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

any decision of any court, lower Federal court, or Supreme Court, which purports to sustain the Commission's findings of fact upon the scintilla-of-evidence rule. On the contrary, sir, in the Consolidated Edison case and the Columbia Enameling Co. case, the Supreme Court repudiated that very rule.

Let me give in paraphrases the language in the Columbia Enameling opinion of Mr. Chief Justice Stone. He said, following the Consolidated Edison principle, that there must be substantial evidence, meaning sufficient relevant evidence to convince a reasonable mind as adequate to support a conclusion; that it would not be enough to have a mere scintilla of evidence. If there was just a scintilla of evidence then, as would be the case if the trial were to a jury, the court would be entitled to direct a verdict for the defendant.

There is a vast difference between the scintilla-of-evidence rule and the substantial-evidence rule, and there is some difference, another range of difference, between the substantial-evidence rule and preponderance-of-evidence rule.

I say, with an effort to be fair and objective on this, that I would not be terribly disturbed if the preponderance-of-evidence rule were written into the statute. I do not think that with the Administrative Procedure Act as it now stands we need that. I think the Federal Trade Commission's statement of policy and its amended rules of practice in practical effect take care of it anyway. I venture to say, that on review of the records made by the Commission, we would find that in most instances there would not even be any reasonable difference of view as to the existence of a preponderance of the evidence to support the findings of fact of the Commission. There are those who, of course, believe that the substantial-evidence rule accomplishes the protection of the rights of the respondent to a sufficient degree. I think that those who feel that the preponderance-of-evidence rule ought to be written into the statute are not going to place upon the Commission a greater burden, or at the most a much greater burden, than it now has, because it sustains its findings of fact in precisely that manner in most instances.

Mr. O'HARA. Mr. Chairman.

The CHAIRMAN. Mr. O'Hara.

Mr. O'HARA. Dean, I presume you were not here this morning when I read the letter from Dean Roscoe Pound.

Mr. OPPENHEIM. No, sir; I was not able to be present this morning. Mr. O'HARA. Would you permit me to read it to you? You recognize Dean Pound as somewhat of an authority?

Mr. OPPENHEIM. I am always glad to hear Dean Pound's name mentioned in any proceeding of a committee of Congress.

Mr. O'HARA. If I may, I will read it. First let me say on the record when I drew up this bill, after some considerable labor, I sent a copy of it to Dean Pound and his letter is in reply to my letter, after he had made a study of the bill. Let me read it to you, sir. It is dated the 16th of July 1947.

Mr. Reporter, it will not be necessary for you to put this into the record again.

(Whereupon, Mr. O'Hara read the letter above referred to, which appears earlier in the hearings.)

Mr. O'HARA. Do you have any comments to make on Dean Pound's observations, which are somewhat different from yours, of course? Mr. OPPENHEIM. It goes without saying that I have great respect for the scholarship and the distinguished achievements of Dean Roscoe Pound.

I am rather surprised that he was willing to word his letter in the exact language which you have read, although I do realize

Mr. O'HARA. Well, are you questioning that that is not his language? The reporter has the original letter.

Mr. OPPENHEIM. No; I say I am rather surprised that he expressed himself in those words. I do not question, of course, the authenticity of the letter.

But, I realize that in its general tenor it follows to some extent the tenor of some of his articles in the American Bar Association Journal. Now, I respectfully differ with the dean's reactions to the work of the administrative agencies, and with particular reference to the Federal Trade Commission.

I have not found from my observation of the Commission's work in Washington, by attendance upon hearings of trial examiners and arguments before the Commission, that hearsay constitutes a basis for the trial examiner's report on the findings of fact or in the Commission's ultimate decision as to those facts. Indeed, I am reminded again of the warning that was issued by the Supreme Court in the Consolidated Edison case, I believe, that a record made up of hearsay evidence or substantially of hearsay evidence would not be sustained by the courts.

The Commission in my opinion has adhered to the common-law rules of evidence even though it is not under a mandate so to do. Just as in the case of the National Labor Relations Board, the Commission is free to depart, if fairness so dictates, from the common-law rules of evidence. However, I do not believe, as Dean Pound seems to believe, that the Commission has ever violated the standard of admissibility of evidence based on the principles of relevancy, materiality, and probative value.

I cannot understand why Dean Pound would make as broad a generalization as he has made. Moreover, I am not at all certain that a reading of the appellate court reports can, in and of itself give anyone an intimate picture of the record in these Federal Trade Commission proceedings. I have examined numerous transcripts of testimony in Federal Trade Commission cases. I realize that the trial examiners of the Federal Trade Commission, just as the Commissioners themselves, are subject to errors of judgment as all human beings are, and that the Federal Trade Commission, as a governmental institution, is no less susceptible to errors of judgment than any tribunal, be it an administrative agency or court; but I am clear in my own mind that the Federal Trade Commission has generally adhered to standards of proof that are well known in the courts of law and that its findings of fact generally are sustained by evidence that would be in conformity with the accepted rules for admission and exclusion of evidence. In fact, sometimes I hear the criticism that the Federal Trade Commission is too much of a stickler on the admission and exclusion of evidence; that the trial examiners are sometimes even more severe in their rulings of evidence than would be the case perhaps in some courts of law.