having the Commission operate as a unit on all matters creates a tendency on the part of the Commission to confuse the two and apply the same concepts and philosophies in both fields. The second stated purpose is that the Commission has centered its attention, as well as the attention of its staff, on broadcasting at the expense of the other matters entrusted to the Commission's jurisdiction.

As to the first point, I have heretofore seen such statements in print both in a trade magazine and in briefs filed by networks during the course of litigation. But I have never seen any facts presented to support the charge. In order to provide a means for proving or disproving the statement I have prepared exhibit No. 2 which catalogs the more important powers which the Commission exercises in the common-carrier field. You will note that when we deal with the telephone or telegraph companies we have authority to order their rates to be raised or lowered, prevent discriminations in rates, prescribe the form of accounts they must keep, determine the depreciation rates which should be applied, ascertain the rate of return they are entitled to earn, et cetera. None of the concepts of common-carrier regulation is used in the broadcast field.

I turn now to the second stated purpose of section 5, namely, that broadcasting work demands a disproportionate share of the Commission's efforts.

It is true that broadcasting work does require a great amount of time, but examination of the Commission's agenda discloses that it is in the common-carrier and safety and special-service work that we are relatively current. In the broadcast field we have a huge backlog. This has been due to the abnormal broadcast work load that has been thrust upon the Commission since the war.

At the present time, this backlog consists principally of hearing cases. A division of the Commission would not expedite this work. What is badly needed in connection with the hearing cases are more hearing officers.

Moreover, in the common-carrier field the Commission has for the past several years had both a telephone and a telegraph committee each composed of three Commissioners to which is delegated a large portion of the Commission's functions with respect to common-carrier matters. Originally these committees were responsible only for coordinating the staff work on common-carrier matters. In the past few years more and more important functions have been delegated to these committees.

So far as the safety and special services are concerned, the new bill would not effect any change in the present set-up. Such matters are now handled by the full Commission and they would continue to be handled by the full Commission under the new system. Indeed, if anything, less attention would be paid to the safety and special services problems under the new system because each Commissioner would be primarily concerned with the work either of the Broadcast Division or of the Common Carrier Division.

This is the situation so far as the Commissioners are concerned. As for the staff, it is presently organized into divisions. Thus, in each of the professional departments-Engineering, Law, and Accountingwe have a Broadcast Division, and Common Carrier Division, and in addition the Engineering and Law Departments have Safety and Special Services Division.

We have no such division in the Accounting Department, because the Accounting Department does not deal with the safety and special services.

Thus far, I have been discussing the reasons which have been advanced for requiring a mandatory division of the Commission, and I have endeavored to show our reasons for feeling that the arguments advanced are not valid arguments.

I should now like to discuss the affirmative objections we have to section 5 of the bill. In the first place, the divisions proposed by section 5 would be composed of three members each. In our opinion, many of the problems which the Commission must pass upon are too important to be finally resolved by a majority vote of two out of three men. This has been recognized ever since the days of the original Federal Radio Commission. That body had five members and did not have the present Commission's common-carrier jurisdiction.

The second difficulty with section 5 is that it provides for only two divisions-Common Carrier and Broadcasting. In our opinion three divisions are desirable since the work that we are performing in the safety and special services field is as important as in the other two branches referred to.

The CHAIRMAN. May I interrupt you right there? Would you not consider that the authority that is reserved to the full Commission, conferred on the full Commission, is pretty near tantamount to constituting a third division? You would have your Broadcasting Division, your Common Carrier Division; and then you have your over-all Commission Division, if you want to call it a Commission Division.

It would seem to me, in thinking about it, that with the specific authorities which we have vested in the Commission, with the right of the Commission to make all the allocations of frequencies available to the Broadcasting Division, with its authority to make all the rules and regulations for the conduct of the business, that we were creating, in fact, although not in name, really three statutory divisions, a Broadcast Division, a Common Carrier Division, and the Commission.

Mr. DENNY. You could, Senator, treat the full Commission as a third division. I quite agree that if we go to the division system, we need coordination that would be supplied in such general matters as allocation and rule making. Those things must be in the hands of the seven members of the Commission.

I have thus far only covered the portion of my statement which is critical of the division system. I am going to say something good about the division system in a little while, and one of the things that I am going to say about the division system that we like is that I think it provides the opportunity in each of these three important fields for supplying more leadership than we now have. That is the keynote, as I see it.

The CHAIRMAN. It almost seems to me that the difference between you and me in respect to this matter is that you really want what I should refer to as discretionary rather than mandatory divisions. I was trying to get into the law a mandatory provision establishing three divisions and conferring statutory authorities upon the Commission. But I do not want you to take time now to discuss that.

Mr. DENNY. I don't think we are quite as far apart as my statement up to this point might seem to indicate. We are apart, I think,

on two fundamental points. One is that if we are to have divisions, it is just as important that we treat Safety and Special Services the same way as we treat Common Carrier and Broadcasting, and not leave that to the seven men who are going to be divided up among two other activities, but give them the same specialized leadership that we supply in the other two fields. Because in those fields we are not dealing with the telephone company and the telegraph company and with the broadcasting companies, who have their counsel, and who can pretty well, in these matters, take very good care of themselves.

In that field, we are dealing with the shipowners, with the itinerant aircraft pilot, with the small boat owner, with the police chiefs throughout the Nation, with the fire departments throughout the Nation, with people who are not so well organized, who cannot quite so competently take care of themselves, and who, therefore, need a little more nursing from the Federal authority than the broadcasters, or the telephone or telegraph companies. And that is one reason why I strongly feel that we need three instead of two divisions if we go to the division system.

The second rather basic point on which I believe we are apart, or at least perhaps a little bit apart, is that I do not feel that three men are enough for a division. Because if, for example, you commit the final authority in this country to making decisions in the broadcasting field, or in the telephone or telegraph field, or in the maritime or aviation field, to the judgment of three men, those decisions are going to be made in many instances by a majority of two men. And to have those important policy matters, which so deeply and importantly affect communications-and, in the case of broadcasting, the very processes of democracy itself-decided by three-man divisions, would be, I feel, to move too far toward a single autonomous authority.

I don't think anyone would think of committing broadcasting regulation to a single administrator, and I think that a three-man division, which would turn on a majority vote of two men, is only one man better than a single administrator. Therefore, I strongly urge that if we are to have divisions they should be divisions of more than three men.

Now, those are the points on which I think we are a little bit apart. The CHAIRMAN. You may go ahead now. I will not interrupt. Mr. DENNY. It is very helpful to me to discuss it this way, Senator. The CHAIRMAN. Well, you are persuasive, but you have not convinced me as yet.

Mr. DENNY. I think this is one of the most important subjects in the bill, and I think I would like to stay with it until I convince you, or at least until I have exhausted my efforts to convince you.

The CHAIRMAN. I said I was not going to interrupt the witnesses, and then I got a little stirred up by what you said, and was not able to restrain myself; but I am going to struggle to keep still and listen. Senator MCMAHON. May I ask a question, Mr. Chairman? The CHAIRMAN. Senator McMahon.

Senator MCMAHON. In a circuit court of appeals, there are three members and decisions come down two to one. I realize that is a judicial body and this is an administrative one, but what is your observation on that?

Mr. DENNY. My observation is this: That on the circuit courts of appeals you are dealing only with judicial matters, and you have an appeal to the Supreme Court of the United States, which has nine members.

Senator MCMAHON. I think that is rather good.

Mr. DENNY. Senator White, I think that on this point that I have been urging, about not committing this authority to the judgment of three men, I at one time had your agreement on that. My research may have misfired, but I have something which goes back pretty far, I think. It goes back to 1939. I have not succeeded in running it down to the Congressional Record yet. The best authority I have is volume 7, No. 7, of the NAB Reports of February 17, 1939, which quotes a statement which you may remember on this three-man point.

Do you remember it?

The CHAIRMAN. Do you wish to have this in the record?
Mr. DENNY. No.

The CHAIRMAN. You are just sending this up for me to struggle with, I gather.

Mr. DENNY. No; I am here to give my views. But in an effort to attempt to persuade you a little further toward my point of view on this, I thought it might be helpful to hand you that and ask you to recall the thinking that had led you to that position in 1939. Because on this point of three members, I do think that we have there a pretty fundamental point.

Under the division system, Senator, as set up in section 5, there of course would be no appeal to the seven-man Commission. The judgment of the three-man division would, for all purposes, be final. Senator JOHNSON. Mr. Chairman, may I interrupt?

The CHAIRMAN. Senator Johnson.

Senator JOHNSON. It seems to me that there is one thing that is very obvious, and that is the danger of having too much law. Setting these divisions up by law, it seems to me, is a very backward step.

I should like to ask the chairman, who is chairman of this Interstate and Foreign Commerce Committee, how he would like to have set up by law divisions of this committee, and delegate authority over certain legislation to those committees in which two members of this committee would have authority in the matter of railroad legislation, aeronautical legislation, or the other matters that we have to pass on to subcommittees for hearings and for reports.

Now, it seems to me that the same thing applies in the FCC as would apply in this committee of the Senate. I do not want to bother the chairman with an answer to that question now, but it seems to me that is the problem, and that is the answer; and there is a grave danger in getting statutes mixed up with administration-a danger that it will result very much to the detriment of good administration.

Mr. DENNY. That is one of the points that I am going to stress. As Senator White suspected, I am going to urge the retention of the present system in the law, which permits, but does not require the Commission to utilize divisions. But the Senator has a good answer for me on that. He says that has been in the law since 1934. The Commission used it between 1934 and 1937. It abandoned it in 1937, and it has never tried it since. So it does not do any good to have a permissive statute a statute which permits divisions.

That is something I would like to deal with just a few steps on.

Senator JOHNSON. Did you abandon it for a good reason, or just to be arbitrary?

Mr. DENNY. I was not with the Commission in 1937. The studies that I made and the talks that I have had with people who were there in 1937 come out to differing points of view. Some people will tell you it did not work satisfactorily. Some people will tell you it worked very well.

My present view, to anticipate what I am going to say in my prepared statement in just a moment, it that we should again try the division system.

The CHAIRMAN. Then the only difference beteen you and me would be whether it was a voluntary system or a system established by statute. Mr. DENNY. That is an important difference between you and me, but there is a second difference, and that is this: That the kind of division system that I, at least, think we should try is substantially different from the type of division system which is written into section 5 of the bill. It does not involve three-men divisions, and it does not involve only two divisions. It contemplates three divisions.

Perhaps if I go back to my testimony, this will tie together. I have a rather specific plan set out here a little later on.

I have dwelt with the second difficulty that we see in section 5; namely, that we have only two divisions whereas we think we should have three in order to cover the Safety and Special Service work.

Now, I come to the third objection to section 5. I trust that the committee will accept my statement that I do not advance this with any selfish view, and there is nothing personal in what I say. This next objection deals with the participation of the Chairman in the work of the divisions.

From a personal standpoint I have no strong feeling. From a standpoint of good administration I do have a very strong feeling on this subject, and I would like to present it to the committee for whatever it is worth and to assure you that it is not colored by the way it would affect me at the present time.

It is this:

The Chairman would not sit on any one of the divisions. Now, this means that with the seven-man Commission you could of course have two divisions, and not more than three members.

Moreover, while the Chairman is declared to be the executive officer of the Commission and its responsible spokesman, I think you will agree that he would be in an anomalous position in trying to represent the divisions on which he did not participate or even have a right to vote. I was thinking, as I came down here this morning, that if I came down as a Chairman of a Commission that was divided, and we had this bill before us, most of which deals with broadcasting, then I could not be the official spokesman for the Commission. I would not sit in the day-to-day actions on broadcast matters. I could read what the Broadcast Division was doing. And if I did a decent job, I would follow them as closely as I could. But I would not be part of those day-by-day actions. I would not necessarily agree with the policies that the Broadcast Division had fixed. Therefore I would not be a very good person to defend those policies.

I would say that instead of having the Chairman of the Commission down here for the hearing, in that case you ought to have the Chairman of the Broadcast Division, on such a matter.