but rulemaking under the Administrative Procedure Act is such a broad concept that things that you and I would not normally think of as being rules become rules by virtue of definition. Orders with regard to rates, minor things of that nature, are probably rules under the Administrative Procedure Act and delegation of matters of that nature seem a desirable thing.

The CHAIRMAN. One other question. There is some concern expressed that these plans would actually, by vesting greater powers in the Chairman, also tend to place greater power and control in the White House. People are concerned and want these agencies to remain independent agencies. There is some concern expressed that these plans may give the White House greater control over these agencies if the President chooses to exercise it. Now, what are your comments about that?

Mr. LANDIS. I find it difficult see how that could result. No delegation can be taken under these plans except by a majority of the Commission and the only power that the Chairman is given under these plans that he doesn't possess or perhaps doesn't possess today is picking the fellow commissioners or a board of employees or something like that to handle the kind of matters that have been delegated by rule to those individuals. Furthermore, if he does delegate, the minority of the Commission can always bring that matter to the attention of the Commission as a whole.

The CHAIRMAN.. That could be a pretty important power. We notice our Supreme Court frequently divides about four to five. Now if I were the Chief Justice of the Supreme Court, just using this as an illustration, or Chairman of a Commission, and I wanted to delegate something to someone, assign it to somebody to handle, why I would have a pretty good opinion, on the merits of the issues involved, as to which one of the Commissioners maybe or members of the Board or which member of the staff I would want to assign it to. Do you think that might enter into some consideration here?

Mr. LANDIS. I doubt it very much. Actually, of course, the assignment of opinions in the Supreme Court is done now by the Chief Justice. It is not done in rotation. He picks the various individuals. The CHAIRMAN. Well, that is to write an opinion.

Mr. LANDIS. That is to write the opinion. It is not the same kind of thing. I mean there the judgment has really been made before the assignment takes place, but this kind of thing is commonly done in many courts today, for example, in New Jersy. The chief justice of New Jersey has the task as regards the assignment of judges for various different actions. I can't see that there is much chance of abuse here.

The CHAIRMAN. I am not necessarily expressing my own views, but I am trying to make this record, and while you are present here to give you the opportunity to refute or to point out what you conceive to be maybe undue concern about such matters. I have heard some talk of that and I was a little concerned about the effect of this-putting a lot of power in the Chairman and possibly giving an entree for the White House to intervene and have things done their way, thus destroying or impairing the independent action of the Board. I don't know just how they rationalize to arrive at that conclusion exactly, but there has been some expression along that line and I thought while you were here, since I understand you are largely the author of these

plans, that you ought to be given the opportunity to make any comment that you felt proper and ought to be made in these areas.

Mr. LANDIS. Mr. Chairman, no power can be granted to any individual without there being a potentiality of abuse. But the safeguards that have been written into these plans are such that the chances of abuse seem to be very, very negligible and they can, of course, always be corrected by a minority standing firm on its rights.

The CHAIRMAN. As I understand it now, the Chairman is assigning these matters. Can he also direct the place where the hearings should be held and impose other conditions or restrictions or directions, may I say, in connection with the whole proceedings?

Mr. LANDIS. Not by virtue of anything that is contained in these plans. He may by virtue of the basic legislation that is already in existence, but certainly there is no grant of any power of that nature in these plans.

The CHAIRMAN. There is no such extraordinary powers conferred by these plans?

Mr. LANDIS. No.

The CHAIRMAN. Whatever power he now has under existing law, he would still have? The plans would take no powers away? Mr. LANDIS. That is right.

The CHAIRMAN. It only enlarges the power in certain areas?
Mr. LANDIS. In this one area, that is all.

The CHAIRMAN. And that after the Commission itself, as I understand it, approves or delegates the power to it; is that correct?

Mr. LANDIS. Only then, only after the Commission has approved the delegation can he then name the

The CHAIRMAN. The naming of the individuals there is left to his discretion, but the Commission has to grant it?

Mr. LANDIS. That is right.

The CHAIRMAN. Senator Gruening, any questions?
Senator GRUENING. I have no questions.

The CHAIRMAN. Senator Javits may want to ask you some questions. He had to go to another committee, I understand, for a vote, but in the meantime we have here Senator Case of South Dakota. Senator Case, I believe you are the author of one of the resolutions or two of them, are you not?

Senator CASE of South Dakota. I introduced one and Senator Mundt is cosponsoring it, and am cosponsor with Senator Mundt on the second one.

The CHAIRMAN. The committee welcomes you and we are all vitally concerned, one Senator as much as another. The committee members may have a little more direct and immediate responsibility for processing these plans, but since you are the author of a resolution of disapproval, Senator Case, the Chair, with the approval of the committee, is going to extend to you the courtesy, if you care to, to interrogate the witnesses as they appear. If you have any questions therefore, you may now ask the witness, if you desire.

Senator CASE of South Dakota. Thank you very much, Mr. Chairman.

I would like to present a statement with respect to the resolutions introduced, but in view of your invitation I would like to comment on two points that have just come up in your colloquy.

The CHAIRMAN. Did you have in mind to testify later before the committee?

Senator CASE of South Dakota. Yes, I do.

The CHAIRMAN. I suggest at the moment, if you have questions, you might ask the witness the questions and then we will hear your testimony later on or hear your statement.

Senator CASE of South Dakota. I should like to ask Dean Landis why, when you spoke of the rulemaking, why did you suggest that that be delegated to a board of employees?

Mr. LANDIS. I didn't suggest that. I think a board of employees in certain situations would be very desirable.

Let me take the particular illustration I gave; namely the manner in which registration statements are filed. I think if you pick the director and the assistant director, maybe two assistant directors of the registration division, they will be the people who would be expert in that field and, in substance, I suppose actually it is delegated to

them now.

Senator CASE of South Dakota. Why did you suggest a board of employees rather than single employees?

Mr. LANDIS. Because in the Interstate Commerce Commission that device is employed with regard to a number of matters. Boards of employees have handled a series of different matters in the Interstate Commerce Commission. That is the only place that I know of where the device of the board of employees is utilized.

Senator CASE of South Dakota. But in the reorganization plan you contemplate that cases of a life and death sentence so far as application of a license should be assigned to an individual, but I am interested in the fact you go back to the board idea when you propose the formation. of rules.

Mr. LANDIS. Well, in these cases that you speak of, the licenses, they are matters that come under section 7 of the Administrative Procedures Act and they go to a hearing examiner now.

Senator CASE of South Dakota. They do, but when they go to a hearing examiner now, there is a mandatory right of review to the party concerned.

Mr. LANDIS. That is right.

Senator CASE of South Dakota. And you are proposing to destroy that mandatory right of review with a single man making the decision, unless a number, one less than a majority of the board or commission, calls for the review?

Mr. LANDIS. That is right.

Senator CASE of South Dakota. Well, it would occur to me that if you think there is some value in having a board, rather than a single individual make the rules that there is some value in having a mandatory right of review preserved for the persons whose life or death will be determined by the single examiner or single commissioner.

Mr. LANDIS. Well, I should think that if the case is important that naturally the discretionary right of review would be exercised and would be granted, but there are many minor matters that don't really call for an expensive procedure of that nature.

Senator CASE of South Dakota. Then you rest upon the fact that a number of one less than a majority could call for a review? Mr. LANDIS. That is right.

Senator CASE of South Dakota. And you used the term "minority." Do you have in mind that the boards would divide on party affiliation? Mr. LANDIS. No, I don't, because my experience has been that the boards don't do that type of thing; they don't divide on party affiliation. They divide, but they divide usually on social and philosophical considerations, rather than on party considerations. However, in most of these agencies a requirement exists that no more than a majority shall be from one party and if party affiliation is important, the minority can always insist upon full action by the board.

Senator ČASE of South Dakota. Now, of course, I expected you to suggest that possibility that the minority might represent one party, but supposing the minority-let's say on the Board of seven that there were four that were members of one political party, but that the minority consisted of one of an opposite political party, one of a minority political party and one independent. Don't you think that would destroy the reliance of these orders placed upon the advice of one less than the majority given the right to call for a review?

Mr. LANDIS. Well, I would say this, that it is rather unusual that that kind of a thing exists. I have seen it where you have one independent on a board. I have seen that situation.

Senator CASE of South Dakota. So that with one independent on a board, the so-called political minority party might not actually have one less than a majority of the entire Board.

Mr. LANDIS. That is correct. I will agree, but I don't think the political considerations are the important considerations.

Senator CASE of South Dakota. They may not be important or they may not be the only thing to consider, but does not the possibility exist with the naming of a Chairman in the discretion of the Chief Executive, that that would tend to emphasize the political affiliation of the membership of the Commission or the Board.

Mr. LANDIS. I don't think so because these plans don't affect the situation, as it exists today, where the President names the Chairman of the Board.

Senator CASE of South Dakota. That is all of the questions.

The CHAIRMAN. Senator Javits, you were away and I made use of the time by letting Senator Case ask some questions. Since you have returned now, it is your witness and you may proceed.

Senator JAVITS. Thank you.

I had the privilege of questioning Dean Landis at the hearing before the Banking and Currency Committee, so I will not repeat that except ask whether you do adopt your direct and cross-examination, as it were, as given before the subcommittee on Banking and Currency. Mr. LANDIS. Yes, I think so, Senator.

Senator JAVITS. I have this one point to ask you: What do you think of the legal question involved in delegating rulemaking power through a reorganization plan? The rulemaking power was given to the Commission by action of the Congress, passed by two Houses, signed by the President, and here we would authorize them to delegate it by a rather different proceeding which can be nullified by one House, but is not tantamount to passing a mandatory statute. Are you satisfied that legally the Reorganization Act permits us to do any such organic thing as that?

Mr. LANDIS. I think so because the Reorganization Act of 1949 specifically carries in it the right for the President to submit plans delegating authority from or permitting the delegation of authority. It is specifically there.

Senator JAVITS. This is, of course, quite a substantive act that would be performed, you agree, with that?

Mr. LANDIS. It depends on how much it is exercised.

Senator JAVITS. We give the power. This is one of the fundamental differences between us. I am against giving these agencies, especially the SEC, the authority to delegate rulemaking because I think this is a very fundamental organic power which they have and which they ought to exercise and take the responsibility for in the public interest and they say they are not going to use it very much or they are going to use it only in minor cases. Well, if they are only going to use it in minor cases, why give them the power to delegate because I think it is too sacred in terms of people to give them that power.

I have one other question. You said a good deal about delay and I couldn't agree with you more, that we have to find some way of eliminating delays in the SEC. I know how hurtful it is. I represent the State which has the greatest security market in the world. What I am worried about is whether you will cure the delay by delegation because I have seen staffs which could delay you out of your ears a lot more than commissions which are at least subject to getting beaten over the head by the press and radio and television and by us. You can get some very great delay down the line of the staff until you just scream with anguish, especially if you can't go over their heads until the end of the proceeding. You remember we went into that and you felt that the Commission could at any time come and just pick up a proceeding wherever it was. Nonetheless we would be giving you the power to say that the Commission should go nowhere near the thing unless at the very end, according to the rules and regulations of the Commission, two Commissioners or a minority of the Commission say they may do it So I can see where that would lead to delay far more intolerable than the delay you have and give the power not to a Commissioner, but to a staff member, to hold you up until he did what you wanted. Until then your proceeding is just not going to be ground out of that division. I want to get your comments on that. That is a pretty practical thing and you know I have been a very practical practicing lawyer just like you.

Mr. LANDIS. I know what I would do if I ran into that kind of a situation. I simply would petition the Commission to take some action.

Senator JAVITS. Do you contemplate the rules of the Commission will permit petitions during the pendency of it? You know you can't do that in an appeal from a court unless you want to get a writ of prohibition because of jurisdiction or charge him with prejudice. You are stuck. I have seen judges hold decisions for months and months and years and you can't do anything about it.

Mr. LANDIS. Well, I think that, of course, is true in many judicial actions, but I think one of the greatest causes for delay is the inability, very frequently, of a hearing examiner to decide an interlocutory matter and that has to go back to the Commission and then the hearing starts again.