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I. C. C. POWERS

WEDNESDAY, JANUARY 18, 1933.

HOUSE OF REPRESENTATIVES,

COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE,

Washington, D. C. The committee met at 10 o'clock a. m., Hon. Sam Rayburn (chairman) presiding.

The CHAIRMAN. The committee will come to order.

We have for hearing this morning H. R. 7432, which reads as follows, containing recommendations of the Interstate Commerce Commission that have been made for several years. In the Seventy-first Congress, I think, Mr. Parker introduced a bill along this same line, and in this Congress I introduced this bill. I thought the recommendations contained herein would not meet with a great deal of objection and that it was one of the things we might do even at this short session of Congress. I asked Commissioner Eastman of the Interstate Commerce Commission to appear this morning and tell us for the record why the commission thinks this would be a wise thing to do:

[H. R. 7432, Seventy-second Congress, first session]

A BILL To authorize the Interstate Commerce Commission to delegate certain of its powers

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That section 17 of the interstate commerce act, as amended (U. S. C., title 49, sec. 17), is amended by adding at the end thereof a new paragraph to read as follows:

"(6) The commission is hereby authorized by its order to assign or refer any portion or class of its work, business, or functions arising under this or any other act of Congress or referred to it by Congress, or either branch thereof to an individual commissioner, or to a board composed of an employee or employees of the commission, to be designated by such order, for action thereon, and by its order at any time to amend, modify, supplement, or rescind any such assignment or reference: Provided, however, That this authority shall not extend to investigations instituted upon the commission's own motion nor, without the consent of the parties thereto, to contested proceedings involving the taking of testimony at public hearings. All such orders shall take effect forthwith and remain in effect until otherwise ordered by the commission. In case of the absence or inability for any other reason to act of any such individual commissioner or employee designated to serve upon any such board, the chairman of the commission may designate another commissioner or employee, as the case may be, to serve temporarily until the commission shall otherwise order. In conformity with and subject to the order or orders of the commission in the premises, any such individual commissioner, or board acting by a majority thereof, shall have power and authority to hear and determine, order, certify, report, or otherwise act as to any of said work, business, or functions so assigned or referred to him or it for action by the commission and in respect thereof shall have all the jurisdiction and powers now or then conferred by law upon the commission and be subject to the same duties and obligations.

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Any order, decision, or report made or other action taken by any such individual commissioner or board in respect of any matters so assigned or referred shall have the same force and effect, and may be made, evidenced, and enforced in the same manner as if made or taken by the commission. Any party affected by any order, decision, or report of any such individual commissioner or board may file a petition for reconsideration or for rehearing by the commission or a division thereof and every such petition shall be passed upon by the commission or a division thereof. Any action by a division upon such a petition shall itself be subject to reconsideration by the commission, as provided in section 16 a of this act (U. S. C., title 49, sec. 16 a), and in paragraph (4) of this section. The commission may, as provided in paragraph (1) of this section, make and amend rules for the conduct of proceedings before such individual commissioner or board and for the rehearing of such action before a division of the commission or the commission. The secretary and seal of the commission shall be the secretary and seal of such individual commissioner or board."

Mr. Commissioner, we should be very glad to hear you at this time. STATEMENT OF HON. JOSEPH B. EASTMAN, MEMBER OF THE INTERSTATE COMMERCE COMMISSION, AND CHAIRMAN OF THE LEGISLATIVE COMMITTEE OF THE COMMISSION

Mr. EASTMAN. I appear as chairman of the legislative committee of the commission and for the commission in support of H. R. 7432, a bill to authorize the Interstate Commerce Commission to delegate certain of its powers. I shall first describe what the bill undertakes to do and then explain the reasons for its provisions.

You will recall that when the commission was enlarged in 1917, from seven to nine members, it was given authority to conduct its work through divisions. This authority is now contained in paragraphs (2) to (5) of section 17 of the interstate commerce act. Briefly, the commission is authorized to divide its membership into as many divisions, each to consist of not less than three members, as it may deem necessary. It is further authorized to direct by order that any of its work, business, or functions be assigned or referred for action thereon to any of these divisions. With respect to such action, a division has all the jurisdiction and powers conferred by law upon the commission, and is subject to the same duties and obligations; and the action taken has the same force and effect as if taken by the commission. The action of the division is also subject to rehearing by the commission, as provided in section 16 (a) of the interstate commerce act for rehearing cases decided by the commission.

H. R. 7432 undertakes to extend these provisions for the delegation of duties by adding a new paragraph (6) to section 17. This would authorize the commission by order to assign or refer any portion or class of its work, business, or functions to an individual commissioner or to a board composed of an employee or employees of the commission, subject to the proviso, however, that

This authority shall not extend to investigations instituted upon the commission's own motion nor, without the consent of the parties thereto, to contested proceedings involving the taking of testimony at public hearings.

The remainder of the new paragraph, covering the designation and functioning of these individual commissioners or boards of employees, follows closely the present provisions of section 17 with

respect to the designation and functioning of divisions of the commission. It is very clearly provided that any action by an individual commissioner or board of employees shall be subject to rehearing or reconsideration, first by a division of the commission and finally by the commission itself.

The power of Congress to provide for such a delegation of duties by the commission is, I believe, clear. I have here a very excellent and persuasive discussion of that constitutional question which has been prepared by Commissioner Aitchison. With the permission of the committee, I should like to insert it in the record at this point, but without taking your time now by reading it unless that is desired. There are many precedents and supporting decisions of the courts, so that little doubt can be entertained on the point

Mr. HUDDLESTON (presiding). In the absence of Mr. Rayburn, I will say yes, tentatively.

(The document referred to is as follows:)

MEMORANDUM

MARCH 27, 1929.

With respect to the proposal of the commission that it be allowed to assign various of its functions to individual members or subordinates, as far as the constitutionality of the proposal is concerned :

The commission's proposal is exactly that which has, in point of history, been made by numerous administrative officers and departments in the past. It is not a new situation. Congress has enacted similar legislation many times, and the constitutionality of the action has always been upheld. In fact, it is not too much to say that without the liberal exercise by Congress of the legislative authorization of assignment of duties of a quasi judicial, quasi legislative character to subordinates of executive and administrative department heads, the business of the Government could not be carried on. What is involved is not a delegation of power by an agent, but is an assignment of duties to employees by an agent, upon the express direction of the principal that the agent do so. The distinction is clear.

The suggested bill is drafted to correspond with the language of section 17 of the interstate commerce act, which has been in full force since 1917. Under that act the commission has assigned its functions to divisions of three of its members. The divisions have acted in literally tens of thousands of cases without any question as to constitutionality being raised. The Supreme Court has in a number of cases had before it and sustained the actions of divisions of the commission. Some of these have been cases which involved convictions of the crime of violating such orders. Examination of that section will show that while it is provided that the division shall consist of three members, two may act. It is, of course, obvious that if Congress can constitutionally provide for divisions of three, and that the action of two commissioners shall be the act of the commission, it can constitutionally provide for divisions of one, or that in addition to the commissioners, any other civil servants of the Government should be eligible to serve on the divisions.

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The subject matter is interstate and foreign commerce. It is within the purview of the commerce clause. "More completely than ever since the transportation act has the regulatory power of the Congress been exercised. The subject matter being within the scope of permissible legislation, the power of Congress is plenary and has no restrictions except those contained in the Constitution itself. Limitations will not be implied in such case; they must be made clearly to appear. Congress having undertaken to carry out completely and effectually the delegation of powers by the States in respect of the subject, viz, the regulation of interstate commerce, the Constitution is to be read so that if possible it will effectuate such power and not to make the performance impossible or imperfect or fragmentary. It must be conceded there is no direct inhibition against what the commission proposes.

Of course, there is nothing particularly sacred about the use of the word "commissioner." Congress could, if it deemed necessary, directly provide that particular tasks, such as the reduction of the thirty days periods of notice for

the filing of tariffs, might be assigned to a designated employee of the commission, such as the director of the Bureau of Traffic, or that applications for permission to sit upon boards of directors of two common carriers should be passed upon by the director of the Bureau of Finance. If Congress had the right to vest the power in one of these officers it also has the right to authorize the commission to assign such duties to an assistant. This is the substance of the holding of the Court of Appeals of the District of Columbia in Robertson v. United States ex rel. Baff (285 Fed. 911). There are so many of these tasks, and so many officers and employees to whom they may be assigned, and the nature of the duties is so shifting, that the same rules of law which make it permissible constitutionally to assign the carrying out of a general rule of policy to the commission itself would apply in such cases. In other words, it is but the same power as is exercised by Congress when it says that all rates shall be just and reasonable and when it says that commission shall find the just and reasonable rates. The choice of means to execute the will of Congress is for the legislature and not for the judiciary, granted that the subject matter be within the jurisdiction of Congress and the means appropriate to secure the desired end. Such means, so adopted by Congress, constitute due processes of law and are not invalid as an unconstitutional delegation of legislative power. These are familiar principles-So familiar as to need no citation of authority to support them. They have been continually acted upon when Congress has acted under various clauses of the Constitution which give it authority, without serious question, although occasionally the Supreme Court has been called upon to sustain such exercise of authority because of the impracticability of any other course. (See United States v. Grimaud, 220 U. S. 506.)

The general rule against delegation of judicial authority by public officers is well understood. It is thus stated by Mechem, on Public Officers, paragraph 567.

"In those cases in which the proper execution of the office requires, on the part of the officer, the exercise of judgment and discretion, the presumption is that he was chosen because he was deemed fit and competent to exercise that judgment and discretion, and unless power to substitute another in his place has been given to him, he can not delegate his duties to another." (Italics mine.) It is because of this rule that the Commission has asked Congress to give it power, within its discretion, to substitute a single commissioner or a desig nated employee in its place. The qualification on the general rule, italicized above, is as important as the general rule. It is the basis on which a myriad of actions are performed daily by subordinates of executive, administrative and quasi judicial officers, under direction of their principles.

There is precedent in the existing interstate commerce act. What we are asking we have power to do now in a limited degree. Section 1, paragraph 17, of the act provided "that the directions of the commission as to car service and to the matters referred to in paragraphs 15 and 16 may be made through and by such agents or agencies as the commission shall designate and appoint for that purpose." It is made the duty of all carriers, etc., "to obey strictly and conform promptly to such orders or directions of the commission," and a penalty is provided for violation. It is a matter of common knowledge that this was adopted in this form so as to permit the commission if it chose, to utilize the car service division of the American Railway Association as its agency for giving directions of the sweeping character contemplated by paragraph 15 in case of emergency.

The commission has acted under this section, and in 1920 designated Herman M. Griggs, manager of the Coal & Ore Exchange, at Cleveland, as its agent to give directions as to priority, embargoes, etc. The power was used extensively, and, parenthetically, it saved the day. The validity of these orders was tested in a number of civil suits and upheld.

By the boiler inspection act, the commission is directed to appoint 50 inspectors of locomotive boilers through the civil service process. The chief inspector (who is appointed by the President) assigns these inspectors to districts. The commission lays down general rules and restrictions for the inspection of locomotive boilers. By section 6 the district inspector is given jurisdiction to " find any locomotive boiler or apparatus *** not conforming to the requirements of the law or the rules and regulations established and approved" and to notify the carrier that the locomotive is not in serviceable condition. "Thereafter such boilers shall not be used until in serviceable

condition." Provision is made for appeal to the chief inspector-whom, it will be remembered, is appointed by the President and not by the commission-and from his decision to the commission. The law provides that "pending either appeal the requirements of the inspector shall be effective."

There have been many convictions of violations of the finding and requirement of the district inspector. These have been sustained by the Supreme Court. Each of these implied constitutionality in all respects-so often that constitutionality is no longer an open question.

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The safety appliance act of March 2, 1893, provided (section 5) "within ninety days * the American Railway Association is authorized hereby to designate to the Interstate Commerce Commission the standard height of drawbars for freight cars * * *. Upon their determination being certified to the Interstate Commerce Commission, said commission shall at once give notice of the standard fixed upon to all common carriers But should said association fail to determine a standard as above provided, it shall be the duty of the Interstate Commerce Commission to do so This was attacked as being an unconstitutional delegation of legislative power to the American Railway Association, but the act was held constitutional. (St. Louis & Iron Mountain Ry. v. Taylor, 210 U. S. 281, 287.)

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At the risk of prolixity a few out of many available like statutes may be considered.

The procedure suggested is quite similar to that which has been in force in the United States Patent Office for many years, without any serious question from anyone. (References will be made to sections of title 35 of the United States Code.) The issuing or withholding of patents is a quasijudicial function. (Butterworth v. Hoe, 112 U. S. 50, 67.)

Section 2 provides for the Commissioner of Patents, one first assistant commissioner, one assistant commissioner, and five examiners in chief, to be appointed by the President by and with the assent of the Senate.

"The first assistant commissioner and the assistant commissioner shall perform such duties pertaining to the office of commissioner as may be assigned to them, respectively, from time to time by the Commissioner of Patents. All other officers, clerks, and employees authorized by law for the office shall be appointed by the Secretary of Commerce upon the nomination of the Commissioner of Patents."

Please note that the assistant commissioners perform only such duties as may be assigned to them by the commissioner, and that primary and law examiners, later referred to, are appointed (just as are the employees of the Interstate Commerce Commission) under the process of civil service, upon order of the commissioner.

It is interesting and important that the italicized words respecting the assignment of duties to the assistant commissioners was the direct response by Congress to the appeal made to it by the Commissioner of Patents that his business had grown so that he could no longer attend to it in person. He asked that Congress either define the duties of his assistants, or give him power to do so. Congress adopted the latter course.

By section 6, the Commissioner of Patents, under the direction of the Secretary of Commerce "shall superintend or perform all duties respecting the granting and issuing of patents directed by law." He may, subject to the approval of the Secretary of Commerce, from time to time establish regulations, not inconsistent with law, for the conduct of proceedings in the Patent Office. Rules so established, if not inconsistent with law, have the force of a statute. (Westinghouse Traction Brake Co. v. Christinson, 243 Fed. 901, 905, citing cases.)

By section 7, the Examiners in Chief "when required by the commissioner " shall hear and report upon claims for extensions, "and perform such other like duties as he may assign them." They also "on the written petition of appellant revise and determine upon the validity of the adverse decisions of examiners upon applications for patents, and for reissues of patents, and in interference cases.' Note that the examiners whose "decisions" are to be reviewed are mere employees of the bureau, and have only such duties as are assigned to them by the regulation of the commissioner.

By section 39, patents are issued in the name of the United States, under seal, and either signed by the commissioner, or have his name printed thereon and attested by an assistant commissioner "or by one of the law examiners duly designated by the commissioner." This is the first time the law examiner appears in the statute; he likewise is an employee appointed directly by the commissioner.

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