Senator JAVITS. I would just like to spread my own views on the record, after hearing all of the Commissioners and the Chairman of the Commission and, incidentally, I have no criticism of them, they are men of the highest character that testified with frankness and indeed great knowledge of their subject-it is just a difference in public policy. I would say, one, that I would be against giving them the power to delegate the rulemaking authority and, two, that I believe that by retaining the rulemaking authority they would make it possible for us to allow them to delegate uncontested proceedings and the exercise of administrative powers in noncontroversial cases because then they could, by their own rules, define what those are. Thereby, I think, they could materially cut their workload in specific instances, which were testified to, but without running into what I consider to be the real dangers that I have indicated in my discussions with Dean Landis.

I thank you, Mr. Chairman.

The CHAIRMAN. Senator Gruening?

Senator GRUENING. No questions.

The Chairman. Thank you very much. We appreciate your presence and your presentation. There will be inserted in the record at this point a letter from Mr. Landis, responding to a request from the committee, relative to the effect of section 7(a) of the Administrative Procedure Act of 1946, as amended, on the agencies concerned if Reorganization Plans 1 to 4 of 1961 become effective.

(The letter is as follows:)

Hon. JOHN L. MCCLELLAN,
U.S. Senate, Washington, D.C.

THE WHITE HOUSE, Washington, June 12, 1961.

DEAR SENATOR MCCLELLAN: Thank you for your letter of June 7, 1961, having reference to the effect of section 7(a) of the Administrative Procedure Act should the reorganization plans for the various agencies become effective. I apologize for not having replied earlier, but I have found myself unavoidably detained in New York for the last several days.

The reorganization plans submitted by the President contain a provision in section 1(a) "that nothing herein contained should be deemed to supersede the provisions of section 7(a), of the Administrative Procedure Act (60 Stat. 241), as amended." Under section 7(a) of the Administrative Procedure Act, in certain cases of rulemaking and adjudication, there must preside at the taking of evidence (1) the agency, (2) one or more members of the body which comprises the agency, or (3) one or more examiners appointed pursuant to the Administrative Procedure Act. Since section 1 of the reorganization plans submitted to Congress provides that the agencies may delegate their functions to employees and employee boards, it was necessary to preserve the limitations of section 7 (a), which, in effect, means that in those cases required by the act to be heard by the agency, members thereof or hearing examiners, no delegation can be made to employees or employee boards pursuant to these reorganization plans. The delegations to employees and to employee boards contemplated by the plans will therefore have to be accomplished in those instances where there is no requirement that the provisions of section 7(a) govern.

For those cases required to be heard within the limitations of section 7(a), therefore, operation under the reorganization plans will be the same as in the past, excepting only that the agencies concerned may, under the plans, delegate to panels or to individual commissioners the function of presiding at the taking of evidence in full accordance with section 7(a) of the Administrative Procedure Act. Thus, these plans complement section 7(a) of the Act.

Very truly yours,

JAMES M. LANDIS,

Special Assistant to the President.

The CHAIRMAN. Senator Case, will you come around, please. Senator CASE of South Dakota. Mr. Chairman, I have only three copies of my statement.

The CHAIRMAN. All right, Senator. Identify yourself for the record and proceed.

STATEMENT OF HON. FRANCIS CASE, U.S. SENATOR FROM THE STATE OF SOUTH DAKOTA

Senator CASE. I am Senator Case of South Dakota. I introduced Senate Resolution 142, with my colleague Senator Mundt as a cosponsor, relative to the Federal Communications Commission Reorganization Plan No. 2 and as a cosponsor joined Senator Mundt in his introduction of Senate Resolution 143 relative to Reorganization Plan No. 3 relating to the Civil Aeronautics Board.

Mr. Chairman, I appear today in opposition to Reorganization Plans Nos. 2 and 3, which were submitted to the Congress on April 27, 1961, and May 3, 1961, relating to the Federal Communications Commission and the Civil Aeronautics Board, respectively. Both of these proposals ostensibly provide for greater efficiency in the dispatch of business. I would say they may expedite action, but whether so or not, in my opinion they tend to defeat the fundamental purposes of these agencies. These proposals will become effective 60 days from the date of submission unless a majority vote in opposition is adopted in either house.

At the outset, let me say my opposition to Reorganization Plan No. 2 is not prompted by disagreement with the Federal Communication Commission Chairman's recent statement with respect to television programs before the National Association of Broadcasters. I think possibly these programs serve a far greater public purpose than was accorded in the opinion of the Chairman, as expressed at that time, but I couldn't disagree that there shouldn't be improvement, as much as possible, from time to time.

Agency reorganization should be a continuing objective, as bureaucratic rigidity has a tendency to override administrative flexibility. Nevertheless, reorganization proposals should be carefully examined to see whether they will in fact cure the alleged problems they are intended to solve and, more importantly, whether such proposals are consistent with our fundamental concepts.

The plan proposed for the FCC is comprised of three parts:

First, the authority to delegate; second, the transfer of functions to the Chairman; third, abolition of the review staff.

Since the plans must be adopted or rejected in toto, all parts should be carefully considered.

One of the inherent dangers in a broad delegation of powers is that the delegating authority may become isolated or at least inaccessible to the actual operating level. Further, present authority exists in the Federal Communications Commission to make assignment or referral (47, sec. 155 (d)) to an individual Commissioner or Commissioners or to a board composed of one or more employees of the Commission. But under the plan the Commission has a discretionary right to review actions taken by those to whom authority has been delegated. Three votes, in the case of the Federal Communications Commission,

one less than the majority, would be required to bring the action before the Commission for review.

Since the law states that not more than four members of the Commission shall be members of the same party, this provision would appear to pay lipservice to the bipartisan character of the Commission. But in practice there is no such assurance that one member, much less three, will be members of the minority party. I mean, speaking of minority party, politically. That was the point I discussed in interrogation of Dean Landis. Thus the protection given in the provision is something less than real. The net effect, therefore, would be to tend to transform the Federal Communications Commission, an independent regulatory agency, into an arm of the executive, which has the authority of appointment, and the designation of Chairman.

Not only does this proposal do violence to the concept of bipartisanship and independence, but it runs contrary, also, to a basic procedural concept of review. The plan proposed, plan No. 2, would deny the right of aggrieved parties to even one administrative review of the presiding officer's initial decision and to present oral argument in this review. Under the present law, and adjudicatory matter is heard by a hearing examiner as established by section 11 of the Administrative Procedure Act and the examiner's decision is subject to review as a matter of right by the full Commission (sec. 409 (b)). So also all rulemaking or other regulatory actions by subordinates are subject to review as a matter of right (sec. 5(d) (2)).

Under the present law, the Commission may delegate all of its business except the Commission's decisionmaking functions in cases of adjudication (sec. 5(d) (2)). Thus, Reorganization Plan No. 2 in basic effect merely adds to present broad powers the power to delegate the Commission's decisionmaking functions in cases of adjudication. But it destroys any right of review to persons aggrieved. The danger is that the Commission, under the press of its many responsibilities, will not exercise the discretion it has to review these adjudicatory decisions and other important matters. Parties would be forced to depend upon the opinion of any one of 15 examiners, 7 individual commissioners, and an unlimited number of employees or boards of employees to whom their cases might be assigned. I hope the committee will give careful consideration to that fact that it isn't merely to the 7 individual commissioners that cases might be assigned, but also to any one of 15 examiners and to an unlimited number of employees or boards of employees.

An aggrieved party should have at least some automatic right of review by one or more of the commissioners themselves.

The CHAIRMAN. Does this plan deny that now altogether?

Senator CASE of South Dakota. It does, unless a number, one less than the majority of the commissioners, votes to exercise the right, and with a board of seven, three could require the review, but if only one or two of the commissioners asked for review, it would be ineffectual.

The CHAIRMAN. What I am trying to understand is this: I am an aggrieved party. The examiner made a ruling against me; it is adverse and I am aggrieved. I want to get some relief under this plan. To whom I do appeal? How do I find out whether I can get relief?

Senator CASE of South Dakota. The plan says, in paragraph (d): With respect to delegation of any of the functions as provided in subsection (a) of this section, the Commission shall retain a discretionary right to review the action of any such individual commissioner, hearing examiner or employee or employee board upon its own initiative or upon petition of a party to or an intervenor in such action within such time and in such manner as the Commission shall, by rule prescribe, Provided, however, That the vote of the majority of the Commission, less one member thereof, shall be sufficient to bring any such action before the Commission for review.

The CHAIRMAN. As I understand, under the plan the Commission can still, in its discretion, make rules that could provide where one could be heard?

Senator CASE of South Dakota. The Commission obviously could, by a majority vote or by more than a majority or up to one less than a majority, but with a board of seven members or a commission of seven members it would require at least three of the Commission to request it.

The CHAIRMAN. What I am trying to get fixed in my mind is, What is the limit of my right as an aggrieved person? Now, as to discretion, you explained that, but what is my right to demand it?

Senator CASE of South Dakota. You have no right to require a review. There is no mandatory right to review by one commissioner, as there is in the present law.

The CHAIRMAN. In other words, my rights are limited. Now I do have a right to review?

Senator CASE of South Dakota. You have a mandatory right to a review by one member of the Commission. That is my understanding. If you feel aggrieved, you have a right of one review by at least one Commissioner. That is my understanding of the present law. That would be destroyed by the plan.

The CHAIRMAN. It is my understanding that some of these plans before us take away rights that an aggrieved person now has.

Senator CASE of South Dakota. That is my interpretation of the plan.

The CHAIRMAN. That is why we must have it clearly before us here. The Senate needs to know exactly what rights that now exist are being limited, restricted, or taken away. What rights will participants have litigants before the Commission have when these plans go into effect?

Senator CASE of South Dakota. I think that the plan destroys that mandatory review which an aggrieved party feels he has today under section 409. An aggrieved party should at least have some automatic right of review by one or more of the Commissioners themselves. The Commissioners are charged with the enforcement of the Communications Act and establishment of policy. No serious burden is imposed by demanding or requiring no decision become final until at least one or three Commissioners review the matter, if requested by an aggrieved party, and essential to this right of review should be the right of oral argument before the individual Commission or panel. The benefits of the right to oral argument are well established procedurally and judicially.

I want now to discuss the transfer of functions to the Chairman. Reorganization Plan No. 2 gives the Chairman virtually unlimited discretion in the assignment of cases to agency personnel, including the Commissioners themselves.

The Chairman, under present law, is the chief executive officer of the Commission and in this capacity exercises broad authority on behalf of the Commission. That his authority is not complete is not justification for adding to it.

The role of the FCC demands that its status as lawmaker, judge, and executive should be specially treated. The vast powers granted to the independent agencies were conferred with the intent that these agencies should be neither executive nor legislative, but in fact independent.

Historically the Federal Communications Commission was established in 1934 as a successor to the Federal Radio Commission. The hearings and reports on the legislation passed in the 69th Congress which resulted in the Radio Commission support this position. Strong differences of opinion and lengthy hard-fought disputes preceded and followed the 1926 legislation. The report of the Senate Committee on Interstate and Foreign Commerce, Senator C. C. Dill, chairman, in 1926, has special significance in the evaluation of the reorganization proposal plan No. 2.

Senate Report 772, 69th Congress, 1st session, May 6, 1926, at page 2, on the regulation of radio transmission, read as follows:

After consideration of the facts given your committee at the hearings, the committee decided that the importance of radio and particularly the probable influence it will develop to be in the social, political, and economic life of the American people, and the many new and complex problems its administration presents, demand that Congress establish an entirely independent body to take charge of the regulation of radio communication in all its forms.

The exercise of this power is fraught with such great possibilities that it should not be entrusted to any one man nor to any administrative department of the Government. This regulatory power should be as free from political influence or arbitrary control as possible. A commission which would meet only occasionally would gain only a cursory and incomplete knowledge of radio problems. It would necessarily be largely dependent on the administrative authority; namely, the Secretary of Commerce, for expert knowledge it would require.

I was interested in noting the remarks of the then Secretary of Commerce Hoover at the House hearing (cited in minority views of Ewin L. Davis, H. Rept. No. 464, 69th Cong., 1st sess.):

The minority views, as per page 20, House Report 464-these are the remarks of Mr. Davis, quoting Mr. Hoover:

The bill as originally introduced provided for the establishment of a national Radio Commission, consisting of nine members to be appointed by the President

When Secretary Hoover appeared before the Committee on Merchant Marine and Fisheries with respect to said bill during the present session, he declared in part as follows:

"I have always taken the position that unlimited authority to control the granting of radio privileges was too great a power to be placed in the hands of any one administrative officer and I am glad to see the checks and reviews which are placed upon that power in this bill."

President Kennedy's Reorganization Plan No. 2 violates the principles so well stated by Mr. Hoover 35 years ago. It places the granting of radio privileges in single administrative officers, either Commissioners or examiners as the Chairman may designate, and it destroys review as a matter of right by parties feeling aggrieved. In any field that is wrong procedurally, to deny the right of review; in the field of public communications, it is the road to destruction of informed Government by the people.