STATEMENT OF EUGENE O. SYKES, ACTING CHAIRMAN, FEDERAL COMMUNICATIONS COMMISSION

The CHAIRMAN. Judge Sykes, you are Acting Chairman of the Federal Communications Commission?

Mr. SYKES. Yes, sir.

The CHAIRMAN. The committee has invited you to appear to make any statement that you desire to make, with reference to S. 2700. Has the Commission submitted a statement in writing?

Mr. SYKES. No, sir; we did not. We had the request, Mr. Chairman, and I must apologize for our not complying with it. We lost two members lately. I have before me, however, the comment of our general counsel discussing the bill as it applies to the Communications Commission, which I will be very glad to file with the committee. The CHAIRMAN. All right, if you desire to do so. We will have it incorporated in the record. I really thought we had one. (The paper referred to is as follows:)

FEDERAL COMMUNICATIONS COMMISSION, Washington, D. C., July 2, 1937. Memorandum to the Commission in re S. 2700, A bill to provide for reorganizing agencies of the Government, extending the classified civil service, establishing a General Auditing Office and a Department of Welfare, and for other purposes. At its meeting en banc on June 29, 1937, the Commission referred to the Law Department S. 2700 for study and report as its affect the Federal Communications Commission.

Complying with the direction of the Commission, there is submitted in part I of this memorandum an analysis of the provisions affecting the Commission; and in part II, for such consideration as the Commission may care to give thereto, the Law Department's comments.

I. ANALYSIS

The provisions of this bill analyzed below are sections 1, 2, 202-204, 206-208, 211, and 501, which, as they contain all the elements of the plan for governmental reorganization which affects the Commission, may be considered without reference to other provisions of the bill.

Section 1: This section provides for investigation by the President of the organization of the various agencies of the government to determine what changes are necessary to bring about reduction of expenditures, increase efficiency, consolidate functions according to major purposes, abolish functions not necessary for the efficient conduct of Government, eliminate overlapping and duplication of effort, and segregate routine, administrative, and executive functions from regulatory functions.

Section 1 does not confer power to carry any changes in organization into effect. Section 2: This section specifies, defines, and limits the power of the President to take action after investigation made under section 1. He is given broad powers to accomplish by Executive order (which, however, under sec. 4 must be submitted to Congress and remain there 60 calendar days while Congress is in session before becoming effective) to effect transfers, retransfers, regrouping, coordination, consolidation, reorganization, segregation, or abolition of governmental agencies. However, his powers with respect to "independent establishments", which by definition contained in section 5 includes this Commission, are limited to the matters covered by the provisions of section 2 (c).

Section 2 (c) reads as follows:

"The President is authorized by Executive order to transfer to an executive department any of the routine administrative and executive functions of any independent establishment which are common to other agencies of the Government, such as the preparation of estimates of appropriations; the appointment of personnel and maintenance of personnel records; the procurement of material, supplies, and equipment; the accounting for public funds; the rental of quarters, and related matters.'

It would not appear possible to define precisely the President's power under this provision. He is given the power to transfer to an executive department "routine", administrative and executive functions which are "common" to other

agencies. Some further limitation appears to be implied from the classes of routine functions specifically mentioned following the words "such as.' There are decisions of the courts which hold that the specific mention of particular matters restricts the meaning of general provisions which precede them, and under this construction the powers of the President would be limited to the classes of things having the nature of preparation of estimates of appropriations, appointment of personnel, procurement of materials, accounting for funds, rental of quarters, and "related" matters, to the exclusion of such matters as the whole work of administering any provision of the Communications Act.

It seems clear under the rule of ejusdem generis, as interpreted in the decisions that the words "related matters" have a rather closely restricted meaning as here used, and include only such things as fall clearly within the classes of matters specifically mentioned.

However, considering the over-all effect of section 2 (c), it must be said that the rules of statutory construction will be made to yield so as to give full effect to the intention of the legislature, which is to be ascertained by reference to the law as a whole and by reference to the committee reports and other recognized aids to interpretation. It would appear that to some extent, at least, section 2 (c) is ambiguous and thus subject to interpretation.

It should be observed that upon the basis of a narrow interpretation of section 2 (c) the President has the power to place under an executive department by Executive order matters such as the preparation of estimates of appropriations and the appointment of personnel, which are of primary concern to the Commission in carrying on its work and which are now vested in the Commission.

No provision is made for public hearings such as often take place before the committees of Congress in connection with the investigation of any matters of reorganization of the type dealt with by the bill.

It should be emphasized that while the bill gives the President the power to accomplish these things by Executive order, this power is further limited by the necessity for laying the same before the Congress prior to becoming effective. Section 202: This provision affects the Commission only to the extent that it authorizes the Civil Service Administrator to prepare and recommend to the President plans for the development and maintenance of a career service in the Federal Government.

Section 203: This section relates to Presidential appointments and provides that any offices or positions to which an appointment is now to be made by the President alone shall be filled by appointment without term by the head of the agency under which the office is located. There is expressly excepted from this provision any "policy-determining" office or position, and any officer or head of a bureau or division or service directly responsible to the head of an executive department or agency. The provision is a limitation on the powers of the President under 2 (c).

The office of Federal Communications Commissioner is clearly outside the provisions of section 203, as such an appointment is not authorized to be made by the President alone and would also undoubtedly be found to be policy-determining. It is unlikely that section 203 (a) affects any office under the Communications Commission. The provisions of paragraph (b) of this section, authorizing the President, by and with the advice and consent of the Senate, to fill vacancies in policy-determining offices, would appear to leave unchanged the present situation with regard to the appointment of commissioners.

Section 204: So far as it relates to the Commission this provision would appear to extend by its own terms, upon the expiration of 1 year after the enactment of the bill, the classified civil service so as to include the following positions under this Commission: The secretary, the director of each division, the chief engineer and his three assistants, the chief accountant and his three assistants, the general counsel and his three assistants, and the secretaries of the commissioners. This provision is subject to a determination by the President that the foregoing offices are now "policy-determining" in character. In the case of the secretaries to the commissioners, it is also subject to a determination that a "confidential relationship" does not exist between the "head" of the Commission and the person holding the office of commissioner's secretary.

Section 206: This provision provides a method for covering such offices into the classified civil service and provides for a probationary period and for “noncompetitive" examinations.

Section 207: This section gives the President the power to find that an office or position is not policy-determining in character and to cover such office or position into the classified civil service, provided that the incumbent of any such office or position which has previously been excepted from the classified civil service

as policy-determining in character shall not acquire a classified civil-service status, except by appointment as the result of open "competitive" examination.

Subsection (b) of this section gives the President the power to make exemptions from civil service in the case of "confidential relationships" and may give the President discretion to exempt not only the secretaries to the commissioners, who are not now under the civil service, but also the assistant secretaries who are now under civil service.

Section 208: Under this provision the Classification Act is extended to various additional offices not now included thereunder, and a new provision is made for adjustments of rates of compensation under said act within specified limitations. Section 211: This provision declares that nothing contained in the bill shall be construed to prevent promotions in accordance with civil-service laws.

Section 501: Subject to regulations prescribed by the President, this provision confers power upon him and the heads of independent establishments, including the Commission, to appoint and fix the compensation of experts and consultants for temporary periods without regard to civil-service laws. The present power of the Commission in this regard is limited to appointment of temporary counsel, and the provisions of section 501 would appear to make possible, under proper circumstances, the appointment of engineers, accountants, economists, and other expert consultants for special temporary work, in addition to lawyers.

II. COMMENT

The Federal Communications Commission was created by act of Congress approved June 19, 1934. The express purpose of the President in asking for the passage of the Communications Act and of Congress in enacting it was to secure a more effective execution of the national communications policy "by centralizing (in the Commission) authority heretofore granted by law to several agencies" (sec. 1, Communications Act of 1934). This purpose, intended to be fully covered by the provisions of the act, coincides closely with the declared standard contained in section 1 of the bill S. 2700.

It may be said the Communications Act was well designed to accomplish the objects of increasing efficiency, coordinating activities with relation to the major purpose of regulating communications, and that it has resulted in the elimination of overlapping and of duplication of effort. The experience of the Commission has indicated that there have been segregated under its head functions distinct from those of other Government agencies and functions which have as their object the accomplishment of a single major purpose of Government.

In carrying out its regulatory functions, it is submitted that the Commission has found a certain amount of coordination necessary with several of the executive departments, including, particularly, the Department of State, the War Department and the Navy Department, the Department of Commerce, and the Department of Justice. There has not seemed in this work of coordination any substantial impediment to the realization of joint objectives of the effectuating of coordinate governmental policies; nor has there been apparent any appreciable overlapping or avoidable duplication of effort.

The general plan of the Commission, having administrative, executive, quasilegislative, and quasi-judicial functions, has seemed well suited to the particular problem delegated to it by Congress; that is, of regulating interstate and foreign communication by wire and radio.

Section 1 of the bill provides for investigation by the President of the organization of the various agencies of the Government, and it may be that the Commission will consider it appropriate, in lieu of an expression of views on this provision, insofar as it may affect the Commission, merely to furnish information to the Congress based on the experience gained during the 3 years of its existence. It is our understanding that the Commission has not been asked to comment on the possible effects of the bill considered in its broadest aspects as it might or could change or affect the ultimate responsibility as between the executive and legislative branches of the Government for the carrying out of its mission.

Section 2: The changes which are, in contemplation under the provisions of section 2 which may affect this Commission are to be brought about through Executive order, which would issue after investigation and determination by the President.

It may be observed that important changes in the organization of the independent establishments have heretofore been brought about by direct action of the Congress which has usually been taken after public hearings before its committees. The bill, S. 2700, would permit, but no require, that opportunity be given to those particularly familiar with the problems of an organization to give evidence before the making of a final determination.

Sections 202-204: The Commission will no doubt desire to offer comment, based on its experience, as to the need for development and maintenance of a career service in the Federal Government. Regulation of communications is a vital concern of Government. Communications are a powerful force in the preservation of peace and the first line of defense in time of war; the availability of adequate communications is essential to the conduct of trade and the transaction of all the business of the nation. In such an undertaking there is a special need for trained and qualified personnel, loyal to the interests of the Government, appointed on merit alone.

Sections 206-208, 211: Reference is made to the analysis of these provisions contained in part I of this memorandum.

Section 501: The law department desires to emphasize the particular need in connection with the Commission's work of a provision such as that contained in section 501 for the temporary employment of experts and consultants without regard to the provisions of the laws generally applicable to employment and compensation of Federal officers. Section 4 (f) of the Communications Act now contains a provision for the appointment of temporary counsel for the performance of special services, and the specialized work of the Commission is such as to make desirable the extension of such provision to other offices such as engineers, accountants, and economists available when the need arises.

Respectfully submitted.

HAMPSON GARY, General Counsel.

Senator BYRD. Mr. Sykes, as to section 207, do you construe that to give the President the right to blanket the employees within the civil service without any kind of examination?

Mr. SYKES. I would be inclined to so construe it, sir.

Senator BYRD. In other words, any of these thousands of employees that never took a civil-service examination you believe could be blanketed in without any examination at all?

Mr. SYKES. Let me look at that section, Senator. That is section 207 is it not?

Senator BROWN. Page 15.

Mr. SYKES (reading):

Whenever the President finds that an office or position is not policy-determining in character, he is authorized by executive order to cover such office or position into the classified civil service: Provided, that the incumbent of any such office or position which has been previously excepted from the classified civil service as policy-determining in character shall not acquire a classified civil service status except by appointment as the result of an open competitive examination.

No, sir, I think he would have to take the examination to get into the civil service there.

The CHAIRMAN. Judge, will you look at section 206, on the other page, the preceding page? It says:

The incumbent of any office or position which is covered into the classified civil service under the provisions of this title shall not thereby acquire a classified civil service status, except (1) upon recommendation of the department, and (2) upon passing such suitable noncompetitive examination as the administrator may prescribe.

Would you not think that that would effect, when it says, "any office or position which is covered into the classified civil service under the provisions of this title"?

Mr. SYKES. I think that is the object of it, Senator, but that might be clarified a little, I should think, to make it perfectly clear.

Senator BYRD. It is claimed, though, that they are not to be competitive examinations.

The CHAIRMAN. Noncompetitive.

Mr. SYKES. Noncompetitive; yes, sir.

Senator BYRD. Judge, would you mind teiling the committee what you regard as a confidential relationship? In other words, if a con

fidential relationship exists between the head of an executive department, and so forth, the President then has the power to exempt that person from civil service.

Mr. SYKES. The only place for a confidential relationship, Senator, I think is your personal secretary. It would the personal secretary of a Commissioner, not of anyone else.

Senator BYRD. You say your personal secretary. Why should it be confined to your personal secretary? There certainly are other confidential matters in other departments of the Government, the Bureau of Internal Revenue, Taxation, there are any number of confidential relations that exist which, under this provision, the President could exempt from civil service. I just ask for information, as to why it should be confined to your personal secretary alone... Haven't you got other confidential matters?

Mr. SYKES. We have confidential matters, but not as opposed to the confidential relationship.

Senator BYRD. What is a confidential relationship? Explain your interpretation.

Mr. SYKES. Oh, well, I would assume that was the secretary who was the head man in your office, who did everything you told him to do.

Senator BYRD. I should think there is no more confidential relationship there than in any other place.

Mr. SYKES. They are usually regarded as such. That is about the only one that I really know of.

Senator BYRD. I do not see why a personal secretary should have a confidential relationship and no one else should have it who deals. with confidential matters.

Mr. SYKES. It is rather hard to define as to what would be confidential relationships.

Senator BYRD. That is rather ambiguous, in your judgment, in this bill, is it not?

Mr. SYKES. Yes, it might be. Mr. Chairman, I would like to state this about section 2 (c), before we leave it, which has been discussed by Commissioner Eastman of the Interstate Commerce Commission. In addition to certain matters to which he has called your attention I would like to call your attention to the fact that if the power to employ and the power to discharge for cause are taken away from a commission I fear very much for the efficiency of the operation of that commission.

Senator BYRD. You do agree, do you not, with Mr. Eastman that that does give the President the power, or rather the executive department to which these functions are transferred, the power to appoint the personnel?

Mr. SYKES. It gives him power to transfer that to some other department.

Senator BYRD. Then it gives the department the power to appoint the personnel?

Mr. SYKES. The other department.

Senator BYRD. The other department, and that would include all the personnel, I imagine, except the Commissioners themselves. Mr. SYKES. I should so construe it.

Senator BYRD. In other words, it would even include the confidential secretary?