to act independently in the same manner as if we were the old board, subject only to a very general supervision of the Secretary.

We began to operate in the manner of an independent agency, holding regular meetings with a secretary-a docket, recorded votes, and formalized action. For a short time the advisory committee's actions were approved by the Secretary. Soon, large questions were presented on which the advisory committee had to take action affecting adversely large interests, particularly financial matters such as insistence on payments of debt by delinquent ship operators, or recommending certain foreclosures; or on the regulatory side, condemning or approving certain rates and practices. Disappointed and dissatisfied litigants rarely have a good opinion of the court. Approval by the Secretary of Commerce of the advisory committee's action slowed up as parties adversely affected by its decisions appealed to the Secretary for reversal. Without machinery to pass on these appeals, he would constitute impromptu committees before whom these were heard. Extensive arguments were had. Delays were incurred. When the Secretary finally acted, if unfavorably to the applicants, they would not infrequently carry their story to the White House and in instances, I am credibly informed, the questions became matters for Cabinet discussion.

Early in 1934, if I recall correctly, there was created by the Secretary an Office of Director of Shipping Board Bureau with a diminution of the powers of the advisory committee; the members of the advisory committee felt that their actions were not given the consideration which the facts called for. General Saltzman resigned for that reason. Thereafter Admiral Cone and I resigned after there were intimations that we were not cooperative. The actual operation of the activity under the Department of Commerce was, from my observation, unsatisfactory.

The exercise of regulatory powers by the advisory committee was interferred with by officials who were unfamiliar with the records of the case. The regulatory powers at a later time were exercised by a rather curious order of the Secretary where one member of the advisory committee and two subordinates to him constituted the regulatory mechanism. This unsatisfactory experience was, I understand, one of the important reasons why Congress established the Maritime Commission under the Merchant Marine Act of 1936 as an independent agency.

Previous to my trick with the Shipping Bureau, from 1914 to 1920, I was attorney and examiner of the Interstate Commerce Commission. From 1920 to 1924, attorney for the United States Railroad Administration trying cases before the ICC. From 1924 to 1933, in private practice, largely before the ICC. I merely cite that to show that I was supposed to have some experience in the processes of regulation. In 1937, I was appointed as a member of the Maritime Commission which was set up by statute and operated as an independent agency of Congress. At times, many times, we had pressures from executive agencies to shape our course of action. For the most part, we successfully resisted. I recall specifically, and I mention small instances as illustrative only-one executive department insisted that we order ship operators to maintain rates on newsprint papers to a South American country for political or diplomatic reasons on a basis which

would not be compensatory. Again we were pressed to reduce rates to another South American country by an executive department on the ground that they damaged its economy. We held a preliminary hearing, formalizing it by the regulatory process, insisted on witnesses from the representatives of that country and found that the rates were in fact extremely moderate. Had we not been an independent agency of Congress, we would, I am sure, have been compelled to yield to policy as made for us in that and many other instances.

It is perhaps natural, as a member of the Maritime Commission from 1937 to 1945, that I feel its accomplishments along with defects should be considered. It should be recalled that the Commission as an independent agency of Congress had carefully organized the shipbuilding program before the war and during the war had built under its supervision 5,000 ships with speed and reasonable cost considering wartime conditions, counted by some not a mean performance.

To digress: An independent agency to carry out a transportation policy laid down in an act of Congress is a long-range instrumentality to carry out long-range policies. If it is an executive department and those policies change from time to time, it practically is impossible to carry out a long-range program such as the Merchant Marine Act prescribes and possible change from administration to administration. Transportation in all forms, with few isolated, inconsequential exceptions, is still private enterprise in this country, regulated, not managed, in the public interest by long-range policy prescribed by Congress to be affected as little as possible by temporary political changes. If our transportation companies were socialized, it would be quite logical to have an executive department make their policies, regulate their charges and practices, and order their scheme of development; otherwise it would seem that our present private ownership and operation could best be regulated by independent agencies of Congress-not managed.

Thank you.

The CHAIRMAN. Thank you, Mr. Woodward.

Mr. Kadans?

STATEMENT OF JOSEPH KADANS, ATTORNEY, PROFESSOR OF ADMIRALTY LAW AND FEDERAL PROCEDURE, AND REPRESENTING BALTIMORE CHAPTER, INTERSTATE COMMERCE COMMISSION PRACTITIONERS

Mr. KADANS. Mr. Chairman, I do not have a prepared statement to make, and I have only a few brief remarks to present for the consideration of this committee.

I should like first of all to state as to my own status that I am a member of the Maryland bar, and of the bar of the United States Supreme Court, practicing law in Baltimore and before Government agencies in Washington. I also teach admiralty law, Federal administrative and court procedure, and insurance law at the Eastern College of Commerce and Law in Baltimore. I am also the author of a book entitled "Federal Administrative and Court Procedure," which will be released on or about June 1.

I am also a member of the executive committee of the Baltimore chapter of the Interstate Commerce Commission Practitioners.

Recently, at a meeting of the Baltimore chapter, a committee was appointed to work against Organization Plan No. 21. I was appointed on that committee and the chairman asked me if I could arrange to appear here today and express to the committee our views with respect to this plan.

The chapter voted against the plan for the reason that it would provide an opening wedge in the formation of a Department of Transportation; and we believe that this is undoubtedly the case.

I might state that this morning I spoke to a member of the Interstate Commerce Commission-I would rather not mention his name— who stated that he undoubtedly believed that that is what would happen, that as soon as that wedge opened, it would not be long before the Interstate Commerce Commission would be placed under the Department of Commerce with the Commission perhaps abolished as an independent establishment.

I might say in conclusion that I just cannot understand from listening to the remarks of the gentlemen who have preceded me why more emphasis has not been placed upon the constitutional features of this proposed plan. We have before us a plan which, if adopted, would place under an executive department of the Government legislative functions, regulatory activities of course being in the nature of legislative functions. That, to my mind, is certainly unconstitutional and sooner or later when a test arose in Court, I belive that the Court would state that such action, or regulation, was unconstitutional, if issued directly or indirectly by the executive department of the Government. I feel very strongly about that. Many times in lecturing to lawschool students on Federal procedure, and the functions of administrative agencies, I have pointed out as I now state to this committee that it is the duty and function of the President to execute the laws as an executive officer of the Government and not to make the laws. It is the duty and function of the legislature, the Congress, to make the laws. Neither one can delegate; neither one should delegate those functions and powers to the other.

This is simply, to my mind, a delegation of legislative powers to an executive branch of the Government and is a delegation of legislative powers to the Chief Executive. For that reason, it is unconstitutional. I might further state that I agree with the views expressed formerly to this committee by the general counsel of the Pennsylvania Railroad, Mr. John Dickinson, and also by Mr. J. C. Gibson, at previous hearings, and also expressed in a statement in 1938 by Mr. Thomas Woodlock who was formerly a member of the Interstate Commerce Commission, that placing regulatory functions under the power of an individual or under the general supervision of the Executive, which amounts to the same thing, will eventually lead and has led in other countries to Government ownership of the regulated public utility.

We know from experience that, when any country places transportation under a minister of transportation, it has almost always been followed with Government ownership.

If you believe that what England has done in the way of socialism is wrong in the way of public ownership, which of course is nothing more or less than communism, the two differ simply in the means of reaching the goal of Government ownership and replacing private

ownership, then you will take no action to further this proposed Reorganization Plan No. 21.

This is simply another step in my opinion, and in the opinion of others whom I have mentioned to you a moment ago, another step toward the left, and sooner or later it has got to be stopped. I think that now more and more men and women are coming to the point where they are standing up to be counted against socialism or communism, both being the same, and this is the time, not only to simply vote against steps leading toward that end but this is the time to take aggressive action in the opposite direction.

Those are my views and I thank you for listening to me.

The CHAIRMAN. Are there any questions?

Senator SCHOEPPEL. On the constitutionality or the legal phases of what you mentioned, did you hear the testimony of, I think it was, Mr. O'Connor.

Mr. KADANS. Yes, sir.

Senator SCHOEPPEL. He stressed one particular phase of unconstitutionality of this, or certainly questioned the legality.

Do you fear that this would be vesting too much power and authority in one individual to exercise quasi-judicial functions that would disrupt the orderly processes of an independent agency?

Mr. KADANS. Yes, Senator; I do. I understood that Mr. O'Connor's objection as to the illegality of the act was to the failure of the President to point out specifically how there would be any advantages in the way of savings under the act. I do not recall whether Mr. O'Connor made the specific point as to the nonconstitutionality of any legislation enacted.

Senator SCHOEPPEL. I do not think he did, but I think he touched on that one phase you mentioned. You are carrying it one step further into the strict nonconstitutionality of the act, or the unconstitutionality of this type of proceeding, if it goes on.

Mr. KADANS. Yes, sir.

Senator SCHOEPPEL. Are you acquainted somewhat with the operations of this Maritime Commission? I take it that you are familiar. Mr. KADANS. Yes, sir; I teach admiralty law. I am working at the present time on a book on admiralty cases and principles. I was formerly with the Government, having had 13 years' experience with the Government before I resigned to enter private practice, and I was formerly with the Interstate Commerce Commission on the field staff, and before that I was with the War Department, Army Engineers on river and harbor work, and I am familiar, I believe, to a considerable degree with the functions of not only the Maritime Commission but the Interstate Commerce Commission as well.

I might point out that it had been previously mentioned that the President referred to the Maritime Commission as operating a huge business and that, if you will recall from the previous testimony, I believe it was Mr. J. C. Gibson's testimony, who spoke for the Association of American Railroads and who is general counsel for the Atchison, Topeka & Santa Fe, that the reason for transportation getting out of hand to the point where the Government takes ownership is because under the guise of economy and efficiency, a single man is given the power and authority to make decisions required to meet immediate local needs whereas a board functions independently, acts more slowly. and has in mind the long-range views.

Consequently, an individual who has the power to make certain changes to meet certain contingencies is under pressure, and when he is placed under pressure and makes changes efficiently, so to speak, then he has to take an interest, a close look into the intricate operations of the various transportation functions. In doing so, he becomes, as has been previously referred to, a super manager, and it is a very short step from being a super manager to being the manager himself. And that is what is going to happen under the guise or pretence of efficiency and economy and in order to produce this flexibility we are gradually leading this country, if this step is taken, where regulation of transportation becomes a matter of individual action rather than commission or agency action, why then we are taking a step that will lead toward socialism or communism such as Great Britain and Yugoslavia and Russia and other countries already have. I think we should not take that step.

Senator SCHOEPPEL. We have a department here, as we have learned from testimony, which is operating under some rather loose practices and has a rather unsavory reputation. Now have you given any thought as to how it could be remedied if this plan is not adopted?

Mr. KADANS. I concur in Congressman Ramspeck's views that it is a matter for the President in the way of appointment of commissioners who will be able to solve the problems and meet the demands of the public in accordance with the law as stated by Congress. Now there might be something wrong in the law that hampers the Commissioners and makes it difficult for them to meet the demands of the people who are making these demands, in which case, of course, the Congress should act.

Someone stated a moment ago that there are committees-I believe it was the former speaker, Mr. Macleay, who referred to a Senate committee and a House committee who are working on the maritime problem at the present time and they are holding hearings. Why dispossess them of their functions by failing to take the necessary action to enable them to continue what the Congress assigned to them? And it would be certainly premature at this time to permit a plan to go into effect that would more or less nullify what is being done at the hearings by the committees that are already now working on the maritime problems.

Senator SCHOEPPEL. Thank you very much. I appreciate your statement.

The CHAIRMAN. Thank you, sir.

That concludes the list of names that I have for appearance here this afternoon. Is there anyone else who desires to be heard?

Mr. LEA. May Mr. Roscoe Hupper have the right to file a statement? The CHAIRMAN. Yes, sir. He certainly may.

I want to place in the record a letter and statement dated May 5, 1950, from Capt. C. F. May, president, National Organization Masters, Mates and Pilots of America, with respect to this Resolution 265. That may be printed in full in the record.

I also have a letter from Hoyt S. Haddock, executive secretary of the CIO Maritime Committee, dated May 8, 1950, enclosing a copy of a letter dated May 4, 1950, to President Harry S. Truman regarding Reorganization Plan No. 21. These letters may be published in the record.