ly fresh in our minds, even if the
earlier spasms of a similar nature are
not, to bring pause to efforts the
major effects of which were to reject
a forward-looking document and to
save the political skin of a notorious
spoilsman.
Michigan Attacks ^Red Tape' j
Officials and Bureau of Business Administration develop
plans to streamline and simplify government to eliminate
evils of bureaucracy; see antedate for centralization.
By ROBERT S. FORD, Director
Michigan Department of Business Administration
/GOVERNMENT in Michigan has
^-^ grown like Topsy. There has
been little thought of an over-all
pattern of unified organization that
would promote interdepartmental co-
ordination and greater efficiency in
governmental services. As a result
there are now 97 separate depart-
ments, boards and commissions
headed by almost 700 appointed or
elected officials. Some of the exist-
ing agencies are too small for efficient
operation and many are dealing with
the same problems but with separate
sets of officials. As new problems
have arisen, new agencies have often
been created to deal with them in-
stead of placing responsibility for
the new activity in an existing agen-
cy. Such a condition is not peculiar
to Michigan but exists in many other
states as well.
It is a curious fact that in an in-
dustrial country like the United
States and a highly industrialized
state such as Michigan, which are
outstanding in the development of
efficient industrial organization and
management and ingenious produc-
tion methods, so little attention has
been paid to the application of busi-
ness principles and techniques to gov-
ernmental organization and manage-
ment.
Realizing that something should
be done to correct this situation, an
attempt is being made in Michigan
to get at the root of the trouble.
Upon the recommendation of Gov-
ernor Harry F. Kelly in his inaugural
message in January 1943, the state
legislature passed an act providing
for the creation of a Department of
Business Administration in the
Executive Office. This department
is "charged with the duty of making
investigations and recommendations
concerning the economic coordination
of state activities," and is authorized,
when directed by the Governor, to
make investigations of any execu-
tive or administrative departments or
agencies in the state government "to
determine whether the activities
thereof are essential to good govern-
ment and are being carried on in an
economical and efficient manner and
without duplication."
On the basis of this legislative
mandate, the essence of the program
being followed in the department is
the promotion of better governmen-
tal administration and operation. It
should be pointed out, however, that
many of our state agencies are op-
erating efficiently and use modern
equipment and procedures. Some of
these changes have been made by
the agencies themselves; several de-
partments have engaged outside con-
sultants in the past few years to make
surveys and recommendations as to
methods of improving operations.
Relation to Other Agencies
From the legislation it is clear that
576
1944]
MICHIGAN ATTACKS "RED TAPE'
577
the Department of Business Admin-
istration is a staff or advisory agency
along with the service and control
departments of budget and civil ser-
vice. It has been the desire of the
Governor that the activities of these
three agencies be coordinated, and
the State Budget Office and the Civil
Service Department have given as-
sistance in several surveys carried
out by the Department of Business
Administration.
This department has close con-
tact with other staff and study agen-
cies. When the State Planning
Commission was reorganized at the
1943 legislative session the director
of the Department of Business Ad-
ministration was made an ex-officio
member of that Commission, which
has been active in the formulation of
a postwar building program.
The Governor directed the state
business administrator to work with
the Capitol Building Commission in
formulating plans for a new state
office building in Lansing. It has
therefore been possible to coordinate
our activities with those of the archi-
tects engaged by this commission,
and to incorporate into the blueprints
for the new building some of the
plans for consolidation and reorgani-
zation which are not now feasible be-
cause of poor arrangements in state-
owned buildings. Much of the
$125,000 rent which the state is pay-
ing annually for quarters in privately-
owned buildings in Lansing could be
saved by consolidating these agen-
cies with others in state-owned build-
ings, but present space restrictions
make it impossible.
The Governor has also assigned the
director of the Department of Busi-
ness Administration to work with
the Tax Study Advisory Committee,
which is making a study of the tax
structure, particularly state-local
fiscal relationships, as well as the
possibility of consolidating some of
the tax administration agencies.
The state business administrator
has also kept in contact with the
Public Education Study Commission,
which is investigating various edu-
cational problems in Michigan, in-
cluding the reorganization of the
6,600 school districts.
In dealing with the line agencies,
the approach has been one of service
and assistance in working out im-
proved procedures within various de-
partments. One of the first steps taken
was to have each department head
designate a departmental business
manager where the agency was with-
out one. Department heads are busy
with many different problems, and it
is essential that there be some one
person in each department who has
continuous and direct responsibility
for its efficient and economical oper-
ation. It is not hard to "sell" new
ideas to department heads and busi-
ness managers if it can be demon-
strated that the change will result in
a saving of money, time or effort.
General Program and Activities
The legislation creating this de-
partment states that investigations
made of the various state agencies
shall be "for the purpose of deter-
mining the feasibility of improving
the administration of state govern-
ment by the elimination of all un-
necessary activities, the avoidance of
duplication, and increasing efficiency
and economical operation by consoli-
578
NATIONAL MUNICIPAL REVIEW
[December
dation or rearrangement of any such
state departments, boards, institu-
tions, commissions and agencies."
This work is implemented by section
4 of the act which states that "the
department shall have power, sub-
ject to the approval of the governor,
to conduct hearings and to compel
the attendance of witnesses, the giv-
ing of testimony under oath and the
production of all books, records and
papers. Subpoenas for such purposes
may be issued by the director or his
authorized agents."
Our program has been formulated
with this legislative intent in mind
and may be classified into four main
divisions or types of projects:
(1) consolidation and reorganization
plan, (2) procedures analysis, (3)
central office services and (4) mis-
cellaneous projects.
Consolidation and Reorganization
It is elementary as well as funda-
mental that the organizational frame-
work of government promote smooth
operation and functioning. Obvious-
ly this is impossible with the wide
decentralization of authority that
exists when there are 97 separate and
independent agencies, many of which
have overlapping functions and re-
sponsibilities. The primary object,
therefore, has been a study of the
feasibility of consolidating, reor-
ganizing and rearranging state agen-
cies, some immediately and others
over a longer period of time.
The possibilities for immediate
consolidation are somewhat restrict-
ed because of insufficient floor space
in state-owned buildings. Despite
this situation, however, there are
some consolidations that could be
accomplished, and they would result
in substantial money savings to tax-
payers.
One plan worked out, as a first step
in the consolidation program, would
bring about the elimination or con-
solidation of a number of agencies
with a measurable money savings of
$200,000 a year. Chief among these
would be the consolidation of the
strictly office services and license-
issuing functions of fifteen regula-
tory boards doctors, dentists, nurs-
es, pharmacists, architects, engineers,
cosmetologists, barbers, etc., at an
estimated saving of $100,000 a year.
The various boards as constituted at
present would continue to be respon-
sible for professional standards, quali-
fications for entrance to the profes-
sion, and the regulation of unpro-
fessional conduct.
Another important merger, which
would cut costs by $50,000 a year
without impairing services, would be
to abolish the State Tax Commis-
sion and transfer its duties to the
Department of Revenue.
Some of our reorganization pro-
posals would not reduce the number
of agencies, but would simply pro-
vide for a more logical arrangement
by placing similar functions in one
department. This would make possi-
ble more efficient operation, through
relocation of personnel, equipment
and records, while at the same time
it would make the structure of gov-
ernment more understandable to the
people of the state.
By way of illustration, regulation
of the building and loan companies
should be transferred from the Sec-
retary of State to the State Banking
Department, and the regulation of
1944]
MICHIGAN ATTACKS "RED TAPE'
579
the finance companies should be
shifted from the State Treasurer to
the same department. This would
place the regulation of all financial
companies under the Banking De-
partment and would eliminate a
clear-cut case of unnecessary dupli-
cation. Other types of consolidation
could be mentioned, but these will
suffice to illustrate the manner in
which the problem is being attacked.
Accomplishment of this first step
would be relatively easy, but the next
would be more difficult for, in addi-
tion to other consolidations, it would
require certain constitutional amend-
ments for the elimination of some of
the ex-officio boards, and authoriza-
tion of a four-year term for the gov-
ernor and certain other elective
officials.
Procedures Analysis
One of the most important exam-
ples of the manner in which the ad-
ministration of state government is
less efficient than that in most large
industries is the absence of a con-
tinuous search for shorter, quicker
and better methods for the perform-
ance of daily operations. The Depart-
ment of Business Administration,
therefore, has placed considerable
emphasis upon analyzing depart-
mental procedures and has made cer-
tain recommendations that simplify
and accelerate operations. In devel-
oping this type of service the depart-
ment is in a position to provide any
agency whose procedures are in need
of reorganization with information
and advice based on proven experi-
ence elsewhere. Although there are
a number of state departments that
are organized and operated efficient-
ly, the field of methods development
is literally virgin territory. No other
phase of the work of the department
offers greater possibilities in promot-
ing efficiency, economy and better
service to the public.
In addition to the immediate need
for procedural reorganization in
agencies where there have been few
changes in many years, this type of
work is also basic to the consolida-
tion program. Careful analysis of
operating procedures must, of course,
precede recommendations for con-
solidation, and those procedures play
an important part in consummating
a merger if the reorganized agencies
are to be integrated in fact as well
as in law.
Although methods development
constitutes a major part of the pro-
gram of this department, it should
be pointed out that with a budget of
$20,000 and only three staff mem-
bers the department has not been
able to do more in the year and a
half of its existence than "scratch
the surface" in this important phase
of its work. Nevertheless, the two
procedures analysts on the staff have
made surveys at the request of sev-
eral agencies, and have conducted
other investigations of departments
or boards typifying certain problems
in reorganization. For example, a de-
tailed analysis was made of the
Board of Cosmetology because it
presented many problems that would
arise in consolidating the administra-
tive activities of the regulatory
boards. Certain divisions in the De-
partment of Agriculture were sur-
veyed because they illustrated the
problems involved in the central is-
suance of licenses. Surveys have also
580
NATIONAL MUNICIPAL REVIEW
[December
been made of the Corporation and
Securities Commission, Conservation
Department, Insurance Department
and one of the large state hospitals.
Central Office Services
Another phase of the program that
has great potentialities in the field of
governmental improvement is the de-
velopment of central office services.
We are attempting to develop central
service units, such as a central license-
issuing unit, central mail and mes-
senger service, central duplicating
machines, central filming service,
central tabulating and addressing
machines and central stenographic
pools. Some of these will be briefly
described.
Duplicating machines. Several
thousand dollars were saved for the
state within the first two months
after the Department of Business
Administration arranged for the De-
partments of Social Welfare and
Highways to perform multilith and
varitype jobs for other state depart-
ments on a cost basis. This was ac-
complished through Budget Office co-
operation in first referring all requisi-
tions for the purchase of multilith,
varitype, and mimeograph equipment
to the Department of Business Ad-
ministration. The department requir-
ing the equipment was then request-
ed to take advantage of the services
provided by the Highway and Wel-
fare Departments rather than pur-
chase new equipment.
Mail-messenger service. Another
type of central office service is the
central mail and messenger service
which was initiated on a voluntary
partial basis in July of this year,
with a small appropriation. At that
time approximately 50 persons were
employed as full- or part-time mes-
sengers and about 35 of these em-
ployees made several calls at the
substation daily. Needless to say,
there was much criss-crossing of de-
partmental messengers between the
various buildings in Lansing, in-
volving duplication of effort and
needless waste of time and personnel.
Additional waste arose because a
great deal of interdepartmental mail
between the State Capitol and the
State Office Building two blocks
away passed through the U. S. mails.
This situation is now being corrected,
although there are still a few de-
partments which are not cooperating
to the fullest extent. The system has
now been established, however, and
with adequate enabling legislation
Michigan could have a modern and
efficient centralized mail and mes-
senger service.
License-issuing. One of the most
important programs now in the pro-
cess of development is the plan for
centralized issuance of licenses. State
agencies issue about 450,000 licenses
a year, most of which are of a type
that must be renewed annually and
therefore lend themselves to mechan-
ical methods. In the sixteen regula-
tory boards alone there are 53 differ-
ent types of licenses of varying kinds
and sizes. At present each depart-
ment must issue its own licenses, and
this is usually done by time-con-
suming and costly hand methods.
Recognizing that the whole process
of license-issuing should be simpli-
fied, standardized and mechanized,
the Department of Business Adminis-
tration undertook a survey looking to
the possibilities along this line. As
1944]
MICHIGAN ATTACKS "RED TAPE"
581
a result it was apparent that many
economies could be realized, and al-
ready the procedures and methods
of issuing licenses have been re-
organized and mechanized in three
agencies.
As license-issuing is reorganized in
other departments it may become
possible to transfer the mechanical
process of license-issuing to a central
service unit with the regulatory
aspects of licensing remaining under
the jurisdiction of the various de-
partments concerned. At least it is
possible to centralize all license-
issuing in three or four departments,
which would result in large money
savings as well as better service to
licensees.
Micro photography. Finally, a cen-
tral filming service for photographing
state records has been initiated. The
problem of filing inactive or dead
materials in space badly needed for
office quarters has reached the point
where it can no longer be ignored.
Because of the war and the difficulty
of obtaining equipment priorities the
project is necessarily on a small
scale, but it will be expanded with
an easing in the priorities situation.
The money savings will be very large
from this project, inasmuch as the
placing of records on film involves a
reduction of 95 to 98 per cent in
filing space requirements and also
reduces the need for much of the ex-
pensive filing equipment now in use.
Miscellaneous Projects
Employee Suggestion Plan. More
than a year ago all department heads
were asked to develop an employee
suggestion plan, similar to those now
used in many war industries, for im-
provement of work in their depart-
ments. Employee suggestion boxes
have been placed in most depart-
ments, a system of awards has been
worked out and reports received from
department heads indicate that the
plan has been successful, especially
in several of the large departments.
"/ Programs" In June of this year
the Department of Business Admin-
istration initiated, in cooperation
with the Department of Vocational
Education, the so-called "J Pro-
grams" for training supervisors job
instruction training, job relations
training, and job methods training.
For some time the Department of
Vocational Education has been pro-
viding instructors for the training
within industry division of the War
Manpower Commission in carrying
out this program for Michigan in-
dustry. With a group of experienced
instructors immediately available,
the state was well situated to carry
out such a program. Starting on an
experimental basis JIT job instruc-
tion training was initiated in five
departments and is now being ex-
tended to others. Results thus far
indicate that the same simple train-
ing methods which have been used
so effectively by war industries will
prove just as successful in state gov-
ernment. It is anticipated that ihese
programs will be made available dur-
ing the next year to all supervisors in
the state service.
Paper conservation. Finally, ref-
erence might be made to some of the
activities in connection with the con-
servation of paper. It has been cus-
tomary in the past to transmit all
communications between depart-
ments in the regular envelopes which
582
NATIONAL MUNICIPAL REVIEW
[December
are used for mailing purposes. This
department designed inexpensive
multiple-use interdepartmental en-
velopes, which are now in general use.
A survey of all forms used by
various state agencies was initiated
with a view to reducing the number
and size of forms and to achieving
a greater degree of uniformity and
simplification. The results of this
survey indicate quite clearly the need
for some kind of planning and cen-
tral control in the selection as well
as introduction of new forms.
Other types of paper economies
could be mentioned but these will
serve to illustrate the general ap-
proach that has been followed.
Conclusion
The present structure of state ad-
ministration, which is virtually a
federation of independent govern-
ments, has led to a great deal of
duplication in performing services
and activities and to much uneco-
nomical use of money, space, equip-
ment and personnel. This duplication
is of a dual character first, from a
functional standpoint several differ-
ent agencies are engaged in activi-
ties related to public health, perform
services for the blind, administer the
tax and labor laws, etc.; second, du-
plication arises out of the separate
performance of office services by each
department, such as mail and mes-
senger, filing, stenographic work, mul-
tilith and mimeograph operations,
tabulating, etc. With each depart-
ment operating as a completely inde-
pendent unit, there has been little
interest in the past in coordinating
complementary activities or in cre-
ating specialized units to perform
certain office services common to all.
If the governmental structure is to
be modernized and the fullest appli-
cation made of well established prin-
ciples of public administration and
business management, it is neces-
sary to regard the whole structure
of state government as an integrated
concern. An attack on "red tape" and
bureaucracy is being made in Michi-
gan by the state's own officials, who
are aware that people want govern-
mental simplification. Furthermore,
it is realized that if the needed de-
centralization of government now
concentrated in Washington is to
be accomplished, the organizational
structure of state government must
be streamlined, with greater empha-
sis placed on efficiency in operating
procedures. It is toward this end
that the Department of Business Ad-
ministration is working, in coopera-
tion with many forward-looking state
officials.
Buy United States War Bonds and Stamps
Machine Beats County Charter
Vigorous efforts to secure streamlined council-manager
plan for suburb of nation's capital loses to campaign of
misrepresentation; Montgomery County citizens to try again.
By JOHN F. WILLMOTT, Research Chairman
Montgomery County Charter Committee
AT THE general election on No-
^"*- vember 7, Montgomery County,
Maryland, defeated the proposed
council-manager charter by a vote of
15,683 to 14,048 after a hot campaign.
Montgomery County adjoins the
District of Columbia on the north-
west. It is Maryland's third largest
county. The 1940 census found
83,912 people living in the county
but its present population is over
100,000 by reason of the influx of
federal employees during the past
four and a half years.
Roughly three-fourths of the regis-
tered voters are concentrated in the
suburban communities of Bethesda,
Chevy Chase, Silver Spring, and Ta-
koma Park which lie just across the
line from the District of Columbia.
The remaining inhabitants are dis-
persed throughout the up-county
towns and farming areas. Rockville
is the county seat.
Even before the influx of war work-
ers Montgomery County was ex-
periencing "grrwing pains." It was
the same old story of increased popu-
lation, demands for more and better
services, and an antiquated county
government. The citizens are fairly
well satisfied with such services as
education, welfare and health over
which county officials have only par-
tial control; these services are gov-
erned largely by general laws pre-
scribing statewide standards includ-
ing a state administered merit sys-
tem. But there has been widespread
dissatisfaction with the activities
which are controlled by county offi-
cials and governed by local laws
passed by the county delegation
to the legislature under the rule of
legislative courtesy.
During recent years the county
government has been in large meas-
ure controlled by a county boss and
a tight little machine. The spoils
system has operated brazenly. There
is no effective budget system or other
device for financial planning or co-
ordination of activities. Debt re-
funding has become an annual prac-
tice; at no time during the past ten
years has the county made full pro-
vision for retiring its maturing bonds.
Some local laws vitally affecting
the county and its government have
been quietly "cooked up" by the
legislative delegation at Annapolis
and put through in the closing days
of the session without consulting or
or even notifying the county's citi-
zens. On at least one occasion inter-
ested citizens who sought to find out
from a leading member of the legis-
lative delegation what local bills were
under consideration at Annapolis
were told blandly: "I don't know."
Montgomery County has a great
many civic associations and an un-
usually active Civic Federation which
has been wrestling with the problem