authorizes assignment of the employees of such staff as the Commission may designate. The review staff is composed of technically qualified personnel whose sole responsibility is to assist the Commission in cases of adjudication which have been designated for hearing, by preparing for the Commission a summary of the evidence presented at any such hearing, and, subsequently, after an initial decision certain other materials specified in the statute, and as directed by the Commission. According to the President's message, these functions can be better performed by the Commissioners themselves, with such assistance as they may desire from persons they deem qualified. ACTION ON EARLIER REORGANIZATION PLANS In 1950, the President transmitted to the Congress reorganization plans on each of the agencies involved in the current proposed reorganizations. Plans No. 8 (FTC), No. 10 (SEC), 11 (FCC), and 13 (CAB) of 1950 proposed the transfer of all administrative and managerial functions within each of the agencies to the chairman and, in the case of plan No. 10, provided for his appointment by the President, rather than by the Commission. Plans Nos. 8, 10, and 13 went into effect in May 1950; plan No. 11 was rejected in the Senate by a vote of 50 to 23 on a resolution of disapproval. STATUS According to information received by the staff, there is some opposition to plan No. 1 (SEC), and the Federal Communications Bar Association has requested an opportunity to be heard in opposition to plan No. 2 (FCC). The Senate Committee on Commerce has referred plan No. 2 to its Subcommittee on Communications, which has scheduled hearings on the plan for May 23, 1961. Resolutions (H. Res. 285, H. Res. 286, H. Res. 287, and H. Res. 288) to disapprove each of these plans were introduced in the House of Representatives on May 10, 1961, and hearings on plans Nos. 1, 2, and 3 have been scheduled by the House Committee on Government Operations for May 19, 1961. Resolutions (S. Res. 142 and 143) to disapprove plans Nos. 2 and 3 were introduced in the Senate on May 11, 1961. · Should the House of Representatives approve any of these resolutions, it will not be necessary for this committee to take any action with respect to the plans affected thereby. Approved: WALTER L. REYNOLDS, Chief Clerk and Staff Director. ELI E. NOBLEMAN, Professional Staff Member. SENATE COMMITTEE ON GOVERNMENT OPERATIONS, Staff Memorandum No. 87-1-30 June 2, 1961. Subject: Reorganization Plan No. 5 of 1961, provided for reorganization in the National Labor Relations Board. Reorganization Plan No. 5 was submitted by the President to the Congress on May 24, 1961. Unless disapproved by a majority vote of either House of Congress, it will become effective on July 23, 1961. PURPOSE OF THE PLAN According to the President's message transmitting the plan, the principal objective of plan No. 5 is to relieve the members of the National Labor Relations Board from the necessity of dealing with numerous matters of lesser importance, thus conserving their time for the consideration of major matters of policy and planning. Under existing law, they are required to devote the great bulk of their time to hearings, determinations, and review of both regulatorý and adjudicatory matters. Plan No. 5 is identical to section 1 of plans Nos. 1, 2, 3, and 4 of 1961, details of which are set forth in full in staff memorandum No. 87-1-15, dated May 15, 1961. PROVISIONS OF THE PLAN Plan No. 5 would permit the National Labor Relations Board, by published order or rule, to delegate any of its functions to subordinate divisions, individual Board members, hearing examiners, employees or employee boards. This authority to delegate would be subject to the provisions of section 7(a) of the Administrative Procedures Act of 1946, as amended, which provides, in effect, that, where the organic statute of an agency requires that regulatory or adjudicatory matters may be decided only upon a written record, after a public hearing, these functions must be performed by the full agency, one or more members thereof, or a qualified hearing examiner appointed in accordance with that act. The functions which may be delegated include hearings, determinations, orders, certifications, reports, and all other work or business of the agency. As in the other reorganization plans of 1961, the National Labor Relations Board would retain the right to review the decision, report or certification of any subordinate to whom authority has been delegated, either upon its own initiative or upon the petition of a party or intervenor demonstrating to the satisfaction of the Board the desirability of having the matter reviewed at the top level. However, this right of review is made discretionary with the Board, and unless the Board desires to review on its own motion, no review may be had, except by a vote of a majority of the Board, less one member. Since the Board is composed of five members, the votes of two members would be required for review. In the event that the Board declines to exercise discretionary review, or if no review is sought within the time required by the Board's rules, then the action of any of the subordinates to whom the Board has delegated its functions is final and shall, for all purposes, including appeal or review, be deemed the action of the agency. According to information furnished by a member of the Board (copy attached), under existing law, a party seeking review of a trial examiner's findings takes exception to such findings in broad and conclusionary language. This requires the Board to examine the entire record which is a very time consuming procedure. The effect of plan No. 5 would be to require the party seeking review to show the Board by specific reference to the record and citation of applicable law that review of the trial examiner's findings is warranted, and it confines the issues only to those items of evidence referred to. Thus, if such a party has not been able to show specifically where the trial examiner erred, there would be no review by the Board. On the other hand, if he is able to persuade two members of the Board that there are substantial grounds for review, or that novel or policy questions are raised, the Board would grant review. STATUS To date, the committee has received no indication of opposition to plan No. 5, and no resolution of disapproval has been filed with respect thereto in the Senate. However, House Resolution 322 to disapprove plan No. 5 was filed in the House of Representatives on June 1, 1961. The Chairman and the General Counsel of the Board have requested an opportunity to be heard in support of the plan and they are scheduled to testify at the hearings which will be held on June 6 and 7 when the committee will hear testimony concerning the resolutions of disapproval of plans Nos. 1, 2, 3, and 4. The Chairman, the General Counsel and all members of the Board were requested to submit their views and recommendations to the committee prior to the scheduled hearings, to be held on June 6 and 7. No reply has been received to date, except for the letter set forth below from Mr. Boyd Leedom, member of Board and former Chairman, in support of plan No. 5. The chairman of the Senate Committee on Labor and Public Welfare has also been requested to give the committee the benefit of the views and recommendations of that committee for committee consideration. "Hon. JOHN L. MCCLELLAN, "NATIONAL LABOR RELATIONS BOARD, "DEAR SENATOR MCCLELLAN: I favor Reorganization Plan No. 5 of 1961. "The most significant and desirable result of the plan, in my judgment, would be the change from a procedure granting review of the trail examiner's findings automatically to one that places the burden on the parties seeking review to establish that the trial examiner's findings merit review. Under the present method, it is sufficient that the parties seeking review take exception to the trial examiner's findings by referring in broad and conclusionary language to matter being relied upon to indicate a contrary result. Adequate treatment of such exceptions often calls for a perusal of the entire record, and, especially where the record is lengthy, this procedure leads to waste of untold hours and lends itself to purposeful delay. "To require the party seeking review to show the Board, by specific reference to the record and citation of applicable law, that review of the trial examiner's findings is warranted, will result in confining the issues to only those items of record evidence referred to and to those cases cited. Thus, the new procedure will eliminate from Board review those cases which are not shown to have been improperly decided. This, of course, will have the incidental and desirable effect of allowing more time to the Board to review those cases in which review is, in fact, warranted, including those cases which raise novel issues and policy questions. "Certainly the aggrieved party can be relied upon to point up substantial and material error in a trial examiner's work. When this is done, the trial examiner's initial decision will be reviewed and his error corrected. When this is not done, and only frivolous, unmeritorious, or insubstantial grounds are advanced for reviewing the initial decision, review under sound judicial and administrative procedure should not be granted. "I have heard it said that the proposed plan vests too much decisional authority in one person. This contention, I believe, is based on a misconception of the plan. The authority of the trial examiner is essentially the same now as it will be after reorganization. Now, as then, he must make determinations of fact and law. Such determinations do not stand now if they involve substantial error; neither will they under the new plan. The same standards that prevail now to determine validity of the trial examiner's findings of fact and law, will be applied by the Board under plan 5. The only real difference, as stated, is that his work will not be reviewed unless at least two Board members of the five are persuaded, after consideration of the arguments by the parties requesting and opposing review, that there appears to be substantial ground for review. "The foregoing sets forth my basic views on the proposed plan. I have joined with other members of NLRB in a more detailed and comprehensive statement to be filed with the committee in support of the proposal. "Sincerely, "BOYD LEEDOM, Member." ELI E. NOBLEMAN, Professional Staff Member. Approved : WALTER L. REYNOLDS, Chief Clerk and Staff Director. The CHAIRMAN. Communications from the public, if deemed pertinent and informative, will be inserted in an appropriate place in the record. Senator Gruening, do you have any comments at this time? Senator GRUENING. NO. The CHAIRMAN. Senator Javits? Senator JAVITS. We have before us the record of the hearings before the Securities Subcommittee of the Committee on Banking and Currency on Reorganization Plan No. 1 and I didn't know whether the chairman desired to incorporate that in the record. The CHAIRMAN. The Chair has a letter here for Senator Harrison A. Williams, chairman of the Subcommittee on Securities of the Committee on Banking and Currency, transmitting the work of that committee on Reorganization Plan No. 1. This letter may be printed in the record at this point. DEAR MR. CHAIRMAN: I enclose copies of hearings held by the Subcommittee on Securities on Reorganization Plan No. 1 of 1961, providing for reorganization in the Securities and Exchange Commission, for the use of your committee in connection with that plan and Senate Resolution 148. As you will remember, these hearings were held as the result of your letter of May 2 to the chairman of this committee requesting any comments which the Banking and Currency Committee might have with respect to the plan. As I announced at the start of the enclosed hearings, while the hearings were held by the Subcommittee on Securities, all the members of the full Committee on Banking and Currency and of the Committee on Government Operations were invited to attend. Neither the Subcommittee on Securities nor the full Committee on Banking and Currency has made any formal comments with respect to Reorganization Plan No. 1 of 1961. I trust, however, that the enclosed hearings will be of use to your committee in your deliberations on the plan, and I trust that they will be of use, too, to the members of this committee on considering any legislation which may arise out of this proposal. Sincerely yours, HARRISON A. WILLIAMS, Jr., Chairman, Subcommittee on Securities. The CHAIRMAN. The record submitted by that committee, for the moment, will be filed as a document for reference. I don't know whether we want to reprint it all in the record. We can determine that later. For the present, it will be filed as a part of the records of this committee for reference. Senator JAVITS. May we also have it considered as part of the basis for the action of this committee? I really don't care about the mechanical printing of it. The CHAIRMAN. I am just trying to avoid reprinting it again, if it is already printed, and, of course, anything that will become a part of the record of this committee is for the committee's consideration and is properly before us for our consideration. I assume they made some specific recommendations. I have not read it. Senator JAVITS. What they did, if I may be recognized-I suggested to Senator Williams that he write the Chair of this committee. I said that I would express my own feelings as a member of the committee and I wish to state for the record that I am opposed to Reorganization Plan No. 1. I believe that it makes certain transfers of authority possible to the staff which are very unwise and which raise very serious constitutional questions, as well, and will not, in my opinion, materially facilitate the work of the Commission, but will materially raise serious questions of jeopardy of the interest of those who appear before the Commission and of people buying and selling and owning securities. I have made various suggestions to the Commission as to what I think can be done consistently with their plan. They have limited the term, as the Commission itself is limited in term, the extent to which it proposes to use this plan, if it should be approved, and that is all incorporated, Mr. Chairman, in the record of the hearing before the subcommittee of the Banking and Currency Committee. The CHAIRMAN. Very well. As I note here from the chairman's letter, no formal action was taken. They just submitted the record that was developed and we make that now a part of the record of this committee by reference only, to avoid reprinting and duplication. Therefore, any of its contents are eligible for such consideration as members of this committee may desire. Senator JAVITS. May I then hand to the clerk, Mr. Chairman, enough copies for the members? The CHAIRMAN. Oh, indeed. Anything further? Any comments, Senator Gruening? The CHAIRMAN. Mr. Landis, will you come around, please, sir. Just have a seat and identify yourself for the record. STATEMENT OF JAMES M. LANDIS, SPECIAL ASSISTANT TO THE PRESIDENT Mr. LANDIS. My name is James M. Landis. I am Special Assistant to the President, dealing primarily with the problems arising out of the regulatory agencies. The CHAIRMAN. First I want to say that the committee welcomes you. We are especially glad to have you and we know that you have given a great study to the problems that are involved in these plans that are now before us. For that reason we thought it appropriate that you be the first witness and deal in some detail with respect to the plans, what their effect will be, and why such reorganizations are needed. Mr. LANDIS. May I say at the outset, Mr. Chairman, that I think that everybody is genuinely concerned with the delays in the dispatch of business before the regulatory agencies. The whole purpose of these plans is to try to help that situation. The plans themselves follow a general principle of permitting the commission or the board which may be involved to delegate its functions to an individual commissioner, a panel of commissioners, a board of employees, or even to an employee. The CHAIRMAN. Is that principle now followed throughout all of the plans? Mr. LANDIS. Yes, sir. The CHAIRMAN. As I understand your testimony, that applies to all of them. Mr. LANDIS. That is true. The CHAIRMAN. That is the general purpose of all of the plans, to enable these agencies to expedite their business; to give the power to the commission to delegate certain authorities in order to accomplish that result? Mr. LANDIS. That is right. That is the general principle that lies behind the plans. I might also point out that the delegation has to be done by a published rule or order. In other words, it has to be a formal action on the part of the commission and the adoption of a rule or order of that nature will be governed by section 4 of the Administrative Procedure Act, so that notice of the adoption of a rule of that nature must be given and an opportunity for hearing be given before the rule itself is adopted. The CHAIRMAN. Could a rule adopted by the Commission delegate to the chairman, say, the power to further delegate to somebody else? |