Mr. GIBSON. They are not. The CHAIRMAN. Are they or are they not? They must come within one of these three branches. Are they or are they not a part of the legislative branch of the Government? Mr. HOFFMAN. I do not think he should be required to answer that question by "Yes" or "No." Mr. GIBSON. I could not answer it accurately "Yes" or "No." The CHAIRMAN. Are they part of the judicial branch of our Government? Mr. GIBSON. I would say that they are not. They are more nearly a part of the legislative department of the Government, and they have been often described as an arm of Congress. They have been so described time after time, as an arm of the Congress. Mr. HOLIFIELD. Mr. Gibson, on that point, the Reorganization Act gave the Hoover Commission the authority to reorganize the executive branch. Mr. HOFFMAN. Oh, no; recommendation. Mr. HOLIFIELD. Well, recommendation, if you want to get technical. Mr. HOFFMAN. I want to get substantive. Be realistic. Mr. HOLIFIELD. It is obvious that the Hoover Commission considered these regulatory agencies as part of the executive branch, otherwise they could not have brought them within the scope of their reorganization consideration. You must concede that, I think, that they at least considered it, whether they were right or wrong; they considered them part of the executive branch. Mr. GIBSON. We are dealing here, Mr. Holifield, with agencies that occupy a debatable ground, if I may describe it as such. They perform certain quasi-legislative functions; they perform certain quasi-judicial functions; and they perform certain incidental administrative functions. The courts have said time and time again, and it has always been a source of a great deal of debate as to whether technically considered they were in the executive branch of the Government or in the legislative branch of the Government, or whether, on the other hand, they were not because of the peculiar nature of their functions in the third category, that of independent regulatory tribunals. I think that we could debate a long time on that. I know that lawyers and scholars have in the past debated a great many times on that and I can only say that we are dealing with a subject matter here that is close to the line of demarcation between the legislative and the executive and perhaps, I might add, the judicial branches of the Government. Mr. HOLIFIELD. May I follow that up? The CHAIRMAN. Yes. Mr. HOLIFIELD. Then the position you take fundamentally is this: That the Hoover Commission had no right to consider any reorganization of this area, the area of regulatory agencies at all because they were specifically told to confine their attention to the area of general management of the executive branch. That is what they studied. The CHAIRMAN. That is what we authorized them to report to Congress on. Mr. GIBSON. No, sir; I am not saying that. I am merely saying that I have not examined into that particular question and I would ask respectfully to be excused from giving a horse-back opinion on a legal question of such intricacy. The CHAIRMAN. You are a lawyer, are you not? Mr. GIBSON. Yes, sir. Mr. HOFFMAN. Lawyers do not know everything without consulting a book. The CHAIRMAN. But as a lawyer I want him to explain to me how you are going to get out of putting responsibility for any action of this Government, any set-up in this Government, in not one of the three major branches of the Government, as set up by the Constitution. The responsibility must lie within one of the three departments of the Government. There is no existence outside of those three. Mr. HOFFMAN. Conceding all this and answering for him without his consent, let me say this, that the Congress, as I understand it, created these-if you want to call them independent agencies-they created them, then, for just efficiency or because there was no other place for them and they gave them office space in the executive departments and they made them responsible to the Executive by giving him the power of removal and they left the courts to interpret the orders they made. The CHAIRMAN. That being the case, if the Executive has the power of removal, and the power of naming, and so on, it is in his department. Mr. HOFFMAN. That part of it, removal, yes. The CHAIRMAN. If you give him the power to hire and fire, then you have given him this jurisdiction. The President can appoint to a court, that is provided in the Constitution, that is another branch of the Government-but he cannot fire. Mr. HOFFMAN. Congress can. The CHAIRMAN. No, Congress cannot create a new department of government. Mr. HOFFMAN. No. The CHAIRMAN. Or create any function of this Government not operating in one or the other of these branches. Mr. HOFFMAN. It can create agencies in any branch to carry out the provisions. The CHAIRMAN. That is what this was. This was a study of the agencies within the executive department. Now, if he will say they are part of the executive department, O. K. But he has to place them in some department in order that we might have responsibility. Mr. HOFFMAN. He has placed them in all three departments. The CHAIRMAN. There is no such thing in our form of government. Mr. HOFFMAN. The ICC, the General Counsel of the National Labor Relations Board. The CHAIRMAN. They are part of the executive department if the President has the right to hire and fire. Mr. HOFFMAN. He has not any power to fire the General Counsel of the Labor Board. The CHAIRMAN. The President can fire the General Counsel. He can fire you or me for that. The CHAIRMAN. That puts it within the executive department because you place the responsibility for the performance of his duty in the hands of the President. Mr. GIBSON. Mr. Chairman, if I were permitted, I could answer this question most accurately by referring to the determinations of the Supreme Court of the United States on this subject that we are now considering. And according to the Court, the ICC function partakes of the character of the legislative, the judicial, and the executive functions which in a sense overlaps into three of the great branches of our Government. This has been repeatedly recognized by the Court. And the best that I can say as a result of those cases is that these independent commissions are, as a whole, and considering the whole subject, not in any one of the three departments but they are independent agencies. In this connection I refer particularly to the decision of the Supreme Court in the Humphrey case (Humphrey's Executor v. U. S., 295 U. S. 602). On page 624 of its opinion in that case, the Supreme Court said of the Federal Trade Commission: It is charged with the enforcement of no policy except the policy of the law. Its duties are neither political nor executive, but predominantly quasi-judicial and quasi-legislative. Like the Interstate Commerce Commission, its members are called upon to exercise the trained judgment of a body of experts "appointed by law and informed by experience" (Illinois Central R. Co. v. Interstate Commerce Comm'n, 206 U. S. 441, 454; Standard Oil Co. v. United States, 283 U. S. 235, 238-239). Again, on page 629 of the opinion, the Court said: The authority of Congress, in creating quasi-legislative or quasi-judicial agencies, to require them to act in discharge of their duties independently of executive control cannot well be doubted; and that authority includes, as an appropriate incident, power to fix the period during which they shall continue in office, and to forbid their removal except for cause in the meantime. For it is quite evident that one who holds his office only during the pleasure of another cannot be depended upon to maintain an attitude of independence against the latter's will. Now, with the chairman's permission, could I proceed with my statement? The CHAIRMAN. Certainly, sir. Mr. GIBSON (continuing): PLAN FORESHADOWS FURTHER ENCROACHMENTS ON COMMISSION INDEPENDENCE Plan 7, as already indicated, does not stand alone. It was sent to Congress along with 21 other plans. One of these others, plan No. 21, furnishes a pattern of treatment of an independent agency which may foreshadow additional reorganization plans which would further impair the independence of the Interstate Commerce Commission. From the time of its creation in 1887, the Interstate Commerce Commission has been the leading agency of the Government dealing with transportation problems. The message transmitting plan 21, however, reveals a clear and distinct purpose of transferring this preeminent position to the Department of Commerce which, it is said, has for more than a decade been in the process of becoming the major transportation agency of the Government. The transfer under plan 21 of the functions of the Maritime Commission to the Department of Commerce is said to be another move in this direction which will give the Department jurisdiction over the major portion of the operating aspects of the programs of the Government relating to air, highway, and water transportation as well as over the development and coordination of policies affecting the Nation's transportation system as a whole. For the more effective administration of these growing rowers, plant 21 calls for the appointment of an Under Secretary of Commerce for Transporation.28 THERE IS NO INDICATION PLAN 7 WOULD PRODUCE ECONOMY IN EXPENDITURES One of the principal reasons advanced for the support of current plans for reorganization of the Government is that they will produce very great economies. It is therefore pertinent to inquire what savings are likely to come about from the adoption of plan No. 7. In the current budget for the next fiscal year which calls for over $42,000,000,000, the amount included for all of the activities of the Interstate Commerce Commission is something under $12,000,000. It would of course be something of an accomplishment if any substantial part of that sum could be saved by changes in organization, but there is no indication that the adoption of the plan would bring about any specific savings. In the message transmitting plan No. 7, it is candidly stated that the plan "may not in itself result in substantial immediate savings." The view is expressed that a reduction in expenditures will probably come about in future years although it is not possible to make a concrete estimate of the amount. So far as I can see there is no substance to the vague hopes for savings in future years. As long ago as 1887-88 two successive Secretaries of the Interior said they saw no real purpose to be served by giving them a measure of control over expenditures of the Interstate Commerce Commission. More recently the Brookings Institution has said that the arguments in favor of placing independent commissions within the Government departments in order to improve "housekeeping" arrangements is of doubtful merit, since it is questionable whether much if any, saving could thereby be accomplished.2 29 The potential savings would in any event be of a minor character. They could under no conceivable circumstances justify the grave risks attendant upon an impairment of the independence of a regulatory agency such as the Interstate Commerce Commission. 28 Transfer of the functions of the Maritime Commission to the Department of Commerce through plan No. 21 will mark a long step forward in the integration of the many governmental programs affecting transportation. This step, again, is in accord with the recommendations of the Commission on Organization of the Executive Branch. For more than a decade the Department has been in the process of becoming the major transportation agency of the Government. The establishment of the Civil Aeronautics Administration within the Department was the first major move in this direction. The transfer of the Weather Bureau to the Department was based in large part on that Bureau's importance to transportation. One of the reorganization plans which I transmitted to the Congress last year transferred the Bureau of Public Roads to the Department. Now, with the addition of the functions of the Maritime Commission, the Department will have jurisdiction over the major portion of the operating aspects of the programs of the Government relating to air, highway, and water transportation, as well as over the development and coordination of policies affecting the Nation's transportation system as a whole. Plan No. 21 establishes in the Department of Commerce a three-man Federal Maritime Board and a Maritime Administration under a Maritime Administrator. The award of subsidies and all regulatory functions are transferred from the present Maritime Commission to the new Board. The remaining functions of the Maritime Commission, involving ship construction and other administrative operations, are transferred to the Department of Commerce for execution through the Maritime Administration. The plan also provides for appointment of an Under Secretary of Commerce for Transportation, who will assist the Secretary in the direction and coordination of the transportation activities now centered in the Department (H. Doc. No. 503, 81st Cong., 2d sess., pp. 3 and 4). 29 What the Brookings Institution said was this: "The argument for placing these independent boards and commissions within Government departments in order to improve housekeeping' arrangements seems to be, in respect to the larger commissions at least, of doubtful merit. After an organization reaches a certain size, it is questionable whether much, if any, saving in 'housekeeping' operations is gained by placing it within a large unit" (Brookings Institution: Report to the Select Committee of Executive Agencies of the Government, No. 10, p. 94). Mr. Chairman, I have attached to my statement a letter that I referred to a while back of October 11, 1949, from Mr. Mahaffie, Chairman of the Interstate Commerce Commission, to Hon. Edwin C. Johnson, chairman, Committee on Interstate and Foreign Commerce of the Senate, expressing opposition to provisions of Senate resolution or bill No. 2330 which contained many provisions substantially similar to those of plan No. 7, and may this letter be incorporated in the record as a part of my testimony? The CHAIRMAN. Certainly, sir. (The letter referred to and appendix following are as follows:) OCTOBER 11, 1949. Hon. EDWIN C. JOHNSON, Chairman, Committee on Interstate and Foreign Commerce, United States Senate, Washington, D. C. MY DEAR CHAIRMAN JOHNSON: Your letter of July 28, 1949, requesting a report and comments on S. 2330, introduced by you, making certain changes in laws applicable to regulatory agencies of the Government, has been considered by the entire Commission, and I am authorized to submit the following comments in its behalf: The only portion of S. 2330 which pertains to the work of the Interstate Commerce Commission is section 2, proposing to amend section 11 of the Interstate Commerce Act by adding the following sentences thereto : "The functions of the Commission in respect of (1) its internal management, including budgeting and accounting, personnel (including appointments and assigments), supply, management research, information and publications, and other administrative matters; (2) its relations with Congress; and (3) the execution of its policies, shall be performed on behalf of the Commission by the Chairman, and the Chairman shall have exclusive and final authority, on behalf of the Commission, in respect of such functions. Such authority of the Chairman may be exercised, subject to the direction and control of the Chairman, by any officer or employee of the Commission designated by the Chairman for such purpose." From the beginning of this Commission, in 1887, consideration has been given continuously and intensively to the duties assigned to the Chairman and to his length of term. Initially the term was indefinite, and it continued so until the resignation in 1910 of Chairman Knapp as a member of the Commission to become a judge of the United States Commerce Court. The Commission then unanimously adopted a policy of annual rotation of the chairmanship, in order of seniority, as grave weaknesses had developed in the system of a continuing or permanent chairmanship. Annual rotation was the rule until July 1, 1940, when, as a necessary part of the reorganization of its internal organization, the Commission extended the term to 3 years and gave the holder of the office greater administrative and executive responsibilities, including the duty of seeing "that the work of the Commission is done promptly and efficiently." However, annual rotation was resumed at the end of one 3-year period. During the period of service of the Federal Coordinator of Transportation, the Commission, called on to comment on his recommendations for amendment of the law and for a reorganization of the Commission, carefully and at length reexamined its policy of annual rotation of the chairmanship and, by a vote of 9 to 2, disapproved the Coordinator's recommendation for an indefinite instead of annual term for such service, January 23, 1935 (H. Doc. No. 89, 74th Cong., 1st sess.). On February 5, 1945, the Commission adopted specifications of duties and responsibilities relating to the office of Chairman and directed that the same be incorporated in the general organization minute, which was done (11 Federal Register, 10662, Code of Federal Regulations, 1946, Supplement, title 49, sec. 0.5a). Appended to this letter are the specifications so adopted, which are now in effect. The purpose of this amendment is to centralize a considerable amount of administrative work in the Chairman of the Commission apparently because of the belief that the other members of the Commission are at present devoting an undue amount of their time to such work. Much of the administrative work of the Commission other than that referred to in this bill is carried on through the various bureaus, each of whom reports to the Commission or a division thereof through an individual Commissioner, who exercises general supervision over its work. Such Commissioner necessarily acquires a specialized |