Senator AUSTIN. I recommend that we have printed at this place in the record this resolution of the Board of Governors of the American Bar Association to which reference has already been made. Senator HATCH. Without objection it may be incorporated in the record, at this point.

(The resolution referred to is as follows:)

ADMINISTRATIVE LAW

The Board of Governors transmits the report of the Special Committee on Administrative Law. It concurs in and approves the statement of principles contained in the report, with three modifications. The Board believes that the resolution should state these principles instead of incorporating them by refer ence. It therefore recommends that the following resolution be adopted in lig of that recommended by the committee:

Resolved, That the house of delegates of the American Bar Association notes with satisfaction the reports by the Attorney General's Committee on Adminis trative Procedure, which strongly confirm the need for early enactment of remedial legislation along lines heretofore urged by this Association; further Resolved, That the house of delegates hereby approves the following statement of principles which should be reflected in any bill enacted for the improvement of Federal administrative procedure:

(1) Completeness. A short but complete statement of the fundamentals of the whole administrative process, including clear declarations of policy;

(2) Rules and Regulations. In connection with administrative regulations. (a) The specification of required types of administrative rules; (b) a statutory enumeration of methods of rule making to be adapted to different kinds of rules and situations and designed to secure the participation of all interested parties in the rule-making process, including formal notice and public hearing if requested and practicable preliminary to the issuance of interpretative or substantive law rules; (c) a recognition of a right of petition in connection with the making and modification of rules, and (d) clear provision for judicial review both upon recognized principles of declaratory judgment or in cases of actual controversy.

(3) The adjudicatory system. In connection with administrative adjudication: (a) The segregation of prosecuting and judicial functions in the adminis trative process; (b) a requirement that adjudications be expedited in order to secure the prompt relief of private parties; (c) a definition of the duties of offi cers who may preside at administrative hearings; (d) declared standards of fair and impartial procedure; (e) provision for the independent selection of administrative hearing officers, other than the heads of agencies, designed to secure their independence of judgment; (f) a statement of the applicability of the basic principles of evidence, together with a recognition of the right of cross examination; (g) provision that decisions shall be made by the administrative officers who heard the case in the first instance (subject to review by superior administrative officers), and that all deciding officers shall confine their con sideration to the record, shall personally master the pertinent parts of the record, and shall not rely upon outside aid (other than clerical) in the per formance of this function; and (h) adequate requirement of the making of findings and conclusions, and the statement of reasons for decisions.

The foregoing standards should be placed within a legislative framework which requires (a) adequate and specific notice in all cases, the simplification of responsive pleadings, and the availability of declaratory rulings in all cases of threatened action or controversy; (b) a statement of unmistakable authority for the informal disposition of uncontested cases, coupled with a requirement of formal procedures in all cases where private parties demand them; (e) the limitation of sanctions or penalties to those authorized by law; and (d) a clear statement of the procedure for judicial review and an adequate scope thereof, together with provisions which will simplify and decrease the cost of such review.

(4) General provisions.—In connection with all administrative proceedings: (a) Provision for the proper delegation and decentralization of authority; a definitely stated right of appearance and representation of parties; and the simplification of the admission of attorneys or others to practice before administrative agencies and (b) appropriate limitations upon investigatory pow ers, the issuance of subpenas, and administrative publicity.

(5) Exceptions.-The exception of purely executive functions which do not lend themselves to formal procedures, such as lending, spending, national defense, and similar types of governmental activity.

Resolved, That the house of delegates expresses the opinion that Senate bill 674 (which was drafted by the minority of the Attorney General's committee) is the bill which up to this time best embodies the above statement of principles; and further

Resolved, That the enactment into law of legislation embodying these principles is of great public importance and that the association lend every effort in aid thereof.

STATEMENT OF ROBERT B. WATTS, GENERAL COUNSEL, NATIONAL LABOR RELATIONS BOARD

Mr. WATTS. Mr. Chairman, my name is Robert B. Watts. I am General Counsel of the National Labor Relations Board. I should say for the purpose of the record that the views I am about to express here in amplifying the statement of the chairman have not been submitted to the Bureau of the Budget by reason of lack of time, and therefore they, of necessity, will be my own views.

First I want to speak very briefly on the total lack of self-enforcing character of the National Labor Relations Act and the Complete judicial review afforded as to any action taken under it. As has been stated, there are two main functions performed by the Board under the act. The first of those functions has to do with the ascertainment of whether or not unfair labor practices have been committed. After full hearing and after a decision there is open to the Board on one hand or the respondent on the other, resort to the circuit courts of appeals, and it is only after a circuit court of appeals has reviewed and approved the Board's order that any enforcible character emerges, and then only by way of the court's exercise of its own power of contempt for failure to obey its decree. In this connection it should be borne in mind that the statute is unlike, for instance, the Federal Trade Commission Act in which there is provided an automatic affirmance of the Commission's determination if review is not sought within 60 days, and after that the imposition of substantial fines in the event of violation.

The other type of activity which the Board carries on is that which has been referred to as the investigative process, the fact-finding process in relation to representation questions. There the Board states a fact, as to the existence or nonexistence of a majority bargaining representative. Nobody is ordered to do anything. If, after the statement of that fact, the employer refuses to bargain with the certified representative, the Board must institute a formal complaint action, go through the formal hearing process and make a formal order, and then, if resort is had to the courts, the courts go back through both processes and review not only the refusal to bargain but also the preceding hearing which resulted in the certification of the bargaining representative.

Senator HATCH. The employer has the right to appear at this hearing and show that the action of the Board in making its original ascertainment as to representation was erroneous?

Mr. WATTS. That is so, Senator. Indeed the Board specifically calls in the employer at the preliminary representation question, makes him a party to the proceedings, even though other agencies, such as

the Mediation Board, do not conceive that the employer has any real interest in that kind of ascertainment of fact. But by reason of the fact that the certification does realistically have some relation to the employer, and by reason of the further fact that if a complaint cas is instituted against the employer he may very well say that he would like to have been heard in connection with the earlier proceeding, the Board, in its regulations and in its practice, brings in the employer at the initial step. So he is there all the way through.

Turning now briefly to the subject of rules and their judicial review. about which the Senator indicated he had a possible question, if, a« we understand S. 675, it contemplates essentially our present practice-which is the printing of our individual decisions with headnotes which we provide, and of which I have samples here (handing documents to the committee)-and if it also contemplates the type of annual analysis that we make of all the Board's decisions for the preceding year (handing documents to the committee), the requirements of S. 675 are certainly workable. We present these samples to you so that you may see what it is that the Board has done, and what the Attorney General's committee seem to believe was the desirable end.

Senator O'MAHONEY. Did I understand you to say that the provisions of S. 675 are workable in connection with your practices?

Mr. WATT. If S. 675 is satisfied by the printing with headnotes of individual decisions as made, and the annual collecting of all of the decisions, the summarizing of principles covered, we already do that, and we therefore say it is entirely workable. Our only doubt arises as to whether or not S. 675 envisages something more.

Senator O'MAHONEY. Then the only question in your mind is whether or not the sort of procedure represented by these two sample documents is the kind required by the provision of S. 675?

Mr. WATTS. That is right.

Senator HATCH. I do understand, though, that if it is not that kind, and if you are required to put these decisions into the form of rules, that would be an impossible task?

Mr. WATTS. That is equally true, Senator, as stated by the Chairman of the Board in his statement.

Senator DANAHER. That is precisely where my question arises, Mr. Chairman. As I understood Dr. Millis' statement, he concluded on page 5, "Like the courts which review our decisions we can only interpret the statute from case to case," and at the top of page 6, "It might be wise, therefore, to indicate specifically that the summaries and digests of decisions furnished in our annual reports would satisfy the proposal in S. 675 that adapted policies and interpretations of law be made available to the public," and he there is referring to section 201, clause (2), line 12 of the bill. That is on page 9. Is that not so, Mr. Watts?

Mr. WATTS. Title II, section 201 (2)?

Senator DANAHER. Yes.

Mr. WATTS. That is right.

Senator DANAHER. Now, surely, if the circuit court of appeals or the United States Supreme Court decides some general rule that becomes the law so far as your conforming to it is concerned, does it not?

Mr. WATTS. Certainly, as to the Supreme Court, it becomes the

rule of that case.

Senator DANAHER. And that is true of the C. C. A. if certiorari is denied, for instance?

Mr. WATTS. In that circuit?

Senator DANAHER. Yes.

Mr. WATTS. Yes.

Senator DANAHER. Why would not it be possible then in your own agency, basing your rule-making on a matter of general policy and nterpretation, why would it not be equally applicable everywhere on a general basis? Not in every case, I agree, because this will vary, but in most cases you ought to be able to formulate rules, I would think. Mr. WATTS. Let me point out to you some obvious difficulties which We will encounter. Speaking, first, on the result of judicial review in the circuit courts of appeals, it is not only entirely possible but frequently is the case that through extended periods of time there is Lo uniform rule among the various circuit courts of appeals. What is the law in the second circuit is not the law in the fourth, and so on throughout the country. We are, therefore, in a state of flux as to that general principle of law. Now when you get from there down to the endeavor to formulate any code-because that is really what your question envisages-as to what is or what is not to constitute a violation of the law, you have these simple areas of prohibited Conduct. For instance, it is contrary to the statute to dominate or support a labor organization. Now the factual methods of domination which have already come before the Board are almost numberless. The means by which domination is achieved over another organization may range all the way from absolute imposition of a ystem of employee representation over to the most subtle kinds of interference through the provocation of third parties to set in motion certain forces.

My answer generally to you, as a lawyer, would be that to the xtent that rules of law may be finally determined by the Supreme Court, they not only can be but are announced in the decisions of hat court, and are, of course, guiding, but it has, in the field of hifting factual situations, never been practicable to set up in advance the abstract statement of every possible permutation and combination of facts which would result in a violation of the law.

Senator DANAHER. We lawyers say, for instance, that there is such a thing as fraud.

Mr. WATTS. Yes.

Senator DANAHER. We set out certain given definite elements which constitute fraud. Whether or not on the facts of an instant case fraud has been committed is the question to be decided. Now you take these headnotes that you have submitted in the sample, and the very first one I pick up having to do with the International Harvester Co., it is no more than an abstract of the rulings which have been made in that particular case.

Mr. WATTS. That is right. That is what it is supposed to be. It is supposed to be a directive to the portions of that decision. Senator DANAHER. In that case.

Mr. WATTS. In that case, that is quite so.

Senator DANAHER. Do you have as many applications of rules and as many views, if you choose, as you have trial examiners?

Mr. WATTS. No; these are Board decisions, Senator.

Senator DANAHER. All right. Then if you have board decisions will not you expect your trial examiners to conform to those very board decisions in the future?

Mr. WATTS. Insofar as they enunciate principles of law. In other words, the trial examiner with us, as the judge in the judicial system. is entirely free to deal with the facts as he finds them. He starts out with a statutory statement of what the ultimate unfair labor practice is. That is implemented by decisions of the courts which have di cussed this aspect or that aspect as it has been applied to this state of facts or that state of facts. He has the decisions of the Board in par ticular cases. How close he can get in matching his new combina tion of facts to one of those situations is a matter of chance. It may be that he has what we lawyers call a "white horse" case, or it may be that he has something that is novel, that presents the issue of supposed or alleged domination or discrimination in an entirely new fashion and one in which he must start from the beginning to apply the law, the statute, and the general decisions as best he may. The Board may or may not agree with him, and eventually the courts ma or may not agree with the Board. It is very much like what we lawyers have been struggling around with for a great many years as have the courts-what constitutes interstate commerce. We think we have it in our heads, and yet no one so far has been able to sit down and dash off something in the compass of a few pages which can be tacked up against the wall and against which you can measure any disputed interstate commerce question. It varies as the facts vary. One element may predominate and may, in the next case, sink into a subordinate position.

Senator O'MAHONEY. The problem, I take it, of the trial examiner in a particular case is to determine whether the facts presented to him in that case come within the rule of law laid down by the statute. and the principle laid down in previous precedents set forth in the hearings.

Mr. WATTS. Quite so.

Senator O'MAHONEY. That is all it is. Now then, the question from my point of view is whether or not this bill, S. 675, in paragraph (2) of section 201 means that such a decision by the Board is to be regarded as a rule. The language is: "All general policies and interpretations of law, where they have been adopted." Now the query is: Is a decision in a particular case a general interpretation which comes within the meaning of what the draftsman had in mind when he set this down?

Mr. WATTS. I do not know, Senator.

Senator O'MAHONEY. My own judgment would be no, because it seems to me it would be utterly impossible to administer in any reasonable way, to regard every single decision that you hand dow as a rule which comes within the purview of this bill.

Mr. WATTS. We have only this light on the subject, which, of course, is more limited than that available to you. It has been indicated to us informally that at least the Attorney General's commit tee, in thinking of this problem of the statement of general policy. had in mind definitely the very practice which the Board follow with the thought that some such annual bringing together of the principles, of the thinking of the agency, should be had as to every