Subsequent to the termination of the war, the case was again submitted to the Supreme Court and the matter is now pending therein. This case involved only one company and has been in litigation in the courts since April 1937, to the present date and still is in litigation. Many other illustrations could be made but would serve no useful purpose.

Commission proceedings once begun are in a strict literal sense never ended because Congress, in section 5 of the Federal Trade Commission Act, has required of the Commission that it exercise a continuing supervision and control over its reports and orders made and issued under that section.

It was given the authority

after notice and opportunity for hearing, to reopen and alter, modify or set aside in whole or in part any report or order made or isued by it under this section whenever in the opinion of the Commission conditions of fact or of law have so changed as to require such action or if the public interest shall so require.

If the criticism of the Commission that its proceedings are too long is a just criticism, it should not serve as a reason to abolish the administrative process. In fact, it should be remembered that one of the reasons for the creation of administrative agencies was the long delays in court proceedings.

The length of time taken by the Commission in its proceedings is caused by a number of facts-the careful and thorough investigation of the facts in each case, the development of all of the facts in its hearings, the consideration of the public interest-the consideration given to the law applicable to each case, the opportunity given respondents at their convenience as to time and place anywhere in the United States for presentation of testimony and evidence, the opportunity to secure the testimoney of the best experts in every field who otherwise would not be available to testify in a district court proceeding, the opportunity to prepare and present written briefs on all legal and factual matters involved, the opportunity to make oral arguments on such matters, the fullest and most careful consideration of every defense offered or suggested by a respondent, and in many cases at respondents' requests, the reconsideration of every problem presented.

The authority of the Commission to amend, modify and set aside its reports and orders gives the Commission a continuing jurisdiction that not only protects the public interest but also protects the interests of the respondents in every case whenever a change in law or fact or the public interest requires such revision favorable to respondents. One further comparison of the length of time of court proceedings with proceedings before the Commission is taken from the recently filed report of the Judicial Conference of Senior Circuit Judges held in Washington, D. C.

On page 90 of this report it is stated that at the end of 1947 the total number of civil cases pending in the United District Court for the Southern District of New York was 10,099, as compared with 7,434 at the same time a year ago.

I am informed that with 12 district court judges this court will be able to dispose of not more than 2,000 of these cases per year and that more than 2,000 new cases will be filed each year.

In other words, it is 5 years behind with its work. Obviously, if the O'Hara bill is enacted requiring Commission proceedings to be filed

in the district courts of the United States for the district in which the respondent resides or maintains his or its principal place of business, this would mean that all respondents now or hereafter residing and maintaing their principal places of business in the southern district of New York would be immune from Commission prosecutions for at least 5 years before the Commission's case could even begin in the district court of that district.

If it is assumed, for the sake of argument, that the O'Hara bill is now the law and the Commission is required to try its cases in the courts, the question immediately arises what will happen to the large body of administrative law which has been built up by the Federal Trade Commission during the past 34 years and now contained in forty-odd volumes of orders and stipulations to cease and desist and upon which business interests throughout this Nation now depend for guidance.

Section 4 of the O'Hara bill provides that—

in any case where the Federal Trade Commission, prior to the date of the enactment of this act, has issued a complaint under subsection (b) of section 5 of the Federal Trade Commission Act as in force prior to the enactment of this act, the provisions of the Federal Trade Commission Act as in force prior to the enactment of this act shall apply as though this act had not been enacted. In other words, the authority and jurisdiction of the Commission over its orders and stipulations to cease and desist which had been issued and accepted prior to the assumed enactment of this bill and the proceedings upon pending complaints would continue under the present Federal Trade Commission Act and would not be affected by the O'Hara bill. Only new proceedings by the Commission would be controlled by this bill and such new proceedings would be conducted in the Federal courts.

If the criticism of the Commission by some of the proponents of this bill that the Commission is unfair, that the Commission acts in an arbitrary and capricious manner, that the Commission bases its findings upon hearsay, biased or otherwise incompetent evidence, and that the circuit court of appeals must sustain the Commission's findings if supported by any evidence, that the Commission prejudges its cases, and that the Commission could theoretically write its orders before it issues its complaints-if these criticisms are just-if all of these criticisms or any part of them are true, then it would seem that the great body of administrative law built up by the Commission during the ye. rs of its existence for the guidance of all business interests should be abolished, the slate wiped clean and a new start made by proceedings in the courts as distinguished from administra

tive bodies.

The very fact that this bill by the provisions of its section 4 would continue the jurisdiction of the Commission over its pending proceedings, its orders and stipulations to cease and desist issued and executed prior to the O'Hara bill is in itself an endorsement and an approval of the work done by the Federal Trade Commission since its creation by Congress in 1914. In short, the O'Hara bill condemns the future administrative process in the Federal Trade Commission and at the same time approves that process in the work that the Commission has previously done.

In view of what has been said by the proponents of this bill regarding the statutory provision that the findings of the Commission shall

be conclusive "if supported by evidence," I would like to discuss this matter very briefly

The present statutory provision is that the findings of the Commission as to the facts shall be conclusive "if supported by evidence." Prior to the Wheeler-Lea amendment of 1938, the only difference was that the word "testimony" was used instead of the word "evidence" and that had been the law since passage of the act in 1914.

A number of statutes enacted prior to the Wheeler-Lea amendment employed language similar to the present provision of the Federal Trade Commission Act.

The National Labor Relations Act and the Securities Act of 1933 incorporated the language of the original Federal Trade Commission Act except that they substituted the word "evidence" for "testimony." The Federal Power Act and the Securities and Exchange Act of 1934 refer to "substantial evidence."

All of these statutes have been construed as embodying the substantial-evidence rule. The statutory language that "the findings of the Commission as to the facts, if supported by evidence, shall be conclusive" has been uniformly construed by the courts to refer to substantial evidence.

This means substantial evidence in support of every essential fact. The Supreme Court has declared that "substantial evidence is more than a mere scintilla" (I. C. C. v. Jersey City (322 U. S. 503); Rochester Telephone Co. v. U. S. (307 U. S. 125); Consolidated Edison Co. v. N. L. R. B. (305 U. S. 197)).

It means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion.

The rule of law that administrative findings are conclusive, if supported by substantial evidence, does not, so the Supreme Court has held

go so far as to justify orders without a basis in evidence having rational probative force (Ibid. 230).

The question whether the evidence relied on is substantial is a question of law for the courts to determine and in reaching their conclusion they are at liberty to and do examine the whole record. The rule of law applicable to the court review of Federal Trade Commission findings as to the facts is:

If capable men, acting reasonably, could have reached the same conclusion and made the same findings as did the Commission, then the courts will not disturb the Commission's judgment.

The court will determine, however, upon the basis of the whole record whether reasonable minds could have reached the same conclusions as the Commission and if the courts think that they could not, they may set the Commission's findings aside.

The rules of evidence which now apply to the Federal Trade Commission are stated in section 7 (c) of the Administrative Procedure Act, as follows:

Except as statutes otherwise provide, the proponent of a rule or order shall have the burden of proof. Any oral or documentary evidence may be received but every agency shall as a matter of policy provide for the exclusion of irrelevant, immaterial, or unduly repetitious evidence and no sanction shall be imposed or rule or order be issued except upon consideration of the whole record or such portions thereof as may be cited by any party and as supported by and in accordance with the reliable, probative, and substantial evidence.

Every party shall have the right to present his case or defense by oral or documentary evidence, to submit rebuttal evidence, and to conduct such crossexamination as may be required for a full and true disclosure of the facts. In rule making or determining claims for money or benefits or applications for initial licenses any agency may, where the interest of any party will not be prejudiced thereby, adopt procedures for the submission of all or part of the -evidence in written form.

The substantial evidence rule applied by the appellate courts in reviewing the Commission's findings closely approximates the rule developed out of their own experience by appellate courts in reviewing jury verdicts. It is the right of a jury to determine issues of fact. A well-established rule is that the jury is the trier of the facts but the court may set aside a jury's verdict if the evidence supporting it is not substantial.

The existence of some evidence or a scintilla of evidence supporting the verdict is not enough. Substantial evidence, the Supreme Court has held means more than a scintilla. It must do more than create a suspicion of the facts to be established. The court said it means "such relevant evidence as a reasonable mind might accept as adequate to support a conclusion."

It is left to the jury to pass upon the credibility of witnesses and determine the weight of the evidence and to draw inferences from the evidence and the verdict will be sustained if it is grounded upon substantial evidence. (Galloway v. U. S. (319 U. S. 372); N. L. R. B. v. Columbian Enameling Co. (306 U. S. 292).)

Court review of this Commission's findings is based exactly on the same principle. The substantial evidence rule applicable to jury verdicts is the rule governing review of findings of the Federal Trade Commission. A finding of the Federal Trade Commission unsupported by such evidence is beyond the power of the Commission to make as it is contrary to law and would be set aside by the courts. It is the duty of the court to examine the whole record, to determine whether there was no evidence, a scintilla of evidence, or whether the evidence was substantial enough to base a reasonable judgment thereon.

In Carlay Company v. Federal Trade Commission, decided February 15, 1946 (153 F. 2d 493), the Circuit Court of Appeals for the Seventh Circuit correctly stated the substantial evidence rule as follows:

Substantial evidence is more than a mere scintilla. It means such relevant evidence as a reasonable mind would accept as adequate to support a conclusion. It must be of such character as to afford a substantial basis of fact from which the fact in issue can be reasonably inferred. It excludes vague, uncertain, or irrelevant matter. It implies a quality and character of proof which induces conviction and makes a lasting impression on reason. (Consolidated Edison Co. v. National Labor Relations Board (305 U. S. 197) ; National Labor Relations Board V. Columbian Enameling and Stamping Co. (306 U. S. 292, 299); National Labor Relations Board v. Thompson Products, Inc. (97 F. 2d. 13, 15 (C. C. A. 6)).)

The rule of substantial evidence is one of fundamental importance and marks the dividing line between law and arbitrary power; and the requirement that a finding must be supported by substantial evidence does not go so far as to justify orders without a basis in evidence having rational, probative force. Consolidated Edison Co. v. National Labor Relations Board, supra., National Labor Relations 'Board v. Thompson Products, supra.

The intent of Congress was evident when the act was amended in 1938. Chairman Lea is debɛting the conference report on the Wheeler

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Lea amendment of the act defined the substantial evidence rule as not debarring the courts

from going into the facts to ascertain if there is substantial evidence because there is evidence that is merely colorable, seeming, or merely nominal. It means an honest-to-God review by the court for the purpose of performing its function of protecting the law against the legislative or the executive departments of the Government.

Chairman Lea also stated that "of course the court has a right to review the whole testimony before it, with a view of determining whether or not there is substantial evidence" and that "it is the fundamental or ultimate fact that we are dealing with in deciding what is substantial evidence."

The record also shows that Chairman Lea's interpretation was what the conferees wanted

to go into the record for future consideration by any court if there is a matter of review involved (83 Cong. Rec. 9096-9101 (1938)).

The scope of review of Federal Trade Commission decisions and orders by the United States circuit courts of appeals and the Supreme Court is provided in section 10 (e) of the Administrative Procedure Act, as follows:

So far as necessary to decision and where presented the reviewing court shall decide all relevant questions of law, interpret constitutional and statutory provisions, and determine the meaning or applicability of the terms of any agency action.

It shall (A) compel agency action unlawfully withheld or unreasonably delayed; and (B) hold unlawful and set aside agency action, findings, and conclusions found to be (1) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law; (2) contrary to constitutional right, power, privilege, or immunity; (3) in excess of statutory jurisdiction, authority, or limitations, or short of statutory right; (4) without observance of procedure required by law; (5) unsupported by substantial evidence in any case subject to the requirements of section 7 and 8 or otherwise reviewed on the record of an agency hearing provided by statute; or (6) unwarranted by the facts to the extent that the facts are subject to trial de novo by the reviewing court. In making the foregoing determinations the court shall review the whole record or such portions thereof as may be cited by any party, and due account shall be taken of the rule of prejudicial error.

In conclusion, I wish to direct your attention to an article published in the American Bar Association Journal of September 1946, by Congressman John W. Gwynne, entitled "The Architecture of the New Administrative Procedure Act."

Your attention is especially directed to Congressman Gwynne's diagram synopsis of this act in connection with his article. Your. attention is further directed to a subsequent article by Congressman Gwynne in the American Bar Association Journal for January 1948, entitled "Administrative Procedure Act: A Warning Against Its Impairment by Legislation."

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In this article, Congress Gwynne calls attention to the responsibility of the bar as well as the Congress for vigilance in seeing to it that the Administrative Procedure Act is not whittled away and impaired by administration, interpretation, or future legislation. This article is specifically applicable to the O'Hara bill. For your information, I will file copies of these articles with the clerk of this committee.

In view of the many years of legal research and work of the American Bar Association which culminated in the enactment of the Administrative Procedure Act and in view of the great interest shown in this