Government Corporations

March 6, 1945

Report Outline
Public Corporations as New Arm of Government
Rise of the Government Corporation
Congressional Control of Federal Corporations
Special Focus

Public Corporations as New Arm of Government

Congress, the Wallace Nomination, and the R.F.C.

Public corporations, owned in whole or in part by the Government of the United States, have increased rapidly in size and number during recent years. They now number more than 100 and have total assets in excess of $30 billion. Taken together, they have been characterized as “a fourth arm of the federal government.”

In successive emergencies—World War I, the depression, World War II—the government corporation has been found an elastic and efficient instrument for the conduct of business and other activities outside the competence of the regular government departments. The existing corporations may shortly be subjected to new controls, and some of them may be terminated after the close of hostilities, but there is every reason to expect continued and enlarged use of the corporate device after the war in dealing with problems of reconstruction and natural resource development.

Economic and political conditions throughout the world indicate that the expansion of governmental business activities in the United States is likely to increase still further. The body of experience which is already available demonstrates that business enterprises can be effectively carried on by the government only through agencies which possess a degree of autonomy and flexibility typical of successful types of private business organization. These essential characteristics are likely to be possessed by the government corporation to a greater degree than any other type of federal agency.