delay or difficulty. It is not so easy to correct in the case of the commission. Work on such special boards would give the men chosen a fine opportunity to make names for themselves, and would also afford a good training ground for membership on the commission. I realize that in H. R. 7432, as proposed, the new authority to delegate work does not extend, without the consent of the parties, to contested proceedings involving the taking of testimony at public hearings. Many of the cases which we would wish to delegate are now tried under the so-called "shortened procedure," which does not involve the taking of testimony at public hearings. That procedure, I may say, can only be used with the consent of the parties. There are, however, others which should be delegated, but we are persuaded that we would be able to get the consent of the parties in such cases, at least if the new procedure should work out as satisfactorily as we believe it would.

After some considerable study, H. R. 7432 is, in short, the best method we can devise for improvement of the conditions under which the work of the commission is performed. We believe that it would make it possible to do that work more expeditiously and effectively, and create conditions under which the work could be expanded to any extent that is likely to be desired. We hope that we may be given the desired authority.

Before closing this statement, however, I think that I should add a word about other possible plans designed to accomplish somewhat similar results. A good deal of well-meaning advice has been and is being offered on this point from more or less disinterested

Some of this advice is based on an imperfect knowledge of the way in which the commission performs its work and of the conditions under which it is performed. I sometimes wish that we had time to prepare and issue statements in reply to these suggestions, or that those who offer them would talk with us in advance. However, no doubt this may be impracticable.

Without going into details, one idea which persists in certain quarters is that the commission should be freed from its administrative duties and confined to those which are judicial. Apparently it is the thought that the administrative duties should either be eliminated or handled by some other public body. I find it very difficult to draw such a line of distinction between our duties. As a matter of law, the great bulk of our duties are neither administrative nor judicial but instead are legislative. That has several times been declared by the Supreme Court. The commission is not a court nor an executive department but an agency of Congress, created to do work, very largely, which would otherwise devolve upon Congress. About the only chiefly judicial work which we do, so far as I am aware, is the awarding of damages for past violations of the law which we administer, such as the charging of unreasonable rates in the past.

Of course, much of our legislative work involves the weighing of evidence offered by opposing parties, just as you have to weigh evidence on matters before you. But this is by no means confined to rate cases; it is equally true of every contested proceeding which we hear, whether it involves rates or securities or service or safety devices, or new construction or any other matter with which we

deal. Nor is it true that the commission was ever intended by Congress to be a mere passive tribunal for the decision or arbitration of issues presented by opposing parties. The original act gave the commission power to initiate investigations not only upon complaint but upon its own motion. It was intended that the commission should be an expert and active agency, with full powers of investigation into railroad affairs and with authority to produce on its own account such evidence as it might conceive the decision of a given case to require. It was recognized that the general public is in no position to present evidence relative to matters which are peculiarly within the railroads' own knowledge and which can only be ascertained through power to examine their books and records. Finally, it is not true that controversies between shippers and carriers with respect to rates are the only railroad controversies which are affected with a public interest. As the interstate commerce act now recognizes, there are many other controversies between carriers and investors, between carriers and their employees, between carriers and the general public, and between carriers themselves which are equally affected with a public interest. Good administration requires that the handling of such matters, which are all interrelated, should be coordinated so far as practicable in the hands of a single public body. The commission uses all of its bureaus in the conduct of its work generally. Service agents, for example, have proved helpful in rate cases, as well as accountants and valuation engineers. I could give many illustrations of this sort of thing. If a division were to be made, I would not know where to draw the line between administrative duties on the one hand and judicial or quasi-judicial duties on the other hand. Nor do I believe that an attempt to draw such a line would serve any useful purpose. On the contrary, it would impair efficiency and effectiveness and increase expenses.

That completes my statement, Mr. Chairman.

Mr. HUDDLESTON. Mr. Chairman, I want to ask Mr. Eastman a question. I am not certain that I understood his view clearly. Do correctly understand you to hold the view that all of the functions of the commisison are those conferred upon it under the commerce clause?

Mr. EASTMAN. They are all conferred upon it by Congress.

Mr. HUDDLESTON. I refer now to the distinction between legislative, executive, and judicial functions.

Mr. EASTMAN. Well, I would not want to say offhand that they were all conferred under the commerce clause, although I should presume that to be the case.

Mr. HUDDLESTON. Has Congress the power to confer upon this legislative agency judicial or executive functions?

Mr. EASTMAN. I can only say this, that it has been recognized by the courts that in prescribing rates for the future, for example, the work done by the commission is legislative in character. That has been so held by the Supreme Court. On the other hand, when it comes to deciding whether rates have been unreasonable in the past and whether reparation or damages should be awarded because of such unreasonableness, the courts have held that to be a judicial duty. It was a duty which could have been and to some extent was per

formed by the courts prior to the establishment of the commission. Under the law, parties can now resort to the courts for the obtaining of such damages, although I believe that the Supreme Court has indicated that they ought first to resort to the commission for the ascertainment of the facts.

Certainly the Congress has conferred upon us the power to perform that particular judicial duty, although it has not eliminated the courts from the picture.

Mr. HUDDLESTON. How are those reparations decisions enforceable?

Mr. EASTMAN. They are enforceable in court. If the railroad does not pay the reparation awarded by the commission, it is my understanding that it is necessary for the party desiring reparation to go into court.

Mr. HUDDLESTON. The decision, then, has no final effect?

Mr. EASTMAN. No; although it has been given great practical effect by the decisions of the Supreme Court.

Mr. HUDDLESTON. Could Congress make that decision have the same effect as a decision by a court.

Mr. EASTMAN. I presume that it could.

Mr. HUDDLESTON. Then, if so, would it be referable to the commerce clause and be a legislative act?

Mr. EASTMAN. Well, all I can say is that I have never made a close study of that particular question. I know that that has been held to be a judicial duty.

Mr. HUDDLESTON. My own views have a soft place right there and I wanted to strengthen it a little bit. I thought perhaps you could help me.

The CHAIRMAN. I should think, Mr. Commissioner and Mr. Huddleston, Congress might do this: We have a Committee on Claims that considers various and sundry maters that people bring to Congress. Those matters are referred to the Committee on Claims. It appears to me that Congress, without having delegated this to the commission, could very easily handle a case of reparations.

Mr. EASTMAN. I presume that could be the case.

The CHAIRMAN. Any power that the Interstate Commerce Commission has, it appears to me, is purely the power of an agency. Mr. HUDDLESTON. Congress has the power to create inferior courts? Mr. EASTMAN. Yes.

Mr. HUDDLESTON. The point in my mind is whether they might mix up these legislative and judicial functions in the same body. If they may do so, then they could make out of the commission a court with power to enforce its decisions.

Mr. EASTMAN. They certainly have mixed them up in the case of the commission.

Mr. LONERGAN. Under the provisions of this bill, final decision will be made by the Interstate Commerce Commission on all questions, and not by a group within the commission to whom certain powers are delegated?

Mr. EASTMAN. The parties to any case decided by a board of employees would have a full right of appeal to the commission for rehearing or reconsideration of that case.

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Mr. SHALLENBERGER. Mr. Commissioner, does this increase the expense of the commission; does it increase the personnel?

Mr. EASTMAN. If there were no additional duties conferred upon the commission, it would not increase the expense a particle.

Mr. SHALLENBERGER. You would not expect that it would employ additional investigators and additional personnel to carry out these provisions?

Mr. EASTMAN. No. We would do it with the present staff.

Mr. SHALLENBERGER. You spoke about approving loans as part of your duty now; that is, the consideration of loans made to railroads by the Reconstruction Finance Corporation. The railroads are not allowed to borrow any money without your approval, are they?

Mr. EASTMAN. The Reconstruction Finance Corporation can not make loans to railroads without the approval of the commission.

Mr. SHALLENBERGER. Are they allowed to make loans to water carriers or to carriers by bus or to trucking corporations without your approval?

Mr. EASTMAN. I can not say how extensive their powers may be as to making loans, but so far as our approval is concerned, it is confined to loans made to carriers by railroads.

Mr. SHALLENBERGER. But not to common carriers by any other means?

Mr. EASTMAN. No, sir. I have not refreshed my memory on that act, but I know that we have only been asked to approve loans to carriers by railroad.

Mr. SHALLENBERGER. So you do not know whether these other agencies have borrowed money of the Reconstruction Finance Corporation or not; you do not have that information?

Mr. EASTMAN. No, sir.

Mr. LEA. I notice on page 2, beginning on line 4, the proviso

That this authority shall not extend to investigations instituted upon the commission's own motion nor, without the consent of the parties thereto, to contested proceedings involving the taking of testimony at public hearings.

What would be the reason for withholding from the commission the power to make such an assignment where the investigation was instituted by the commission?

Mr. EASTMAN. When we originally proposed this legislation we proposed to leave the delegation solely to the discretion of the commission. There was some fear on the part of the shippers, and I think the carriers also, that we might delegate under that discretion matters of considerable and major importance. In order to alleviate that alarm we proposed this proviso, so that we could not delegate investigations instituted upon our own motion, which are almost invariably matters of major importance, nor, without the consent of the parties, contested proceedings involving the taking of testimony at public hearings. Those also are likely to be matters of major importance.

Mr. LEA. It struck me as a little bit novel to leave to the interested parties to decide what their tribunal should be. I can conceive that it would be perfectly proper for the interested parties to state their reasons, if they have any why the commission should not take the proposed action. On first impression my mind does not concur in the idea that the litigants should decide whether a method of procedure should be adopted.

Mr. EASTMAN. We had no intention when we proposed this legislation of delegating to employees or individual commissioners matters of major importance. But there was the fear that we would do that, and while we thought that discretion could safely be entrusted to us, we were willing to consent to this proviso which limited our discretion to that extent.

Mr. LEA. I suppose after work has been assigned, under the provisions of this bill, it would be within the power of the commission to revoke the order at any time?

Mr. EASTMAN. Oh, yes.

Mr. LEA. I notice the language in line 15 and above, this language:

In case of the absence or inability for any other reason to act of any such individual commissioner or employee designated to serve upon any such board, the chairman of the commission may designate another commissioner or employee, as the case may be, to serve temporarily until the commission shall otherwise order.

In that case, what would set the commission in motion to act on the matter?

Mr. EASTMAN. That refers to a vacancy occurring either temporarily or permanently in the membership of that board. It might be necessary to fill that vacancy at once-without any delay. This authorizes the chairman of the commission to do that, but provides that the commission may overrule his action in that respect if it deem it necessary. I think that provision is exactly the same as is now contained in section 17 with respect to the creation of divisions of

the commission.

Mr. LEA. How is this temporary appointment terminated? The commission has the power, but how soon and in what way would it be called upon to act? Suppose a man, unsatisfactory to the litigants, is named temporarily by the chairman. The original assignment is by the commission, I believe?

Mr. EASTMAN. Yes.

Mr. LEA. The chairman fills the temporary vacancy, makes the temporary appointment until the commission shall otherwise order. I suppose that would be subject to regulation by the commission?

Mr. EASTMAN. Yes; I should think that would be fully within its discretion.

Mr. LEA. I was interested in this, of course, from the standpoint of facilitating the work of the commission. What do you think would be the reaction from the standpoint of the public and the shippers? In other words, would these activities and decisions be as satisfactory as if made by the commission?

Mr. EASTMAN. I believe that they would be. In fact, I think in some respects that they might be more satisfactory. Let me say at the outset that because of that proviso, no case could be delegated to a board of employees for decision except with the consent of the parties to that proceeding. But I believe that with respect to several classes of cases which we decide, these employees could specialize upon them and decide them more quickly than we are able to at the present time, and also give the lawyers appearing in those cases a better opportunity to argue them before the body which makes the decision in the first instance. So I believe that if we pick good men, as I think we would, the result would be a more expeditious disposition of certain of the minor cases and also the allowance of more time to argue them.