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In that connection I want to read a very short quotation from the creed of Mr. Joseph B. Eastman, one of the most distinguished men who ever served on the Interstate Commerce Commission, who was its Chairman for a number of years, who was, during the first part of the late war, the Director of Defense Transportation.
In this credo, he gave his concept of the place in our governmental structure of an agency such as the Interstate Commerce Commission and the manner in which it should be regarded and treated. I quote from Mr. Eastman:
With the country as big and complex as it is, administrative tribunals like the Interstate Commerce Commission are necessities. Probably we shall have more rather than less. To be successful, they must be masters of their own souls, and known to be such. It is the duty of the President to determine their personnel through the power of appointment, and it is the duty of Congress to determine by statute the policies which they are to administer; but in the administration of those policies these tribunals must not be under the domination or influence of either the President or Congress or of anything else than their own independent judgment of the facts and the law. They must be in position and ready to give free and untrammeled advice to both the President and Congress at any time upon request. Political domination will ruin such a tribunal. I have seen this happen many times, particularly in the States.
While President Wilson is reported to have said that he would as soon think of proffering suggestions to the Supreme Court upon a matter before it as to suggest how the Commission should decide a case,12 in later years there have been in spite of the Commission's secure legal status as an independent agency attempts to bring political influence to bear upon it.13
The conclusions on this subject of those who have spent a lifetime in the regulated transportation industry was well summed up by Scharman when he said:
Interference by the executive branch of the Government [with the Commission] is an unmixed evil however subtle and indirect its manifestations may be.11
What he could have added is that the most dangerous kind of interference is that of the subtle and indirect variety which takes so many people unawares. The lesson of experience suggests eternal vigilance in jealously guarding these independent commissions from what at first may seem to the unpracticed eye to be minor encroachments on their independence.
Thus it is, as the Hoover Commission task force observed, thatmost carriers, shippers, and students of transportation appear to agree that the independent status of the Commission should be maintained. * * * In the hands either of the legislature or the executive their solution would tend to become trials of political strength.15
What is needed for the solution of these problems is the impartiality, deliberation, expertness, and continuity of policy that has
12 D. Philip Locklin, Economics of Transportation, 3d ed., 1947, p. 300.
13 Sharfman, The Interstate Commerce Commission, vol. 2, pp. 488-489. Joseph B. Eastman. The Place of the Independent Commission in the Federal Government, the Constitutional Review (April 1928), vol. 12, p. 95102.
In 1928, B. H. Meyer, then a member of the ICC, in an address entitled "In the Public Interest" before the University of Wisconsin Chapter of the Phi Beta Kappa, stated: "The Commission has always been an independent body. It has nothing to do with politics and no political influence has ever determined its official action on any question. must admit, however, that occasionally attempts have been made to nibble politically at the Commission. In the past these nibbles were sometimes annoying but never harmful. It has remained for recent time to attempt to control Commission action through political channels. These attempts were made boldly and at times with fury. Every one of them has failed. I do not believe they ever will succeed, but it will be a sorry day for government if they ever should succeed."
14 Sharfman, The Interstate Commerce Commission, vol. II, p. 488.
15 Hoover Commission Task Force Report on Regulatory Commissions (1949), p. 83.
marked the history of the Commission. The economic power over shippers, carriers, and the general public now confided to the Commission is too vast to be placed in the hands of a political officer in the executive department. The consequences of doing so might be disastrous to the present system of private ownership and operation of the carriers under public regulation. As Thomas F. Woodlock wrote in 1938 after he had left his position as a member of the Commission:
* * * If private ownership and operation is to continue in this country we cannot afford to lodge the regulatory power necessary for such a system in any person or persons who are subject to the vicissitudes of party-or of group-political control, or influence.16
In other countries the world over a ministry of transport has ordinarily emerged as the operator of a governmentally owned system of transportation. The reasons why this is the natural outcome of placing control of transportation in the hands of an executive department were pointed out by Mr. John Dickinson, vice president-general counsel, Pennsylvania Railroad Co., in Proposals To Create a Federal Department of Transportation, ICC Practitioners' Journal, January 1949, page 341:
At this point, the essential and fundamental differences mentioned above between the methods of decision which might be expected to characterize a cabinet department and those which prevail in an independent commission become of special importance. All those characteristics which have been described as likely to prevail in the making of decisions by a cabinet secretary or department-the disregard of precedent and principle, the emphasis on immediate need rather than long-range results, the subordination of one interest to another for the sake of a program, the importance of direct pressures for immediate results-all these are properly characteristics not of a regulatory agency employed in the application and enforcement of law, but of a managing agency. In short, the new department would almost from its inception be headed in the direction of becoming a managing body, or rather the managing body, in the fields now occupied by the managements of the privately owned transportation agencies.
The CHAIRMAN. You appreciate that this plan does not create a new department of transportation?
Mr. GIBSON. Yes, sir.
May I proceed with my quotation from Mr. Dickinson?
The CHAIRMAN. Yes, sir.
Mr. GIBSON (reading):
The new department would clearly approach the position of a supermanager rather than of a regulatory tribunal; and it is impossible for the position of supermanager to be long occupied before its occupant begins to take over the functions of ordinary management. * *
The basic reasons for placing such tremendously important economic contests in a nonpartisan agency were tersely summed up by the Honorable Sam Rayburn for many years chairman of the House Committee on Interstate and Foreign Commerce and now Speaker of the House, in an address before the National Association of Railroad and Utility Commissioners in 1934, when he said:
It would have been a great mistake to have placed the regulation of transportation in an executive department. The Members of Congress would have been daily annoyed with the request to see the appropriate member of the Cabinet with reference to reparations on some shipments of scrap iron or on rates or on any one of the thousands of rates that are published from time to time. In my judg
16 Wall Street Journal, October 24, 1938.
ment, it would be a great mistake to create any agency which would in any way duplicate or interfere with the work of the Commission. We can get results that are most satisfactory by placing all the responsibility in one place. In my mind, that one place should be removed as far from the maelstrom and melee of politics as legislative ingenuity can devise.
In passing the Interstate Commerce Act Congress exercised its legislative ingenuity in devising a way to keep these issues and these responsibilities out of politics and in the hands of an impartial regulatory commission. Plan No. 7 is a plan which would break down these barriers. It would expose the shippers, the carriers and their employees, as well as the general public to hazards which more experienced, more practical, and more far-sighted men have warned against throughout the years.
ORGANIZATION OF COMMISSION
The Commission is now composed of 11 members of whom not more than 6 may be of the same party. A member is appointed by the President, subject to confirmation by the Senate, for a term of 7 years or until a successor is appointed, and may be removed by the President only for inefficiency, neglect of duty, or malfeasance in office. The present Interstate Commerce Act vests all of the powers in the Commission as a body. The statute contains no mention of a chairman so that his selection is left under general principles of law entirely to the Commission itself. Under the present practice the chairman is elected annually, each member serving for 1 year in rotation. Different methods have been pursued occasionally in the past, such as a 3-year term and the election of one man for the remainder of his term of office as a Commissioner. The Commission has been free to vary its practice to suit the needs of the times and has not hesitated to adopt the method which it regarded as likely to produce the best results at any given time.
The Commission has 15 bureaus, each of which is headed by a director or other designated official who exercises immediate administrative control. A part of the general administrative work is taken care of by the Bureau of Administration headed by the Secretary of the Commission. Each individual commissioner is designated as reporting commissioner for one or more bureaus and exercises general supervision over their administrative activities.
Mr. HOLIFIELD. Will you yield there for a question?
Mr. GIBSON. Yes, sir.
Mr. HOLIFIELD. It is my conception that this plan actually puts the general administrative responsibility in the hands of the chairman rather than that the specific administration of the different bureaus by the different Commissioners-is that your conception of it? You make a differentiation here, I must say, between the general administrative work and the separate work of the bureaus.
Mr. GIBSON. I was speaking here, Mr. Holifield, of the present organization of the Commission. I am about to come to the changes that would be effectuated by plan No. 7.
It is my understanding that now the chairman does have certain administrative responsibilities for the Commission as a whole and that many of the administrative responsibilities are taken care of by this bureau of administration headed by the secretary who reports
on some matters to the Chairman, in many matters to the Chairman, and in other matters acts in consultation with the reporting Commissioners who have administrative supervision over the several bureaus of the Commission.
Mr. HOLIFIELD. About five bureaus?
Mr. GIBSON. Well sir, I think there are 15. There are five divisions, sir.
Mr. HOLIFIELD. That is what I meant.
Mr. GIBSON. The five divisions, sir, are made up of members of the Commission. These bureaus are the administrative units of the Commission.
Mr. HOLIFIELD. Five basic divisions, and broken down as follows: The General Administration, Enforcement, Certificates of Convenience and Necessity, Safety, and the Motor Carrier Act Functions of 1935. They are broken down in turn into 15 bureaus.
Mr. GIBSON. No, sir; the Commission's organization as a whole is broken down into 15 bureaus. These divisions are groups of Commissioners who are given certain designated parts of the work of the Commission to be performed by them in the first instance. That is, to decide certain types of cases subject of course to a petition for a rehearing, which is in the nature of an appeal to the full Commission.
ANALYSIS OF REORGANIZATION PLAN NO. 7
Plan No. 7 is short and concise, but profound changes would be effected by its broad and sweeping terms.
The two vitally important changes it brings about are (1) centralization of control of the administrative affairs of the Commission in the office of the chairman; and (2) the transfer of the power to select that officer from the members of the Commission where it now resides to the President. The first is in conformity with the recommendations of the Hoover Commission but the second is something that the Hoover Commission deliberately refused to approve after it had been proposed by the task force.
Mr. HOLIFIELD. I think we ought to stop there and read the section of the Hoover Commission report.
Mr. HOFFMAN. Why not let the witness state the authority for the statement? That would be the quicker way.
Mr. HOLIFIELD. This is a statement here which I think is in error
and maybe I am
Mr. HOFFMAN. You mean his statement?
Mr. HOLIFIELD. Yes; his statement.
Mr. HOFFMAN. Let him give his authority for it and instead of Mr. Holifield looking up his authority.
Mr. HOLIFIELD. I was going to take the liberty of so indicating.
Mr. GIBSON. Could I proceed with my statement as I have it here now and come to that question a little later on? I think that the continuity of my remarks might be improved if I were permitted to follow that policy.
Each of these changes is in our view objectionable, but the evils inherent in the separate features are magnified many times by their combined effect.
CONCENTRATION OF ADMINISTRATIVE AUTHORITY IN CHAIRMAN
Under plan 7 the executive and administrative functions now vested collectively in the members of the Commission are transferred to its chairman. The exact language of this feature of the plan is worthy of careful attention. In the broadest terms it "transfers the executive and administrative functions of the Commission," that is, all of those functions rather than merely the three specific ones which are expressly mentioned as among those transferred. Those three functions are in themselves of vital importance. They include (1) the appointment and supervision of personnel; (2) the distribution of business among personnel and among administrative units; and (3) the use and expenditure of funds.
LIMITATIONS ON TRANSFERRED POWERS
There are certain limitations on the Chairman's exercise of these transferred functions. Regular full time personnel in the immediate offices of the individual Commissioners are left unaffected by the plan. There are reserved to the Commission its functions of revising budget estimates and of allocating appropriated funds to major programs. The chairman must be governed by general policies of the Commission and by such regulatory decisions, findings, and determinations as the Commission may by law be authorized to make. While the chairman may appoint the heads of major administrative units, their selection is subject to the approval of the Commission.
LIMITATIONS ARE OF DOUBTFUL EFFICACY
While all of these limitations are desirable, it is doubtful whether they cover any considerable part of the total field or are sufficient to impose any effective restraint on the chairman's right to exercise full administrative control.
The requirement that the chairman shall be governed by the general policies and regulatory decisions of the Commission is so broad and vague as to raise doubt whether it would in actual practice impose any concrete limitation susceptible of enforcement. The right to revise budget estimates is of limited significance in view of the fact that the estimates are mere requests for money which may or may not be approved by the Bureau of the Budget, the President, or the Congress. The significance of the right to allocate appropriated funds to major programs is considerably diminished to the extent by which such allocations are set forth in detail in the statutes appropriating funds for the use of the Commission.
The power of the Commission to approve or confirm bureau heads might be little more than the power to veto an obviously unfit candidate. In any event however the heads of major units form only a small part of the key personnel employed by the Commission in the discharge of its functions. Other key personnel such as examiners, attorneys, traffic experts, engineers, economists and accountants perform duties of vital importance.