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Mr. OPPENHEIM. I beg your pardon.

The CHAIRMAN. If you know what he is asking, will you just answer the question !

Mr. OPPENHEIM. I think the Congressman is seeking to do what has been attempted many times and simply cannot be done, namely, having a literally complete separation of all functions of an administrative tribunal.

Mr. O'HARA. Please answer the question, Dean.
The CHAIRMAN. The question is, Who prepares the complaint ?

Mr. O'HARA. Who prepares the complaint? That is a simple question.

Mr. OPPENHEIM. The complaint is prepared by the Chief Trial Counsel's Office of the Bureau of Litigation of the Federal Trade Commission. I suppose that is the exact designation. But the Chief Trial Counsel prepares the complaint.

Mr. O'HARA. Does it go out in the name of the Chief Counsel or the name of the Commission?

Mr. OPPENHEIM. In the name of the Commission, of course.
Mr. HARRIS. Signed by the Chairman of the Commission?

Mr. OPPENHEIM. By the Chairman of the Commission. It is issued in the name of the Commission.

Mr. HARRIS. It is signed by someone.

Mr. OPPENHEIM. It is prepared by the Chief Trial Counsel of the Commission and is sent out over the signature of the Secretary; yes.

Mr. O'HARA. Who conducts the prosecution under that complaint?

Mr. OPPENHEIM. The Commission's Chief Trial Counsel, of course, has to designate attorneys as attorneys of the Commission, and in the hearing in a contested proceeding before the trial examiner, of course, the attorneys of the Commission perform the prosecuting functions.

Mr. O'HARA. As agents of the Commission?

Mr. OPPENHEIM. Well, I suppose in a rough sense we can say agent of the Commission. You know the word "agency” is a label which can be given various meanings in various situations. Strictly speaking, it is true that the attorney for the Commission is an agent of the Commission; that is true.

Mr. O'HARA. And the examiner, if he is one of the old examiners, is still an agent of the Commission, is he not?

Mr. OPPENHEIM. I do not think we gain very much by looking back to the situation as it existed not only prior to the Administrative Procedure Act of 1946 but prior to the time the Commission itself took positive steps to cure that commingling of functions; but if you are referring to the earlier days, I would say, and I would think that the Commission, as of today, would agree, that in the early days there was too much commingling of functions.

Mr. O'HARA. Now, Dean, will you answer this question? We have gotten up to the trial examiner and whatever his classification is under the rules of procedure. He makes a written finding or report, or whatever it is called. What is it called?

Mr. OPPENHEIM. A recommended decision and proposed finding of fact and conclusions of law.

Mr. O'HARA. That is not of force and effect until the Commission passes upon it?

Mr. OPPENHEIM. That is right.

Mr. O'HARA. And makes the decision basic on his findings of fact?

Mr. OPPENHEIM. And the Commission has reserved the power to make those decisions.

Mr. O'HARA. So that they are the jury, and they assess the penalty at the same time. Is that not true?

Mr. OPPENHEIM. Well, that is the formula that we hear about, of


Mr. O'HARA. Who renders the judgment?

Mr. OPPENHEIM. There is no question about the fact that the Commission has the ultimate decision in a situation where a formal complaint is initiated at the instance or under the authority of the Commission, and by trial or a hearing in a contested proceeding before a trial examiner with attorneys representing the Commission. I grant you all of that and I grant you that the Commission makes the final decision as to whether or not the complaint shall be dismissed or whether an order to cease and desist should be issued, I take the position that a commingling of functions on principle in and of itself should be avoided. I take the position that on principle we should try to separate such commingling of functions. But I say, as a practical matter, when you consider the hard-headed practicalities of the situation, here we have the Administrative Procedure Act which provides for this internal separation. Here we have the effort of the agencies to conform to it and they have conformed to it. I say, give them a fair chance to demonstrate how it works, and I also quote Arthur T. Vanderbilt, who himself recognizes that even though on principle a complete separation of functions is desirable, we simply cannot hope to achieve it with literal effectiveness.

The CHAIRMAN. Well, what you have said, in a few words is this, that the Commission is prosecutor, jury, and judge. Is that right?

Mr. OPPENHEIM. I do not put it that way. I do not say just that.

The CHAIRMAN. You use more words than I have, but I thought that the result I have arrived at was the result that your answers led us to.

Mr. OPPENHEIM. Yes, but the reason that I do not want to use that formula is because it is associated with certain implications that I do not entertain, namely, that because of a literal commingling of functions it is not possible to have a fair and impartial trial before the Federal Trade Commission.

Now, I think that as a body that finally decides, prior to judicial review, the Commission is able to act with impartiality despite the fact that internally you do have certain processes which involve the performance of functions by members of the staff. I think the greatest achievement that has been made under the Administrative Procedure Act in that regard is the increase in independence of the trial examiner, and as long as we have that, and have a hearing before him, and a record which will go up to a court of appeals on judicial review, I do not think we need fear that the Commission will be unable to disengage itself from partiality.

The Supreme Court in the Cement Institute opinion, recently pointed out that the Commission can even have beliefs and yet not be personally prejudiced or biased. I do not see that there is any great threat to private rights and to the institution of a fair and impartial trial, merely because you have within an agency functions which are sep

arated, as they are now separated under the revised rules of practice, and yet in a strict sense involve what you might say is a commingling of the agency functions among the employees of a commission in the performance of its duties.

The CHAIRMAN. This statement that you have just made seems to me to be a verification, in your judgment, of the presence of the functions of prosecutor, jury, and judge in the Commission.

I am not arguing there whether it should or should not be. I am just suggesting that simple question, that in the duties that they perform as a Commission that they should not act as a prosecutor, jury, and judge.

Mr. OPPENHEIM. Well, I do not see how you could say that in the light of the fact that, as I have already said, to meet that problem, the Commission has provided for internal separation of those functions as best can be achieved in conformity with the new act.

If one wants to say that you cannot eliminate the fact that it all takes place within the same house, as it were, why, I suppose one would say you still have the commingling of functions. I think in the last analysis the Administrative Procedure Act has recognized that all that can be hoped for in an agency of that sort is internal separation, and I think that ought to assure protection of private rights, because, sir, we do have after all judicial review. We do have judicial review in the circuit courts of appeals and the Supreme Court of the United States.

The CHAIRMAN. In the passage of the Taft-Hartley Act, an effort was made to divide those functions so that the prosecution is separate and apart from the duties of the Board. Do you approve of that kind of a provision?

Mr. OPPENHEIM. Well, I would say for certain regulatory agencies, if it were possible to achieve a complete separation of function without impairment of the essentials of the administrative processes, that that in itself would not be an undesirable thing.

The CHAIRMAN. That is one of the fundamentals.
Mr. OPPENHEIM. It would not be undesirable.

The CHAIRMAN. That is one of the fundamental matters that this committee has under consideration at the present time, whether this Commission could have a separation of its functions without destroying its effectiveness. Your opinion evidently is that it could not, but the fact remains that at the present time it is prosecutor, jury, and judge.

Mr. OPPENHEIM. I do not admit that with respect to the Federal Trade Commission it is necessary to deprive it of its quasi-judicial powers, by throwing into the courts in the first instance, on the filing of a complaint by the Commission, of the whole processes of fact-finding adjudication. I do not believe that.

The CHAIRMAN. This might be what might seem to be a personal question I know, but what has been your experience; have you practiced before the Federal Trade Commission?

Mr. OPPENHEIM. I have not practiced actively before the Federal Trade Commission but I have been consulted on Federal Trade Commission matters by attorneys on several occasions. But apart from that, my main interest in the Commission and my appraisal of the Commission's work is based upon the fact that for the last 20 years I have been studying and doing research in that field and have been a close observer of the Commisison's work by day-by-day observation.

The CHAIRMAN. I realize that, because you have some very definite opinions which I assume could only be formed by study such as you have indicated; but notwithstanding the breadth of your studies, I do not assume that you have had the opportunity to examine every case and the handling of every case that has come before the Commission.

Mr. OPPENHEIM. That may be true. I do not suppose anyone can claim such a vast storehouse of information.

The CHAIRMAN (continuing). When you have not had some practical experience with the operation of the rules, why, it seems to me that your opinion has to be limited more or less to a theoretical statement rather than to one that would be based upon practical experience.

Mr. OPPENHEIM. I realize that whenever anyone in the academic field, or primarily in the academic field, appears before a congressional committee he is likely to be told two things, that he has not met a pay roll and secondly that he has not had an opportunity to see the practical operation and effects of the things he is talking about.

As to the Federal Trade Commission, the latter may be so to a greater degree among some of my colleagues in the profession of teaching law who are not located in Washington, but I have been right here and I venture to say that so far as that particular aspect is concerned, I have examined more records of proceedings in the Federal Trade Commission than the average attorney other than one who deeply specializes in that work could possibly have done and I think also that ought to alleviate some of the fears about the lack of insight based on lack of experience with actual cases as an attorney in practice before the Commission. There is the counteracting influence of being able to get a better perspective, I think, on the operation of the work of the Commission as a whole.

I have known aitorneys, for example, who sometimes make almost a career of one case. I do not think that adds to perspective. So, I say in answer to your point, I cannot claim to have had active trial experience before the Federal Trade Commission. On the contrary, I am rather proud in stating that fact, because I feel that having devoted a major part of my life to study and reflection about that process here in Washington, I have been able to achieve perhaps a greater objectivity than one can hope to achieve by being involved in the daily grist of the mill of private practice.

The CHAIRMAN. Dean, we appreciate your attendance before us today and what you have contributed to the thought of the committee on this matter.

The CHAIRMAN. I am sorry that the situation on the floor of the House is pressing us along a little bit faster than we would like, because there are questions that we would like to ask, but it seems that we are asking questions that take so long to get answers to, that I doubt if we are going to have an opportunity to hear all of these witnesses today, and I am anxious to hear them all today if possible.


Mr. MONTAGUE. Mr. Chairman and members of the committee, my name is Gilbert H. Montague. I am a lawyer. I have been practicing

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in the city of New York since 1904. I have been practicing before the Federal Trade Commission from the first week in which it was organized in 1915 up to the present day.

I am here speaking for no one except myself, although I am a member of a great many committees and a great many organizations, and have been for many years, that have been watching the work of this Commission. I have represented dozens and scores and hundreds of people who have been involved in proceedings before the Commission. I have conducted proceedings before the Commission. I have never been in the Government employ, with one exception, and that was more than 40 years ago when I was special assistant to the attorney general for the State of New York for the prosecution of election frauds, but I have never been an employee of the Government. Otherwise, I come here at my own expense and representing no one except myself, and at considerable inconvenience to myself, for just this reason:

I was greatly impressed 2 years ago when I was before this committee on the Reece bill with the very cogent and sincere questions which Judge O'Hara put to witnesses in that hearing. I recognize in the bill just the point of view which he was expressing at that time in his questions. It was a point of view which, at different times, I want to say, over a considerable period of time, I myself once had.

I thought it might perhaps be of interest to the committee to hear why, out of my experience, I have reached a different view, notwithstanding all my respect for the complete sincerity of Judge O'Hara's point of view which he indicates there, and the complete, theoretical logic of his point of view, about the judge, jury, and prosecutor being the same.

Notwithstanding all this, I feel that this bill would be a step in the wrong direction.

Perhaps I should qualify myself a little more, because my experience may show how it is that I have come around to this point of view.

I graduated from Harvard College in 1901. I entered the graduate school, and also became a member of the teaching staff in the economics department, and so continued for the next 3 years. I got my master of arts degree, and at the same time wrote two books on the then very new subject of trusts, which were used as prescribed reading there for a considerable period of time.

I also entered the Harvard Law School. During my last year I was an editor of the Harvard Law Review.

I graduated in 1904 and came down to New York and was admitted to the bar. I had a very complete trial experience and general practice, until I opened my own office with a stenographer and one office boy in 1910. I now have a number of lawyers working for me, but from that time on I have been, with the exception of possibly the first 1 or 2 years, chiefly interested in antitrust law. I had already acquired some reputation, because while I was in law school I wrote these two books on trusts. From 1903 until 1912 I was contributing articles on the subject of trusts to the Atlantic Monthly and the North Atlantic Monthly Review and numerous other magazines. After I graduated in 1904, I wrote for a number of law reviews—the Harvard, Columbia, and Yale Law Reviews, and others. I did an enormous amount of writing, so that up to about 1911, when I began to be taken in as associate counsel in antitrust law cases, I had my feet on the lower


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