Hon. HARLEY O. STAGGERS, THE SECRETARY OF COMMERCE, Chairman, Committee on Interstate and Foreign Commerce, Dear Mr. CHAIRMAN: I am grateful that your letter of April 7 offers me the opportunity to clarify any difficulties in understanding what is contemplated by creation of the new Department of Transportation. Let me state at the outset that I fully recognize, as do you, that responsibility for a national transportation policy, the determination of Federal investments to be made in different modes, and the shaping of transportation programs and policies of the Nation to support our continued growth and development, rest with Congress. These legislative prerogatives remain unimpaired by H.R. 13200. What this bill does propose to do is to insure that congressional transportation legislation and the programs contemplated by such legislation are effectively and efficiently administered. The proposed Department would evaluate existing programs and organizations to determine how best to accomplish these ends. Such action as might appear desirable but which is beyond the scope of existing statutes will have to be the subject of appropriate legislative proposals. Insofar as the independent regulatory agencies (the Interstate Commerce Commission, the Civil Aeronautics Board, and the Federal Maritime Commission) are concerned, the bill does not disturb their economic regulatory functions. It does, however, transfer to the new Department the safety functions now residing in the Interstate Commerce Commission and the Civil Aeronautics Board. It also transfers such noneconomic regulatory functions as administration of the Standard Time Act and the railroad car service functions of the Interstate Commerce Commission. It also requires the Civil Aeronautics Board, in making subsidy determinations, to take into consideration standards and criteria developed by the Secretary for determining the character and quality of transportation required for the commerce of the United States and the national defense. You will note that the language in section 8(a) of the bill states only that the Civil Aeronautics Board "shall take into consideration" such standards and criteria. It is my belief that this limited language provides the best mechanism for the Department of Transportation, which will be responsible for administering the many programs enacted by Congress, to submit its views to the Civil Aeronautics Board in this important area. In a similar vein, section 7 dealing with transportation investment criteria to which you have alluded simply contemplates that overall evaluations of the many proposals for the investment of Federal funds in transportation facilities be made. The importance of the proper allocation of Federal resources will undoubtedly grow as investments by the Government increase. I believe that it will be useful for the Congress to have the benefits of these evaluations for such uses as it may choose and that it is appropriate for the executive branch, in performing its proper functions, to carry out this task. Like the Interstate Commerce Act, many other regulations and programs are phrased in statutory terms which will permit a reasonably broad range of sound discretion and judgment. The Department bill would permit the Secretary of Transportation to develop policy within this framework. Insofar as the independent regulatory agencies are concerned, the Secretary would be expected to participate as a party in cases involving policy issues and present such views as he believes appropriate. This would not impinge upon the responsibilities of the regulatory bodies to render independent judgments. It would, in fact, be consistent with present practices. By way of example, this Department has recently submitted its views in two cases now pending before the Interstate Commerce Commission, is participating in a proceeding before the Civil Aeronautics Board, and has petitioned to intervene in another CAB proceeding. I might point out that the Secretary of Agriculture is specifically authorized under the Agricultural Adjustment Act of 1938 and the Agricultural Marketing Act to appear by complaint or petition before Federal or State transportation regulatory bodies in the interest of improving agricultural services, facilities, and rates. Similarly, the Department of Justice can seek to intervene in cases involving appeals from regulatory body decisions and to urge its own views on the courts. In summary, it is my firm belief that this bill is a significant organizational reform in the interest of sound promotion and development of transportation. Its functions will, of course, be carried out in a manner consistent with the mandates of the Congress. Sincerely yours, JOHN T. CONNOR, Secretary of Commerce. COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE, Hon. JOHN T. CONNOR, DEAR MR. SECRETARY: Your letter of April 25 replying to my inquiry of April 7 for some clarification of the perplexity in which I found myself after reading your testimony before the House Committee on Government Operations on April 6, as well as the testimony of the Director of the Bureau of the Budget, is most helpful. I do welcome this statement on your part of your full recognition that responsibility for a national transportation policy, the determination of Federal investments to be made in different modes, and the shaping of transportation programs and policies of the Nation to support our continued growth and development, rests with the Congress. Inasmuch as I fully agree with you as to this statement, I think that any problems that I might have had in the interpretation of the testimony given before the other committee are fully resolved. On the other hand, I still have some reservations as to whether or not the recognition contained in H.R. 13200 of the responsibilities and role of the Congress does not leave something to be desired insofar as it recognizes the respective roles of the Congress and of the Department. This seemed to me especially true in the phraseology employed in sections 4 and 7. It would seem to me desirable that it be made clear through amendment to the bill that the Congress is, and will continue to be, the body responsible for formulating national transportation policies and the determination of Federal investments, and so on, and that the role of the Secretary of Transportation is to operate within this policy framework as established by the Congress effectively and efficiently to administer such policies and programs established by the Congress, and in the light of its experience in such administration from time to time make such suggestions for legislation for change, diminution, or enlargement of the policies and programs so established. This last concept of the role of the Department, I am sure, would cover recommendations on the investment of Federal funds in transportation facilities and suggestions as to criteria or standards to be set forth by the Congress in this area. In addition, your letter is very helpful in setting forth the role which you believe the Secretary has in participating in cases before independent regulatory agencies such as the Interstate Commerce Commission. The examples which you give of the present participation of the Department of Commerce, of the Depart ment of Agriculture, and of the Department of Justice seem to me to indicate a most appropriate role of the Government departments in their presentation of the interest of each department, and of factors which the regulatory agencies should consider in their final determinations of where lies the public interest. As I have indicated in a letter which I wrote to Under Secretary Boyd under date of April 27, the statement made by Chairman Bush of the Interstate Commerce Commission in a speech on April 18 in Honolulu of the role of the Department as a "spokesman for the public interest" seriously disturbed me. I am gratified to note in this letter which you have sent to me, as well as in a reply which I have received from Chairman Bush under date of April 29, that neither he nor you conceive of the role of the Secretary of Transportation as being the sole spokesman for the Government departments nor of the public interest. The determination of where does lie the public interest must repose with the regula tory agencies in these situations. Thank you again for your considered analysis of these major questions. I should think that on the predicates you have outlined, it would be possible to work out acceptable legislation. Sincerely yours, HARLEY O. STAGGERS, Chairman. THE UNDER SECRETARY OF COMMERCE FOR TRANSPORTATION, Hon. HARLEY O. STAGGERS, Chairman, Committee on Interstate and Foreign Commerce, DEAR MR. CHAIRMAN: Your letter of April 27, 1966, indicates that, as of that date, you had not yet received Secretary Connor's reply, dated April 25, to your earlier inquiry. I assume that they have crossed in the mail and that you now have the Secretary's letter. I have enclosed a copy for your convenience. You have also indicated that you continue to be disturbed by testimony concerning the proposed jurisdiction and responsibilities of the new Department, particularly in light of ICC Chairman Bush's recent remarks that the Department "could be an articulate spokesman for the broad public interest." Initially, I believe it would be appropriate if I were to restate paragraphs 6 and 7 of Secretary Connor's letter to you of April 25: "Like the Interstate Commerce Act, many other regulations and programs are phrased in statutory terms which will permit a reasonably broad range of sound discretion and judgment. The Department bill would permit the Secretary of Transportation to develop policy within this framework. Insofar as the independent regulatory agencies are concerned, the Secretary would be expected to participate as a party in cases involving policy issues and present such views as he believes appropriate. This would not impinge upon the responsibilities of the regulatory bodies to render independent judgments. It would, in fact, be consistent with present practices. By way of example, this Department has recently submitted its views in two cases now pending before the Interstate Commerce Commission, is participating in a proceeding before the Civil Aeronautics Board, and has petitioned to intervene in another CAB proceeding. "I might point out that the Secretary of Agriculture is specifically authorized under the Agricultural Adjustment Act of 1938 and the Agricultural Marketing Act to appear by complaint or petition before Federal or State transportation regulatory bodies in the interest of improving agricultural services, facilities, and rates. Similarly, the Department of Justice can seek to intervene in cases involving appeals from regulatory body decisions and to urge its own views on the courts." In the above manner, I believe a Department with broad, overall responsibilities could make relevant information concerning its position, plans and programs known to the regulatory body. I see no discrepancy between this approach and the views of Chairman Bush. Without attempting to speak for him, I note that he indicates that the Department could be an articulate spokesman for the broad public interest. The guardian of the public interest would still be the Commission, and I do not hesitate to state the administration's views in this respect. To put the matter somewhat differently, the public interest is comprised of many facets. The Department, in fulfilling its responsibilities to the public, would endeavor in particular cases of very broad significance to present such evidence and views as it believes the Commission should be aware of in carrying out its functions of protecting the public interest. The Commission would be perfectly free, in its best judgment, to accord the appropriate weight to such evidence and views, or to have its own staff advance different views. It is free to take these very approaches now. I recognize, however, that its budgetary limitations and large caseload place some restrictions on the actual participation of its staff in formal proceedings. It is well recognized that many of the parties appearing before the Commission are concerned largely with their own particular interests. From their point of view, this is entirely reasonable. I believe that any Department participation would attempt to take a broader view. Such an approach is reflected in the two ICC proceedings referred to in the quotation from the Secretary's letter. In both cases, it should be added, the Commission's Bureau of Enforcement is also a party. In conclusion, I do not believe that H.R. 13200 affects any of the responsibilities of the Commission delegated to it by the Congress. Nor, I believe, do Chairman Bush's views or those of administration witnesses. Sincerely, ALAN S. BOYD. APRIL 26, 1966. Hon. JOHN W. BUSH, Chairman, Interstate Commerce Commission, DEAR MR. CHAIRMAN: Last week your congressional liaison officer forwarded to me a copy of your remarks of April 18 given at the Royal Hawaiian Hotel, Honolulu, Hawaii, in which you make reference to the proposed new Department of Transportation, in addition to that set forth in your speech before the Common Carrier Conference Irregular Route of March 8 in Miami. I am greatly disturbed by two sentences appearing on page 9 of the copy of your April 18 speech which you forwarded to me, reading as follows: "And, third, our decisions in important proceedings before the Commission may vitally affect the national economy and the public interest. In such proceedings, the Department of Transportation could be an articulate spokesman for the broad public interest." This suggests a role for the Department which it has always been my assumption was that of the Interstate Commerce Commission; namely, that of representing the public interest, and possibly contains the further implication of reducing the role of the Commissioners to solely that of judges in which they are to act upon a record wherein the new Department is to be the spokesman for the public interest. It has always been my impression that the principal obligation of the Interstate Commerce Commission was that to represent the public interest. I have looked back at the representations made before this Committee over the various years when the Commission has been before it to describe its jurisdiction, duties, and responsibilities, and find that this is the thrust of the position represented to us in 1957 by Chairman Clarke, in 1955 by Chairman Mitchell, in 1953 by Chairman Alldredge and Commissioner Mahaffia, and in 1951 by Chairman Splawn. It seems to me that this understanding of the Commission's role is no better expressed than in the words of Commissioner Aitchison, which were quoted by Judge Frank in his Isbrandtsen Co. v. United States (96 F. Supp. 883, 892 (S.D. N.Y. 1951)), and quoted with approval by Judge Hays in Scenic Hudson Preservation Conference v. Federal Power Commission and Consolidated Edison Company of New York, Inc. (354 F. 2d 608, 2 Cir. (1965)), as follows: Hon JOHN W. BUSH, Chairman: APRIL 26, 1966. "This is a somewhat surprising contention, to be contrasted with the following views of Commissioner Aitchison of the Interstate Commerce Commission concerning the obligations of administrative agencies:** * The agency does not do its duty when it merely decides upon a poor or nonrepresentative record. As the sole representative of the public, which is a third party in these proceedings, the agency owes the duty to investigate all the pertinent facts, and to see that they are adduced when the parties have not put them in *** The agency must always act upon the record made, and if that is not sufficient, it should see the record is supplemented before it acts. It must always preserve the elements of fairplay, but it is not fairplay for it to create an injustice, instead of remedying one, by omitting to inform itself and by acting ignorantly when intelligent action is possible ***" [Italic supplied.] Judge Hays in his Consolidated Edison decision has remarked upon the role of the Commission as follows: "In this case, as in many others, the Commission has claimed to be the representative of the public interest. This role does not permit it to act as an umpire blandly calling balls and strikes for adversaries appearing before it; the right of the public must receive active and affirmative protection at the hands of the Commission." Your statement standing alone I might judge (and indeed I very sincerely hope that it is) a lapsus calami, but when taken in conjunction with certain testimony by the Director of the Bureau of the Budget, Charles L. Schultze, and by the Secretary of Commerce, John T. Connor, in their appearances before the House Committee on Government Operations on behalf of H.R. 13200, serves but to enhance my anxiety over just what this proposal may mean in transferring to the new Department the responsibility for policymaking on behalf of the public interest. which, presumedly, hitherto has lodged with the legislature and with its authorized delegate, the Interstate Commerce Commission. It is my earnest hope that you can clarify this matter for me as well as indicate to me what is the position of the Commission with respect to this proposed legislation at your very earliest convenience. Sincerely yours, HARLEY O. STAGGERS, Chairman. INTERSTATE COMMERCE COMMISSION, Washington, D.C., April 29, 1966. Hon. HARLEY O. STAGGERS, Chairman, Committee on Interstate and Foreign Commerce, DEAR CHAIRMAN STAGGERS: In reference to your good letter of April 26 I want to tell you that I welcome your inquiry and to express my admiration for the quick and experienced eye that would catch or note that important item in the speech. While the statement wasn't really a calculated statement neither was it quite a casual one, nor accidental. I heartily agree with you that the principal obligation of the Interstate Commerce Commission is to represent the public interest. On the other hand, I have had an increasing feeling (not to be applied to any particular or individual case) that with the tremendous increase in our caseload, the scope, or breadth of the effect, of some of our larger cases, and our limited personnel, that I would like to see more extensive and effective record presentation of the public interest in these cases. For example, a major rail merger case report might show that 70, 80, or 100 fine lawyers worked for the applicants, plus all the additional resources available all concentrated on one goal. The public interest teams would probably represent far fewer, talented counsel and less resources, and might represent numerous and varied, even conflicting goals. Thus I said that the Department of Transportation could be an articulate spokesman for the public interest. We welcome any defenders of the public interest, and I only meant that here could be one additional defender. I should think that, very properly, the Department would appear as possibly the most objective party in such cases as we are discussing in this exchange of letters. In other words, I think they could strongly supplement our complete "look at" the probably results of either an affirmative or a negative decision. Keep checking on us. It is a comfortable feeling to know that while we have the general support of your committee and your experience staff you will quickly point out to us any errors or any place where our intent might even be misinterpreted. Sincerely, JOHN W. BUSH, Chairman. COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE, Hon. JOHN W. BUSH, Chairman, Interstate Commerce Commission, DEAR CHAIRMAN BUSH: You were very gracious to reply so promptly under date of April 29 to my inquiry of April 26 concerning the statement which you made in Honolulu to the effect that in important proceedings before the Commission affecting the national economy and the public interest, the Department of Transportation could be an articulate spokesman for the broad public interest. I am very pleased with your statement that it is the responsibility of the Interstate Commerce Commission to represent the public interest and that it was your thought only that in creating a record in proceedings which the Commission would consider in its determination of the public interest, it was your thought that the Department of Transportation could be one more spokesman defending the public interest. In such proceedings the Department, of course, would represent the Department's interest but I cannot conceive that the Department would undertake the role of coordinating all of the interests of the various departments of the Government in an attempt to present one uniform position in which the interests of the |