posing the Commission is hereby transferred to the President of the United States.

(b) Nothing in this reorganization plan shall preclude the Commission from designating a commissioner to be the acting chairman of the Commission and to perform the functions of the Chairman during any period of time when (by reason of death, resignation, or other cause) no Presidentially designated Chairman is available to perform

them.

Sec. 4. Taking effect. Section 3 of this reorganization plan shall take effect on the first day of January, 1970, and the other sections hereof shall take effect on the date determined under section 906 (a) of title 5 of the United States Code.

SENATE COMMITTEE ON GOVERNMENT OPERATIONS STAFF MEMORANDUM 91-1-35, SEPTEMBER 25, 1969

Subject: Reorganization Plan No. 1 of 1969 (Interstate Commerce Commission) Plan No. 1 of 1969 was submitted by the President to the Congress on July 22, 1969 and referred to the Subcommittee on Executive Reorganization on September 2. Unless it is disapproved by a majority vote of either House of the Congress, it will become effective on October 11, 1969. The original effective date, September 21, 1969, was extended for an additional 20 days pursuant to the provisions of Chapter 9 of Title 5, United States Code, which requires the exclusion of any period of adjournment of either House in excess of three days.

PURPOSE OF THE PLAN

The stated purpose of Plan No. 1 of 1969 is to modernize and improve the organization and operations of the Interstate Commerce Commission by providing for continuity of leadership and for the vesting by law of administrative and executive authority in the Chairman of the Commission. The plan seeks to accomplish this objective by (1) transferring to the Chairman all of the executive and administrative functions of the Commission; (2) authorizing the Chairman to delegate the performance of these functions to any officer, employee or administrative unit, as he deems appropriate; and (3) transferring from the Commission to the President of the United States the function of choosing the Chairman of the Commission, effective January 1, 1970.

The plan provides further that (1) the executive and administrative functions shall include the appointment and supervision of personnel, the distribution of business among such personnel and among administrative units of the Commission and the use and expenditure of funds; (2) in carrying out any of these functions, the Chairman will be governed by general policies of the Commission and by such regulatory decisions, findings and determinations as the Commission may be authorized by law to make; (3) the appointment by the Chairman of the heads of major administrative units under the Commission would be subject to the approval of the Chairman; (4) personnel employed regularly and full time in the immediate office of commissioners other than the Chairman would not be affected by the plan; (5) requests for regular, supplemental or deficiency appropriations for the Commission would require the approval of the Commission prior to submission by the Chairman to the Bureau of the Budget; (6) the Commission would retain its functions with respect to determining the distribution of appropriated funds according to major programs and purposes; and (7) nothing contained in the plan shall preclude the Commission from designating a commissioner to act as Chairman and perform the duties of Chairman when by reason of death, resignation or other cause, no Presidentially designated Chairman is available to perform them.

THE PRESIDENT'S MESSAGE

In his message transmitting Plan No. 1 of 1969, the President called attention to the fact that the Interstate Commerce Commission is the oldest of the Federal Regulatory agencies; its jurisdiction extends over 17,000 carriers, including rail, motor, water and pipeline, express companies and freight forwarders; and its decisions help shape the scope and character of the Nation's transportation system. He stated further that despite the importance of the Commission and the extent of its jurisdiction, it is hampered by lack of continuity and lack of leadership. Thus, with respect to the former, the Chairman of the Commission serves only a year, selected by annual rotation from among the eleven Commissioners, and in no other major Federal regulatory agency is the President without power to designate the Chairman. Concerning the latter, he noted that the Chairman does not have vested in him by law the executive and administrative functions of the Commission, as a result of which there is no firm and clear legal responsibility for the management of the Commission's day-to-day affairs. With further reference to continuity, the President stated:

"The Chairman of the Interstate Commerce Commission is the Commission's spokesman, its key link to the other agencies and the industry, the supervisor of its staff, and director of its internal operations. Yet today, despite the need for sustained leadership, the Chairman of this agency serves only one year. I know of no modern business that would tolerate the practice of annually rotating its chief executive.

"To provide the necessary continuity of leadership in the conduct of the Commission's administrative affairs, I propose that the President be authorized

to designate the Chairman of the Commission from among its members. This principle of good management has already been taken with respect to most other major Federal regulatory agencies. The time has come to apply it to the Interstate Commerce Commission."

Concerning leadership, the President stated:

"The administrative powers of the Chairman must be strengthened. In 1961, the Commission delegated its administrative powers to its Chairman. However, unless and until the administrative powers are vested in the Chairman by law, statutory authority will remain dispersed among the Commissioners.

"Almost 20 years ago the Hoover Commission emphasized that 'Administration by a plural executive is universally regarded as inefficient.' It then recommended that all administrative responsibility be assigned to the chairman of these regulatory agencies.

That recommendation is as sound today as it was then. It has already been applied to almost every other major Federal regulatory agency. I propose that administrative authority be vested in the Chairman of the Interstate Commerce Commission."

In concluding his message, the President stated:

"In sum, the reorganization plan provides continuity of leadership and vests responsibility for internal administrative functions in a chairman designated by the President, with safeguards to ensure that the Commission retains full control over policy and the direction of its regulatory programs. This does not affect the the statutory provisions governing the exercise of quasi-legislative and quasijudicial powers by the Commission and its employees to whom it has delegated the responsibility of hearing and deciding cases.'

Organization of ICC

BACKGROUND

The Interstate Commerce Commission was established by the Interstate Commerce Act of 1887 (Act of February 4, 1887, (24 Stat. 379, 383, 49 U.S.C. 11)). It is presently composed of 11 members, of whom not more than 6 may be of the same political party. Members are appointed by the President, subject to Senate confirmation, for terms of 7 years or until a successor has been appointed and qualified, and may be removed by the President only for inefficiency, neglect of duty or malfeasance in office.

The organic statute which created the Commission vested all of its powers in the Commission as a body and made no provision for the selection of a Chairman. The only reference to the office of Chairman, contained in the original Act, is found in section 18 thereof which required the Chairman to approve certain vouchers reimbursing Commission members and employees for necessary expenses (24 Stat. 386). Subsequent amendments to the Act authorized the performance by the Chairman of additional administrative duties relative to the filling of certain vacancies on major administrative units of the Commission (49 U.S.C. 17 (1) (2)). In addition, reference is made to the salary of the Chairman in the Executive Schedule (5 U.S.C. 5314(24)) and in the Federal Aviation Act of 1958, as amended, with respect to designating members to serve on certain joint boards (49 U.S.C. 1483(a)).

The Act authorizes the Commission to create and delegate certain of its duties and functions to divisions of the Commission, each to consist of not less than 3 members. The Commission may also delegate certain duties and functions to individual Commissoners, or to boards consisting of not less than 3 eligible employees. Pursuant to this authority, the Commission has created and assigned duties to three regular divisions whose duties are primarily as follows: Division 1, Operating Rights; Division 2, Rates, Tariffs and Valuation; and Division 3, Finance and Service. These same divisions also function as appellate divisions for action on petitions for reconsideration or rehearing of decisions of divisions or board of employees. The staff of the Commission is organized into 5 bureaus and 4 offices.

Internal Procedures

Selection of Chairman and Vice Chairman.-Under present practice, the Commission elects a Chairman and a Vice Chairman for a period of one year, in rotation, by what is called a minute order. When it was first established, the Commission elected a Chairman without specifying any time limitation with respect to term. In 1898, the Commission elected a Chairman for a one-year term and reelected him each year thereafter until the close of the year 1910. On January 13, 1911, the Commission established the policy that the term of office of Chairman shall be for one year and be filled from year to year in order of seniority of service.

The annual rotation system with election for a one-year term has been followed ever since, with the exception of a brief period (1940-43) during which one Chairman was elected for a 3-year term.

The Office of Vice Chairman was established by minute order on February 8, 1961 and is filled in the same manner and for the same term as that of the Chair

man.

Duties of Chairman.—It appears that from the outset of the Commission's existence, attention was given by its members to the duties and responsibilities of the Chairman. Formal action delegating to the Chairman duties and responsibilities, similar to those now exercised by the incumbent of that office, was taken by Commission minute order dated February 5, 1945, which delegated certain basic administrative responsibilities and duties to the Chairman (or in his absence to the Acting Chairman, who was stated to be the available senior Commissioner in point of service). The order stated that the Chairman shall be the executive head of the Commission, with the duty and responsibility to see that the work of the Commission is promptly and efficiently dispatched. In this connection, he was directed to take certain action to expedite the Commission's work and to report periodically, but not less than quarterly to the Commission concerning progress in its work and to suggest ways and means of correcting or preventing unusual or unnecessary delays in the disposition of official matters. In addition, he was directed to preside over the Commission's arguments and conferences and exercise general control over its argument calendar and conference agenda; exercise general supervision over the Commission's minutes and, unless delegated elsewhere, to act as official correspondent and spokesman for the Commission in all matters involving relations with the heads of other Government agencies and in all other cases in which an official expression of the Commission is desired.

Further Developments.—In 1961, and again, in 1967 following the establishment of the Department of Transportation, the Commission revised its internal organization and procedures, as reflected in its minutes which constitute the regulations governing its organization and operations. Current minutes reflect that the Commission has provided that its Chairman shall be the executive head of the Commission with general responsibility for (1) the over-all management and functioning of the Commission, (2) the formulation of plans and policies designed to increase its effectiveness in the administration of the Interstate Commerce Act and related acts, (3) prompt identification and early resolution, at the appropriate level, of major substantive regulatory problems, and (4) the development and improvement of staff support to carry out the duties and functions of the Commission.

These minutes reflect further the delegation by the Commission to its Chairman of executive and administrative duties which are virtually identical to those which would be transferred to the Chairman by Plan No. 1 of 1969. The minutes further provide that the exercise by the Chairman of this delegated authority shall be subject to the same limitations as are provided for in Plan No. 1-that they be exercised subject to general policies, etc., of the Commission, and the approval of the Commission with respect to appointments by the Chairman of the heads of major segments and to top-level positions.

It thus appears that the proposed transfer provided for in the plan would not change the present duties and responsibilities of the Chairman. However, their exercise by the chairman would be based upon statutory authority rather than by delegation from the Commission.

EARLIER EFFORT TO REORGANIZE ICC

Recommendations of First Hoover Commission

In its report on Regulatory Commissions, issued in 1949, the first Commission on Organization of the Executive Branch of the Government found that

"Purely executive duties-those that can be performed far better by a single administrative official—have been imposed upon commissions with the result that these duties have sometimes been performed badly. The necessity for performing them has interfered with the performance of the strictly regulatory functions of the commissions.

"Administrative direction has not developed within the commissions. Their chairman are too frequently presiding officers at commission meetings. No one has been responsible for planning and guiding the general program of commission activity.

"Administration by a plural executive is universally regarded as inefficient. This proved to be true in connection with these commissions. *** those cases where administration has been distinctly superior are cases where the admin

istrative as distinguished from the regulatory duties have been vested in the chairman. There are many of these administrative duties. Their efficient handling will frequently make the difference between a commission's keeping abreast of its work or falling woefully behind."

In an effort to correct this situation, the Commission recommended:

"*** that all administrative responsibility be vested in the chairman of the commission."

President Truman's Reorganization Plans

On March 13, 1950, President Harry S. Truman submitted 13 reorganization plans, 7 of which dealt with regulatory agencies. In his message transmitting these plans, the President stated that they were designed to strengthen the internal administration of the regulatory agencies. After reviewing pertinent Hoover Commission recommendations, President Truman stated that:

"The commissions, concerned primarily with the substantive problems of regulation and with the adjudication of cases, cannot give adequate attention to the dayto-day executive direction of complex organizations. To the extent to which they have concerned themselves with administrative problems, the unwieldiness of the structure has sometimes rendered administration slow, cumbersome, and indecisive.

"Accordingly, within the limitations explained in later paragraphs, each of these plans vests in the Chairman, in each case, responsibility for appointment and supervision of personnel and among administrative units of the Commission, and for the use and expenditure of funds.

"In the conduct of all of these activities, the Chairman will be bound by the general policies established by the Commission and by its regulatory decisions, findings and determinations. In addition, the right is specifically reserved to the Commission to revise budget estimates and determine the distribution of funds among the major programs and purposes of the agency. The appointments of the heads of major administrative units under the Commission is subject to the approval of the Commission, and each Commissioner retains responsibility for actions affecting personnel employed regularly and full time in his immediate office.' The reorganization plans submitted were Plans 7 through 13 of 1950, relating, respectively, to the Interstate Commerce Commission, the Federal Trade Commission, the Federal Power Commission, the Securities and Exchange Commission, the Federal Communications Commission, the National Labor Relations Board and the Civil Aeronautics Board. All of these plans were virtually identical in language and form to Plan No. 1 of 1969.

Plan No. 7 of 1950 (ICC)

As indicated above, Plan No. 7 of 1950 was identical to Plan No. 1 of 1969, except for transfers relative to locomotive inspections which were effected by Plan No. 3 of 1965. This committee, on May 16, 1950, reported favorably S. Res. 253, 81st Congress, disapproving the plan, and the Senate considered and agreed to the resolution on May 17, 1950. (S. Rept. 1567, 81st Cong.). The committee's action was based upon the grounds that the plan would (1) impair the independence of the Interstate Commerce Commission as an instrument of the Congress; (2) provide for an extension of the executive branch of the Government into the regulatory field; (3) imperil the bipartisan complexion of the Interstate Commerce Commission by providing for Presidential appointment of its Chairman; (4) subject the Commission to domination by its Chairman, since all administrative responsibility would be vested in him; (5) subject Commission personnel to his exclusive control by vesting the appointive power in the Chairman; (6) tend to alienate the other Commissioners from the Commission staff which would be directly responsible to the Chairman; (7) provide a minimum of restraint upon the administrative powers transferred to the Chairman; (8) promote efficiency at a price, in terms of concentration of power, which is too high to pay; (9) fail to bring any substantial economy in the expenditure of public funds; and (10) far exceed the recommendations of the Hoover Commission (S. Rept. 1567, pp. 1-2).

In its report, the committee also raised a question concerning section 3 of Plan No. 7 of 1950, which is identical to section 3(a) of Plan No. 1 of 1969, and proposes to transfer from the Commission to the President the function of designating the Chairman of the Commission. The issue involved was whether such a proposed transfer was authorized by the reorganization statute. Although the committee report characterized this as a "seeming illegality", it stated that the committee was not disposed to make an issue of the matter. This question will be treated below.