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or influence of either the President or Congress, nor 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."
So great has been the concern of Congress, and so great has been the concern of the public when any step has been proposed to take away the independence of the Interstate Commerce Commission, that storms of opposition have caused the Commission to be characterized as a "sacred white elephant." We think it
should be kept sacred.
Under Reorganization Plan No. 7 the Chairman of the Commission would have the power of appointment of its personnel, except in a few limited instances, and the personnel of the Commission would be dependent upon the Chairman not only for appointment, but for promotion and pay. Employees would be selected more because of their political backing than for their ability. They would, therefore, quite naturally function according to the wishes of the Chairman, so that the other members of the Commission would not be able to depend upon them for that fair and impartial service which they now render, and which they have been so ably rendering for more than 60 years.
Under these circumstances, the type of men who should be appointed as members of the Commission could not be induced to accept such appointments.
The Interstate Commerce Commission is one of the busiest and most overburdened of the administrative agencies. It needs able, conscientious, fairminded, and hard-working men. It needs men of courage, vision, seasoned judgment, and common sense. It also helps when these men are kindly and friendly, as most of them have been. Most of the members of the Commission have had all of these qualities. The capacity for work should count for more than political affiliation. One of Commissioner Eastman's great qualities was that he was addicted to hard work and was little given to press conferences and pronouncements.
Experience has taught us that men become good Commissioners by being Commissioners. Continuity of service has been a great factor in the success which the Commisison has had. Certainly no agency is more in need of skilled and devoted service and a large measure of continuity in that service than is the Interstate Commerce Commission.
Upon the occasion of Commissioner Eastman's death, the Little Rock, Ark.) Democrat in its issue of March 18, 1944, said: "There are bureaucrats in Washington whose chief qualification for their job is their acquaintance with some political big shot who put them there. But there also are bureaucrats in the Capital who have served the people well, and given most of their time and all of their talents to do their jobs as true public servants."
If Reorganization Plan No. 7 is permitted to become effective, it is feared that we will have more of the first type of bureaucrats referred to in the quotation and fewer of the second type.
President Roosevelt, in a letter to Commissioner Eastman, on June 16, 1936, said: "Legislation has its place. But it is a remedy to be taken with great caution or it may prove worse than the disease."
I am a great believer in efficiency. I have always liked the general staff system, where responsibility and authority go together, and where each man is held strictly acountable for the performance of his assigned task. The general staff system is efficient. But, it is not democratic. The public policy of this country is to keep the general staff system out of the regulation of the civil affairs of the Government.
I have lost my share of cases before the Interstate Commerce Commission. I have lost some where I am sure the Commission reached an erroneous conclusion. But I know, as every practioner before the Commission knows, that the Commission decided those cases conscientiously, honestly, and fearlessly. I know the Commission tried to follow the law and the facts, even though it might have failed. That is a great thing to know.
The documents which accompanied the President's reorganization plans convey the impression that these plans are designed to carry out the recommendations of the so-called Hoover Commission. In House Document No. 503, which relates to all of the plans, it is said: "Our ability to make such comprehensive recommendations is due in large part to the outstanding work of the Commission on Organization of the Executive Branch of the Government. Plans which I am transmitting are all designed either to put into effect specific recommendations of the Commission, or to apply principles set forth by the Commission in its reports."
So far as Reorganization Plan No. 7 is concerned, this statement is not quite accurate. The Hoover Commission did not recommend that the selection of the chairman of the Interstate Commerce Commission be transferred from the Commission to the President. Also, the Hoover Commission did not recommend that the director of locomotive inspection and the two assistant directors of locomotive inspection perform their functions subject to the direction and control of the Chairman of the Commission instead of the Commission.
Both of these departures go to the very heart of independence.
There is another phase of this subject to which I should like to direct your attention.
The Administrative Procedure Act, which was approved by President Truman on June 11, 1946, was passed by both Houses of the Congress without a dissenting vote. It is a very important piece of legislation, and I have always been proud of the fact that I could contribute something to bringing it into existence. That act received its first consideration by the Supreme Court of the United States in the case of Wong Yang Sung v. McGrath, decided February 20, 1950. The decision of the Court in that case materially strengthened the enforcement of that law, which was described by the Court as "a new basic and comprehensive regulation of procedures in many agencies." The Court pointed out that the Congress has determined that the price of greater fairness in administrative proceedings is not too high.
Section 11 of the Administrative Procedure Act governs the appointment of hearing examiners and their duties and responsibilites. That section is one of the key provisions of the act.
In House Document 504, reference is made to Reorganization Plans No. 1 to 6, relating to the executive departments. With respect to these plans, it is said: "These reorganization plans exclude from transfer to the Department heads two classes of functions which are retained in their present status. These are the functions of the hearing examiners appointed under the Administrative Procedure Act and the functions of Government corporations in the departments."
No such statement is made with respect to plans Nos. 7 to 13, which relate to the regulatory boards and commissions. On the other hand, these plans, such as Reorganization Plan No. 7, vest in the Chairman of the Commission, to be designated by the President, (1) the appointment and supervision of personnel employed under the Commission, and (2) the disposition of business among such personnel and among administrative units of the Commission.
With respect to Reorganization Plans Nos. 7 to 13, the omission of the language respecting hearing examiners may well prove to be very significant. It may very well give rise to the claim that section 11 of the Administrative Procedure Act, relating to hearing examiners. is no longer applicable to those agencies reorganized under plans 7 to 13. This argument could be made notwithstanding the provision in section 12 of the Administrative Procedure Act that:
"No subsequent legislation shall be held to supersede or modify the provisions of this Act except to the extent that such legislation shall do so expressly." With respect to the Interstate Commerce Commission, there is a special danger. The Administrative Procedure Act was opposed by the Commission, and the act is very unpopular with the Commission, as is evidenced in its last annual report to the Congress, at pages 57-58. Therefore, a politically minded and politically appointed Chairman of the Commission may very well take the view that section 11 of the Administrative Procedure Act is not applicable to him. Further, it is to be kept in mind that the examiners on the Commission's staff, other than the hearing examiners, are subject to civil-service requirements only because of an agreement between the Interstate Commerce Commission and the Civil Service Commission. A politically minded and politically appointed Chairman of the Commission could very well abrogate that agreement, so that all of the examiners would be subject to politics rather than the civil-service laws.
Under the circumstances, it is not at all unlikely that such a course would be pursued, at least until the courts rule otherwise. But, here again, difficulties arise. First of all, it is hard to get a case into the courts before the damage has been done. That is illustrated by the recent decision of the United States Court of Appeals for the District of Columbia Circuit in Riss & Co., Inc., v. Interstate Commerce Commission et al., decided January 12, 1950. Then, too, the courts are unpredictable. That is no where better illustrated than by the Supreme Court of the United States in Slocum v. The Delaware, Lackawanna & Western R. Co., decided April 10, 1950. There is not in the books a better
illustration of judicial legislation, as Mr. Justice Reed so ably points out in his dissenting opinion.
I have always liked to quote Mr. Justice Holmes, and now I should like to call your attention to what he said in The Western Maid (257 U. S. 419) at page 433:
"Legal obligations that exist but cannot be enforced are ghosts that are seen in the law, but that are elusive to the grasp."
It has been my purpose to point up the dangers that exist in Reorganization Plan No. 7. I hope that what I have said will convince you that you should favorably report Representative Crosser's resolution, and that the House should reject Reorganization Plan No. 7. I do not know of any greater public service you can render than by taking this action.
The CHAIRMAN. The committee is privileged to have before it this morning Mr. Charles B. Stauffacher, the Assistant Director of the Budget, Mr. Stauffacher, will you proceed, please.
STATEMENT OF CHARLES B. STAUFFACHER,
ASSISTANT DIRECTOR OF THE BUDGET IN CHARGE OF ADMINISTRATIVE MANAGEMENT
Mr. STAUFFACHER. I am very happy to be here to present these views on the reorganization plan. My name is Charles B. Stauffacher, and I am Assistant Director of the Bureau of the Budget, in charge of the Division of Administrative Management.
Reorganization Plan No. 7 of 1950 is designed to strengthen the management of the Interstate Commerce Commission. The sole objective of this plan is to improve the organization and administration of this agency, and in no way does it modify or alter the substantive laws administered by the Commission. This plan was developed as a part of a general pattern of reorganization for all regulatory commissions. This general pattern was recommended by the Commission on Organization of the Executive Branch of the Government.
The reports of the Commission on Organization give great emphasis to the establishment of clear lines of authority and responsibility in the executive branch. In line with this major objective, the Commission recommended:
That all administrative responsibility be vested in the chairman of the commission (Recommendation No. 1, Report on Regulatory Commissions).
Plans Nos. 7 through 13 effect this recommendation in the seven regulatory commissions. They retain in the commissions basic authority and responsibility for all substantive policies and vest in the chairmen authority and responsibility for day-to-day administration.
These plans, of which the Interstate Commerce Commission plan is the first, transfer from each commission to the chairman the executive and administrative functions of the Commission, including the functions with respect to
(1) The appointment and supervision of personnel employed under the Commission,
(2) The distribution of business among such personnel and among administrative units of the Commission, and
(3) The use and expenditure of funds.
In administering these functions, the Chairman will be governed by the general policies of the Commission and by all regulatory decisions, findings, and determinations of the Commission. The appointment by the Chairman of the heads of the major administrative
units under the Commission will be subject to the approval of the Commission. Personnel employed regularly and full-time in the immediate offices of the Commissioners will not be affected by the plans. And there are reserved specifically to the Commission the functions relating to revising the budget estimates and determing the distribution of appropriated funds according to major programs and purposes.
The reorganizations contained in these plans are aimed at correcting what the Commission on Organization regarded as a principal defect in the organization of regulatory commissions. In its discussion of what is wrong with the regulatory commissions, the Commission said:
Purely executive duties—those that can be performed far better by a single administrative official-have been imposed upon these Commissions with the result that these duties have sometimes been performed badly. The necessity for performing them has interfered with the performance of the strictly regulatory functions.
The Commission further stated:
Administration by a plural executive is universally regarded as inefficient. This has proved true in connection with these Commissions.
In commenting on its own proposal, the Commission said:
This recommendation (to center responsibility for administration in the Chairman) does not derogate from the statutory responsibilities placed upon the other members of the Commission. They remain exactly as they are, and because of the better functioning of the organization the Commission members will be enabled to discharge these responsibilities much more effectively.
Mr. HOLIFIELD. Would you yield at that point, Mr. Stauffacher? If all of the administrative duties are placed in the chairman, will the burden of that administrative detail be such that he cannot devote his time to the quasi-judicial and quasi-legislative functions?
Mr. STAUFFACHER. We do not feel that that will be the case. Mr. HOLIFIELD. Why will it not be the case? It is a large organization, and unless he plans to delegate his duties to an administrative assistant, to really do the actual work of administration, it would seem to me, it would leave him very little time for regular commission duties.
Mr. STAUFFACHER. He will undoubtedly have to make some provisions within the organization to delegate some of these duties. As a matter of fact, they have already been delegated in a number of the commissions to staff members who report to the chairman for their direction.
Mr. HOLIFIELD. The chairmen of the respective bureaus?
Mr. HOLIFIELD. Is the administrative detail heavy enough that it takes a staff to handle it?
Mr. STAUFFACHER. I believe that it takes a staff of some kind to carry it out. The policies that are to govern the administrative arrangements of the commission must be well established; and that is one feeling that we have, that vesting the responsibility in the chairman will place him in a position of taking these issues to the full commission in a better way than they are now presented to the commission, that is, issues of administrative policy, for them to determine. If they are well enough established, then the staff, responsible to the chairman, can handle those, I think, in a way that will not be burdensome, and will actually be better for the entire organization.
Mr. HOLIFIELD. As to the allocation of cases, we had quite an argument made about arbitrary action on the part of the Chairman in the allocation of cases. The inference was made that if the Chairman had authority to assign the work, that he would assign certain types of work to individual Commissioner, and certain types to another individual Commissioner. Now, are the cases that come before the Interstate Commerce Commission of such a nature that they automatically go to one of these Commissioners? There are five different divisions and there are certain types of cases that would fall into those five divisions, I would think.
The point I am trying to find out is this: Is there a latitude left to the Chairman whereby he could use arbitrary and discriminatory methods in the allocation of cases, or would those cases automatically fall into the proper types of boards to hear them?
Mr. STAUFFACHER. I do not think that you can say it is automatic, sir, but I believe the plan has adequately provided for that in this way: This plan does not transfer from the Commission any of the authority that they now have under section 17 of the Interstate Commerce Commission Act to establish the divisions or to define the regulatory responsibility of one of the Commissioners or, a thing which they have never done, of a board of employees. Those are not executive and administrative duties; they are duties pertaining to the regulatory activities of the Commission.
Our feeling in working on the drafting of this plan is that we used the words "distribution of business among administrative units" very advisedly, because had we used the word "divisions," there would have then come in the question of whether we were talking about divisions: of the Commission.
As we understand this plan and the discussions in its development, the Chairman is not in a position of distributing work to other members of the Commission. That remains the prerogative of the Commission as it is today. Such decisions as they would make as to the type of regulatory activities that are to be carried on by each one of these divisions or by individual Commissioners, would be a part of the general policy which would govern the Chairman in whatever work he did in directing and supervising the staff.
Mr. HOLIFIELD. That is the point I wanted to bring out. I wanted to know if the plan would break down the present policies of allocation and consideration of different types of cases.
Mr. STAUFFACHER. No, sir; in our judgment it would not. And I tried to point out by pointing to these words, "administrative units," a great deal of attention was given in the development of this plan to whether we had words there that would embrace the entire divisions of the Commission. We wanted specifically to avoid that.
I think that there are two other matters that would tend to reinforce what I have said. As you know, on these reorganization plans the message of the President is particularly a part of the legislative history, because of its inclusion with the reorganization plan. In his message on this point the President made two statements that contribute here. The first is, and I am quoting:
The fact that under these reorganization plans the Commission retained all substantive responsibilities deserves special emphasis. The plans only eliminate multihead supervision of internal administrative functions. The Commissions retain policy control over administrative activities, since these are subject to the