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Yesterday when Mr. Lyons, who represented the Railway Executives Association, and Mr. Gibson, an attorney, gave their testimony, the point they made was that if this plan was adopted by the Congress, it placed all of this authority in the hands of the chairman, and they were fearful-and they dwelt on the word "fear"-that whomever this Chairman appointed by the Chief Executive might be, he might be subject to influences from the Chief Executive or political influences. Now, in the past few years we have had several major railroad accidents, and I recall reading where newspapers and certain columnists criticized the ICC for not ordering the railroads to install certain safety devices that were developed to prevent future railroad accidents.

What I am trying to clarify in my mind, if this gentleman can answer me, is how much power or authority does the ICC have today in ordering railroads to install safety devices that have been developed and which would cost the railroads millions of dollars to install such equipment? Have they the authority to say to the railroads, "Now, you must install these safety devices or you are subject to being penalized," under any law on the statute books?

Mr. DONOHUE. Is there not divided authority, insofar as the train is concerned?

Mr. STAUFFACHER. Only to this extent, that the Director of Locomotive Inspection is not as clearly a part of the ICC staff, and he is not pinned down quite the same way that, say, the Director of the Bureau of Safety is; but the regulations against which he conducts his inspections are ICC regulations in both cases. So that actually, the regulation authority is not divided.

Mr. HOLIFIELD. I think the important part, as far as plan No. 7 is concerned, in relation to the ICC authority, is that it does not change the authority at all. The authority stems from the basic act; and the influence of the Chairman, and if any influence was brought to bear on the Chairman, he in turn would have to obtain Commission-wide acquiescence to anything that he would propose today, just the same as before.

Mr. STAUFFACHER. That certainly pertains to anything that you would raise to the level of a policy matter.

Mr. HOLIFIELD. A policy matter or quasi-judicial or quasi-legislative. Mr. STAUFFACHER. It is quasi-legislative. It would not change in that case, it is not changed.

Mr. BURNSIDE. One of the major things here would be that you change from a new Chairman each year to a Chairman who, through a period of years, had particular qualifications to do the job, is that right?

Mr. STAUFFACHER. It would allow that to be done.

Mr. BURNSIDE. That is one of the major administrative things.
Mr. TAURIELLO. The same as before.

Mr. STAUFFACHER. This does not change any laws on the statute books today governing the ICC. It merely places in the hands of the President the power to appoint the Chairman; and then in turn places in the hands of the Chairman the power to be the chief administrative man of the Commission, and that is all.

Returning to my statement: In my judgment, there is no basis for fear that plan No. 7 constitutes "an invasion of legislative powers by the President." By enacting the Reorganization Act of 1949, which

authorizes reorganization of regulatory Commissions by reorganization plan, the Congress clearly recognized that the regulatory Commissions should be subject to Presidential reorganization action. This plan in nowise affects the regulatory functions of the Commission. It neither limits nor extends the substantive laws governing the Commission. Plan No. 7 only seeks to establish in the Interstate Commerce Commission a single focus for the supervision of day-to-day operations in order to improve the Commission's internal administration. In my judgment, this is precisely the type of reorganization of regulatory Commissions anticipated by the Congress when it, by deliberate intent, brought these agencies within the purview of the reorganization statute.

Historically, the regulatory commissions have presented problems of Government organization. These problems were thoroughly studied by the Commission on Organization and its task force, and they have proposed changes which, in their view, will provide the most practical administration of these agencies. Reorganization Plan No. 7 will effect these changes in the Interstate Commerce Commission. This Commission is already by law bipartisan in composition. There are existing limitations on the President's power to remove Commissioners, and Commissioners continue in office until their successor is appointed and qualified.

All these conditions recommended by the Commission on Organization are already in effect, and there remain only the transfers provided in Reorganization Plan No. 7, with the one exception that I have noted, to effect the remaining proposals of the Commission.

In closing I would like to quote what the President said as he transmitted this plan for congressional consideration:

I urge the Congress to add its approval to my acceptance of these recommendations of the Commission on Organization.

The CHAIRMAN. Are there any questions?

Thank you very much, sir. You did much to clarify many of the points that were raised in the discussions.

Gentlemen, we will go over and answer the roll call, and then we will come back and go into executive session.

(The following statements were received by the committee:)


I appreciate this opportunity to file a statement in support of House Resolution 545, which I hope that this committee will report favorably. In my judgment, Reorganization Plan No. 7, relating to the reorganization of the Interstate Commerce Commission, should not be approved. I have expressed my opposition to such plan by introducing this resolution, which is the manner provided for taking action against approval of the plan.

Reorganization Plan No. 7 provides that the so-called executive and administrative functions of the Interstate Commerce Commission shall be transferred to and lie with the Chairman of the Commission, rather than with the Commission as a whole as at present. The functions so transferred comprise the very important ones of (1) the appointment and supervision of personnel; (2) the distribution of work among the administartive units; and (3) the use and expenditure of funds.

In addition, the plan provides that the Chairman of the Commission shall be designated by the President, instead of chosen by the Commission membership as it is at present.

It is my opinion that the selection of the Chairman by the President, and the granting of these powers to the Chairman, clearly casts doubt on the continuance of this Commission as a completely nonpartisan and nonpolitical body. The vesting of such authority in the Chairman, so chosen, can but be construed as a strong step in the direction of modifying the long-standing and proper regard in which the Commission has been held, namely, as a direct arm of the Congress, not of the Executive.

The traditional and fundamental bases of quasi-judicial agencies, such as the Interstate Commerce Commission, are the exercise of legislative and judicial functions delegated to them by the Congress, for which they are responsible to the Congress, as well as the exercise of administrative functions under such delegation.

It is my opinion that the duties transferred to the Chairman transcend in scope and responsibility what properly may be handled by one man, and have been so demonstrably capably handled by the Commission as a whole in the past. The breadth of the Commission's duties is so vast and attended with so much responsibility, that the Chairman unaided alone cannot adequately cope with such undertaking. How else can he administer them except with the counsel and approval of the entire Commission? How else except by redelegation to various sections and members of the Commission? Why then any thought of change from procedures which have proved so effective in the past, which have resulted from long years of experience in such matters?

I direct your especial attention to the further proposed transfer of responsibility for the administration of the Locomotive Inspection Act called for by the provision that the Director and Assistant Directors of the Bureau of Locomotive Inspection shall perform their functions subject to the direction and control of the Chairman. This proposal reverses a policy deliberately established by the Congress after most careful consideration, that this Bureau be in a quasi-independent status, with its administrators free to direct activities to the end of securing the greatest safety in the operation of locomotives.

I urge that the committee give the deepest consideration to the effect of the changes proposed by plan No. 7, to this change in status as an effective arm of the Congress. I urge your favorably reporting the resolution disapproving of the plan..

The Honorable WILLIAM L. DAWSON,

Washington, D. C., April 24, 1950.

Chairman, Committee on Expenditures in the Executive Departments,

House of Representatives, Washington, D. C.

MY DEAR CHAIRMAN DAWSON: On behalf of the Interstate Commerce Commission and each Commissioner, may I express our deep appreciation for your thoughtfulness in offering to us either collectively or individually the privilege of expressing views on Reorganization Plan No. 7 of 1950. After careful consideration, the Commission has authorized me to advise that the Commission does not desire to be heard by the committee nor to make any recommendation as to this plan.

The problem appears to us to be a matter of policy for the Congress as to how its work that is delegated to this Commission can best be performed. If, on consideration, it is decided that our procedures will be improved and our work can be better done under this plan, we will, of course, undertake to proceed accordingly.

Respectfully submitted.

J. M. JOHNSON, Chairman.

Washington, D. C., April 25, 1950.

Chairman, Committee on Expenditures in the Executive Departments,
House of Representatives, House Office Building, Washington 25, D. C.
DEAR CHAIRMAN DAWSON: Yesterday noon just before your committee recon-
vened hearings on ICC Reorganization Plan No. 7, you announced that to save
time your committee would welcome the filing by interested parties of copies of
their statements with it; further, that the statements would be included in the

official proceedings of your committee and copies would be brought to the attention of the entire committee in executive session.

To save time, therefore, I take pleasure in filing a brief statement on behalf of the members of the National Industrial Traffic League. The nature of the league's mmebership is fully explained in the opening paragraph of the statement.

Your kindness in incorporating this statement in the official proceedings of the committee on this subject and in laying copies before the members of the committee in executive session will be greatly appreciated. Fifty copies are attached for the convenience of the committee.

Very truly yours,

E. F. LACEY, Executive Secretary.


The National Industrial Traffic League, as its name implies, is a national organization of firms, corporations, and industries, large and small, engaged in the shipment and receipt of commodities; its membership also includes chambers of commerce, boards of trade, and commercial and traffic organizations dealing with general transportation matters from the standpoint of the shipper and receiver. The members of the league are the buyers and users of all types of transportation, and, therefore, are vitally interested in all matters affecting transportation.

Specifically, the league is also deeply interested in any proposal which would bring about a reorganization of the Interstate Commerce Commission as that agency is now constitued. The league on numerous occasions over the years has appeared before the Commission through counsel, and by representatives of the league in their capacities as chairmen of particular committees, dealing with various cases before that agency.

The National Industrial Traffic League is opposed to President Truman's Reorganization Plan No. 7, dealing with the Interstate Commerce Commission, which was submitted to Congress on March 13, 1950.

The chief reasons for our opposition to the plan are twofold:

1. That the appointment of the Chairman of the Commission by the President is not made subject to, by and with the advice and consent of the United States Senate. (See sec. 3 of the plan.)

2. That the members of the Commission should have more than merely the power of approval of the appointment by its Chairman of the heads of the major administrative units. (See sec. 1 (b) (2) of the plan.)

The Interstate Commerce Commission is an arm of Congress, and as such has been recognized as an independent regulatory body reporting directly to Congress. It has been independent of the executive branch of the Government throughout the 63 years of its existence. We believe that that independence should be maintained. Any plan under which the President would be authorized to appoint a permanent Chairman of the Commission should specifically provide that such appointment be made, by and with the advice and consent of the United States Senate. Unless this is done, there is great possibility that the independence of the Commission would be impaired, and that it would constitue a disrupting factor in its admistrative and regulatory functions.

Under the proposed plan, the power of appointment of the major administrative units of the Commission is vested in the Chairman, merely subject to approval of the Commission. We believe that the appointment or selection of the heads of the major administrative units should remain vested in the whole Commission, the same as at preesnt. We earnestly believe that the continuation of the present procedure is definitely in the public interest.

We further believe that transportation legislation, and administrative action thereunder, should not be handled piecemeal. The general subject of revision of the statutes and their administration for the different types of transportation are before the Interstate and Foreign Commerce Committees of both Houses of Congress, and much of the basic investigatory work has already been done. Interim changes will only confuse still further a highly complicated problem, and will make the attainment of a genuine consistent and sound national transportation policy more difficult, if not impossible.

The National Industrial Traffic League supports the adoption of House Resolution 545, introduced by Representative Crosser to reject Reorganization Plan No. 7 of 1950, and respectfully urges your honorable committee to report it favorably.

Respectfully submitted.

WASHINGTON, D. C., April 25, 1950.

E. F. LACEY, Executive Secretary.



Mr. Chairman, I appreciate the generous courtesy shown me by you and the members of your committee in this hearing.

I concur in the views expressed by Congressman Crosser, chairman of the Interstate and Foreign Commerce Committee of the House. I believe he is commendably attempting to serve the best interests of transportation and the Nation by resisting the adoption of Reorganization Plan No. 7 affecting the Interstate Commerce Commission.

The advocates of Reorganization Plan No. 7 seem to proceed on the false assumption that the Interstate Commerce Commission is exercising duties of an executive and administrative character that properly belong to the executive department. In my judgment there is no just foundation for this assumption. As a matter of physical fact and as a matter of law, these functions exercised by the Interstate Commerce Commission are given to it by the Constitution. As a physical fact the exercise of these duties by the Commission is a necessary incidental power to its effective administration. The engagement of its personnel in these activities, sometimes of an administrative character, or the semijudicial or semilegislative functions, are only incidental to the work of the Commission and legitimately belong to its control.

Under the Constitution it is specifically made the duty of Congress to regulate interstate commerce. The duty assigned to the executive department is solely that which authorizes the President to name the membership of the Commission for the time and in the manner prescribed by Congress. Nowhere is the Executive given authority to appoint the Chairinan of the Commission or to limit or define its functions, or to either directly or indirectly control the employment and supervision of its personnel or assign them to the duties of the Commission, or to use and expend its funds, unless that power is granted by Congress.


The limitations upon the Executive authority in reference to the control of this Commission are, in my judgment, clearly defined in the case of Humphreys v. United States, reported in United States Reports 295, page 601. In that case the President requested a member of the Federal Trade Commission who had views adverse to those of the President, to resign because the "aims and purposes of the administration with respect to the Commission can be carried out most effectively with personnel of my own selection." This action of the President indicated he entertained the erroneous view that he should control the action of an independent regulatory agency established as an agency of Congress.

The President further stated that he thought it would be best for the people of the country that he should have a "full confidence" from the members of the Commission.

On appeal to the Supreme Court it was held that the duties performed by the members of a congressional regulatory agency in aid of its semilegislative and judicial purposes is not an executive function over which the President had a right to exercise control. The Court stated that the duties of the members of such a body "is not political or executive."

The Supreme Court compared the Federal Trade Commission with the Interstate Commerce Commission in this respect. The Court called attention to the fact that the Interstate Commerce Commission was once in the executive department under the Bureau of Corporations. After some experience, the Interstate Commerce Commission was for the good of the service moved out of the executive department into its present independent status with the approval of both the Commission and the executive agency in which it had been placed. The Court

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