am afraid of the channeling of all this authority into the Chairman in an administrative way, and how that administrative attitude or discretion could influence all the personnel, being subservient to and answerable as they are to the Chairman.

Mr. Rowe. I think that is a somewhat different question from the examiners. The Administrative Procedure Act removes them for all intents and purposes from the Commission. But as to the other personnel, I think you probably mean the lawyers and that sort of thing? Senator SCHOEPPEL. That is right.

Mr. Rowe. I think not, Senator. You have to make certain assumptions. First of all, you have to assume that a Chairman, this particular Chairman, just does not want to get along with his Commission and wants to run the whole thing and will pay no attention to the members. I think in that case there is in the plan a check and balance.

Senator SCHOEPPEL. b (1) ?

Mr. Rowe. b(1). And I think section 4, the general policy provision there If you take an extreme example, if the Chairman decides he will appoint everybody and he will do exactly what he wants, I think the members of the Commission can then outline a general policy which will control that. That is in a case where the Chairman is running roughshod over everything. I think that check is so strong there would be no problem whatsoever about it. Senator SCHOEPPFL. In other words, certainly it was not the desire of the members of the Hoover Commission to permit this to get into a position where the other Commissions would merely be figure heads?

Mr. Rowe. Certainly not.

Senator SCHOEPPEL. And certainly on the decisions relating to important quasi-judicial determinations and functions?

Mr. Rowe. No. My own feeling about it is it puts an administrative burden on the Chairman. It is rather dull work. It leaves members free to work on the important and exciting problems, the substantive problems of the Commission. That is the way I would look at it.*

The view of Mr. Rowe was shared by Senator O'Conor, author of the Senate Report favoring Reorganization Plan No. 8.5 During debate on the Plan for the Federal Trade Commission he explained that the Commission is free to determine that even an administrative matter may be of sufficient importance to treat it as a matter of policy subject to determination by the full Commission (96 Cong. Rec. 7361, 7362, emphasis added) :

Further, the plan expressly provides certain limitations on the Chairman, so that even if the Chairman is vested with this authority he still will be subject to the Control of the Commission. The plan also provides certain reservoirs of responsibility in the Commission. Thus it is expressly provided that in exercising any of these functions, the Chairman shall be subject to general policies of the Commission. This refers to the Commission's policies on administrative matters.

Then the plan expressly reserves to the Commission, as a whole, rather than the Chairman, certain specific administrative responsibilities, namely: First. Approval of appointment by [sic] heads of major administrative units.

Second. Personnel employed in the immediate offices of the commissioners. Third. Revising budget estimates and allocating appropriated funds according to major programs and purposes.

All those things I repeat, are reserved to the Commission as a whole. These three administrative responsibilities specifically reserved to the Commission are concrete examples of the over-all administrative control

Hearings, pp. 46-47.

The "check and balance" cited by Mr. Rowe is as follows (id., p. 7) :

(b) (1) In carrying out any of his functions under the provisions of this section the Chairman shall be governed by general policies of the Commission and by such regulatory decisions, findings, and determinations as the Commission may by law be authorized to make.

There are hereby reserved to the Commission its functions with respect to revising the budget estimates and with respect to determining upon the distribution of appropriated funds according to major programs and purposes.

S. Rep. No. 1562, 81st Cong., 2d Sess., reporting unfavorably S. Res. 254 (expressing disapproval of Reorganization Plan No. S).

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which remains in the hands of the Commission, namely, that whenever a matter of administration and administrative action is of such importance that the Commission regards it as a policy matter, then the Commission may handle it as being a question of policy.

*

The reservation of the commission's power as to matters of policy in administrative matters completely refutes the charge that these plans make dictators out of the chairman. The commission has the authority to decide what is a question of policy.

A commission set-up not only does not make for efficiency in regard to these details, but the individual commissioners have their time taken away from the really important responsibilities.

This is not simply a matter of abstract analysis. The Hoover Commission found, for example, that the Federal Trade Commission, the very Commission we are now discussing, which has a system of rotating chairmen, at the time of the task-force survey, was giving consideration in commission meetings to such matters as "the organization of the stenographers pool; mail-room procedures; appointment of junior professional personnel-and shortly before the FTC was also passing on all appointments-even clerical." I submit, Mr. President, that such matters ought not to engage the attention of the entire Commission, but should properly be handled in a more businesslike way.

*

The President has established plans which are generally wise and well considered. They will tend to centralize administrative responsibility and leadership in the Chairman and to free the time of the individual commissioners for basic regulatory determinations and for such matters of administration as are matters of policy.

On the basis of the foregoing, it is apparent that the phrase "heads of major administrative units" as used in Reorganization Plan No. 8 was intended to embrace heads of administrative units below the Bureau level. It is equally apparent that the determination of the positions in the Commission's organiza tional structure to be included in this category is a matter of general policy over which the Commission as a whole retains control. And since the meaning and application of the phrase "heads of major administrative units" are necessarily flexible, the action taken by the Commission on January 31, 1969, was consistent with the purpose and spirit of the plan.

In originally implementing Reorganization Plan No. 8, the Federal Trade Commission was guided by a memorandum opinion by General Counsel William T. Kelly, dated June 28, 1950. It was Mr. Kelly's view, among others, that while "obviously" all administrative units are not major, "there is a considerable area of discretion in determining which are major. It is perfectly clear that the heads of each of the seven Bureaus are heads of major administrative units. Within the area of discretion it is possible that the Chairman and Commission might determine that some of the administrative units within bureaus are major administrative units, provided this is not carried to the extent of designating a majority of the administrative units as major."

While Mr. Kelly's memorandum supports the principle that a determination of which administrative units in the Commission's organizational structure constitute "major administrative units" must be made, which, Mr. Kelly said, involves the exercise of "discretion," it is deficient in at least two key respects: (1) it does not indicate whose "discretion" is controlling in the event of a disagreement between the Chairman and the Commission as a whole; and (2) its conclusion that numerical considerations are pertinent in forming judgments as to which administrative units are "major" and which are not is wholly unsupported.

With respect to the first of these deficiencies, the legislative history appears to be irrefutable. It shows that in the minds of the supporters of the legislation, at least, the determination of which of the agency's administrative units are to be regarded as "major administrative units" for purposes of operation under Reorganization Plan No. 8 is a matter of policy over which the Commission retains control and that in the event of a disagreement between the Chairman and the Commission, the decision of the Commission is controlling.

On the second deficiency, the legislative history is silent. It would seem, however, that any attempt to maintain a numerical balance as between those ad

ministrative units which are "major" and those which are not, might well lead to an unreasonable proliferation of subdivisions in the Commission's Bureaus and thus to a more complex and wholly undesirable organizational structure, which Reorganization Plan No. 8 does not encourage. Additionally, and of even more significance, is the apparent encroachment of this concept on the clear intention of the supporters of the plan to leave the determination of all questions of general policy, including those related to administration and administrative actions, to the Commission as a whole."

Respectfully submitted,

JOHN V. BUFFINGTON,

General Counsel.

Presumably, the Commission had not, prior to January 31, 1969, seen fit to determine as a matter of policy that any of the administrative units in its organizational structure below the Bureau level were "major administrative units." This, however, is of no consequence and does not now preclude it from making such determination, for "The fact that powers long have been unexercised well may call for close scrutiny as to whether they exist; but, if granted, they are not lost by being allowed to lie dormant, any more than nonexistent powers can be prescripted by an unchallenged exercise." United States v. Morton Salt Co., 338 U.S. 632, 647 (1950); cf. United States v. DuPont & Co., 353 U.S. 586, 590 (1957); Federal Trade Commission v. Dean Foods Co., 384 U.S. 597, 610-611 (1966).

LETTER TO THE HONORABLE JOHN N. MITCHELL, ATTORNEY GENERAL, FROM PAUL RAND DIXON, CHAIRMAN, DATED JUNE 12, 1969, ATTACHING COPY OF HIS LETTER TO THE CHAIRMAN, CIVIL SERVICE COMMISSION AND GENERAL COUNSEL MEMORANDUM OF MAY 29, 1969; JOINT LETTER TO ATTORNEY GENERAL JOHN N. MITCHELL SIGNED BY COMMISSIONERS PHILIP ELMAN, MARY GARDINER JONES AND JAMES M. NICHOLSON, DATED JUNE 13, 1969; AND LETTER TO ATTORNEY GENERAL JOHN N. MITCHELL FROM COMMISSIONER A. EVERETTE MACINTYRE, DATED JUNE 20, 1969—ALL PERTAINING TO THE AUTHORITY TO MAKE APPOINTMENTS OF KEY STAFF PERSONNEL

FEDERAL TRADE COMMISSION,
Washington, D.C., June 12, 1969.

Hon. JOHN N. MITCHELL,

Attorney General,

Department of Justice,

Washington, D.C.

MY DEAR MR. ATTORNEY GENERAL: On January 31, 1969, a majority of the Federal Trade Commission took an action affecting the duties and responsibilities of the Chairman of the Federal Trade Commission under Reorganization Plan No. 8 of 1950. By letter of March 5, 1969, addressed to Chairman Robert E. Hampton of the Civil Service Commission, I outlined the problem presented by the action of the majority of the Commission and asked for his approval of an appointment of a Division Chief, without submitting the appointment to the Commission for approval. Similar action has been taken by me and my predecessors since 1950. On June 10th, by phone, I asked Chairman Hampton for a status report on my request and he informed me that it had been sent to your office for an opinion. I am enclosing a copy of my March 5th letter to Chairman Hampton.

Due to the retirement of the General Counsel of the Commission in March of this year, the Commission recently selected as its General Counsel Mr. John V. Buffington. Upon assuming the office of the General Counsel, Mr. Buffington was called upon by a majority of the Commission to furnish the majority with a memorandum in support of its position regarding its determination that "the occupants of a total of sixty-three staff positions henceforth should be regarded as 'heads of major administrative units,' as that phrase is utilized in Section (1) (b) (2) of Reorganization Plan No. 8 of 1950." Enclosed also is a copy of this memorandum.

Characterizing as irrefutable the "legislative history," referred to in his memorandum, Mr. Buffington concludes that the phrase "heads of major administrative units" as used in Reorganization Plan No. 8 was intended to embrace heads of the administrative units below the Bureau level, and that the determination of such positions is a matter of general policy over which the Commission as a whole retains exclusive control. With this opinion, I disagree.

I am not persuaded that the remarks referred to by Mr. Buffington properly constitute binding “legislative history" because of the nature of the proceeding. The Congress was not here considering proposed legislation originating from its body, but was debating the merits of a proposed disapproval resolution. Congress had delegated to the President reorganization powers which he had exercised subject to disapproval by resolution.

When Reorganization Plan No. 8 became effective in 1950, the Federal Trade Commission adopted the recommendation of Chairman James M. Mead that under the Plan "major administrative units" would be considered the Secretary, Executive Director, General Counsel, and the heads of all the Bureaus of the Commission. Since that date, this action of the Commission has been followed by