thus be said that the fuller life of this administrative agency has begun well before the proverbial 40. Without overlooking differences in subject matter, legislative policies, procedure, and judicial attitudes, it is noteworthy that the sister Interstate Commerce Commission also passed through a period of trials and tribulations before it was awarded a doctor of philosophy degree in administrative efficiency. The more than 50 years of the Interstate Commerce Commission teaches the lesson that the element of time cannot be circumvented in the accumulation of administrative wisdom and experience. It is a continuous process of trial and error.

"Vitalized as it is at 25, the Federal Trade Commission, like the Interstate Commerce Commission when it was the same age, has credit items and potentialities which betoken further progress toward a fuller attainment of the objectives contemplated by its sponsors. If the Commission continues to command the cooperation recently shown by Congress and the confidence of the courts and the public, such as it now has, there is every reason to believe that it will constantly reappraise its own policies, refurbish its work tools, and correct errors as they are discovered. Already woven into the fabric of our system of public regulation of trade and monopolistic practices, the Commission has demonstrated the importance of safeguarding our business order from the forces which would impair the functioning of our competitive system and drag down the level of business conduct."

I respectfully urge the Committee on Interstate and Foreign Commerce to reject H. R. 3871. As stated at the outset of this statement, it represents an attitude that the quasi-judicial administrative tribunal is alien to the AngloAmerican legal system and that only a traditional court of law can accord a citizen a fair and impartial trial of issues of fact. That attitude is a throw-back to the days when courts of equity were regarded with a jaundiced eye by those who espoused common-law courts as the sole legitimate tribunals.

There is no irreconcilable conflict between administrative justice and judicial justice. Both types of adjudication can exist in harmony with the fundamental concept of judicial supremacy of the courts of law.

H. R. 3871 is an ill-considered proposal to revive the outmoded concept of a legal system in which only traditional courts of law exist.

If the entering wedge of H. R. 3871 in taking from the Federal Trade Commission its quasi-judicial powers is once made, then an erosive process will have been begun to deprive other similar Federal regulatory agencies of their lifeblood powers. For it should be remembered that the various other Federal regulatory acts are patterned on the Federal Trade Commission Act.

There is no need for burning a house in order to roast prime ribs of beef. We can have the Federal Trade Commission with improvements and judicial supremacy as well. "The baby should not be thrown out with the bath."

H. R. 3871 should be understood for what it is-an effort to bring about the demise of the Federal Trade Commission as a regulatory agency. It does not even purport to give the Commission a decent burial. I have every confidence that Congress will not give any encouragement to such a proposal.

The CHAIRMAN. Are there any questions?

Mr. DOLLIVER. Mr. Chairman.

The CHAIRMAN. Mr. Dolliver.

Mr. DOLLIVER. I first want to disabuse your mind of any notion that this bill is in any sense an attack upon the Federal Trade Commission or, indeed, upon any commission or individual or group of individuals. I hope that you understand, and I am sure that you do, that the purpose of this committee is to find a solution to a dilemma with which we are constantly confronted in dealing with specialized subjects such as come under the purview of the Federal Trade Commission. Now, I am interested in one aspect of your testimony which I would like for you to develop, if you will.

You speak of the inevitability of the development of administrative processes. What do you mean by that?

Mr. OPPENHEIM. Well, sir, before I answer your question, I may say that I was not under the impression that this bill was an attack upon the Commission in the shape of an attack upon any Commis

sioners or on its staff as such, but I do believe it does attack what I consider to be the essence of the administrative processes, namely, the adjudicatory function.

Now, in answer to your question, by inevitability of administrative precesses, I mean what has been described by Elihu Root, by Arthur T. Vanderbilt, and by Mr. Chief Justice Stone an in article in the Harvard Law Review, as conditions in modern economic society where it has become necessary to resort to an administrative agency in order to resolve the complicated issues of fact which necessarily are presented when some tribunal is entrusted with the functions of determining whether a certain public policy and the standards declared under that policy, as applied to specific factual situations are violated.

Now, I do not see how, under conditions which exist under the present competitive enterprise system, for example, which is within the sphere of the Commission's work, a court, as competent as it may be in dealing with conventional types of cases involving the traditional legal issues, can hope adequately to cope with the vast array of forces and factors that arise in connection with such matters, as, for example, a violation of the Sherman Act. And the Federal Trade Commission has jurisdiction over Sherman Act violations.

I submit, sir, to you for consideration, for example, the complexity and the involvement of the issues in the Cement Institute case, on which the Supreme Court handed down an opinion last Monday.

It seems to me that the courts themselves would be unwilling to say that in view of this evolution of a modern industrial system such as we have now, it is not inevitable that there be committed to administrative agencies for initial determination, subject to judicial review, the regulation of that vast complication of factual issues.

I do not know whether that answers what you have in mind when I say that or not.

Mr. DOLLIVER. Permit me to be frank. Your answer completely misses the point of what I have in mind. What I am trying to bring out is, the matter of inevitability. To me that means a kind of foreordained, predestination, by some higher authority. The thing that I am trying to bring out, and to focus, is the idea that after all the Congress of the United States is the ultimate body which has the responsibility for these processes. Do you agree with that, and it is not inevitable-it is subject to the control of the Congress. Is that correct?

Mr. OPPENHEIM. But, inevitability is not the question of whether Congress has or has not the power to do what this bill purports to do. I was speaking about the inevitability of the industrial and economic processes which made it necessary for Congress in the first instance, when it created the Federal Trade Commission Act, to realize that it was simply unworkable to put into the courts, into the district courts, as triers of fact, the original determination of the economic and social questions involved under the act.

Now, I think your point, if I may say so, is really beside the point for the simple reason that Congress made a basic choice years ago in the Federal Trade Commission Act and again when it amended that act in 1938. Those choices rested upon just the very thing I was talking about; and also the fact that the Congress cannot itself cope with the problem as a legislative matter without the aid of an administrative agency.

Mr. DOLLIVER. Do you consider that it is beyond the power of Congress to revoke that choice and make other choices?

Mr. OPPENHEIM. I certain do not, and my remarks do not go to the question of existence of congressional power, because they go to the question of the wisdom of change.

Mr. DOLLIVER. That is an entirely different thing, my dear sir, then telling us that this is an inevitable thing.

Mr. OPPENHEIM. No.

Mr. DOLLIVER. It may be the wise thing to do precisely what we have done or precisely what is proposed to be done. That is the thing, is it not, that is for the determination of Congress?

Mr. OPPENHEIM. Yes; but I am asking Congress to recognize the inevitableness of this evolution that I have been talking about, so that it would not take the unwise step of trying to go back, turn the clock back, and reverse a trend which I do not believe can be reversed. We are talking about two different things. You are talking about the question of congressional power and congressional choice and as to what is wise. I am talking about an evolutionary process which I do not think Congress, even if it could change it, would be wise in changing.

Mr. DOLLIVER. Is it not true; is it not conceivable at least that back in the days when the Federal Trade Commission was originally set up a different mode of procedure may have been determined? Perhaps they might have enlarged the Federal courts or set up a specialized court of some kind instead of an administrative body. Is that not within the purview of possibility?

Mr. OPPENHEIM. I recognize that, and if this bill did not go any further than the old Logan bill of 1936 purported to go, which proposed to create a Federal administrative court as a specialized trial body, and as I recall it with also an appellate division, there might be some debatable ground as to an alternative about which you speak; but I would like to call your attention, if I may, to the fact that this bill goes much further than any such bill as the Logan bill. This bills says, in effect, that it is not possible to get a fair and impartial trial of factual issues before an administrative tribunal vested with quasi-judicial powers. I do not see that.

I think that, in view of the procedural reforms which have been accomplished under the Administrative Procedure Act of 1946, Congress at least should wait until a reasonable period of time has elapsed and the act has had a fair chance to demonstrate what it can do to safeguard fundamental rights.

Mr. DOLLIVER. What observation, if any, have you made of the effectiveness of the Administrative Procedure Act in its operation since it has passed?

Mr. OPPENHEIM. Since it has been enacted, so far as the Federal Trade Commission is concerned, I can say that I have very carefully compared the procedure that existed in the Federal Trade Commission prior to the act and as it exists today. I was conscious of the fact that even before the act was passed the Commission had already taken, on its own initiative, measures to conform their procedures to what are now the underlying principles of the act. I believe, sir, that you will find very readily accessible articles-and as a matter of fact, I have before me, a book on the matter-where there is a recording of the

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various ways in which the Federal administrative agencies, including some of the regulatory agencies about which we are talking this afternoon, have taken positive measures to conform their procedures with meticulousness to the requirements of the Administrative Procedure

Act.

Mr. DOLLIVER. I wonder if you would be willing to express the view as to whether there has been any improvement in the procedures by reason of the Administrative Procedure Act?

Mr. OPPENHEIM. I am quite certain that so far as separation of functions is concerned, the efforts to remove the commingling of functions of prosecutor, investigator, and quasi-judicial functions show that definite progress has been made toward achieving a better internal separation.

I also want to say that I do not join with those who believe that the Administrative Procedure Act of 1946 is the last word on the subject. Mr. DOLLIVER. I said that myself in supporting the bill on the floor. Mr. OPPENHEIM. I think that certain compromises were necessary and were made in the enactment of that statute; but I join Arthur T. Vanderbilt, for example, when he said that despite its shortcomings and despite the compromises, it still represents a beginning of a new era of administrative law and that it represents the best that probably could have then been achieved in view of the conflicting viewpoints that existed at that time.

The thing the Federal Trade Commission has done is that it has improved its internal procedures since the act, and, as I said, with greater specificity, than before the act.

I think the Commission deserves credit, moreover, for having been foresighted enough to have taken previous steps on its own violition in bringing about internal separation of the functions. There is also no question that an examination of its revised rules of practice and policy statement will reveal that in conformity with the act the Commission has sharpened as much as it could the division of functions, and I believe also that in connection with other objections that underlie H. R. 3871, improvement has been indicated.

I refer to the fact that the provision of the Administrative Procedure Act, section 10 (e) dealing with judicial review has been regarded by some as permitting a broader scope of judicial review than was formerly possible under the substantial evidence rule.

I realize, as you do, that in the absence of court decisions on the subject we are still in a rather speculative stage; but I point to section 10 (e), and I cite

Mr. DOLLIVER. Section 10 (e)?

Mr. OPPENHEIM. Of the Administrative Procedure Act, and I cite John Dickinson on that section. He has published an article The Judicial Review Provisions of the Federal Administrative Procedure Act, section 10, in a book that was recently published entitled "Federal Administrative Procedure Act and the Administrative Agencies." This volume reports the proceedings of an institute conducted by the New York University School of Law as recently as 1947.

Mr. Dickinson, who is recognized as one of the outstanding authorities on administrative law, concludes his article with the observation that section 10 should now make impossible a judicial refusal, as in the case of Dobson v. Commissioner, which arose in the tax field,

to consider independently so-called technical questions of law. His next point, by way of conclusion, is that under section 10 (e) of the act, he even believes that the substantial evidence rule will be modified to the point where the courts will review the entire record to see whether there is evidence which is opposed to the apparently "substantial" character of the evidence tending to support the administrative determination of fact.

This is another area in which progress might be made under the present act without any need for further legislation specifically broadening the scope of judicial review of Commission findings of fact. However, I am not concerned about that, sir, because I believe the Federal Trade Commission, in most instances, develops a record which is supported by a preponderance of the evidence.

I realize that the courts have not been governed by the preponderance-of-evidence test, and I realize, therefore, that in some instances a court might sustain the Commission's finding of fact only on the substantial-evidence test as laid down in the Consolidated Edison

case.

Mr. DOLLIVER. Do you think the courts should be provided with the standard, preponderance of the evidence, as opposed to a scintilla or any other standard on which they can base their review?

Mr. OPPENHEIM. Well, prior to the Administrative Procedure Act, I might have answered your question a little differently than I answer it now.

The Administrative Procedure Act, as I have pointed out in indicating the views expressed by John Dickinson, may enlarge somewhat the scope of judicial review of findings of fact.

Prior to the act there may have been more justification than there is now for imposing on the Commission by legislative rule a heavier burden of proof than the substantial-evidence rule imposes upon it.

I think in fairness to the proponents of this bill it ought to be said that if the Commission is an expert, specialized fact-finding body, there should be no reason why it should not be prepared to meet the test of a preponderance of the evidence. I am confident that the Commission does that in most instances anyway.

Mr. DOLLIVER. Let me interject right at that point that it is at that very point where the people who live out in my part of the countryand I think perhaps all over the country-find their greatest objection to administrative procedures. When they are brought before an administrative body for an alleged violation, they feel that they should be confronted with not a scintilla of evidence based upon hearsay, but there should at least be a preponderance of the evidence against them in order to secure a conviction; and the objection is right at that point. I think perhaps Mr. O'Hara can speak more accurately on this than I. It is at that very point and that is the reason for the introduction of this kind of legislation, because the business community has been outraged by some of the decisions that have been rendered by these administrative bodies. I am not throwing any darts at anyone in particular.

I think that is all, Mr. Chairman.

Mr. OPPENHEIM. Mr. Congressman, lest this discussion be misinterpreted, I want to say as vigorously as I can say, that I have not seen