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Our association has been in existence for 36 years. It is a voluntary, cooperative, nonprofit organization. I receive all of my compensation from that association.
I appear here today in support of Representative Crosser's House Resolution 545, proposing that the House not favor Reorganization Plan No. 7 transmitted to Congress by the President on March 13, 1950. This plan relates to the Interstate Commerce Commission. I am, therefore, appearing in opposition to Reorganization Plan No. 7.
For many years our association has printed and distributed its Federal legislative program, and, for many years, that program has said that, "The association opposes any legislation impairing the efficiency or independence of the Interstate Commerce Commission."
In my statement I shall make the following principal points:
1. The Interstate Commerce Commission is primarily an arm of the Congress.
2. The Commission's preeminence as a Federal regulatory agency is due to the fact that it has been independent of politics and of the executive branch of the Government; has been composed of good men; and has maintained an able and efficient staff.
3. The independence of the Commission would be destroyed, and its efficiency impaired, if Reorganization Plan No. 7 becomes effective.
4. Reorganization Plan No. 7 was not recommended by the Hoover Commission, so far as two important provisions of the plan are concerned.
5. There is grave danger that section 11 of the Administrative Procedure Act, relating to the appointment and work of hearing examiners, would be regarded as inapplicable to the Commission if Reorganization Plan No. 7 becomes effective.
6. Reorganization Plans Nos. 8, 9, and 11 should also be rejected. A word with respect to my experience may not be inappropriate. It has been about 30 years since I left the office of the Legislative Counsel of the House of Representatives to begin the practice of law. During the past 25 years most of my experience has been in the field of transportation law, with particular reference to the Interstate Commerce Commission. I have never been on the staff of the Commission, so that I must speak from my experience as a lawyer and long association with the Commission. For 10 years I was very active in the Association of Interstate Commerce Commission Practitioners, and am a past president of that association. I was also editor in chief of the ICC
Practitioners' Journal for several years. I have done considerable writing with respect to the Commission. This includes not only books relating to the Interstate Commerce Act and to practice before the Commission, but also a book known as The Lives of The Interstate Commerce Commissioners. My research and writings have gone back prior to the passage of the Interstate Commerce Act in 1887. It is well known that I have not hesitated to praise the Commission, nor have I hesitated to criticize it. My activities have brought me in some contact with some of the other administrative agencies of the Government and their work.
Judged by any standards, and by common consent, the Interstate Commerce Commission is preeminent among the Federal regulatory administrative agencies. Many reasons have been assigned for the preeminence which the Interstate Commerce Commission has achieved as a Federal regulatory administrative agency. But, the principal reasons for its unparalleled success may be thus briefly stated:
1. Good men have, as a general rule, been appointed to the Commission. 2. Once appointed, the members individually, and the Commission as a whole, have been independent.
3. The Commission has maintained an unusually well-qualified staff. It is our view that if Reorganization Plan No. 7 becomes effective the independence of the Interstate Commerce Commission will be destroyed, and its efficiency impaired.
Ours is a government of men and not of laws. If that statement sounds harsh, and contrary to what one frequently hears, it is, nevertheless, true. The Honorable Joseph B. Eastman, who was a member of the Interstate Commerce Commission for 25 years prior to his untimely passing on March 15, 1944, said: "The statutes which the tribunal administers should be well, simply and carefully framed, but the personnel which does the administering is more important than the wording of the statute. Good men can produce better results with a poor law than poor men can produce with a good law."
There is much truth in the frequently repeated statement that—
"I care not who makes the laws so long as I can appoint the men who administer them."
The power of appointment of men is more important that the power to make the laws.
The Interstate Commerce Commission is primarily an arm of the Congress, and it is, of course, for the Congress to decide whether it wants to turn over to the executive branch of the Government the administration, control, and conduct of its own agency. We think that Congress should not do so.
I want to discuss, as briefly as I can, the point that the Interstate Commerce Commission is an arm of the Congress.
The Interstate Commerce Commission was created in 1887 to bring into existence a body which, from its special character would be best fitted to determine, among other things, whether upon the facts in a given case, certain rates should be prescribed, approved, or disapproved, or whether certain practices should be approved or disapproved, and for many other purposes. Basically the Commission was established to do the things that Congress could itself do but which the Congress did not have the time nor the peculiar qualifications for doing. The Commission is a special tribunal continually engaged, in an administrative and semijudicial capacity, in investigating railway, motor carriers, water carriers, and freight forwarders rates and practices. There are many reasons why the Commission is and always has been essentially an arm of the Congress, and why it has been variously referred to as the "child of Congress" and as the "eyes and ears of Congress," so far as transportation is concerned.
Although the Commission performs a multitude of functions, one of its principal duties is the regulation of rates, which has always been regarded as a legislative function. What Congress does is to lay down the policy in broad principles and then leave it to the Commission to carry out the congressional mandates, to "fill in the details" so to speak.
But, in addition to all of that, the Commission performs many other duties as an agency of the Congress, not the least of which is the conducting of investigations for the Congress.
As you know, the Congress has broad powers of investigation. It has frequently been said by the courts that legislation may begin where the evils begin. Congress frequently determines these evils by means of investigations. But, again, the Congress does not have the time to conduct all of the investigations necessary. So, on many occasions, the Congress has directed the Commission to make the investigations, and to report to the Congress its recommendations for legislation.
I give you a list of some of the investigations which the Interstate Commerce Commission has made by direction of Congress. I make no claim that the list is complete. It is intended only to illustrate and support the facts which I have just stated. I shall not detail them, but ask that they be included in my statement. They are:
1. The facts in connection with existing or prospective ownership or control of railway lines in the United States by the Government of Canada. Report was made to the Senate on December 3, 1919. (See Annual Report of Interstate Commerce Commission, 1920, p. 38.)
2. Living conditions of railway trainmen. Senate on August 3, 1920. (See 58 I. C. C. 761.)
Report was made to the
3. The causes of freight congestion in the principal cities of the United States and the measures that have been taken or may be taken to relieve the situation. Report was made to the Senate on December 9, 1920. (See Annual Report of Interstate Commerce Commission, 1921, p. 29.)
4. The cost of railroad fuel for the year 1920 over such cost for the year 1919. Report was made to the Senate on April 4, 1921. (See Annual Report of Interstate Commerce Commission, 1921, p. 30.)
5. The organization, management, and control of the Transcontinental Freight Bureau. Report was made to the Senate on February 3, 1923. (See 77 I. C. C. 252.)
6. The feasibility and advisability of ordering an embargo upon shipments of anthracite coal to foreign countries, and the steps taken or which may be taken for the establishment of priorities in the equitable distribution of such coal and for the prevention of its purchase or sale at unreasonably high prices. Report was made to the Senate on February 28, 1932. (See Annual Report of Interstate Commerce Commission, 1923, p. 31.) 7. The extent to which the railroads serving the Northwest Pacific States
failed to supply adequate transportation facilities during the crop season of 1922, with an analysis of the causes and a suggestion of remedies designed to prevent a repetition of such failure or adequacy of transportation facilities. Report was made to the Senate on February 4, 1924. (See 87 I. C. C. 472.)
8. The administration of the fourth section (long- and short-haul clause) of the Interstate Commerce Act. Report was made on February 11, 1924. (See 87 I. C. C. 564.)
9. The assessed valuation, as for taxation processes for the year 1923, of all the property of each of the railroads in the United States acting as a common carrier. Report was made to the Senate on February 9, 1925. (See Annual Report of Interstate Commerce Commission, 1925, p. 34.)
10. The effect upon operation, service, and expenses of applying the principle of the 6-hour day in the employment of railroad labor. Report was made to the Congress on December 13, 1932. (See 190 I. C. C. 750.), Every one of these investigations was made pursuant to Senate resolutions, with the exception of the last one named, and that was made pursuant to a public resolution. It will, therefore, be noted that all of the reports, except the last one, were made to the Senate.
The Congress should, therefore, be peculiarly sensitive to the fact that the Interstate Commerce Commission is one of its agencies.
So far back as 1868, practically 20 years before the Interstate Commerce Act was enacted, committees of Congress have labored over a great variety of proposals to regulate the railroads and other transportation agencies. The Interstate Commerce Commission is under a statutory duty to make recommendations to the Congress for such legislation as it believes should be enacted. Additionally, many bills for the amendment of the Interstate Commerce Act, and other acts administered by the Interstate Commerce Commission are introduced in each session of the Congress. The committees of the Congress generally refer these bills to the Interstate Commerce Commission with the request that the Commission give the committees the benefits of its views. The value of these views of the Commission and their aid in the determination of the congressional policy, need not be stressed by me. It is too well known to you. Those activities of the Commission became such that so far back as 1916 the Commission established its legislative committee, which gives careful consideration to every request from the Congress for an expression of views; and, in many instances, the subject is considered by the entire Commission. Although the Congress may not always agree with the views expressed by the Interstate Commerce Commission with respect to legislative proposals, it has, however, the assurance that the Commission has given it a sincere and independent expression of judgment.
In support of my point that the Interstate Commerce Commission is primarily an agency of the Congress, I want to quote from two men who are well-qualified to speak on this subject. The first is the distinguished Speaker of the House of Representatives, who was for so many years a member of the House Committee on Interstate and Foreign Commerce and, also, for many years the chairman of that committee. Back in 1937, at the exercises commemorating the 50 years of service of the Interstate Commerce Commission, Speaker Rayburn said: "The work of the Committee on Interstate and Foreign Commerce in the House, with which I am personally familiar, has for the most part been toward perfecting the Interstate Commerce Act in the light of experience. In this continuous and sustained effort the Congress has had as its efficient and dependable agency this Commission. When facts were needed this Commission was called upon to furnish them. Hundreds of bills have been introduced to amend the act, and on practically every one of these we have sought and have had the advice of this Commission. The members of the legislative committee of this Commission have worked almost continuously with the congressional committees. Through them the congressional committees have kept in constant touch with the Commission and through them have utilized the Commission's resources for gathering information and for analyses.
"Through amendments to the act and through resolutions, the Congress has constantly guided the Commission, defined its duties, and directed how it should expend its energies. The Commission has always been responsive to the congressional will. In determining policy Congress has had the benefit of advice and counsel of Commissioners, individually and collectively, and has had at its call the staff of experts developed by the Commission. In the light of information so obtained and of the counsel devoted to the public interest, the Congress has
been aided in determining its policies. After those policies have been expressed in statute or resolution, the Commission has carried them out, always conforming to the directions and standards laid down in the statute. When, after experience, some policy has been found to be impractical, or obsolete, the Commission in its annual report has been faithful to call our attention to the facts, and the Congress again and again has passed measures responsive to such recommendations.
"For an organization to have acquitted itself so creditably and to have acquired the prestige of a half century of successful performance, it is remarkable that the Commission has not thought of itself as an end to be served nor has it assumed that it, instead of the Congress, should determine the policies. The Commission has made its reports and its recommendations and has awaited the pleasure of the Congress."
All of you are familiar with the long and distinguished service rendered by Senator Wheeler, both as a member and as chairman of the Senate Committee on Interstate Commerce. On the same occasion, Senator Wheeler said:
"Individually and as a group it is your right to be proud of the tradition, the efficiency, and the independent responsibility which characterizes the present Interstate Commerce Commission.
"To me, the most significant feature of your half century is the close cooperation between the Commission and the Congress in the process of making additions and betterments to your organic structure and in the development and maintenance of our national transportation policies.
"Primarily, the Commission functions in that sphere of transportation problems which has long been considered to be reserved to the legislature, that is, the fixing of rates and charges, and the prescribing of rules of conduct for the future. These Commission duties have never been considered to be within the powers of the Chief Executive or the courts. Further, the Commission has been directed to exercise certain functions of a judicial nature, such as the settling of private rights and the measuring of damages in reparation claims and the like.
"And then I recall a day, which I am sure Mr. Aitchison, Mr. Porter, and Mr. Farrell will also remember, when the Committee on Interstate Commerce of the Senate was disturbed over what appeared to be a failure of the Commission to carry out certain mandates of the La Follette Valuation Act. Several of us on the committee were anxious to find out why these mandates had not been fulfilled, including such stalwarts as Senator Pittman of Nevada, the late Senator Fess from Ohio, and former Senator Watson of Indiana. Senator Pittman made the following statement while questioning Mr. Aitchison :
"What I am getting at is this: In creating the Interstate Commerce Commise sion we made it totally responsible to Congress and not to any department of the Government. We were in hopes that it would be responsible to Congress rather than to a department of the Government or the Bureau of the Budget."
To which Mr. Aitchison replied: "Since you enacted the budget law it has imposed very important restrictions upon our ability to come to you and talk things over the way we used to do."
To which Chairman Watson said: "Then we ought to repeal the law." And Senator Pittman: "I think so, too. I am trying to get at that. Congress passes a law and, apparently, the Director of the Budget repeals it in part or in toto as he sees fit by refusing to allow appropriations."
And later in the hearing Senator Pittman said: "What I am getting at is this: I am dissatisfied with the whole Commission in their failure to grasp the intent of Congress in creating the Interstate Commerce Commission, and that was that it was to be a separate, nonpartisan commission as far as possible, and I mean by that it was to be an establishment that was as independent as possible of any institution except Congress * ** * It looks to me as though the institution has conceived the idea that it is responsible to the Chief Executive rather than to Congress."
Then Senator Watson said: "I have not any doubt about this as a general principle, because this idea of economy has been so thoroughly indoctrinated that I think it has been thoroughly inculcated. Of course, they lose sight of the legislative function and that the Interstate Commerce Commission is purely an agent of Congress simply because of the inability of Congress to do it."
Commissioner Aitchison: "Yes, sir."
Senator Wheeler: "But they assume that they are a branch of the executive branch of the Government rather than the legislative branch of the Government." Senator Pittman: "I hope that the Commission does not find anything in the statute other than that section 206 to cause them fear, because the effort of Congress was to have an independent body and not a body that was afraid of anyone.
"I want to say to the Commission that my convictions in this matter have not changed since 1928, and I am unalterably opposed to diminishing the independent, bipartisan character of the Interstate Commerce Commission or of the similar independent agencies by placing them under executive domination, either indirectly as has been the case, or directly as in a pending proposal."
For the reasons which I shall later state, we believe if Reorganization Plan No. 7 becomes effective the Congress will be deprived of that independent expression of judgment by the Commission upon which it has so frequently relied, with utmost assurance, for more than 60 years.
Ever since the Interstate Commerce Act was enacted in 1887, the Chairman of the Interstate Commerce Commission has been selected by the members of the Commission. Since Judge Thomas M. Cooley's name headed the list of the original nominations sent to the Senate by President Cleveland, he was selected as the first Chairman of the Commission. This was but natural, in view of his very excellent qualifications. The Commission has ever since reaped the benefits of that fortunate action, because Judge Cooley set a pattern, which has not since been departed from. From 1887 until 1910, it was the policy of the Commission to elect a Chairman who continued to serve as such until the expiration of his term as commissioner. In 1910 the Commission adopted the policy of annual rotation in the chairmanship, and that policy has been continued, with certain exceptions, up to the present time. The principal exception was the action of the Commission in electing Commissioner Eastman as Chairman for a 3-year term, beginning July 1, 1939, and ending June 30, 1942. This was an unprecedented action and, of course, a great tribute to Commissioner Eastman.
If Reorganization Plan No. 7 becomes effective, the Chairman of the Commission will be designated by the President, from the membership of the Commission. We regard this as being the wrong thing to do, and for reasons which I think will be apparent. First of all, the Chairman will be political and politically minded. He will be chosen for his politics and political backing rather than for his ability. The Chairman would have the ear of the President, so that the other members of the Commission would be under the necessity of agreeing with him if they expected to be reappointed. It would take a man of great courage to disagree with the Chairman of the Commission if he wanted to be reappointed. It must be remembered that when a man becomes a member of the Interstate Commerce Commission he ordinarily leaves behind him his business, his profession, and his connections, practically everything upon which his living up to that time depended. Therefore, his future living and family welfare are thereafter a part of his future position as a Commissioner. Under these circumstances, it will be readily seen how difficult it would be for men to act independently. As the late Commissioner Eastman said: "Moral courage is, of course, a prime qualification, but there are often misapprehensions as to when it is shown. The thing that takes courage is to make a decision or take a position which may react seriously in some way upon the one who makes or takes it."
When Senator Wheeler was chairman of the Senate Committee on Interstate Commerce he used to like to tell the story of what Vice President Garner once said to him. I need not relate the circumstances under which it was said, but the statement, as told by Senator Wheeler, is as follows: "You know the longer I live in Washington, the more I see of Washington, and the longer I live, the more important I think it is to have guts than it is to have brains."
Another statement by the late Commissioner Eastman is appropriate here. Less than a month before he passed away, upon the occasion of the celebration of the 25 years of service he rendered as a member of the Interstate Commerce Commission, and with more than 700 persons present, he made this statement: "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