Mr. Justice Stone put it well when he recently said that looking back over the 50 years since the establishment of the Interstate Commerce Commission, no one could seriously doubt the possibility of establishing an administrative system which can be made to satisfy and harmonize the requirements of due process and the common-law ideal of the supremacy of the law, on the one hand, and the demand, on the other, that government be afforded a needed means to function freed from the necessity of strict conformity to the traditional procedure of the courts.

Mr. Justice Stone also said that the theories firmly established in this country of due process and of the supremacy of the law over official action afford that protection of individual right and justice which is the ideal of the common law, that the time has come for a more ready recognition that the procedures worked out by administrative bodies have realized this ideal largely without the intervention of the courts, and that they have set up standards for the appraisal of the specialized experience with which they are concerned which courts could have formulated, if at all, only more tardily and with far greater difficulty. All this the Commission has done as an independent body, but working within the framework of the law as laid down by Congress.

It does not seem to us that it is putting it too strongly to say that the continuance of the democratic ideal that is embodied in our heritage of liberty and law may be, to a very large extent, dependent upon the increasing use of administrative tribunals and their functioning in such a way as to command the respect and the confidence of those who are affected by their decisions.

The Commission's essential job is the hearing and determination of controversies between those who pay and those who serve. All its functions are addressed to the ultimate question, essentially a legislative one and not an executive one, of what is a reasonable rate, what is a nondiscriminatory rate, and nonprejudicial rate.

The instant that the Commission reaches the fundamental question of what is a lawful rate, what should be the relationship of one rate to another, it touches conflicting interests, and its decisions affect, of course, not only the parties immediately before it but the public at large. Now the continued usefulness and success of the Commission in this, the administrative field, depends, in our judgment, upon the respect that the parties have for the Commission who appear before the Commission and whose interests are affected by its decisions. They cannot possibly have the respect that they should have for the Commission as an administrative tribunal unless they feel deep in their hearts that when they present a case to the tribunal that case will be decided on the facts submitted at an open hearing, that those facts will be impartially weighed, and the decision reached within the framework of the law that controls the Commission's discretion and action. Only an independent tribunal, independent in every way, having control, within the framework of the law, of course, over its organization, its functions, its personnel, the assignment and division of its work, and the heads and chiefs of its bureaus, can achieve such a result.

The Commission's usefulness and its capacity to function as a necessary part of our system of Government would, we believe, be impaired if any steps are taken that will affect its independence and its freedom to control its own work, its functions, its organization, and its personnel in such a way as will enable it best to discharge the legislative

tasks imposed upon it by Congress of regulating the rates and services of interstate carriers.

We submit, therefore, that nothing whatever should be done that will impair to any extent the essential independence of the Commission, and that the Commission should be left free, as Congress has left it free, to exercise its powers within the framework of the law laid down by Congress, of which it is the agent. The Commission has no policy of its own except the policy laid down in the law passed by Congress. And to suggest, as has been suggested, that the Commission should be placed within a department, that its policies may be coordinated with other policies of the Executive who happens to be in power at the particular time, is to misapprehend completely the place of the Commission in our governmental scheme. The Commission, as the Supreme Court has said, is an arm of Congress. Its work is predominantly legislative in character. Congress would be doing everything that the Commission is doing, except possibly entering reparation orders, had it not concluded that the complicated questions that arise as a result of the transportation of persons and property in interstate commerce could better be determined by an administrative tribunal guided by the principles laid down by Congress.

It seems to us, therefore, that the fundamental question presented to Congress is whether Congress, as a matter of governmental policy, taking into consideration the complicated relations of mankind in a machine age, the increasing importance of administrative tribunals in the adjustment of these relations, and the necessity of extending the rule of law to, these relations, should now run the risk of impairing to any extent whatever the continued capacity of the Interstate Commerce Commission to perform in a way that commands public respect and confidence what has become an essential function of government. We believe, as stated by the Brookings Institution, that the control to any extent of an administrative tribunal by the Executive would almost of necessity control the policy of that tribunal. Certainly to give the Executive the power to reorganize the Commission, to regroup it, to transfer a part of any of its functions to the jurisdiction and control of another agency, to abolish a part of any of its functions, and to control the appointment of its personnel and the maintenance of its personal records, would mean in the end that the Commission would be deprived of taking those steps and of establishing those ways and means that would enable it most effectively to carry out the duties imposed upon it by Congress. The Commission knows as a result of its 50 years of experience better than anyone else what its internal organization should be, and the manner in which its work can best be carried on to enable it to discharge its tasks.

The Commission's organization, the division of its functions, the establishment of bureaus, and the control over its personnel are all just as much a part and parcel of the stream of the administrative process as the holding of a hearing and of an argument, and the consideration of evidence. They all lead to the final act in this process— the decision of the Commission on the facts. To borrow the language of Professor Sharfman, the administrative process is a seamless web, and cannot be separated into bits and pieces. In our day and age with the examples of other nations before us, we ought to do everything that we can to build up and strengthen the processes of a democratic government, and we submit that one way to bring this

about is to protect and preserve the integrity and independence of a regulatory tribunal such as the Interstate Commerce Commission.

The control of the social and economic relations of mankind in our day and age will require probably more administrative tribunals instead of fewer. If we are to have in this country a continuance of the rule of law, those tribunals must attain the same respect that is given our courts. They must exercise their powers, to use again the language of the Supreme Court, in the coldest neutrality. The parties whose work brings them before the Commission believe that these results cannot be achieved unless the Commission's independence is preserved and maintained.

It was said by Judge Cooley, the Commission's first chairman, that he exalted the Commission, made its foundations broad and strong, and made it a tribunal of justice in a field and for a class of questions where all was chaos before. The Commission has pointed the way to the extension of the rule of law and order over questions which a few decades ago were thought to be above and beyond that rule. The achievements of the Commission and the reasons for those achievements should not be ignored in our judgment in now considering the extent to which the Commission should be subjected to Executive control.

The Commission, acting of course under the direction and supervision of Congress, has won the public confidence under its present organization and the present control that it has of its organization, its functions, the division of its work, its personnel, and the appointments of the heads of its bureaus and divisions.

The practitioners before the Commission submit that the proposed bill should be rewritten so as to exempt the Interstate Commerce Commission from any of its provisions.

The CHAIRMAN. Thank you very much, Mr. Smith. Mr. C. A. Miller.

STATEMENT OF C. A. MILLER, GENERAL COUNSEL, THE AMERICAN SHORT LINE RAILROAD ASSOCIATION

Mr. MILLER. My name is C. A. Miller. I am general counsel of the American Short Line Railroad Association, with offices at 425 Union Trust Building, Washington, D. C. All the professional services for which I am compensated are rendered to that association.

The Anerican Short Line Railroad Association is a voluntary, nonprofit association and has a membership of 319 short-line railroads, located in practically every State in the Union. I am appearing before your committee today by authority and direction of our board of directors, which is composed of 35 members, representing all sections of the United States.

I am also a member of the special committee on reorganization of the Interstate Commerce Commission created by the Association of Practitioners before the Interstate Commerce Commission, but other members of that committee are presenting the view of the Association of Practitioners. I have been an officer of that association practically ever since its organization, in 1929.

With what I hope is becoming modesty, I may say, also that for the past 10 years or more I have devoted a great deal of time outside

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of my regular office hours to a study of the Interstate Commerce Commission and its work, and to the Interstate Commerce Act and its interpretation. As a result of these studies, I have written a book and several Law Review articles dealing with the Interstate Commerce Act and the Interstate Commerce Commission.

On March 31 and April 1, there was quite a commemoration of the fiftieth anniversary of the establishment of the Interstate Commerce Commission. I was chairman of the Committee on Semi-Centennial of the Interstate Commerce Commission created by the Association of Practitioners before the Interstate Commerce Commission. As a part of that commemoration our committee directed and staged a golden jubilee dinner on March 31. On the following day the Interstate Commerce Commission had exercises commemorative of the event which consisted very largely of addresses, some of them being made by Members of the Senate and of the House of Representatives. I was also a member of the special committee of the board of editors of the George Washington Law Review which directed the publication of a special issue of that Review commemorating the occasion. To this issue of the George Washington Law Review I contributed biographical sketches of all of the men who had served on the Interstate Commerce Commission during its first 50 years, these sketches having been prepared from original research.

These statements are made in order to give you, in a general way, my background, and to show you that I have both a professional and personal interest in the subject which is before you for consideration. I hope it will serve to qualify me to counsel with you for a time today with respect to the bill which you are now considering, namely, S. 2700. We view this bill as important as any bill which has been before the Congress during this session, and we urge that it be given the serious consideration which it should have.

I shall not attempt any detailed analysis of the bill, but I would like to call your attention to the essential elements of it so far as it relates to the independent agencies of the Government. By independent agencies I refer generally to those agencies which are not a part of any of the executive departments of the Government.

I would like also to make it perfectly clear that what I say is not intended to in any way impugn the motives of any person. I want to stick to the facts, so far as I purport to discuss facts, and to express my professional and personal opinion so far as nonfactual matters are concerned.

The bill, as drawn, goes much further than appears on its face. It is a masterpiece of legislative craftsmanship so far as it permits the accomplishment of things not specified in it.

Section 1 of the bill directs the President, from time to time, to investigate the organization of the various agencies of the Government, and to determine what changes therein are necessary to accomplish any of the purposes enumerated in that section.

By the terms of section 2 (a) the President is authorized whenever he shall find and declare that any such contemplated action is necessary to accomplish any of the purposes set forth in section 1, to issue an Executive order, and thereby to do any of the following things: 1. Transfer or retransfer the whole or any part of any agency, or the functions thereof, to the jurisdiction and control of any other

agency.

2. Regroup, coordinate, consolidate, reorganize, or segregate the whole or any part of any agency, or the functions thereof.

3. Abolish the whole or any part of any agency, or the functions thereof.

4. Prescribe the name and functions of any agency affected by any such Executive order, and the title, powers, and duties of its executive head.

* *

* *

This is followed by a provision in section 2 (b) which, on the face of it, is a limitation on the powers of the President, but which seems to be more of a limitation in form than in substance. Section 2 (b) states that nothing therein shall be construed to authorize the President to abolish any * independent establishment * This, however, applies to only two of the four things specified in section 2 (a) which the President may do. On the face of it, the powers of the President are limited insofar as transferring the whole or any part of any agency or the functions thereof to the jurisdiction and control of any other agency, and to the abolition of the whole or any part of any agency.

This leaves wholly untouched the power of the President to regroup, coordinate, consolidate, reorganize, or segregate the whole or any part of any agency, and to prescribe the name and the functions of any agency affected by an Executive order issued pursuant to this bill.

In dealing with this subject I shall limit myself to the Interstate Commerce Commission, but what I shall say with respect to that Commission applies with equal effect to the Federal Trade Commission, the Federal Communications Commission, the Securities and Exchange Commission, and other similar agencies.

The President is left wholly unrestricted in his power to reorganize the Interstate Commerce Commission. He might conclude to transfer or retransfer various of its functions from one bureau to another, and if he did so, so far as this bill is concerned, the members of the Commission could do nothing about it.

Further, the President is left wholly free to prescribe the functions of the Interstate Commerce Commission and even to change its name. He has unlimited power in this respect.

Perhaps I would not be so much concerned about this matter were it not for the fact that when this bill was introduced it was announced that it specifically negatived any authority in the President to abolish or transfer any of the functions or activities of the Interstate Commerce Commission and other like independent agencies of the Government. This statement does not square with the terms of the bill. The proposal to establish the Interstate Commerce Commission was before the Congress for a number of years before it was accomplished. One of the reasons for the delay was the differences of opinion between the Senate and the House of Representatives with respect to the nature of the Commission and its powers and duties. The recital of this controversy in detail is historically interesting, but not necessary to a consideration of this bill. Suffice it to say that the Commission has from its inception, and by the terms of the Act to Regulate Commerce (now the Interstate Commerce Act) been an independent establishment. It is true that for the first 2 years of its existence it reported to the Secretary of the Interior. That, however, was changed in 1889, and it has been wholly independent since that time. The Interstate Commerce Commission is, and always has been, essentially an arm of Congress. It has been variously referred to as