Lecture delivered before the Taylor Society, New York City, December 4, 1931
IT is my desire in speaking on this subject first to indicate the reasons prompting the establishment of the Federal Coördinating Service, then to give an outline of the mechanism of the service and the results accomplished by it, and finally to express views regarding some of the larger problems with which coördination is confronted.
It is not within the scope of a paper on the guiding influences of coördination to discuss economics. We all know that men, money, material, and machines, together with merchandising methods and markets, are the elements of industrial civilization, and that in human problems the factors are interrelated in the most complex manner. In whatever degree we recognize that in economics and industry the law of supply and demand controls and adapts these elements, nevertheless we are warranted in seeking a more scientific regulation to prevent the wastage that accompanies the working out in time of any such general principle.
Grouped about us we view the involved perplexities of advancing civilization. Having much the same basis as those confronting the tribes of ancient Israel, all insistently now demand increasing and unremitting and intelligent attention in order that the frequency and length of gaps in the cycles of prosperity may be lessened.
Theoretically, the reconciliation of the details of the federal government in accordance with a master plan, plastic to executive judgment, and with a definite end, should be a simpler matter than that of guiding widely dispersed industries competitively producing for profit.
But politics in all governments is a highly competitive activity. Legislative expediency to meet particular and unrelated situations ultimately makes for confusion and, in a message addressed to Congress on January 17, 1912, President Taft remarked regarding the efficiency and economy of American public business, that a vast organization of concern to every taxpayer, costing billions annually and including a personnel of more than half a million,
has never been studied in detail as one piece of administrative mechanism. Never have the foundations been laid for a thorough consideration of the relations of all of its parts. No comprehensive effort has been made to list its multifarious activities or to group them in such a way as to present a clear picture of what the government is doing. Never has a complete description been given of the agencies through which these activities are performed. At no time has the attempt been made to study all of these activities and agencies best fitted for its performance, to the avoidance of duplication of plant and work, to the integration of all administrative agencies of the government, so far as may be practicable, into a unified organization for the most effective and economical dispatch of public business.
The outbreak of the long struggle beginning in 1914 supplied a bottomless receptacle for almost anything America could produce. Once we had entered the arena, everywhere became manifest the importance of better guiding, if not checking, the hitherto unrestrained competitive tendencies of American enterprise. An enumeration is unnecessary of the many associations, boards, councils, and committees set up for the adjustment of badly tangled industrial lines.
The war finished, government turned the regulation of private industry back to those directly concerned therein but when such was done, a great industrial authority recommended that:
Such practices of coöperation and coördination in industry as have been found to be clearly of public benefit should be stimulated and encouraged by a government agency, which at the same time, would be clothed with the power and charged with the responsibility of standing watch against and preventing abuses.
A direct and immediate result of war experiences, which had amply confirmed the views previously expressed by a former federal executive and clearly demonstrated the value of coördinative effort, was the creation by statute of the Bureau of the Budget for the purpose of adjusting the remittances of the taxpayer with the insistent demands of independently proud branches of federal business.
Strongly backed by the President, General Dawes, with characteristic energy, proceeded to substitute coöperative common sense for vanity and pride in independent action. He sought to put business ideas into a political organization in which coördination occupied a high stool in a very dark corner, in order, as he wrote:
That the largest business in the world will not as heretofore, continue to be the worst conducted.
As an addition to the legally constituted bureau intended to coördinate the financial needs of various executive branches with the financial condition of the federal treasury, an office was established for the coördination of interdepartmental routine.
The liquidation of the huge surplus of war accumulations was a colossal business venture then immediately confronting the government, but the creation of a very extensive organization with which to carry on was not found to be necessary. Administration and not organization was wanting. The putting to work along constructive lines of a small but effective administrative unit, while overcoming bureaucratic resistance, became the immediate task for General Smither, our first chief coördinator.
Liquidation proceeded satisfactorily and on November 8, 1921, an executive order enlarged and more clearly defined the duties of the chief coördinator who was given responsibility of exercising general supervision over all interdepartmental business activities. To this end that official was authorized to call on bureau chiefs and employees for information and they were required to attend conferences at his request. The order specifies that a decision of the chief coördinator transmitted to the heads of establishments concerned shall be final, except that an appeal may be made to the director of the Bureau of the Budget, and if not sustained, then to the President himself.
Congress, nonresponsive if not openly skeptical regarding the advisability of adding to the very complicated machinery of governmental organizations, has enacted but one piece of legislation touching on coördination. This, contained in the Army Appropriation Bill approved in February, 1925, reads as follows:
Hereafter no commissioned officer of the Army, Navy, or Marine Corps shall be deprived of his right to pay and allowances while serving on such duty as the President may direct in the coördination of the business of the government, as now being conducted by him under the general supervision of the Director of the Bureau of the Budget; provided, that the number of officers detailed to this duty shall not at any time exceed 26.
The coördinating service, with more than a decade of experience, endeavors to promote economical federal management that eliminates overlapping and makes useful to any executive department or independent establishment, information and resources available and idle in other departments. As inimical to the efficient functioning of organization as the old “water-tight compartment” type of bureaucracy, would be the exercise of an excess of zeal without responsibility for action, harassing legalized organization with well-meant but ill-advised suggestions for improvements in procedure. Therefore aiming simply to discover situations needing collaboration and to facilitate action wherever coördinated effort may promote efficiency and economy, both responsibility and credit for actions taken are left and entirely belong to the departments and establishments concerned.
The service in Washington comprises the chief coördinator, his assistants, and the various boards operating under his direction. Under him in the field are nine area coördinators and, scattered about the continental United States, Alaska, Hawaii, and Porto Rico, wherever several federal activities function, are about 300 federal business associations made up of some 13,000 individuals already engaged in governmental business.
The rôle of chief coördinator is simply that described by Oliver Sheldon in the Harvard Business Review in an article entitled “Policy and Policy Making”—
To hold the reins without restraining the vigor; to guide the way without pulling at the reins; to urge forward without the whistling of the whip; to determine the halting place without applying the brakes—is indeed, the task beyond all others.
Coördination encounters the greatest obstacles and difficulties, yet calls the most imperatively tor performance.
Coincidental with the enlarged mission assigned the coördinating service came the establishment of the various federal boards, through which a considerable part of coördinating routine is conducted.
Details of the organization and duties of these coördinating agencies are set forth in the Congressional Directory and will not be described except in a very general way.
The organization of the Federal Purchasing Board is fairly typical. This board is composed of one representative from each department or establishment having authority to purchase supplies together with a representative of the Federal Specifications Board, who acts as liaison contact between these two activities. The chief coördinator is ex officio chairman of it as of other boards, but the executive chairmanship is delegated to an official in the chief coördinator’s office. The board’s investigational work is performed largely by committees, and when a committee report is adopted in its final form and approved by the chief coördinator, it is promulgated as a guide to all departments and establishments. The board endeavors to discover cases where it may be practical and economical to have two or more departments pool their requirements in order that the one department best fitted for the purpose may purchase for all. This board has also brought about a gradual extension of the use by others of the inspection service of one department, thus eliminating travel and overhead expenses and giving a flexibility to the service of inspection.
The operations of the purchasing board are closely interrelated with those of the Federal Specifications Board, which compiles and promulgates standard specifications for materials and services, bringing specifications into harmony with the best commercial practice. It also endeavors to broaden the field of supply. The director of the Bureau of Standards is ex officio chairman of this board, which consists of groups of technical committees made up of experts selected for their special knowledge of particular commodities or classes of commodities. The board has promulgated its 770th federal specification, and it is now quite a usual thing to see manufacturers placing on their products the statement: “This product conforms to United States Government Specification______.”
The Federal Traffic Board was established for the purpose of effecting a better business administration throughout the government service in the complicated business of handling of passenger, freight, and express shipments. It utilizes in a practical way the various available carrying facilities and institutes methods for the prompt handling of the government’s traffic. Every government shipment of two or more carloads is referred to the board for routing, and through this control and by means of its contact with the carriers the board has been able to obtain directness of service and to effect large savings. As it exists at present it provides a skeleton organization around which might be built a federal traffic bureau, should such an activity ever become a necessity.
The Federal Real Estate Board coördinates all matters affecting the real property of the government, including procurement, occupancy, and disposal. It collects and compiles data pertaining to owned or leased real estate and suggests changes that may be desirable in the interest of the economical use of lands or buildings. All projects for the purchase, sale or lease of real estate are required to be submitted to the board for clearance. Its decisions form the basis of the surveyor general’s action on all real estate matters.
The Interdepartmental Board on Simplified Office Procedure, engaged in devising standard forms and practices for federal offices, has been very successful in eliminating a mass of non-standard material and has reduced the supply schedule on items of common use from many hundred to a relatively few items.
The Interdepartmental Board on Contracts and Adjustments renders valuable service in standardizing business arrangements and in reconciling differences.
The Patents Board and the Forest Protection Board were created to deal with specific problems, the first to formulate a governmental policy with respect to handling the inventions of federal employees, and the second to coördinate and bring together for greater efficiency the federal activities engaged in the various phases of forest protection.
The Federal Standard Stock Catalogue Board is actively at work on a compilation which will simplify the procurement, care, and issue of government stores. Recently a board has been appointed to study the important matter of reconciling and coördinating the collection, arrangement, and distribution of government statistics.
Each board, in its particular field, accomplishes valuable and constructive work, but it should be kept in mind that these agencies are not given final executive power. They are intended to act simply as standing committees in which representatives of departments and establishments are assembled in order that information may be made common to all and that common interests may be served. All duty with boards is in addition to the departmental duties regularly belonging to members. The boards have been found to be of particular value as groups for the contacting of federal activity with that of industry.
Enlightenment is desirable with regard to costs and accomplishments of the coördinating branch now accepted as being essential and businesslike.
Not much is to be said regarding costs. The pay roll of the Army and Navy officers and the sixty-seven civilians engaged exclusively in work of coördination annually amounts to about $307,500, but there have been no additional demands upon the treasury, for both the personnel and material necessary for the organization are drawn from other establishments.
Concerning accomplishments, President Coolidge in an address on January 29, 1927, stated that:
One of the great lessons we have learned in the transaction of our business is the value of coördinated effort. Coördination in any business is essential to success. The nation’s business is no exception. For many long years the executive departments and establishments operated independently with little or no concern for the common good of all. This is no longer the case. The old order of things has disappeared. In its place we have a well-coördinated executive branch of the government. Departmental lines have given away and departmental prerogatives have willingly surrendered to policies and practices which are adopted for the best interests of all.
Since the inauguration of the service of coördination directly traceable savings—not including interdepartmental transfers of surplus property—have totaled over $19,000,000. During the past fiscal year savings, including those effected through transfer of property, sponsored by the Federal Coördinating Service amounted to nearly $6,000,000. The total value of all property, exchanged between departments, through the processes of coördination, now amounts to about $153,000,000.
More important, however, than all the economies effected directly through coördination is the incalculable value of the development interdepartmentally of a conception of coöperation and service unity. There are clear indications that how expenditures are made has become a matter of moment quite as important as who makes them. It is also coming to be recognized that the best administrator is not necessarily he who succeeds in getting the most out of legislation for the purposes of his office, but is also one who, like a vice president of any great corporation, makes the most out of such appropriations as may be allotted to him.
As it becomes evident that surrendering the control of details more directly concerning others always permits expansion and better effort in one’s own domain, the red-tape bound walls of isolation surrounding departmental prestige will have many gates, easing the way for unselfish coöperation and coördinated control.
Passing from a consideration of federal coördination we may concern ourselves briefly with more complicated problems in which the government is involved.
The statement of a German economist that each nation should above all things develop harmoniously its natural resources to the highest possible degree of independence, protecting its own industry and preferring the national aim to the pecuniary advantage of individuals, applies with force to America.
Now directness is important, for, with machines quickening action, thought, planning, and decision must get into gear. This is the power age. All modern industrial accomplishments whether procurement, mass production, rapid transport or the design of machinery and appliances for the conservation of time and labor lead back to power. The efficient generation of energy by falling water, steam, or internal-combustion engines; the minimizing of waste in power generation, transmission, and utilization, either in connection with individual plants or interconnected power pools, are coördinating problems of the first magnitude urgently demanding the scientific attention of engineering management.
Agriculture gives occupation to some ten million workers and to it some thirty millions of our people look for support. The prosperity of the country is reflected by the work of the farmer, now tremendously intensified through mechanization. The coördination of the procurement of agricultural commodities with distributors’ requirements is a most pressing modern economic problem.
Depletion of our supplies of coal, ore, oil, gas, and timber, proceeds rapidly, though knowledge is common that better conservation of these resources and the coördination of their consumption with requirement are vital.
Coördinated power-driven tools have speeded up procurement of materials and the production of goods, while, at the same time, inventive genius has improved possibilities for prompt and cheap distribution. But transportation is replete with complication. Unless coördination acts, an uncoördinated but scientifically developed power will continue a grinding wastage through processes of over-production, and uncoördinated, unscientific systems of procurement and disposal will continue to augment the dire possibilities of agricultural, industrial, and financial depression.
While wise legislation is necessary to assist development and to make practicable the many adjustments continuously necessary in industrial occupations; coördination must be given life by those concerned in industry. It cannot come from others.
Scientific regulation through the action of business associations and organization of the leading industries may bridge a direct path through the maze of procurement, production, and distribution. If successful in so doing it will prepare the way for the exercise of the coördinator’s art.
Broadening of business management is a requisite for today; there is no such thing as complete national economic independence. Countries produce and distribute in accordance with world-wide demands. No longer is commerce pushed before the point of a bayonet, and the slogan that trade follows a protecting flag has ceased to apply. The guidons of traffic have become cost, insurance, and freight, but those seeking the means for straightening and for freeing the paths of intercourse of economic barriers find that tolerance and good will offer themselves as potent coördinating agents for effecting economic as well as social adjustments.
In scheming for the future one cannot fail to observe that vitally necessary for the bearer of the increasing economic, political, and international burdens, which coming years will load on American shoulders, is a scientific broadening of education along lines philosophical as well as practical.
It is ruinous conceit and stupid chauvinism to imagine that the perpetuity of any state, be it monarchy or republic, can be assumed solely by industrial preeminence, superior armament, mastery in the technique of foreign and domestic commerce, or shrewdness in the conduct of international relations. Valuable assets these, but edged tools and engines of destruction unless controlled by minds liberalized by habits of self-analysis, comparison, and reflection.
There are basic principles involved in our citizenship demanding recognition far better than that accorded them. To illustrate, let us turn to an army drawn up for battle, for in trained armies and navies, particularly, there is found that powerful coördinating factor known as discipline making for harmonious attainment of common purpose. Sound discipline, not requiring compulsion, has for its principles loyalty, self-control, self-denial, and self-sacrifice—all and everything for the good of service, organization, and country. In our industrial relations the Army and Navy constitute the reserves; the commercial and business organizations make up the shock troops. Willing coöperation in these latter organizations is accepted as an essential. But what constitute the fundamentals of coöperation? They are precisely the same as those mentioned above as the principles of the discipline practiced by the reserves.
The importance of loyalty, self-control, self-denial, self-sacrifice, demanded in military services and desired in every walk of national and industrial life, together with the value of tolerance, are all accentuated as human relations become closely articulated. Ability to balance the human appeals of ambition and modesty, of desire and self-restraint, of envy and unselfishness, is a scholastic need of youthful citizenship. Stressing now the teaching of the elements of coördination in every home would be a constructive move in the direction of scientific management. They are the fundamentals of accord, of religion, of society, of nationalism, as well as of international comity.
Our standard of education, though in most respects the highest in the world, inadequately impresses the value of coördinated industrial economics. This is to be corrected. Education if well directed must proceed to awaken in the rank and file of coming voters a more unselfish interest in the governmental regulation of federal business and in the coördination of governmental action in accordance with international as well as national requirements. Education, by stressing the ability to coördinate the elements of one’s own character while engaged in bringing together the abilities and activities of associates, develops leadership.
In closing, I who have spent two score years in observing the trend of affairs in various quarters of the globe, may be pardoned for expressing other views of the organized “reserves” than that held by a writer who recently gave the country’s two great public schools of nationalism, the Army and the Navy, a proud position in a list of “wastes” in advance of that occupied by “harmful drugs, narcotics, and patent medicines.” The day of the soldier and the sailor is not done, for peaceful international coördination is an art as yet in its infancy. Unexpected shifts in economic conditions which could not be foretold, and assertion of national ambitions difficult to comprehend, have ever constructed troublesome obstacles in the paths of tribunals designed for the peaceful regulation of affairs.
The armed “reserves” normally have little encouragement to organize for occasion when the nation’s strength musters for compelling the coördination, refused to the diplomat or to a thoughtfully judicial body. Not uncommonly near-sighted politics exercises demoralizing command and sometimes the principles carefully taught to juniors have been forgotten by those occupying positions of high responsibility. Then authority’s vanity for decision and personal ambition have eliminated coördination from the picture.
For the two military services every day opportunities are infinite for useful common endeavor, quietly, economically, progressively, and efficiently promoted.
Coördination is the nervous action controlling economics—the fiber and sinew of community life. It is not to be confused with scientific management, for it is the greatest of arts involving the placing and treatment of complicated human mechanisms, not lending themselves to standardization as do machines, in ways best promoting health, contentment, and prosperity.
Coördination is the elusive “dove of peace.” When the extension of coördination to industrial lines has become worldwide and these lines carry, as the important part of traffic, an abundance of international good will and tolerance, the intensity of struggles on the advance lines will be reduced, and everywhere there will take place a sweeping reduction of the armed reserves, a policy which will then have a strong and a logical appeal.
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the side which takes the initiative has usually the better chance of securing advantage by dexterity or stealth, and there lies one of the advantages of offense. But it is not always so. If either by land or by sea we can take a defensive position so good that it cannot be turned and must be broken down before our enemy can reach his objective, then the advantage of dexterity and stealth passes to us. We choose our own ground for the trial of strength. We are hidden on familiar ground; he is exposed on ground that is less familiar. We can lay traps and prepare surprises by counter attack, when he is most dangerously exposed. Hence the paradoxical doctrine that where defense is sound and well designed the advantage of surprise is against the attack.—CORBETT