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Mr. SWIDLER. Yes, sir. That is the question. Are we asking for too much, or are we asking for enough? That is the question.

Senator MAGNUSON. You are going on the theory that you would rather have too much.

Senator MONRONEY. All departments of Government would rather have twice what it needs. It makes the decision look better,

SETTLEMENT OF COST-OF-SERVICE RATES

Senator ALLOTT. I would like to direct a question to your last answer, Mr. Swidler, and let me say this:

I am not completely critical. I think in the settlement of these things on what I will call a negotiated basis for lack of a better termyou may object to it; that is all right—but I think the Commission has done a very fine job and I think for all these cases you have cleared up, I think you should be congratulated on it. Mr. SWIDLER. Thank you.

Senator ALLOTT. But the Permian Basin has now been going for two and a half years. You also have the South Louisiana case. Neither one of these is determined. You have not determined what just and fair is and from the answer here, I am not sure even that you have settled on a cost-of-service basis. Now, on page 19, you say you have initiated two more of these.

Now, the information I have is that on this, you require this to be broken down into 26 geographical areas and the fact is that these are at variance with the 23 areas which are the basis of the FPC's present proceedings to establish producer prices on an area basis.

TIME INVOLVED IN CASES

Now, why do you start two more! You say you are trying to get information and that you maybe won't go through these but you will get a pattern on these which will enable you to arrive at a conclusion. The Permian Basin case, which is not anywhere near settlement yet, has been going for two and a half years. The South Louisiana case has been going, but now I learn for the first time this morning that you have started two more. Now, why? Somebody described a zealot once as a man who, after he lost sight of his goal, redoubled his efforts to attain it. It looks to me like this is sort of the way we are doing here.

Mr. SWIDLER. Well, I hope you will not have that same opinion when I have tried to explain why we are doing it. You are saying 10 years have passed and where are we? It is a hard question to answer. Suppose we took these cases seriatim, and we did not start a second one until the very last gasp on the first. After all, it is not just a matter of our deciding the case. After the Commission's decision there will be litigation which may take years. There will be people asking us, and next year this may include you, "What about this person in the other area; he is entitled to a just and reasonable rate; what are you doing for him?”

We say, “We have been coasting; we have decided not to do anything until everything has been decided on Permian.” I don't think that is what you want us to do. What we are trying to do is get these cases started, get some facts, be in a position to work a little faster. But if we wait on these other cases, it may be a long, long time, longer than we can justify, before we can determine just and reasonable rates

everywhere. The producers in Wyoming, in Kansas, in West Virginia, and Ohio, if I may say so, are also entitled to just and reasonable rates. I think it is a question of trying to get a sensible kind of program.

PERMIAN DECISION AS YARDSTICK

In the best of all possible worlds, Permian would be decided in a hurry and there would be no waste motion, and then after Permian was all decided, you could start these other proceedings and certainly this would have great advantages. But if waiting for Permian means that for years and years of additional time we have lost the opportunity to fix just and reasonable rates for important groups of producers and consumers, I do not think we can justify it.

Senator MAGNUSON. Wouldn't Permian establish a yardstick for you so you can establish these others quicker?

Mr. SWIDLER. Yes, sir. I think we can. Meantime we are trying to get the facts for the others. When we come to this stage in these two new proceedings, we can have the benefit of the decision reached in Permian to help us dispose of these cases more quickly. In the meantime let's get them rolling. Let's do the things we can do before Permian is decided. That is what we are saying. It seems to us that this is a businesslike thing to do.

I think I can answer your present questions. In trying to appraise these policy questions, we must ask ourselves how about the question that is going to be asked a year from now or 2 or 3 years from now? I think we shall have a better answer to the question. Why did you start? than we would have to the question, why didn't you start? I would not know a good answer to that question.

CRITERION STANDARDS NOT ESTABLISHED

Senator ALLOTT. Well, the answer to that is that you have not been able to establish criterion standards upon which you are going ahead yet.

Mr. SWIDLER. Well, sir, there may be legitimate grounds for criticism on the time required for the Permian case. We have pushed it, we have done our best, but maybe somebody else could have done better. All I can say is that we are pushing as hard as we know how.

Senator MAGNUSON. Well, I do not think that there is any suggestion here that the Commission is not working as hard as they should work. I think the suggestion is that the staff is getting you so bogged down with things that you cannot move very fast.

Senator ALLOTT. I cannot help but feel that way, either.

Senator MAGNUSON. I do not say that when you fellows get a matter in front of you—you decide it with dispatch, but this complete labyrinth of this staff business working up to it-you have obstacles and cobwebs and reports and everything and you fellows, when you get it, I think you do a pretty good job on it.

Mr. SWIDLER. Well, I think we are in control on this.

Senator MAGNUSON. But you are going to get bogged down with the staff if you don't watch them.

Mr. SWIDLER. I think we watch them, sir.

Senator Magnuson. We can do it right here in Congress. My staff submits to me enough reports every day that if I went all day

reading them, I would not have anything else to do all day. But I say put it on one page and get it done.

CONTROL OF STAFF

Mr. SWIDLER. We do not accept staff recommendations without review and I think we are in control of staff. We take the responsibility.

But one thing I do want to say is that I think you gentleman must consider the extent to which this matter concerns you in looking at our request for additional staff. We do not think we can do the job without them. We cannot set up the additional teams of people that are required to carry through these proceedings without more staff. Some of these proceedings have been slowed down already by lack of staff.

Senator MAGNUSON. I think the staff does too much. I think they get into too much detail and this is what causes you not to have enough people. If you keep the same procedure—but look what you have done last year. Last year we kept you at your level, didn't we? The same, less 48.

Mr. SWIDLER. Less 48, yes.

Senator MAGNUSOn. And you have come up here with an excellent report on the progress you have been making down at the Commission with fewer people.

JUSTIFICATION OF PERSONNEL REQUEST Mr. SWIDLER. We pointed out to you, however, sir, the fields in which we are going slowly and one of them is the area rate proceedings. I beg of you not to disassociate our request for staff from the questions you are raising as to the progress of these proceedings, because they are related.

Senator MAGNUSON. That is a relative term. You can have five people give you the same information you need to make a reasonable decision doing half the work that it might take what you have now 15 people doing. And the result of the decisions you fellows make may be just as good without all of this cumulative data.

År. ŚWIDLER. I know from the outside it must be appalling to see all of this paperwork, and I can assure you that from the inside, this is not the most intriguing part of our job. Yet it is work that we think needs to be done and we have tried to minimize it.

For example, on this trend data that Senator Allott referred to, where we are asking for data on how these costs have trended in the last 8 years, we have excused the companies from filing that data except for the areas where there are rate cases underway so that this so-called 10-pound questionnaire

DISTINCTION BETWEEN SMALL AND LARGE PRODUCER

Senator MAGNUSON. Justice Clark in his last decision last month made a suggestion about the exemption of small producers. I am not expert enough to know where you draw the line on the small and large producers, but would that be feasible to help with this workload?

Mr. SwIDLER. We have looked at that and we propose to look at it some more.

Senator MAGNUSON. Of course, it is not new. He has just reiterated

Mr. SWIDLER. When we looked at it before we had to keep in mind the problem of legal uncertainty. In the light of what Justice Clark

said, speaking for the Court, that is a consideration that we do not think we ought longer to take into account. But the other problems are still involved. The original suggestion for exempting the little fellows was in connection with the individual case approach. It was suggested that instead of having 30,000 cases we ...; have perhaps 100, that is quite an improvement. When you move to the area rate approach, however, with a handful of big cases the fact that you have some additional parties, especially when all the little fellows are represented by one or two associations, is not of the same degree of importance at all. The whole dimension of the problems change when you shift to an area rate approach. Other questions are the possibility of triggering and the effect of uncontrolled rates in an area where you are attempting to impose regulation. These are major considerations that still trouble us.

QUESTIONNAIRE FOR SMALL PRODUCER

Senator ALLOTT. Well, you also have a questionnaire for the small producers, do you not? Mr. Swidler. We have a questionnaire that is designed for smaller producers. Senator ALLOTT. This is involved enough—it is not so simple. There are 35 pages of single-spaced instructions alone for that. It is very similar to the situation we found ourselves in with the old Agricultural Credit Act. Until I rewrote that law and Congress saw fit to pass it in 1960, we had 1,200 pages of regulations and instructions interpreting the credit laws. Well, we are getting into the same situation here. Mr. Chairman, I would like to submit, in behalf of the Senator from Nebraska, Mr. Hruska, certain questions and material that he has asked that I submit to the Commission. I would have asked some of these and perhaps there are parts that are covered. But he could not be here, he is engaged in another hearing of his own. I would like to ask that these be answered by a letter or in some appropriate way and inserted in the record, if you will, Mr. Chairman. The material and replies will be found at the end of Vol. 2.)

COMMITTEE recess

Senator MAGNUson. We will have to suspend now. For the information of the Commission, we are going to proceed with all of our agencies. As scheduled now, it .#. us up to about the middle of May at least. So that you can probably expect that some time in the latter part of May, we will come back and pursue some of these other questions.

Mr. SwipleR. We will have another hearing 2

Senator MAGNUson. Oh, yes; as soon as the House bill passes. As a matter of fact, we will have one as soon as the House reports the bill, because we will know then.

Off the record.

(Discussion off the record.) l Senator MAGNUson. We will recess, then, and we will come back ater.

Tomorrow, for the record, we will have the Federal Trade Commission at 8:30.

(Whereupon, at 10:07 a.m., Thursday, April 23, 1964, the committee recessed, to reconvene Friday, April 24, 1964, at 8:30 a.m.)

INDEPENDENT OFFICES APPROPRIATIONS FOR 1965

FRIDAY, APRIL 24, 1964

U.S. SENATE,
SUBCOMMITTEE OF THE
COMMITTEE ON APPROPRIATIONS,

Washington, D.C. The subcommittee met, pursuant to recess, at 8:33 a.m., in room S-128, U.S. Capitol Building, Hon. A. S. Mike Monroney, temporarily presiding

Present: Senators Monroney, Magnuson (chairman), Young, and Allott.

FEDERAL TRADE COMMISSION

STATEMENT OF PAUL RAND DIXON, CHAIRMAN; ACCOMPANIED BY PHILIP ELMAN, COMMISSIONER; A. EVERETTE MACINTYRE, COMMISSIONER; JOHN V. BUFFINGTON, ASSISTANT TO CHAIRMAN; JOHN N. WHEELOCK, EXECUTIVE DIRECTOR; PHILIP R. LAYTON, PROGRAM REVIEW OFFICER; WILLIAM P. GLENDENING, COMPTROLLER; JAMES McI. HENDERSON, GENERAL COUNSEL; JOSEPH E. SHEEHY, DIRECTOR, BUREAU OF RESTRAINT OF TRADE; HENRY D. STRINGER, DIRECTOR, BUREAU OF TEXTILES AND FURS; SAMUEL L. WILLIAMS, DIRECTOR, BUREAU OF FIELD OPERATIONS; WILLARD F. MUELLER, DIRECTOR, BUREAU OF ECONOMICS; CHALMERS B. YARLEY, DIRECTOR, BUREAU OF INDUSTRY GUIDANCE; GALE P. GOTSCHALL, ASSISTANT TO DIRECTOR, BUREAU OF DECEPTIVE PRACTICES; FREDERICK IRISH, CHIEF, DIVISION OF SCIENTIFIC OPINIONS, BUREAU OF DECEPTIVE PRACTICES; CHARLES A. SWEENY, CHIEF, DIVISION OF FOOD AND DRUG ADVERTISING, BUREAU OF DECEPTIVE PRACTICES; JOSEPH J. GERCKE, CHIEF, DIVISION OF COMPLIANCE, BUREAU OF RESTRAINT OF TRADE; JULIAN W. SNYDER, ASSISTANT COMPTROLLER, ROBERT B. SHERWOOD, DIRECTOR OF PERSONNEL; AND JERRY S. HARDY, BUDGET ANALYST

FISCAL YEAR 1965 APPROPRIATION REQUEST Senator MONRONEY (temporarily presiding). The Independent Offices Subcommittee will be in session.

Senator Magnuson, the chairman, asked us to go ahead. He is compelled to attend another appropriations subcommittee meeting but will be here in about 30 minutes. Financial summaries, comparative

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