This study undertakes to examine the rulemaking power in Federal administration. It considers the nature and future role of this power; its relation to the legislative power of the Congress and to the executive power of the President; and the principal means of safeguarding the public against its possible abuse. The central purpose, however, is not to present a comprehensive picture of the rule-making power as such, but rather to view it in relation to the larger problem of administrative management.

The rule-making power stands at the very center of this larger problem, and that for two reasons. First, there are no fewer than 115 Federal agencies that, under 964 statutory provisions and 71 Executive orders and proclamations, issue rules and regulations that affect the public. This means that rule-making constitutes no inconsiderable part of the total function of administration for the supervision of which the President is responsible to the people. Second, rule-making in the form of Executive orders is one of the principal techniques available to the President for the over-all management not only of departmental rule-making but also of the service operations of the Executive Branch.

Definition of the Rule-Making Power

For the purposes of this study the rule-making power may be defined as the legal authority of administrative officers or agencies of Government to prescribe discretionary or interpretative rules and regulations of general applicability and legal effect, or to determine the existence of the conditions under which contingent statutes are to become operative.2

Some Elementary Distinctions 3

The documents produced by the rule-making power may be approached from several different points of view to bring out several elementary distinctions that it is important to bear in mind.

From the standpoint of the element of discretion involved, rules and regulations are to be distinguished from documents that, by determining the existence of certain conditions

1 American Bar Association, Report of the Special Committee on Administrative Law (1936), p. 272.

Cf. James Hart, The Ordinance Making Powers of the President (Baltimore: The Johns Hopkins Press, 1925), ch. II; John Preston Comer, Legislative Functions of National Administrative Authorities (New York: Columbia University Press, 1927), chs. I and II.

Hart, op. cit., ch. III.

or the occurrence of a certain event, bring into operation a statutory provision. Thus under the flexible tariff the President may fix a duty up to 50 percent higher or lower than the statutory duty, whereas in the Tariff Act of 1890 Congress itself fixed the duties to be imposed on named articles on the free list whenever the President found the duties of the other country "reciprocally unequal and unreasonable."

From the standpoint of their nature and effect, rules and regulations may be mere interpretations of the law, or may on the other hand be issued under statutory authority to fill up the details of the law. The former, often called rulings, are given great weight by the courts; but, as the final interpreters of the law, the courts may hold them to be incorrect interpretations. The latter, on the other hand, have the force and effect of law, provided only the delegation is constitutional and the regulations infra vires. Examples of the first are Treasury rulings; of the second, quarantine regulations.

8

From the standpoint of who is legally bound, rules and regulations may apply to private persons or alternatively only to Federal agencies or persons in their capacity as officers, agents, or employees of the Government. Examples are rules and regulations of the Securities and Exchange Commission governing the exchanges, as contrasted with recent Executive orders of the President on annual and sick leave. Of course, some regulations may fall into both classes, or those of one class may indirectly affect persons in the other class.

From the standpoint of the relation between the Government and the citizen, regulations that affect the public include: Those which impose duties for the violation of which Congress has made the citizen criminally or civilly liable or liable to revocation of his license to do business; those which define privileges which the Government grants the citizen, such as grazing cattle on public lands; those which relate not to the substance of legal relations, but to procedural matters, such as the method Comer, op. cit., pp. 32, 64. He aptly calls such legislation "contingent legislation."

of applying for a Government loan or the rules governing a public hearing.

Regulations imposing duties are to be divided into those of a military or political character," those which deal with matters that are under the plenary control of Congress,11 or those intimately related to the constitutional powers of the President,12 on the one hand; and those which control the exercise of common callings, of the presumptive right to engage in economic enterprise, or of free control over property, on the other hand.

The importance of the last-mentioned distinction is that delegations may apparently go further in the former types of situation than in the latter. 13

Executive Orders and Proclamations

The President's own rule-making powers are exercised through Executive orders or proclamations. Presidential proclamations have been issued since the administration of George Washington, who issued six. The only Presidents who did not issue any were William Henry Harrison and James A. Garfield. Taft issued 7.60 proclamations for every month_in_office; Theodore Roosevelt, 4.52; Franklin D. Roosevelt, 3.78; Wilson, 3.76; Hoover, 3.50.14

As

Executive orders have also been used over a long period. In the early days of the War Department, the adjutant commanding would send a letter to the Secretary of War making a certain proposal. After receiving endorsements this letter went to the President who would mark it "Approved" and sign it. early as 1848, such decisions came to take on a more formal character and to be entitled Executive orders. Old employees in the State Department say the numbering of Executive orders began in 1895; at that time they found orders going back to 1862, and so No. 1 in the series is an Executive order of President Lincoln. In 1905 the State Department made the first effort, by a circular letter, to centralize their custody. In 1906, President Theodore Roosevelt's secretary wrote to the Hon. Elihu Root, Secretary of State, that thereafter the originals of Executive orders would be sent to the Department of State, which should furnish copies to the departments concerned.15 The number of orders jumped from 68 under Cleveland, and 50 under McKinley, to 1,011 under Theodore Roosevelt. Extensive use has been made of Executive orders since that time. Wilson issued 1,770; Harding, 484; Coolidge, 1,248; Hoover, 1,004; Franklin D. Roosevelt, 1,616,

10 Cf. Martin v. Mott, 12 Wheat. 19 (1827); Dakota Central Telephone Co. v. South Dakota, 250 U. S. 163 (1919).

11 Buttfield v. Stranahan, 192 U. S. 470 (1904).

12 United States v. Chemical Foundation, 272 U. S. 1 (1926).

13 Cf. the majority opinion in Panama Refining Co. v. Ryan, 293 U. S.

388 (1935). See especially United States v. Curtiss-Wright Export Corporation (New York Times, December 22, 1936, p. 18).

14 See Appendix A for table.

15 This information was obtained from an official who is thoroughly familiar with the history of the Executive order.

as of August 31, 1936. The average number per month is: Cleveland, 1.41; McKinley, 0.93; Theodore Roosevelt, 11.23; Taft, 14.56; Wilson, 18.43; Harding, 16.68; Coolidge, 18.63; Hoover, 20.91; Franklin D. Roosevelt, 38.47.16

There is no clear line of distinction between Executive orders and proclamations. A statute may specify the use of a proclamation, or the content of the document may seem to call for the more dignified form. Thus the flexible tariff clause specifies the proclamation of changes in customs rates; and matters involving foreign relations are usually handled by the same form.

17

Both the Executive order and the proclamation are used for the exercise of the rule-making powers of the President, but other forms also are sometimes used for such exercise, and these two forms may, on the other hand, be used for quite different purposes from rule-making. Thus, the President sometimes embodies administrative directions in letters to his subordinates or in directions decided upon in a meeting of the Cabinet or of the National Emergency Council. For example, the requirement of the clearance of departmental bills, reports, and testimony before committees of Congress is not embodied in an Executive order, but in Budget Circular No. 336, which quotes a direction of the President given in a meeting of the National Emergency Council. Again, although Executive orders and proclamations are frequently of a rule-making character, many are acts of particular application or of no legal effect whatsoever. For example, the President may, by Executive order, authorize the appointment of named persons, the civil service rules to the contrary notwithstanding; whereas proclamations may be merely declaratory, informatory, such as those announcing the death of a distinguished person, or hortatory, such as the annual Thanksgiving Proclamation.

Terminology

In Federal rule-making there is no consistent terminology. The most usual expression is rules and regulations. The Federal Housing Administration distinguishes its rules from its regulations. The President amends the civil service rules by Executive order. For the sake of clarity and consistency it would be desirable to make a few elementary distinctions in terminology to correspond with the classifications given above. Indeed, it would be desirable for the President, by Executive order, to require that Federal agencies identify their different types of rules and regulations by appropriate names. It would also help if he used these names as subtitles to his own Executive orders.

16 See Appendix B for table.

17 See, for example, the letter of President Harding quoted in James Hart, "Some Legal Questions Growing out of the President's Executive Order for Prohibition Enforcement", Virginia Law Review, XIII (December 1926), pp. 86–107.

The choice of any such terminology is arbitrary and the system employed should not be too complicated. It is suggested that the term "regulation" be applied to a document by which is exercised the power to fill up the details of a substantive law that affects private persons; that the term "interpretative regulation" be applied to a document by which is exercised the power to make general administrative interpretations of the meaning of statutory provisions; that the term "administrative regulation" be

applied to a document by which is exercised the power to regulate internal administration; and that the term "rule" be applied to a document by which is exercised the power to prescribe procedure.18 The problem of terminology is complicated, however, by the fact that the statutes frequently use descriptive names for documents that they authorize to be issued; for two names for the same document might be confusing.

18 Great Britain, Committee on Ministers' Powers, Report (London: H. M. Stationery Office, 1932 (Cmd. 4060)), p. 64.

The Rule-Making Power a Practical Necessity

In the simpler days of the agricultural era it was assumed that Congress would produce practically all the uniform rules required for the operation of Government. The statutes were expected to be concrete, specific, and detailed. This would reduce administration to a clerical function.

But never in the history of the Federal Government has practice completely conformed to this traditional conception. As early as 1794 Congress authorized President Washington, during its recess, to lay an embargo "whenever, in his opinion, the public safety shall so require." The act continued: "And the President is hereby fully authorized to give all such orders to the officers of the United States, as may be necessary to carry the same into full effect." 1 This was the broadest of the early delegations; but the fact remains that delegations of one sort or another have been scattered through subsequent history. They are no recent novelty in the Federal Government.2

Delegation of rule-making powers reached maximums in four periods of emergency. The first was 1789-1815, the period when the United States was trying to defend its neutral trade against British orders in council and Napoleonic decrees. The second was 1861-75, the period of the Civil War and Reconstruction. third was 1917-18, the period of participation in the World War. The fourth was 1933-35, the period of the New Deal attack upon the depression.

The

The necessity for exceptionally broad emergency delegations, however, should not obscure the general trend over many years in the direction of an increase in the number of rules and regulations issued by various Federal agencies in pursuance of delegated authority not connected with any emergency. The use of execu

tive rules and regulations has, in fact, long since become a normal method of government. It is sanctioned by a long history, dating from a time practically contemporaneous with the adoption of the Constitution. Within broad limits it has been sanctioned by the Supreme Court of the United States in a series of decisions dating from the Brig Aurora case 3 in

1 Stat. L. 372.

2 Cf. Hart, The Ordinance Making Powers of the President, ch. IV; Comer, op. cit., ch. III. 37 Cr. 382 (1813).

12

1813. The leading case is Field v. Clark, decided in 1892. Recent Supreme Court decisions have defined the scope of delegated authority but have not challenged its validity as a method. There can at this date be no serious question of its practical necessity or of its constitutionality. "Nearly everyone concedes", said the 1934 Report of the Special Committee on Administrative Law of the American Bar Association, "that the necessities of modern Government business require a certain amount of such delegation. 195

There are obvious reasons not only for the necessity for the rule-making power, but also for the necessity for its growth in recent decades. These reasons parallel closely those for the growth of the regulatory and service functions of the Federal Government. Regulation required legislation. The demands for new laws increased the burden upon Congress. The conditions to be controlled were not simple and familiar, as they had been in the agricultural era, but extremely complex and technical. With the coming of the industrial age conditions changed more rapidly than ever before, and, as unprecedented problems emerged, the public demanded new controls, but there was no experience to teach the best methods of control.

The net result has been a change in the regulatory role of Congress. It has been compelled to devolve much of the detail of regulation upon commissions created for the purpose or else upon the regular departments. It is, of course, the task of Congress to define basic policies and to fix the limits of administrative action. But Congress often finds it inexpedient to do more. It then delegates a limited discretion to the agencies charged with the administration of its laws. Such delegations often authorize the issuance of uniform rules and regulations that are later to be applied equally to all persons who come within the same reasonably defined class. Rule-making is thus shown by long experience to be a necessary and normal technique of twentieth century American government. This conclusion is increasingly verified by experience and practice in the several States.6

143 U. S. 649 (1892). Cf. Hampton v. United States, 276 U. S. 394 (1928). See also Report of Committee on Ministers' Powers, pp. 5, 51, 58. • Cf. State v. Whitman, 196 Wis. 472, 220 N. W. 929 (1928).

The Ideal Relation between Statutes and Regulations

The tradition in favor of detailed statutes is the perversion of a principle that is fundamental to the system of government in the United States. Nobody questions the principle that the basic policies of government must be embodied in statutes of Congress. But it does not follow from this-indeed, it is both unhistorical and unsound to hold-that Congress must state in minute detail either its basic policies or the administrative methods by which they are to be carried out.

The practice of delegating rule-making authority to administrative agencies represents the adaptation of eighteenth century governmental machinery to twentieth century governmental problems. This adaptation has taken place within the broad framework of the Constitution. But it has been piecemeal and empirical. The rule-making power is often "grudgingly conceded", as a sort of necessary evil. Like the British Parliament, Congress is still apt to delegate authority to fill up the details only in those cases in which it "is either highly inexpedient or practically impossible" 8 for it to provide the details itself.

Thus, in the United States delegation is not based on a philosophy of legislation as it is in France. In France the statutes are written on the assumption that it is the function of the popular assembly to block out only the general principles of policy, and that it is the function, as well as within the constitutional power, of the Executive to concretize these principles by uniform but more specific regulations before they are applied to individual cases. The power of the President to execute the laws carries with it the power, without special statutory authorization, to supplement all statutes by completing rules and regulations. In the United States, this is not, and need not be, the interpretation of the corresponding constitutional power of the President. The Executive may render more concrete the general provisions of the statutes only when, and to the extent that, he is authorized to do so by express, and in exceptional circumstances tacit," delegation from Congress. But Congress may, within limits defined by the courts, attach express delegations to its statutes as it enacts them.

Suppose Congress adopted a philosophy of legislation whereby it deliberately refrained from freezing details into the statutes, confined itself to the declaration of a policy, and delegated to the agency charged with administration of that policy the power, within defined limits, to issue the rules and regulations necessary to the execution of that policy. What would be the consequences?

7 See Report of the Committee on Ministers' Powers, Annex VI.

A. V. Dicey, Introduction to the Study of the Law of the Constitution (8th ed., London: Macmillan and Co., 1915), p. 50, n. 1.

• United States v. Midwest Oil Co., 236 U. S. 459 (1915).

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Special Advantages

of the Use of Rule-Making

Executive regulations have certain special, though in some cases only potential, advantages over detailed statutory legislation. Certain safeguards, to be mentioned later, are also needed to create the conditions under which these potential advantages can be fully realized. But what are these special advantages?

First, there is an important advantage from the point of view of Congress itself. If the legislative body has to consider only the fundamentals of policy the legislators will have more time for their deliberate consideration. At the same time, public opinion can more easily focus upon the essential issues during the legislative debates; details will not be the football of party conflict; and the statutes will be free from those unworkable amendments that often result from compromises when Congress tries to be too specific. The effect upon Congress as the forum of national debate would be beneficial. It would be strengthened as a representative organ. Its control over administration would also be strengthened, for it would give ample time for the important task of investigating the manner in which administrative agencies exercise the discretion as to details which Congress has vested in them.

A great deal of the time both of Congress and of administrators is now taken up with bills that deal with the most petty details of administration. The reason for this is simply that those details are frozen into the statutes and can thus be changed only by Congress itself. An example may be taken at random. In the United States Code, title 16, section 439, there appears a provision by which Congress some years ago granted the Secretary of the Treasury permission to use permanently a strip of land 60 feet wide belonging to the grounds of Fort McHenry, so that he might have access to and from the Baltimore immigration station; gave him the same power to construct railroad and other facilities upon this outlet as had been provided in an earlier act setting aside a site for an immigration station and providing for an outlet therefrom; but gave the War Department an equal use of the railroad track and other roads so constructed, over which to reach the city streets and railroads beyond from the other part of the fort grounds. Surely administrators could be trusted to decide such details. If there were conflicts of jurisdiction, the President should be authorized to resolve them by Executive order. This would not only avoid needless delay and waste of energy but would also free Congress from business details and permit it to perform more effectively its really fundamental functions.

Second, by constantly rubbing elbows with their particular problems, administrators are in a peculiarly advantageous position to attain an intimate and specialized knowledge, born of