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Senator NORRIS. Now, that would depend, Mr. Lee, upon the business. If in the business it was a disadvantage to have a license and the man who did not apply for a license, did not want one, would think that it was a disadvantage-in other words, if he had some burdens, some duties to perform under the license he has reports to make, for instance, that he wants to avoid-he probably would not want a license, yet he could be compelled to take out a license and operate under a license if his adversary, his competitor, was doing anything that the Secretary thought was wrong, that he wanted to regulate. In other words, he would have no right to regulate anybody unless he made them take out a license, would he? Mr. LEE. Not as to unfair practices or charges; no.
Senator MCGILL. Would he have the right to require these reports? Would he be able to get these reports on agricultural commodities otherwise ? Mr. LEE. No; those only apply to licenses.
Senator MCGILL. And necessarily he would almost have to require the license in order to get the reports?
Senator NORRIS. He could not get reports from anybody who did not have a license, unless they made it voluntarily.
Secretary WALLACE. It seems to me it will be necessary to have greater uniformity of licensing than Mr. Lee contemplates.
Senator MCGILL. If you have any trouble; yes.
Secretary WALLACE. But I agree to some extent with Senator McNary, that you want to avoid licensing so far as possible, but you have power over, we will say, the entire flour-milling industry, in case certain members misbehave, where they are impugning the honesty of the industries, and they would be subject to the possibility of being licensed, and that would tend to invoke the moral suasion within the industry to keep those people in line.
Senator NORRIS. It may be entirely necessary to license everybody, but it ought to be avoided if possible, because there are a great many people who rather resent the interference with their personal liberty.
Senator WHEELER. I would not hesitate for a second to license all of these people in the grain trade, because
Senator NORRIS (interposing). It may be necessary.
Senator WHEELER (continuing). Because the reports of the Department of Commerce, the reports of the Federal Trade Commission, have shown beyond a question of doubt, in my judgment, that they have robbed the people out there, and I think the Secretaryas a matter of fact, I do not think you are ever going to correct that evil until such time as you give the Secretary of Agriculture, if possible, the power to license them all. I mean that idea does not bother me at all.
Senator FRAZIER. I think the only fair way would be to license every grain dealer and every miller engaged in handling wheat. That would prevent any criticism of unfair play or partiality if the order went out to license every one of these grain dealers and millers and that they must comply with the regulations or lose their license to buy grain or mill this flour. There would be no question about that at all. Senator WHEELER. That is my view about it.
The CHAIRMAN. Let us suppose that after the purpose of this bill is declared, the Secretary finds that the grain dealers and millers
are in line and are going along, carrying out the purposes of the bill; it would not be necessary to require any license at all if they voluntarily conformed to the purposes of the bill.
Senator FRAZIER. If you knew the grain dealers as we do up in our country, you would not put a proposition of that kind to them.
Senator NORRIS. They would not do that—at least, there will be some who would not.
Senator WHEELER. I introduced a resolution that passed the Senate the other day, calling upon the Secretary of Agriculture for information with reference to what they did while the Farm Board has been operating; and I will venture the assertion that when the Senate gets that report back, if we get correct information, you will see how they have operated even when we have been passing legislation for the purpose of assisting the grain trade.
Senator NORRIS. Let me ask another question along that line. The Secretary of Agriculture can revoke the license. A man or a corporation engaged in the business of milling or processing cannot operate without a license, we will say. The Secretary had made such regulations that required him to get a license. He gets a license and he has a hearing on some charge made against him, and the license is revoked. Is there any appeal provided in the bill ?
Senator WHEELER. He could always appeal to the courts.
Senator McGILL. The provisions of the bill, as I read them a minute ago, provide that he has no appeal.
Senator NORRIS. Well, then, if he does not have, are we running into Supreme Court, constitutional, legal proposition?
Senator WHEELER. Is not this true: Supposing no appeal is provided; he can always go to the courts, and if the Secretary of Agriculture exercises an arbitrary action, takes an arbitrary position in the matter, the court will grant his petition.
Senator NORRIS. Senator Wheeler, the result would be a very severe penalty. The man would be completely put out of business. He could not stay in business at all if his license were revoked. In other words, it takes away from him his entire business.
Senator WHEELER. He always has a recourse open to him, provided there has been an arbitrary exercise of power.
Senator NORRIS. I would rather have some method provided in the law for an appeal rather than to let them take the general law, because the first thing he would do, I suppose, would be to get an injunction, and the Secretary would be confronted with these injunctions from these fellows, and they would stay in the courts and go to the Supreme Court of the United States, and it would be 4 or 5 years before it would be determined, and in the meantime he would be forbidden by an order of some court from performing his functions under the act.
Senator McGILL. I might have failed to get the point there, but what I have in mind is on page 10
The action of any officer, employee, or agent in determining the amount of and in making any rental or benefit payment shall not be subject to review by any officer of the Government other than the Secretary of Agriculture or Secretary of the Treasury.
That is what I had in mind. It would not be applicable, I think, to the particular situation you cite.
Senator McNARY. Mr. Secretary, under the language in section 2 he could compel every cooperative association, even the milk producer raising hogs, to take out a license before they could transact their business.
Secretary WALLACE. Yes; I think so.
Senator MURPHY. We have run into violations of the Antitrust Act already in the agreements between processors and producers. regarding prices.
Secretary WALLACE. It is stated at the bottom of page 6 and top of page 7 that,
Such licenses shall be subject to such terms and conditions not in conflict with existing acts of Congress.
Senator WHEELER. It would not affect the Sherman antitrust law any in my judgment.
Mr. EZEKIEL. The language of paragraph 2 modifies the application of the antitrust laws to a degree and in the same way that the Capper-Volstead Act modifies the application of the antitrust law to cooperative marketing associations again under the discretion of the Secretary of Agriculture instead of the Department of Justice.
Senator NORRIS. Mr. Lee, may I ask you what is your idea about the advisability of putting in this section a provision for appeal, so as not to leave it—they will get into court anyway, but if you provide a way to get into court they will have to follow that way, if we are not unreasonable in it and provide a method of appeal through the Secretary of Agriculture to the courts.
Senator WHEELER. You mean, for instance, in case the license is revoked?
Senator NORRIS. Yes; suppose he revokes the man's license and he wants to appeal.
Senator WHEELER. We do that very thing with reference to the Radio Commission. For instance, we provide an appeal to the courts.
Senator NORRIS. We did that in the law that we passed several years ago.
Mr. LEE. Perishable products.
Senator NORRIS. No; I was thinking about the Marketing Act, I guess.
Senator WHEELER. I cannot see any objection to it whatsoever.
Senator BANKHEAD. An appeal would suspend action, would it not, and thereby would not many corporations be disposed to appeal whether there was merit in it or not?
Senator WHEELER. No, all you would do, Senator, is this—as I understand Senator Norris—in the event that they resort to the license system, for instance, of all the grain trade, then one man is. charged with a violation of the provisions of the license and the rules and regulations of the Department; in that event, if his license is suspended, that particular individual has a right to appeal from the decision of the Secretary of Agriculture revoking his license, to the courts. It does not affect the general situation.
Senator Norris. My idea in putting it in is to provide a method that will not be as long as it would be if we did not put anything in. What I am afraid of now is that when you revoke a license—and it is a pretty severe thing to revoke a man's license; he has got the savings
of a lifetime involved in his business, and probably is no good, and under the due-process clause of the Constitution he could go into Federal court and get an injunction against the Secretary of Agriculture, starting in with the district court—some Federal district court—and get an injunction, and that would run along for a year or more until he got up to the Supreme Court of the United States.
Senator BANKHEAD. The point in my mind is that in providing an appeal I do not think there is sufficient authority without violation of the due-process clause.
Senator NORRIS. But, Senator, on the theory that it would be a protection to the carrying out of this law to rather shorten by statute the method by which he could get into court—and we cannot keep him out of court; that would be unconstitutional.
Senator BANKHEAD. But that is not the question. What I am driving at is this: I have no objection to it, but could we not provide some short method for determination?
Senator NORRIS. That is what I want to do. I want to make it just as short as I can, with the idea of making it shorter than it would be if we did not put anything in the law, because if we do not put anything in, then under that provision of the Constitution, the due-process clause, it seems to me clear that they can go into court, and they would have a right to.
Senator WHEELER. There is no question at all in my mind but what the Secretary of Agriculture could administer this; that we could pass this law just as it is and make it stand up in the courts.
Senator BANKHEAD. I think so.
Senator WHEELER. I do not think there is any doubt about it; but on the other hand, I agree with Senator Norris that as a matter of protection for the producers themselves, and for the carrying out of the law, it would be better to make such a provision, because here is what you would have come up: The man whose license was revoked would go into the Federal court; he would immediately get out an injunction attacking this whole provision, and might tie up the working of the whole licensing provision of the law; whereas, if he had a direct appeal to the courts, he would not then get out an injunction, he would appeal and he would probably raise the constitutionality of the question in his appeal as to the right of the Secretary of Agriculture to revoke his license, but it would not tie up the whole working of the law as it would if he got out an injunction against the Secretary of Agriculture enforcing the whole clause, and for that reason I think that Senator Norris is correct.
Senator McGILL. He would have the right of appeal as to whether the Secretary had acted arbitrarly or in conformity with the law.
The CHAIRMAN. Could there not be written in here a provision that the Secretary would have the right to call attention to this practice and give a period of time in which the one who is guilty of the infraction of the rule might conform to it?
Senator McNARY. Is not that already the existing statute known as the Volstead-Capper Act? I think it is.
Senator NORRIS. We have been putting these provisions in provisions for years. The bill I was trying to think of a while agothe law I was trying to think of a while ago in which we put one was the Stockyards Act.
Senator McNary. Yes; the Stockyards Act, and it is in the Capper-Volstead Act.
Senator WHEELER. We have put the provision in reference to appeal in practically everything.
Senator NORRIS. In pretty nearly every one, as I remember.
Senator NORRIS. What do you say about it, Mr. Lee? Do you think such a provision is advisable? Do you not think that if you leave it just as it is, any person whose license is revoked would have a right to go to the Federal court if you said nothing about it?
Mr. LEE. I think you and Senator Wheeler have stated the situation fully. If there were an error of law, such as failure to give due notice or opportunity for hearing
Senator NORRIS (interposing). Due process.
Mr. LEE. Or failure to revoke because of a violation of the terms of the license; if there were no evidence, no substantial evidence to sustain the action of the Secretary, all those questions could go to the Federal court. If you had an appeal provision, of course that would cover it in much greater detail; if not, they would go before the Federal court by-extraordinary reference, presumably an application for a mandatory injunction restraining the Secretary from revoking or suspending the license.
Senator WHEELER. Let me ask you this, Mr. Lee: Supposing you do not have the right of appeal in there; then the man, for instance, would go into the Federal court and ask for a mandatory injunction, attacking immediately the whole licensing provision, would he not, and he might tie up the operation of that whole provision; whereas, if he appeals, if you provide a method of appeal, he then would not tie up the operation of the whole law, because he would only be trying out his own specific case. Of course, the court might finally determine that the right to license in the Secretary was in violation of the constitution and that we had exceeded our authority when we gave this arbitrary power to the Secretary
Mr. LEE. That is correct, Senator. In addition, though, you have to recognize that any class of persons who were contemplated or were required to have licenses as the result of the regulations of the Secretary could enjoin or go to court and attempt to enjoin the Secretary from putting into effect that particular provision, and there you have a constitutional test.
Senator WHEELER. There is this thought in my mind : I have not looked it up, but the thought occurs to me from the statement which you made a while ago of this question, that I would doubt offhand that the Secretary of Agriculture could say to John Jones, who is engaged in processing wheat, “ You have got to take out a license, but Jim Smith, who is engaged in the same business, does not have to take out a license." I doubt very much that he could do that. I think if he is going to license them, the license has got to apply to everybody engaged in that particular line of business. Mr. LEE. Similarly situated. Senator WHEELER. Similarly situated.