congress to appropriate $486,000,000 for the 1954 fiscal year (exclusive of the public assistance grants-in-aid mentioned above), it was possible to reduce this request by slightly more than 13 percent, to $382,000,000. The Congress subsequently appropriated $468,691,261 for this "controllable" portion of the Department's budget for the fiscal year 1954. Although every constituent of the Department was responsible in some measure for the saving achieved, there was no arbitrary cut "across the board." The effective functioning of the Department remains unimpaired.

As a result of these reductions and other measures of economy and efficiency, it was possible to bring about the reduction of the number of employees of the Department. At the end of the fiscal year the staff of the Department numbered 36,739 full-time employees-1,315 fewer than at the end of the preceding year. Of this decline, 1,192 separations became effective from March through June 1953. Approximately three-fourths of the reduction came as the result of normally occurring resignations and retirements. Through close scrutiny of vacancies that occurred, with replacements made only in instances of clear necessity, it was possible to achieve this reduction without hardship to the great majority of the Department's personnel. This reduction was accomplished despite the necessity for initial staffing of the new Clinical Center of the Public Health Service. When fully manned, this unique research facility itself will account. for at least 2,000 of the Department's employees.

Although the workload in the old-age and survivors insurance offices increased continuously, a decrease was also achieved in the staff of the Social Security Administration through instituting more modern techniques and procedures.

Further savings by this method appear possible through the use of electronic equipment in keeping the record of earnings of the millions of employees in the Old-Age and Survivors Insurance system. As an example, one device that is being studied can scan documents electronically and automatically prepare punch cards. If it can be utilized-and it seems likely that it can be-additional savings will amount to about $800,000 a year.

Personnel of the Department were also encouraged to exercise individual initiative in making contributions toward the ends of economy and efficiency. During the year, 46 cash awards amounting to $4,850 were made to employees for outstanding efficiency. Two of these were group awards to 22 persons. By the end of the year a saving of nearly $68,000 had resulted from the suggestions of these employees. In addition, 178 staff members were given salary increases for superior accomplishment and 432 cash awards totaling $8,759 were made for worthy suggestions by individual employees. The resulting improvements in management are estimated at approximately $69,000 for the first year alone.

Several important legislative developments during fiscal 1953 are noteworthy. They represented largely responses to immediate and pressing problems that faced the Department.

The first was the restoration of the power of inspectors of the Food and Drug Administration to inspect factories engaged in the production of foods, drugs and cosmetics. Under a ruling of the Supreme Court, in which the language of the Act was ruled as insufficiently clear, the power of the Food and Drug Administration to conduct these inspections was declared unconstitutional. Legislation to close this loop-hole in the law was, therefore, recommended to the Congress by the President. The measure passed by the Congress was subsequently approved on August 7, 1953.

The second was legislation providing for continuing the program of Federal assistance to the States for construction and for operation of schools in areas in which the influx of workers to man Federal installations, largely of a defense nature, had placed inordinate strain on local school facilities. Legislation recommended by the President was passed which extended this aid through June 30, 1955 for school construction and through June 30, 1956 for school support.

Between the date of the institution of this program in 1950 and the close of the fiscal year, the Office of Education approved construction of 1,330 school building projects, located in 44 States, Hawaii,