satisfactorily accomplished within the agency itself by creating the office of hearing commissioner with the salary, tenure, and powers proposed. The separate views of three members doubt this and urge complete separation, but in view of the difficulties inherent in such an undertaking, accept temporarily the hearing commissioner plan with the additional provision for slightly greater independence. Thus, in each plan, the commissioner is made a part of and subordinate to the several agencies, and his decision, both on the facts and on the law, is subject to the determination of the agency of which he is a part. The initial findings of fact and the initial decision is his, but the final decision on both the facts and the law is that of the agency, and while his decision may often receive due consideration, the power exists to ignore it and set aside both as to facts and law; and in those cases in which the power is exercised, with no right of a review of the facts anywhere, present unsatisfactory conditions are left wholly unchanged. The controversy, in such circumstances is finally adjudged and determined by the agency which has initiated and conducted the prosecution, and this, I think, is not only wrong but in the teeth of the principle that separation of the legislative, executive, and judicial is an essential condition of liberty.

Judicial review of administrative decisions might be expanded to include a review of the findings in the light of the weight of the evidence, just as a trial judge may set aside a jury's verdict on this ground. The opposition to this plan is generally based on the theory that it would create delay, increase the number of appeals, and clog the court dockets. Experience alone could prove whether this objection has any foundations, but the plan is unquestionably against the present trend of administrative legislation and would provoke the antagonism of many who now oppose any factual review of administrative decisions by the courts. I mention the method only to pass it by.

The correct decision of this question is one of immense importance. It should, in my opinion, be considered by Congress in the light of the real and true purposes which the founders of our Government sought to achieve for themselves and their posterity. These were free action-free enterprise-free competition. They believed that equal justice between man and man and between citizen and State was one of the impartial rewards which encouraged to efforts that produced great and lasting results. Therefore, they made no provision for exemptions from legal duty. What they did provide for was that there should be no oppression, no exaction by tyranny, no spoliation of private right by public authority, and that there should be a fair, honest, effective Government to maintain the things which were thought to be the prerogatives of every individual man.

In the immense expansion of governmental authority, these principles should be the guiding star to a determination of this vexed question.

D. LAWRENCE GRONER. (Report of the Committee on Administrative Procedure, 77th Cong., 1st sess., Senate Document No. 8, pp. 248–250.) [Italics here added.]

EXCERPT FROM THE REPORT OF THE COMMITTEE ON THE JUDICIARY ON S. 7, SEVENTYNINTH CONGRESS, FIRST SESSION, NOVEMBER 19, 1945 (S. REPT. No. 752, p. 30)

The "substantial evidence" rule set forth in section 10 (e) is exceedingly important. As a matter of language, substantial evidence would seem to be an adequate expression of law. The difficulty comes about in the practice of agencies to rely upon (and of courts to tacitly approve) something less-to rely upon suspicion, surmise, implications, or plainly incredible evidence. It will be the duty of the courts to determine in the final analysis and in the exercise of their independent judgment whether on the whole record the evidence in a given instance is sufficiently substantial to support a finding, conclusion, or other agency action as a matter of law. In the first instance, however, it will be the function of the agency to determine the sufficiency of the evidence upon which it acts— and the proper performance of its public duties will require it to undertake this inquiry in a careful and dispassionate manner. Should these objectives of the bill as worded fail, supplemental legislation will be required. [Ittalics added.] (NOTE. The foregoing refers to the court review section in the McCarran bill and demonstrates clearly the unsatisfactory construction now put by agencies and courts upon the substantial evidence rule. It is in the nature of "giving the

rule another chance" with an admonition that if the agencies and the courts do not do better there will have to be "supplemental legislation.")

JOHN BENE & SONS V. FEDERAL TRADE COMMISSION, 209 FED. 468 (C. C. A. 2, 1924)

The Trade Commission, like many other modern administrative legal experiments, is called upon simultaneously to enact the roles of complainant, jury, judge, and counsel. This multiple impersonation is difficult, and the maintenance of fairness perhaps not easy; but we regard the methods pursued1 in showing Proper's diminution in sales as lacking in every evidential or testimonial element of value, and opposed to that sense of fairness which is almost instinctive (p. 471). [Italics added.1

EXCERT FROM AN ADDRESS BY GILBERT H. MONTAGUE OF THE NEW YORK BAR BEFORE FORUM OF ADMINISTRATIVE LAW OF THE ESSEX COUNTY BAR ASSOCIATION, NEWARK, N. J., ENTITLED "GEITING ALONG WITH THE GOVERNMENT AGENCIES," APRIL 9, 1945, PRINTED IN THE CONGRESSIONAL RECORD OF MAY 14, 1945

LITIGATING WITH THE GOVERNMENT

Litigation of any kind is a nuisance to a businessman, but litigating with the Government is most wasteful of all in lawyers' fees and executives' time.

As a litigant, the Government has advantages of unique prestige, unrivaled powers of publicity, specially trained legal talent, and inexhaustible resources. Such Government agencies as the Federal Trade Commission and the National Labor Relations Board have also the advantage that in all their prosecutions they are both prosecutor and judge, and are empowered by statute to make decisions in their own favor, even though such decisions be contrary to the weight of evidence.

EXCERPT FROM A STATEMENT MADE BY JAMES M. LANDIS, DEAN OF THE HARVARD LAW SCHOOL, FORMERLY A MEMBER OF THE FEDERAL TRADE COMMISSION IN A SYMPOSIUM ON ADMINISTRATIVE LAW

(9 American Law School Review 139, p. 183)

When I went to the Federal Trade Commission, I found that the findings of that Commission were, as a matter of practice, drafted by the Commission's attorney in the case, the prosecuting attorney. It seemed to me absolutely wrong that that should be so. True, the Commission exercised an independent judgment before it said, "Issue an order, or do not issue an order," but the findings supporting that order were drafted by the Commission's own attorney who had presented the case. Naturally, he tied up the respondent, so the respondent couldn't move, with the findings he drafted.

EXCERPT FROM THE FEDERAL TRADE COMMISSION (1924) BY GERARD C. HENDERSON, PROFESSOR OF LAW AT YALE UNIVERSITY

In the meantime, however, mention must be made of a surprising practice revealed by an examination of the official dockets in a fairly large number of cases. I have assumed in the previous discussion that the findings were in fact prepared by the examiners who preside at the trials and hear the testimony, but it appears that this is not always the case. In a large number of cases it appears from internal evidence that the findings, at least in the form in which they were finally adopted by the Commission, were dictated by the trial counsel who prosecuted the case, rather than by the examiner who heard it judicially. The findings consist of typewritten sheets, and generally, according to the custom of stenographers, the sheets contain in the upper left-hand corner the initials of the dictator. In the cases of which I have examined the official dockets, I have compared these initials, wherever they appear, with the names of the examiners and trial counsel, or, as the case may be, with the name or initials

1 By the Federal Trade Commission.

of the counsel who appears to have represented the Commission in the preparation of the stipulation of facts. In 32 cases, where there was no trial, the counsel who dictated or signed the stipulation appears to have dictated the findings. In 10 cases, the counsel who represented the Commission at the trial or argument appears to have dictated the findings. As long as this practice is pursued, it is of course idle to endeavor to preserve the judicial independence of the trial examiner (p. 85).

PROCEDURE OF THE FEDERAL TRADE COMMISSION WITH RESPECT TO THE EXAMINER'S REPORTS AND COMMISSION DECISIONS

REPORT OF THE COMMITTEE ON ADMINISTRATIVE PROCEDURE (P. 442)

Examiners' reports.-The trial examiner's report is served on the attorneys for the Federal Trade Commission and on the respondent or his attorney, but it is considered a confidential document and is not available for public inspection. The typical report begins with a reference to the charges in the complaint; it may be only a brief summary or a several-page synopsis of the allegations. In some reports, the reference to the charges is followed by an outline of the respondent's answer or a statement of the matters admitted by it.

Usually the bulk of the report consists of a narrative statement of the facts found, supported by citations to the transcript and the exhibits. While these citations will often include references under the heading "Contra," thus indicating conflicts in the evidence, the evidence pro and con on each issue is not ordinarily stated. By contrast, some examiners' reports do not present the factual picture in narrative form, but merely summarize separately the testimony of various witnesses, without specific findings as to the ultimate facts in issue. While some of the reports, furthermore, state the specific practices found to have been followed by the respondent and their effect on competitors, others reach only general conclusions in the statutory language.

The conclusions of law which may be drawn from the facts found are nowhere stated, and there is similarly lacking any discussion of the questions of law involved in the case. Finally, the reports do not include any recommendation as to the final disposition of the case nor any indication of the Commission's tentative attitude toward the case in the light of the facts found.

Commission decisions.-Under both the Federal Trade Commission and Clayton Acts, the Commission, if it finds a violation, must issue a report in writing containing findings of fact, and then issue a cease and desist order. The reports and orders, first distributed in mimeographed form, are later printed in bound volumes like those containing decisions of the Board of Tax Appeals or the Interstate Commerce Commission. Unlike the mimeographed copy, which begins with a formal statement of the procedure in the case, the printed version sets out the complaint verbatim and is preceded by headnotes. The bulk of the decision is devoted to numbered “Findings of facts." These are rather formalistically phrased in language, which often resembles that of the complaint; in those cases in which the answer has admitted the allegations of the complaint, the findings merely repeat the complaint verbatim. For the most part, the findings are concerned with ultimate rather than basic facts. The absence of a narrative statement of the basic facts, portraying the history and background of the problem, and the resort to formalistic phraseology sometimes make it impossible to appreciate just what business methods are involved, or what their effect on competitors actually is. Thus, the clear factual picture which is often painted by a decision of the Board of Tax Appeals or the National Labor Relations Board is usually lacking.

In the majority of the contested cases, there is no discussion or even mention of the respondent's defense or justification, As in the case of most agencies, references to the transcript of the hearing are virtually unknown.

The Commission's decisions usually, although not invariably, deal with the legal problems involved as cursorily as they handle the factual side of the case. Decisions containing a reasoned discussion of the principles of law involved are relatively rare, even if not entirely unknown, and although the printed decisions of the Commission now fill 26 volumes, citations of these opinions or of judicial holdings are very uncommon.

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In the exceptional case in which the pertinent questions of law involved are discussed, the reasoning will be found in the "Conclusion," which follows the findings of fact. In the typical case, however, the conclusion is merely a brief formalized statement, devoid of reasoning or explanation, characterizing the respondent's conduct in language designed to bring it within the letter of the statute. It may say no more than the following:

The aforesaid acts and practices of the respondent's have been and are to the prejudice of the public and of respondent's competitors and constitute unfair methods of competition in commerce within the intent and meaning of the Federal Trade Commission Act.

Distinct from the report is the Commission's order to cease and desist, which, after mentioning that the Commission has made findings of fact and concluded that the respondent has violated the act, orders him to abandon conduct specified in numbered paragraphs.

To this point this discussion has dealt only with those cases in which the complaint is upheld, at least in part, and a cease and desist order issued. But in decisions which are "adverse to the complaint," with a few exceptions, there are neither findings of fact nor any statement or discussion at all of the circumstances. in which a cease and desist order will not be issued. These decisions are published in the bound volumes of the Commission's decisions under the caption of "Orders of dismissal, or closing case, etc." After listing the name of the respondent and the date and docket number of the complaint, the decision contains a summary, in two or three lines, of the charges, a brief description of the procedure in the matter, and the Commission's order with a terse explanation of the underlying reason. This may consist, for example, of no more than the statement "that the complaint is dismissed for the reason that the testimony and other evidence adduced do not sustain the allegations of the complaint herein."

Jacob Siegel Company v. Federal Trade Commission (the "Alpacuna" case, C. C. A. 3, October Term, 1943, No. 8407)

Excerpts from brief for respondent (Federal Trade Commission) on the petition to review its order, page 50:

"Section 5 of the Federal Trade Commission Act, inter alia, states that"The findings of the Commission as to the facts, if supported by evidence, shall be conclusive' (52 Stat. 113; 15 U. S. C. A., sec. 45 (c)). It is now Hornbook law that when the evidence in such matter is in the field of controversy, the weighing thereof is solely for the Commission."

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Page 51: "On the record we doubt whether we should have concluded that the 'disparaging' statements were misleading; but," said Judge Learned Hand in Moretrench Corp. v. Federal Trade Commission (127 F. 2d 792, 794-795 (1942)), "since our office ends as soon as we find substantial support for the finding, this part of the order must also be affirmed," and yet, again, said he, "As this was the only part found to have been false, it is again hard to imagine how anyone reading it could have understood it as more than puffing; yet for the reasons we have just given, if the Commission saw fit to take notice of it, we may not interfere."

Excerpts from brief for respondent on petition for rehearing, page 24:

"Unless the findings and order are either (a) outside of the line of the evidence or (b) represent abuses of discretion, there is no power in the courts to disturb such findings and order.'

Page 41:

"It is still contended, we repeat, that the Court has no power to modify the order in this case."

Page 49:

"In view of the facts and the law, as above presented, it is strongly contended that the Court has not the power to 'modify the order in this case."

[All italics quoted.]

National Harness Mfrs' Ass'n v. Federal Trade Commission, 261 F. 170 (C. C. A. 6, 1919)

Facts. The Commission issued an order directing the Harness Manufacturers' Association to desist from using certain methods of competition. The association petitioned the court to review and set aside the order and made a motion to dispense with printing the record. This motion was denied and the record naving not been printed the Commission moved to dismiss the petition for review. Statement of the Court.-Page 171: "The statute further provides that the findings of facts by the Commission shall be conclusive, if supported by any evidence. It follows that there will be no occasion to resort to the record on which the findings were based, unless it is alleged that there was no evidence to support a particular finding, and then it would be necessary to examine only so much of the evidence as pertained to that subject.' [Italics added.]

John Bene & Sons v. Federal Trade Commission, 299 Fed. 468 (C. C. A. 2, 1924)

Page 469:

16* * we 'must inquire whether the Commission's findings of fact are supported by evidence,' and this inquiry includes an ascertainment of what kind of evidence, or evidence so-called, the fact findings rest upon. If by evidence is meant testimonial matter legally competent, relevant, pertinent, and material, this record contains very little of that kind."

Harriet Hubbard Ayer, Inc., v. Federal Trade Commission, 15 Fed. (2d) 274 (C. C. A. 2, 1926)

Facts.

The petitioner was engaged in the business of the manufacture and sale of perfume and cosmetics. It mailed out a suggested price list with its orders and refused to sell to customers who engaged in price cutting. The Commission found that they were utilizing cooperative means of accomplishing the maintenance of uniform resale prices.

The Commission's order was reversed, but the Court said (p. 276):

"The rule is now well recognized that the finding of fact by the Commission, having any evidence to support it, is conclusive and binding upon the courts, and we may not review the weight of the testimony." [Italics added.]

Indiana Quartered Oak Co. v. Federal Trade Commission, 26 F. (2d) 340, 341, (C. C. A. 2, 1928)

It is now well settled that findings of fact by the Commission, having any evidence to support them, are conclusive and binding upon the courts reviewing the weight of the testimony. Fed. Trade Commission v. Beech-Nut Co., 257 U. S. 441, 42 Sup. Ct. 150, 66 L. Ed. 307, 19 A. L. R. 882; Harriet Hubbard Ayer, Inc., v. Fed. Trade Commission (C. C. A.) 15 F. (2d) 274, 276; Oppenheim, Oberndorf & Co. v. Fed. Trade Comm. (C. C. A.) 5 F. (2d) 574; Nat. Biscuit Co. v. Fed. Trade Commission (C. C. A.) 299 F. 733.

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SWAN, Circuit Judge.

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I reluctantly concur in the result, because the Commission has made findings of deception of the public, which there is some evidence to support, though in my, opinion, it is greatly outweighed by contrary evidence. The purchasing public knows little, cares less, I think, about the botanical characteristics of mahogany. The Philippine Government, our own Departments of War, Commerce, and Agriculture, and the Interstate Commerce Commission have been accustomed for years to refer to the woods in question as "Philippine mahogany." The National Hardware Lumber Association has, since 1916, established rules for grading "Philippine mahogany." This terms is used in foreign countries also. Combined with the word "Philippine," "mahogany" is used in its commercial, as distinguished from its botanical, sense. Such usage is common in the lumber industry. Witness: Douglas fir or Oregon pine, which is a false hemlock; red cedar, which is a juniper; and many other instances which might be cited. Interference with