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 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 of policy 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 those 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 procedure; 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 organizational 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 designatng 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 administrative 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,

Hon. JOHN N. MITCHELL,

JOHN V. BUFFINGTON,
General Counsel.

FEDERAL TRADE COMMISSION,
Washington, D.C., June 13, 1969.

Attorney General, Department of Justice, Washington, D.C.

DEAR MR. ATTORNEY GENERAL: Chairman Dixon has sent each of us a copy of his letter to you, dated June 12, 1969, in which he expresses disagreement with the action taken by the majority of the Commission under Reorganization Plan No. 8 of 1950 on January 31, 1969, and in effect asks you to reverse or overrule the determination made by the Commission. As the members of the Commission constituting the majority which took such action, we regret very much that the Chairman has seen fit to seek your intercession in this matter which we regard as purely internal and one which the members of the Commission should be able to resolve by themselves.

In our view, the question whether a particular staff position at the Federal Trade Commission is one for which Commission approval should be required under Reorganization Plan No. 8 of 1950 because it is a "head of major administrative unit", or because it is of key significance in the implementation of the laws administered by the Commission, is one of internal policy which the members of the Commission should determine, not an external body or official. It is the members of the Commission who are best able to make a judgment, based on an evaluation of the nature and importance of a particular staff position, whether, as a matter of policy, the appointment is so critical in the discharge of the Commission's statutory obligations that all members of the Commission should share in the responsibility for such appointment. It is our view, for example, that the chiefs of the divisions which enforce the Merger Law and the Truth in Lending Act should be appointed not by the Chairman alone but with the approval of the Commission. (Even the job descriptions of these FTC personnel reflect on their face the policy significance of their responsibilities.) The Chairman disagrees.

The essential point we wish to make is that the members of the Commission should decide which appointments to staff positions, because of their nature, the importance of the responsibilities assigned, and their bearing on the Commission's performance in fulfilling its statutory obligations, should be subject to the Commission's approval. For our part, we have expressed a willingness to examine any or all of the positions in question and to reach a judgment as to whether they properly fall in this category. We believe that all the members of the Commission,

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).

and not merely the Chairman alone, should participate in the process of classifying these positions, in accordance with subsection (b) (1) of Reorganization Plan No. 8, which provides that in executing his functions under the Plan the Chairman "shall be governed by general policies of the Commission."

We do not believe it is either desirable or appropriate for the Commission to ask you, or any other external body or official, to undertake that responsibility which seems to us to rest exclusively on the Commission's shoulders. If there be disagreements within the Commission, we believe they can and should be resolved internally in a collegial spirit consistent with the Commission's own best interests in effectively carrying out the duties imposed on it by the Congress. We regret very much, therefore, that you should have been asked to intercede in this matter. With best wishes,

Sincerely,

Hon. JOHN N. MITCHELL,

PHILIP ELMAN.

MARY GARDINER JONES.
JAMES M. NICHOLSON.

FEDERAL TRADE COMMISSION,
Washington, D.C., June 20, 1969.

Chairman, Federal Trades Commission, Washington, D.C.

DEAR MR. ATTORNEY GENERAL: This communication is relevant to the matters referred to in the letters to you under date of June 12, 1969, from Chairman Dixon and June 13, 1969, from Commissioners Elman, Jones and Nicholson.

It has been and is my view that the problem presented by those letters is of such importance that to the extent the membership of the Federal Trade Commission is to consider it, that membership should not be so sharply divided that a prospective change in membership within a matter of weeks could lead to a different decision by a majority of the Commission. It was for this reason that I have objected to haste on the part of a majority of the Commission in an attempt to force a decision on this matter before September 25, 1969.

On June 18, 1969, I suggested without objection that I would undertake to disclose what the minutes of the Commission show on the last action by the Commission on this question. This from the minutes of the Commission of June 10, 1969, quoted as follows:

"Mr. Elman moved that to the list of staff positions which the Commission determined on January 31, 1969 require the approval of the Commission that there be added the new positions of Assistant General Counsel for Legal Services, Legislation and Federal-State Cooperation, and for Litigation, and that there be deleted from that list the positions abolished this date-i.e., Assistant General Counsel for Voluntary Compliance, Export Trade, and Consent Orders.

"As a substitute motion, Mr. MacIntyre moved that the determination of the proposals raised in the pending motion be deferred until there is nominated and qualified the incumbent who will hold office in the position on the Commission now held by Commissioner Nicholson for the term commencing September 26, 1969, and that if he were voted down, he possible will state his position publicly as to the reasons for such motion.

"Mr. Nicholson stated that he would not be intimidated by the probability of a public statement in this respect, and would add to Mr. Elman's motion that the position of Assistant to the General Counsel be included on the list of positions to be approved by the Commission.

"As to the foregoing action, Commissioners Elman, Jones and Nicholson voted in the affirmative, and Commissioners Dixon and MacIntyre abstained. Mr. MacIntyre stated he would have preferred the position as stated in his substitute motion and consequently cannot concur for that reason in the motion the Commission adopted, and that this does not mean he was voting yes or no on the merits."

Since each of the other Commissioners has communicated with you about this matter, I think you are entitled to know my position about it.

With best wishes,

Sincerely,

A. EVERETTE MACINTYRE,

Commissioner.

LETTER TO JOHN N. WHEELOCK FROM RICHARD W. MCLAREN, DEPARTMENT OF JUSTICE, DATED MARCH 21, 1969, AND MISCELLANEOUS CORRESPONDENCE RE LIAISON ARRANGEMENT WITH DEPARTMENT OF JUSTICE

JOHN N. WHEELOCK, ESQ.,

DEPARTMENT OF JUSTICE, Washington, D.C., March 21, 1969.

Executive Director, Federal Trade Commission, Washington, D.C.

DEAR JOHN: Many thanks for your thoughtful note and good wishes. I had hoped to stop by to see you, Rand, and others long before this. Perhaps we shall at least get together at the ABA Spring Meeting.

I understand that our liaison arrangement is working very well, and we certainly must keep it that way.

Kindest regards,
Sincerely,

RICHARD W. MCLAREN,

Hon. PAUL RAND DIXON,

Assistant Attorney General, Antitrust Division.

DEPARTMENT OF JUSTICE, Washington, D.C., October 20, 1966.

Chairman, Federal Trade Commission, Washington, D.C.

DEAR MR. CHAIRMAN: This will acknowledge your letter of October 7, 1966, concerning the liaison arrangements between the Antitrust Division and the Federal Trade Commission, established in 1948, to avoid duplication of effort on matters within their respective jurisdictions.

These liaison arrangements have made a significant contribution to our enforcement programs in the past, and I hold the view that they will continue to do so in the future. They have proven effective because they have been pursued in an atmosphere of mutual confidence and cooperation in recognition of our common responsibility for vigorous antitrust enforcement.

Consequently, I find it surprising that, because of a few instances of possible confussion in liaison, the Commission now suggests that the Division as a matter of practice is ignoring the terms of the liaison arrangement and substantially impeding the operations of that agency. To the contrary, the fact that problems have arisen in so few instances speaks well for the efforts of both agencies when we consider that many hundreds of matters have been handled. At the time of the recent meeting between Messrs. Wheelock, Sheehy, and Lipsky of the Commission with Messrs. Zimmerman, Rashid, Philipps, and Swope of the Division on June 13, 1966, it was the consensus of all that the liaison arrangements were, on the whole, working satisfactorily. It was their further view that if problems arose in the future which could not be resodved by our respective liaison officers, personal conferences between Mr. Wheelock and Mr. Zimmerman would be held to resolve them. Until the receipt of your October 7 letter, we have had no suggestions from the Commission of any difficulties over the liaison arrangements.

More effective liaison arrangements between the two agencies are a matter of continuing concern to me. It was this concern which prompted me to issue Directive 5-66, dated July 18, 1966, shortly after the conference with your representatives, which was intended to clarify and reaffirm to all Division attorneys the scope and need of such liaison procedures. I am enclosing a copy of this directive for your information.