September 1937, and that committee has not yet finished the draft of a bill. The president of the American Bar Association has stated that it was expected that draft would be completed and submitted to the board of governors for its action of May in this year. The president has also requested that the opportunity be afforded to Dean Pound of Harvard University, now chairman of the committee, and all members who are interested in this problem, to testify at subsequent meetings of this subcommittee of the Judiciary Committee.

Senator LOGAN. You will please advise the president of the American Bar Association and Dean Pound that this committee is trying to do something of a constructive nature; that it has no pride of opinion as to authorship; and that it wants all the help we can get. If the American Bar Association brings here a bill that is an improvement over this bill in any respect, we will be very glad to accept it. We are trying to get something started. We have been working 10 years without even a hearing. The American Bar Association has a hard time to reach any definite conclusion. You may deliver that message.

Mr. MCGUIRE. Very well.

Senator LOGAN. Have you anything further?
Mr. MCGUIRE. I think not at this time.

(The documents heretofore referred to, "A bill to provide for the more expeditious settlement of disputes with the United States and for other purposes," and the "Report of the special committee on administrative law to the American Bar Association," respectively, are here set forth in full, as follows:)

A BILL To provide for the more expeditious settlement of disputes with the United States and for other purposes

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled:

Section 1. IMPLEMENTING RULES AND REGULATIONS.-That within one year from the effective date of this act and with the approval of the President, the head of every department or independent establishment of the Federal government, including every board, commission, authority, or other agency of the United States (hereinafter in this Act referred to as department), after publication of notice to and hearing interested parties shall issue rules and regulations to implement every statute commencing with the United States Code and all statutes thereafter or hereafter enacted from time to time), affecting persons or property, required to be administered or enforced by such department, by rules of procedure and definitions of policy for the purpose of filling in the details of such statute. Such rules and regulations may be amended from time to time with the approval of the President. All such rules and regulations and amendments thereof shall be published in the Federal Register within ten calendar days from the date of their approval by the President, and shall not be effective until published, except in a public emergency stated in the regulation. No provision of any statute affecting any obligation, privilege, license or permit shall apply to any act done or omitted in good faith in conformity with a rule or regulation or amendment thereof even though the rule, regulation or amendment has been judicially determined to be invalid. This period of immunity shall extend only for thirty calendar days from the date of publication in the Federal Register of notice of the judicial determination of the invalidity of the rule, regulation or amendment thereof. No court shall hold any rule, regulation or amendment invalid except when it violates the Constitution of the United States or is in excess of the authority conferred by the statute or statutes pursuant to which it is issued.

Explanation. The purposes of this section are: (1) To require the issuance of rules and regulations defining both the adjective and substantive details of Federal statutcs; (2) To authorize and require public notice and

hearing if requested prior to such issuance of the rules and regulations; (3) To provide a method by which the subordinate officers and employees of the Government may be controlled, in their administration of the statutes; (4) To provide a method whereby business men and others may be advised in advance of administrative action determining particular cases as to the administrative interpretation of the statutes; and (5) To protect the citizen acting in good faith in accordance with rules and regulations for a reasonable period after the rule or regulation is rescinded, amended, or held invalid. The basic statute in this matter is section 161, Revised Statutes, which originated in the act of July 27, 1789, 1 Stat. 28. This section provides that: "The head of each Department is authorized to prescribe regulations, not inconsistent with law, for the government of his Department, the conduct of his officers and clerks, the distribution and performance of its business, and the custody, use, and preservation of the records, papers, and property appertaining to it."

Many statutes relating to particular subject matters likewise contain authority to issue rules and regulations. Possibly the best of these provisions is contained in the recent Securities and Exchange Act of May 27, 1933, 48 Stat. 85, as amended by the act of June 6, 1934, 48 Stat. 908, as follows: "The Commission shall have authority from time to time to make, amend, and rescind such rules and regulations as may be necessary to carry out the provisions of this title, including rules and regulations governing registration statements and prospectuses for various classes of securities and issuers, and defining accounting and trade terms used in this title. No provisions of this title imposing any liability shall apply to any act done or omitted in good faith in conformity with any rule or regulation of the Commission, notwithstanding that such rule or regulation may, after such act or omission, be amended or rescinded or be determined by judicial or other authority to be invalid for any reason."

There are many decisions of the courts holding that rules and regulations issued pursuant to, and in conformity with law, have the force and effect of law. United States v. Eaton, 114 U. S. 677; Caha v. United States, 152 U. S. 219; Haas v. Henkel, 216 U. S. 462; United States v. McDaniel, 7 Peters 1; Boake v. Comingore, 177 U. S. 459; Merrill v. Jones, 106 U. S. 466; Ex-Parte Reed, 100 U. S. 13; Sherlock v. United States, 43 Ct. Cls., 161; Exparte Curtis, 106 U. S. 371; Campbell v. United States, 107 U. S. 407; United States v. Foster, 233 U. S. 515; United States v. George, 228 U. S. 14.

Generally speaking, the practice in this country has not been to issue rules and regulations after notice and hearing of interested parties. As this Committee stated in its 1936 report to the Association, the Supreme Court of the United States held in the Panama Refining Company, 293 U. S. 388, 415, and Schechter, 295 U. S. 495, cases, that one of the three requisites for the exercise of delegated legislative power-or the issuance of rules and regulations having general application was a requirement of a finding by the administrative agency in the exercise of the authority delegated. The English practice is for notice and hearing.

The First Parliamentary Counsel corresponding somewhat to the Legislative Counsel to the Senate and to the House of Representatives-stated to the Committee on Ministerial Powers (appointed by the Lord Chancellor to investigate the charges made by Lord Chief Justice Hewart in his book, The New Despotism) that:

"In my opinion one of the most important safeguards against the improper use of delegated powers (though this applies much more as respects Regulations of a personal or local character) is the fact that no Minister in his senses with the fear of Parliament before his eyes would ever think of making Regulations without (where practicable) giving the persons who will be affected thereby (or their representatives) an opportunity of saying what they think about the proposal.'

The Procurator-General and Treasury-Solicitor of England stated before the same Committee that:

"It is, I think, important that due notice should be given of any intention on the part of a Department to make new rules and regulations. This is in fact secured very fully at the present time, because organizations of trade, professional and other interests, has proceeded so fast of late years that it can rarely, if ever, happen that there is not somebody whom a Department can consult before rules, regulations, or orders are made affecting the interests of the persons whom that body represents, and these organized bodies are in practice always consulted and an expression of their views obtained.”

The said Committee on Ministers' Powers recommended that the Rules and Publications Act of 1893 be extended to include all rules and regulations and that:

"The system of the Department consulting particular interests specially affected by a proposed exercise of law-making power should be extended so as to ensure that such consultation takes place whenever practicable."

We think that there should be a legal requirement for notice and opportunity for hearing before rules and regulations are issued, more particularly since we propose to expand the terms of section 161, Revised Statutes, supra, so as to require that the rules and regulations shall deal with both the adjective and substantive law sides of any statute the department or other agency may be required to administer. At present, except for the Bureau of Internal Revenue, Bureau of Customs, and the Securities and Exchange Commission (the latter having a special statute to that effect, as above quoted), the Department of Agriculture and the Interstate Commerce Commission, the various agencies of the Government generally limit their rules and regulations to the adjective side of the law.

Such a limitation is unsatisfactory for a number of reasons: First, business men and their legal advisers as well as labor organizations and their advisers or any other individual or group affected by a particular statute can not find out in advance of the trial and error method-suit by or against the United States or its officers, where such an action will lie-what the statute actually means or what the administrative officers of the Government think it means. There is no existing procedure by which an advisory opinion may be obtained from the courts and jurisdiction could not be conferred on the constitutional courts to render such opinions. Such jurisdiction could be conferred on the legislative courts, but it would be dangerous from the standpoint of the courts because organized minorities displeased with an advisory opinion might bring about the abolishment of the court, as was done with respect to the earlier Commerce Court.

Second, the courts are not expert administrators and are not familiar with the administrative processes. Generally speaking the judges of the courts lack the necessary first hand information to enable them to implement the statutes by advisory opinions even if it were not otherwise undesirable to give them such jurisdiction. Third, law-making, whether by statute or rules and regulations-is essentially a political function and to require the courts to legislate from case to case in filling in the details of statutes is to bring them into conflict with the other two political branches of our Governmentthe Legislative and the Executive. If, as proposed, the political branches of the Government be required to fill in the details of the statutes, both adjectively and substantively, the courts will not be required to do so and they may then perform their intended function of judging whether the statute is constitutional, whether the rules and regulations are in accord with the Constitution and statute under which issued, and whether the facts bring the case within or without the statute and regulations.

By such procedure we accomplish a double purpose: (1) We enable the citizen to find out what the administrative officers may think the law means without having to go to court, either as a defendant or plaintiff; and (2) We have the details of the statutes filled in by the administrative officers, who are familiar with the administrative problems and processes, rather than by the courts and we protect the courts from the warring social and economic forces diverting their hostility to the political branches of the Government which are responsible for legislating in accordance with the terms of the Constitution.

Further, the proposed section intends to protect the citizen or other person acting in accordance with a rule or regulation for thirty calendar days after the rule or regulation is rescinded or held invalid and notice to that effect has been published in the Federal Register. As the law now stands, a rule or regulation, affords no protection unless it is in accord with the law. Whether it is in accord with the law must be found out after a suit in the courts with the person affected being either a defendant or where suit may be maintained on the merits against the Government—a plaintiff. This is a long, expensive, and unsatisfactory process. This newer thought in respect to legislation is incorporated in the above quoted terms of the Securities and Exchange Act, but it does not go far enough in extending immunity for a period of thirty calendar days after publication of notice of the invalidity of the rule or regulation so as to enable the person affected to secure notice and readjust his business or professional practices accordingly.

This plan has had a period of more than two years of trial as to the District of Columbia compensation statute. Shortly after it was enacted, the statute was implemented under the able direction of the then Corporation Counsel. During its two or more years of operation there has been no litigation thereunder while a very similar statute in one of the States has resulted in several hundred law suits during the corresponding period. Moreover it stands to reason that such would be the result of careful and correct implementation of statutes. The practice is a common one in both France and Germany. Sec. 2. JUDICIAL REVIEW OF RULES AND REGULATIONS.-That in addition to the jurisdiction heretofore conferred upon the United States Court of Claims, such court shall have exclusive jurisdiction, upon petition filed in accordance with the rules of the said court, to hear and determine whether any rule or regulation issued in accordance with Section 1 of this act is in accordance with the Constitution of the United States and the statute under which it is issued. Upon the filing of any petition alleging the invalidity of a rule or regulation, the Court of Claims, may refer such petition and any reply thereto, whether by answer, demurrer, or otherwise, to a commissioner of said court for the taking of such evidence as shall be material and relevant thereto. The Court of Claims shall have no power except to approve or annul the rule or regulation, and if annulled, the said rule or regulation thereafter shall not have any force or effect except as to the period of immunity as provided in section 1 hereof: Provided, That nothing contained in this section shall prevent the determination of the legality of any rule or regulation which may be involved in any suit in any court of the United States as now or hereafter authorized by law.

Explanation. The United States Court of Claims was established in 1855 and it now has the jurisdiction defined in Chapter 7, Title 28, Section 241 to 293, U. S. Code. It is not a constitutional but a legislative court. See Williams v. United States, 289 U. S. 559, with which compare United States v. O'Donoghue, 289 U. S. 516. This means that the jurisdiction of the Court of Claims is not limited to a "case or controversy" as are the courts organized under Article III of the Constitution but may have such jurisdiction as the Congress sees fit to confer on that court.

It is a court of more than three-quarters of a century of experience and its opinions are reported in some eighty volumes of reports. Except for customs matters that court hears and determines money claims and demands against the United States arising under practically the entire field of Federal statutes. It is thus familiar with a great deal of Federal law, rules and regulations and it has functioned exceedingly well during the long period of its existence. It has earned, and we think, commands the respect of the Supreme Court of the United States and of the litigants before said court. Absolute perfection can not be expected of human institutions but by and large, the Court of Claims has discharged its important and responsible duties toward both the Government and private litigants in a most acceptable manner.

The proceedings before that court is by a suit de novo against the United States except in a few instances set forth in Chapter 7, Title 28, U. S. Code, which are not material here. The court is equipped with commissioners who hear the evidence and submit their findings of facts to the court which the court may accept, modify, or reject as it sees fit in particular cases. The judgments of the court are reviewable by certiorari in the Supreme Court of the United States and questions may be certified for decision—the review procedure being substantially identical with that relative to the United States Circuit Courts of Appeal.

The validity of a rule or regulation may now be raised in any case where the courts have jurisdiction of the particular classes of actions. The procedure is illustrated in the cases which have been cited in the EXPLANATION to section 1 of the draft, sixth paragraph. The proviso to this section 2 would continue that procedure. However, there are a considerable number of cases where no court has such jurisdiction of the controversy that the merits of the case may be placed in issue and the validity of the rule or regulation judicially tested.

The first purpose of this section 2 is to correct that defect in our procedure by conferring jurisdiction on the Court of Claims to determine whether the rule or regulation is in accordance with the Constitution and statute or statutes under which issued. The procedure selected for that purpose is by petition to the court.

This procedure will enable the citizen or other person affected to test the legality of the rule or regulation before such person takes action in accordance

therewith if for any reason it is believed that the rule or regulation is in excess of the powers conferred on the particular Department or other agency. The effect of a negativing judgment of the court in such a proceeding will be to annul the regulation; render it invalid for all future purposes. However, as to action taken by others prior to the invalidity having been declared by the Court of Claims, any question as to such action may be raised by others in the merits of their particular cases invalid by the Court of Claims the individuals affected may nevertheless raise the validity of the regulation in a suit by them on the merits of their cases or if and when the United States should bring suit against such persons.

That is to say, section 2 gives a right where none now exists and does not take away any existing right.

The English procedure is generally to lay the rules and regulations before Parliament. The Procurator-General and Treasury-Solicitor, in the above referred to statement before the Committee on Ministers' Powers, said:

"On the second point, viz., the need of securing some means whereby the public are protected against the undue exercise of Departmental powers, the two main safeguards are, or should be, parliamentary criticism and the action of the courts. Also, that the protection of the public which is not represented by organized minorities "must necessarily rest in the hands of their parliamentary representative, who can at a later date criticise the action of the Minister of Parliament, a fact which the Minister is bound to bear in mind before the regulations are actually made."

We need not particularize the fact that in England the heads of the principal Departments are members of the House of Lords or of the House of Commons and that a Minister is answerable on the floor of his respective House for the discharge of the duties of his particular department a form of procedure which we do not have in this Country.

The procedure for laying rules and regulations before Parliament to be annulled within a given period would not be satisfactory in this Country because the head of Departments, independent agencies, etc., are not members of either the Senate or the House of Representatives and consequently to questioning on the floor of either House; there is not a procedure of dissolution of Congress and going to the Country for reelection when a vote of confidence is denied; the vast extent of this Country and the volume of business make it practically impossible for members of Congress to take on further duties; and the considerable turnover in personnel in Congress deprives the Federal government of the services of many experienced men, a situation not obtaining in England where membership in the House of Lords is hereditary and where members of the House of Commons may stand from any constituency.

As stated, the Court of Claims is a legislative court, created to assist the Congress in disposing of many detailed matters, principally of claims, and that court could very properly consider, annul, or affirm rules and regulations.

We have somewhat similar procedure in the Federal Declaratory Judgment Act of June 14, 1934, Public, No. 343, and the Court of Claims has exercised a somewhat similar jurisdiction for many years. See Chapter 7, Title 28, Sections 253, 254, 255, 256, and 257, U. S. Code. Further, the Supreme Courts of a number of the States have jurisdiction to render advisory opinions. No concrete case is submitted for such advisory opinions. Also, the Attorney General of the United States, since the foundation of the Government, and the Comptroller since 1894, have had jurisdiction to render advisory opinions to certain officers of the Government; these opinions are frequently rendered on the abstract questions of law; and the procedure is a necessity in the conduct of the administrative machinery of the Federal Government.

We think that section 2 of the bill will give a much needed, expeditious, and inexpensive method of determining the validity of rules and regulations and that such action will uphold the hands of law officers of the Government who are not infrequently influenced in their decisions or opinions by lay direction. The procedure will insure the rules and regulations being issued within the four corners of the constitutional and statutory authority of the Governmental agency concerned.

Sec. 3. (a) STATUTORY APPROVAL AND AUTHORITY FOR ADMINISTRATIVE BOARDS AND PRESCRIBING THEIR PROCEDURE.—That every head of a department shall from time to time designate three employees of such department for each intradepartmental board (including the field services of such department) which may