relations, are peculiarly in danger of being charged with bias by those against whom the prohibitions are sought to be enforced.

Is it any wonder that an agency is "peculiarly in danger of being charged with bias by those against whom the prohibitions are sought to be enforced" when the minority report of the Attorney General's committee stated quite properly:

Hearing and deciding officers cannot be wholly independent so long as their appointments, assignments, personnel records, and reputations are subject to control by an authority which is also engaged in investigating and prosecuting.

How much stronger would be this protest if the "deciding officers,' as in the case of the Federal Trade Commission, are found coupled not with the "finding" officers but rather with the "investigating and prosecuting." The Commissioners of the Federal Trade Commission make the decision in the last instance, either in accordance with or in spite of the recommendations of the examiners.

While it is true that under the Administrative Procedure Act the decision of the Federal Trade Commission must be based on evidence that is "reliable, probative, and substantial," the Trade Commission is not bound by rules of evidence, it may admit hearsay and even evidence that is incompetent, irrelevant, and immaterial.

Some of the Commission may feel that the Administrative Procedure Act has made no substantial change in the quality of evidence that may be received. I refer to the dissenting opinion of Commissioner Ayres in the matter of Grocery Distributors Association of Northern California et al. and his citation there of cases supporting the old rules. Under the Supreme Court edict that the findings of the Federal Trade Commission are final and binding if supported by substantial evidence, the Commission need not balance the evidence. It can pick the evidence it prefers and it can choose to rely upon that particular evidence. It is not forced to find the preponderance of evidence as is the district court.

From long experience and practice before ascending the bench, the district court judge has been schooled to establish his case by the preponderance of evidence.

As a judge, he is well aware of the need to sift, screen, and weigh the evidence and find for the preponderance; for he suffers the embarrassment of a reversal on appeal if he fails to do so. The Trade Commission is not compelled to any such refinements.

Similarly, in reaching its conclusions the Trade Commission will draw such inferences as it thinks appropriate. One thing that has always irked me is the alleged special aptitude and skill of the Commission in determining the effect of a commercial representation upon "the careless, ignorant, illiterate, or foreign-born." For the life of me, I can't find basis for any such aptitude or competence for this in a Commissioner. It's never explained to us in an opinion that might be illuminating. There's no corner on common sense.

Possibly it is the result of the demand upon the judge to sift, screen, and weigh the evidence and base his decision on the preponderance that has resulted in the fact that traditionally the judge renders an opinion, advising the litigants and the rest of the world how he arrived at his decision. This is an important element in doing justice, as it explains to the loser how he lost, and it forms some guidance for the future conduct of all. This opinion must meet the test of satisfying

the litigants, the court above, and the public that the judge has thought through his decision.

Unfortunately, we have no such standard of traditional procedure in the Commission. It has only been with the advent of Commissioner Mason that we are now beginning to receive regularly a few opinions, but then only as a rule in instances where the Commissioners have not been able to agree among themselves.

On the question of special competence of the agency over a court, at this very time this very Congress is giving similar consideration to a similar situation existing in the tax laws. I refer to another instance of judicial legislation, the Dobson rule of the Supreme Court. This rule provides in substance that the findings of fact of the Tax Court, formerly the Board of Tax Appeals, are binding upon the circuit courts on appeal if supported by evidence. This rule has been as irritating to the circuit courts as has been the comparable Supreme Court edict that findings of the Federal Trade Commission are final and binding upon the circuit courts if supported by evidence.

The big difference is that the businessman even now may have his day in court on taxes, whereas he may not now have his day in court on business practices.

In the case of taxes he has an election of procedure: He may refuse to pay his tax and appeal the Commissioner's deficiency assessment to the Tax Court, with its Dobson rule; or he may pay his tax and sue for refund in the district court, without any Dobson rule.

There is no method, however, by which he may get into the district court to try an issue forced upon him by the Federal Trade Commission. Even so, the Ways and Means Committee has just adopted the proposal of the Joint Committee Staff on Internal Revenue and of the Treasury Department that the Dobson rule be abandoned, whereafter there will be no greater degree of finality to decisions of the Tax Court than to decisions of the district court.

It has always been difficult for me to understand why the decisions of the Tax Court should have any greater degree of finality than the decisions of the district courts. Though there are 16 judges of the Tax Court, only 1 of them as a rule hears the testimony. The other 15, or a majority of them, may decide against the 1 who heard the case.

Apparently the Joint Committee Staff on Internal Revenue and the Treasury Department and the House Ways and Means Committee are all of the opinion that the decision of the Tax Court should not have any greater finality than the decisions of the district courts.

What possibly can be said then for granting greater finality to the decisions of the Federal Trade Commission, based as they may be on a lesser measure of proof, qualitatively and quantitatively, than the comparable decisions of the district court? We must bear in mind, moreover, that the Tax Court is not an adversay; the adversary is the Commissioner of Internal Revenue, and the Tax Court is a court of record that is independent of control of the Commissioner; whereas the FTC is the adversary itself.

This bill has ample precedent. I have mentioned the special treatment accorded the division of functions under the National Labor Relations Act as amended by the Labor Management Relations Act. I have mentioned the present disposition of the Ways and Means Committee and the Treasury Department and the joint staff of the House and Senate on the Dobson rule.

Finally, I believe that the agency most nearly paralleling the Federal Trade Commission in function and character is one where there is a complete separation of functions. I refer to the Food and Drug Administration.

It has been suggested that the distinction between the Federal Trade Commission and the Food and Drug Administration is that the latter is concerned with enforcement of the criminal law. It is no more concerned with enforcement of criminal law than is the Federal Trade Commission. Both have jurisdiction over conduct that is criminal in character. Both, however, concern themselves primarily with civil restraint of this conduct.

While I have made no actual check of the Food and Drug cases, from an experience of following their releases over a period of 15 years I venture the estimate that not more than 1 case out of 25 and possibly not more than 1 out of 50 brought by this agency is a criminal proceeding.

Its customary procedure is, for example, by libel in a United States district court in an action in rem against a product. Not only are these proceedings not criminal, but they are not even adversary in the sense of being against an individual or a company. The seized product is simply condemned and destroyed unless someone comes forward to claim and defend it.

If someone comes forward to claim, the Food and Drug Administration prosecutes the charge of adulteration or misbranding, but the district court where the product was seized finds the facts and decides the issue. The burden of proof is on the Food and Drug Administration, and the party claiming the product is entitled to his day in court as in any other district court proceeding.

It is frequently stated that the Commissioners of the Federal Trade Commission have acquired a special competence in unfair competition and unfair and deceptive practices in business.

I suggest that the members of the staff of the Food and Drug Administration must acquire a more difficult and uncommon competence in the field of drugs and medicine. Still the Food and Drug Administration, with great credit to itself and almost universal satisfaction to the drug industry has been able to secure to the citizens the benefits intended by Congress in the Food, Drug, and Cosmetic Act of 1938.

I suggest further that it may be because of, rather than in spite of, the need to try its issues in the district court that the Food and Drug Administration is so firmly established in public opinion. No doubt the need to be right by a preponderance of the evidence in the eyes of the court is a firm restraining influence upon that Administration, but it leaves little room for the loser to feel aggrieved.

I see no reason why this bill would interfere with continuance of the informal settlement practices of the Commission. This will continue to account for a great majority of Commission cases. Looking back at some 12 or 15 issues that I have had before the Federal Trade Commission, I can think of only 2, and possibly 1 only, that I was unwilling and would still be unwilling to dispose of by simple stipulation or affidavit. In one of those issues, however, I would most fervidly hope that I might have the benefit of finding and decision by a district court of the United States.

From what I have said, it might be inferred, erroneously, that I am antagonistic toward the principle of the Federal Trade Commis

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sion or critical of its personnel in its administration. This is not so. I am in favor of the principle of the Federal Trade Commission, but with trial of issue in the district court. I have a sincere admiration for the personnel of the Commission, among whom I have a number of old friends.

I admire the job that they have done and that they continue to do within the framework of what I consider an improper structure.

I admire, for instance, that of their own motion as lawyers with an enlightened notion of fair play, the Commissioners place upon themselves restraints and burdens not required under the act; but I do not consider this a solution.

The fair treatment that the Commission accords respondents should be a matter of right, not a matter of sufferance or despotic grant. For the sake of the personnel of the Commission as well as for all others concerned, I believe this bill desirable and necessary.

I think possibly not enough emphasis has yet been laid upon the need for selectivity in considering the proceedings in the administrative process.

We are not dealing, in this instance, with a licensing agency such as the Federal Communications Commission or the Civil Aeronautics Board, or with a rate-fixing agency such as the Interstate Commerce Commission or Federal Power Commission, or a claims commission such as the Social Security Board or the Veterans' Administration or the Railroad Retirement Board.

We are dealing rather with private rights and properties of private individuals, the adversary proceedings that have been for time immemorial the subject of protection and limitation of use of the courts. This morning, Mr. Hoge mentioned an article published by Kenneth Culp Davis in the Harvard Law Review, in February or March.

I should like to quote Mr. Davis on that particular point. He says: The first step in any sound analysis is to recognize that broadside condemnation or approval of combination of functions is likely to be the product of ignorThe next step is to appreciate the need for highly technicalized solutions. Generalizations which are sound for one type of activity may be nonsense for another.

ance.

Each kind of combination must be examined not in the abstract or in general but in the context of a particular administrative activity. Some generalizations may be permissible such as that one who is truly an advocate should never be allowed to participate in judging. But more often a greater particularity is requisite. Combination of investigation with judging may be bad in such prosecuting agencies as the National Labor Relations Board, and the Federal Trade Commission, but it may be harmless and even affirmatively desirable in claims agencies which are as much interested in making payments to the deserving as in withholding payments from the undeserving-the Veterans' Administration, the Social Security Board, the Railroad Retirement Board.

You must bear in mind in the Federal Trade Commission you have the investigating and the advocating or prosecuting functions and the judging function all in one. The Commissioners of the Federal Trade Commission make the decision in the last instance either in accordance with, or in spite of, the recommendations of the examiners. I do not think much should be made therefor, of this separation, or the insulation, or isolation, of the examiners from the Commissioners because in the last instance the Commissioners may make the findings and the decision either in accordance with the recommendation of the examiner or strictly in spite of it.

The findings of the Federal Trade Commission are final and bindings, if supported by substantial evidence, as Mr. Hoge and others pointed out this morning.

The Commission does not balance the evidence. It can pick the evidence it prefers and can choose to rely upon that particular evidence.

I think no change has been made in that in the Administrative Procedure Act.

An argument has been made by John Dickinson that the Administrative Procedure Act provides that the appeal to the circuit court shall be on the entire record. But in preparing the language as finally enacted, Congress decided not to put in that the finding must be made on the evidence of the whole record.

A dissenting opinion by Commissioner Ayers recently shows that he, at least, feels that the old rules of evidence still prevail, that no change is made by the Administrative Procedure Act.

The Commission is not forced to find preponderance of evidence as is the district court. From long experience and practice before ascending the bench, the district court judge has been schooled to establish his case by the preponderance of evidence. As a judge, he is well aware of the need to sift, screen, and weigh the evidence and find for the preponderance; for he suffers the embarrassment of a reversal on appeal if he fails to do so.

The Trade Commission is not compelled to any such refinements. Possibly it is the result of the demand upon the judge to sift, screen, and weigh the evidence and base his decision on the preponderance that has resulted in the fact that traditionally the judge renders an opinion, advising the litigants and the rest of the world how he arrived at his decision.

This is an important element in doing justice, as it explains to the loser how he lost, and it forms some guidance for the future conduct of all.

This opinion must meet the test of satisfying the litigants, the court above, and the public, that the judge has thought through his decision. Unfortunately, we have no such standard of traditional procedure in the Commission. It has only been with the advent of Commissioner Mason that we are now beginning to receive regularly a few opinions, but then only as a rule in instances where the Commissioners have not been able to agree among themselves.

This bill has ample precedent. I have mentioned the special treatment accorded the division of functions under the National Labor Relations Act as amended by the Labor Management Relations Act. I have mentioned the present disposition of the Ways and Means Committee and the Treasury Department and the joint staff of the House and Senate on the Dobson rule.

Finally, I believe that the agency most nearly paralleling the Federal Trade Commission in functional character is one where there is a complete separation of functions. I refer to the Food and Drug Administration.

It has been suggested that the distinction between the Federal Trade Commission and the Food and Drug Administration is that the latter is concerned with enforcement of criminal law. It is no more concerned with enforcement of criminal law than is the Federal Trade