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It seems to me that what we are doing is charging a group of duties to the Secretary of Transportation who will in turn recommend them to the President, who would recommend them to the Congress.

This is not conferring statutory powers upon the Secretary to put into effect a national transportation policy. It is for the purpose of doing the research and developing it.

Mr. ERLENBORN. Would the chairman yield?

It would appear to me that the powers granted by section 7 empower the Secretary, once he has established national policy, as charged in section 4, to implement it by the establishment of standards and criteria that must be followed in the development of every plan survey and report before they ever get to Congress.

Mr. HOLIFIELD. Providing Congress goes along with it.

Mr. ERLENBORN. I think the only proviso in section 7 is that the President agree.

Mr. HOLIFIELD. That is to ignore the functions of the Congress and I don't think we can ignore them.

Mr. ERLENBORN. That is what I fear.

Mr. HOLIFIELD. I don't think Congress would allow itself to be ignored. I have too much confidence in these full committees that have jurisdiction over these modes of transportation to think they would sit by and allow the President and the Secretary of Transportation to reverse and change and completely nullify all of the previous acts of Congress over the past decades. I can't understand that type of reasoning.

Mr. MACKENZIE. Well, may I say one more thing?

Mr. HOLIFIELD. Sure, Mr. MacKenzie.

Mr. MACKENZIE. So that I don't appear in any way even personally to fear such an extreme result, I think matters are much more subtle than that. I believe firmly we will have a very competent Secretary who will be a capable man and of competent action and consideration. On the other hand, the Department of Commerce has interpreted section 4(a) to provide that the Secretary will seek implementation of his national policies and programs before, among others, the various regulatory agencies. I think here is an example of a case in which certainly he is not going to try to write out acts that have been enacted over 10 years. He is not going to take positions that would be subject to complete outright criticisms or would be in any way outrageous. But he will form an opinion, as every man must, and he will form it according to his best likes. But he will form it, we are afraid, without giving us an opportunity or the railroads or the truckers or any other interested party an opportunity such as we get in Congress to explain our views and then, when he has determined his policy, will appear as a party in an adversary proceeding, probably between private industries, and take a position one way or the other. We feel then that when he is taking a position in a case involving the Interstate Commerce Act, for example, on what may be a reasonable rate, this is a matter of judgment but a matter which we believe the Congress had told the Commission to determine under the Interstate Commerce Act. This is under its prior decisions, under Supreme Court decisions, but in no place in the Interstate Commerce Act do we find any direction to any of the Commission's or any recog

nition that what is or is not a reasonable rate will be what may or may not be determined to be such by a Secretary of Transportation. Now he cannot determine

Mr. HOLIFIELD. Just a minute on that point.

Do you think that the Interstate and Foreign Commerce Committee of the House would allow the Secretary of Transportation to put into effect a body of rates contrary to that set by the Interstate Commerce Commission?

Mr. MACKENZIE. I have no idea of a body of rates.

Mr. HOLIFIELD. Don't you realize that under the law that anything we would recommend along that line would have to go before the regulatory body, that there would be hearings held and that there would be notices to all persons and corporations and services affected to come before the Interstate and Foreign Commerce Commission, the Interstate Commerce Commission?

Mr. MACKENZIE. Yes.

Mr. HOLIFIELD. And have their day in court?

Mr. MACKENZIE. They will have their day in court, and to make my point as briefly as I can, I only meant to say I don't envision changes in laws and I know the Secretary is not going to propose specific_rates.

The Interstate Commerce Act requires, among other things, that rates be reasonable. Now, if the Secretary determines that a reasonable rate or reasonable intermodal pricing in competitive situations is based on marginal costs or a criteria and goes to the Commission in an adversary proceeding and he states his position as the Commerce Department has interpreted to be one of his functions-that it should be marginal or incremental pricing, he would be tremendously influential. He won't change the law, nor can he write the law. But Congress has directed that he make policies of national significance. Mr. HOLIFIELD. That he recommend policies.

Mr. MACKENZIE. That's right. I wouldn't like to be either a plaintiff or defendant and have the Department of Transportation on the other side in an issue of that kind. We feel that it is now law, that his position has no part.

Mr. HOLIFIELD. It was testified today that the Secretary of Commerce has made recommendations which have not been accepted and he has pointed out a long series of attempts by executive departments to influence-I don't know why you think the Secretary of Transportation would have any more effect upon the Congress than the Secretary of Commerce or any other Cabinet position.

Mr. MACKENZIE. I think our concern is that no other executive department of our Government has been directed by Congress to make national transportation or national anything else policies.

Mr. HOLIFIELD. Not to make but to develop it and recommend it. Let's try to keep that clear. You speak as though the Secretary has the power to make the policy and order it implemented. The only thing that I read in the bill, and I read the purpose of it very carefully, is that he shall develop and recommend national transportation policies. and programs to accomplish these objectives with full and appropriate consideration of the needs of the public, the users, the carriers, industry, labor and national defense. Who does he recommend it to?

He recommends it to the President and the President undoubtedly sends up a draft of a bill, as this bill has been sent up, from the executive department. It comes to the Congress. If it has to do with the railroads, it will undoubtedly go to Mr. Staggers' Committee on Interstate and Foreign Commerce, and there his recommendations would be considered.

Let's not jump over the intervening processes of procedure in our lawmaking process. The development and recommendations of policy is one thing but the enforcing of policy is another and I don't think the executive branch can enforce any kind of national policy that they might develop after all this consultation with the public needs. The users, the carriers, industry, labor and national defense, after all of this we will say that they have acted in good faith, as most Congressman and most members of the executive branch act, and they come up with a policy.

Now what happens? Is that put into effect automatically? Of course it isn't. If it is in a bill, it will be referred by the Speaker to the committee of jurisdiction, and that committee of jurisdiction has not had its powers changed one bit. It still has the same powers after this bill goes into effect as it had before. It has the same jurisdiction. Even the jurisdiction of the particular mode of transportation is not changed. Maritime matters will go to the Committee on Merchant Marine and the railroads and aviation would go to Mr. Staggers' committee, so your jurisdiction isn't changed; your regulatory bodies are not changed. So it seems to me you are leapfrogging over all the protective processes of the Government and arriving at a conclusion of doom and gloom.

Mr. MACKENZIE. In a final comment, I don't believe that that is the result. I would think that there would be opposition among the drafters of this bill to limiting the action of the Secretary to recommendations to Congress through the President.

I may now go directly to the regulatory agencies and the Commerce Department so interprets that. It doesn't become law but he may go. He can impose his policies on the proposals and recommendations of the Corps of Engineers, for example, or of any other Government agency that makes a proposal with respect to the investment of Federal funds in transportation facilities or equipment. Then, in a vast change from existing procedure, as Mr. Cramer pointed out this morning, the schedule of the Corps of Engineers proposal report or examination going directly to Congress, it must first be written only if it will conform to the standards and criteria. It must conform. It must use the information of the Secretary.

Then, instead of going to Congress, it goes up to the President. We think there is a tremendous difference and we think these policies do become effective without Congress having to do with it, especially under section 7.

Mr. HOLIFIELD. If I felt the same thing I would be against it too. Mr. ERLENBORN. Would the chairman yield? Just to reenforce the witnesses' interpretation of the meaning of the words in this act, we should look to the briefing book prepared by the Department of Commerce and their own interpretation as draftsmen of the bill as to what this language means.

It says on page 2 of the summary of the bill, section 4(a) provide that the Secretary shall exercise leadership under the direction of the President in transportation matters and develop national transportation policies and programs.

Not to recommend them but to develop them. Then how does he implement them? The Secretary would carry them out or make recommendations for the implementation to the President, the Congress or the transportation regulatory agencies as appropriate. In other words, not always going to Congress but going directly to the regulatory agency if the Secretary of the Department thought that this was the proper way to implement it, the policy he has developed.

This would include participation by the Secretary as a party in the proceedings before a regulatory agency. So I think the witness is correct in this interpretation that the policy developed by the Secretary would not necessarily have to get the stamp of approval of the Congress or the President but the Secretary can go directly to the regulatory agency and appear as a party to the proceeding and this is the interpretation of the draftsmen of the bill.

Mr. HOLIFIELD. All right, let's analyze that sentence.

The Secretary could carry them out or make recommendations for the implementation to the President. What power does the President have that is not provided in statute?

Mr. ERLENBORN. Certainly broad power.

Mr. HOLIFIELD. Emergency power in the time of war. But in time of peace, the President certainly has a very limited power and no power to go beyond the statute, to contravene a statute.

Mr. ERLENBORN. We have national guidelines, without benefit of law, as to wage and the cost of goods, implemented with the full power of the Executive as we have seen in recent days, as to steel and aluminum. Certainly the

Mr. HOLIFIELD. Only by persuasion.

Mr. ERLENBORN. True. Very effective persuasion.

Mr. HOLIFIELD. Well, if it be effective, then it is effective persuasion but it does not change the statutes. Any industry affected has a perfect right to resist and some of them have, as you well know, and there have been no violations of the law either in persuading or in resisting persuasion.

Now let's go to the Congress. So he comes to the Congress. Certainly we don't object to that. Or the transportation regulatory agencies. We certainly don't-if the Secretary of Commerce wants to go before the Interstate Commerce Commission today he not only may but he does and he will in the future, so you are conferring no additional power upon the Secretary to vote for a regulatory agency than you have right at this time by the Secretary of Commerce.

Now, in other words, there are checks in this matter all down the line and there are also checks on regulations that it must be under the Administrative Practices Act, consistent and not in violation with the existing statute.

So you have got checks all the way up and down the line on this

matter.

Mr. ERLENBORN. Charged by my colleague Mr. Brown, who unfortunately had to leave to testify before another committee, to ask one

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last question, we have been talking here about Congress giving up some of its historic constitutional powers to establish policy. My colleague wanted me to ask the attorney for the witness, if there is anything wrong with this.

Have the courts ever found that Congress has unconstitutionally attempted to delegate its authority?

Mr. MACKENZIE. This has been found to be unconstitutional in a number of instances. The courts have held that there may constitutionally be a delegation of power only if there are reasonably ascertainable standards within which that power should be exercised by the nonlegislative body to implement it.

Mr. HOLIFIELD. The Chair is in agreement with that statement. Mr. ERLENBORN. I think the witness and I might agree that those guidelines possibly are not clear in this bill.

Mr. HERSHEY. We would agree.

Mr. HOLIFIELD. I might add this committee will do some clearing up if they are not.

Thank you, gentlemen.

The next witness is Prof. Martin L. Lindahl, member of the Transportation Committee of the New England Council of Economic Research.

Mr. Lindahl, go ahead.

STATEMENT OF PROF. MARTIN L. LINDAHL ON BEHALF OF THE NEW ENGLAND COUNCIL

Mr. LINDAHL. Mr. Chairman and members of the committee, my name is Martin L. Lindahl and I appreciate this opportunity to appear on behalf of the New England Council before your committee to testify in support of H.R. 13200, the proposed Department of Transportation bill. I am a member of the faculty at Dartmouth College and serve as a member of the transportation committee of the council. As you may know, the New England Council was established in 1925 at the request of the six New England Governors. It is a private nonprofit organization with a broadly representative membership interested in the sound economic development of the region. As a consequence, it is particularly interested in legislation that would strengthen and improve the transportation services in New England.

I. BRIEF HISTORY OF THE NEW ENGLAND COUNCIL'S INTEREST IN

TRANSPORTATION MATTERS

The New England Council has a continuing interest in the adequacy and financial health of all forms of public transportation serving New England. Because of our location in the northeast section of the country, we are very dependent on the maintenance of an adequate transportation system. Few regions in the Nation rely so completely on long-haul transportation as does New England in acquiring raw materials, fuel, and basic food supplies, and in marketing finished products. The adequacy and efficiency of the transport system have a basic impact on the economy of the region.

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