approval of Senator Johnson's Resolution No. 253 to reject Reorganization Plan No. 7 of 1950. Reorganization Plan No. 13 which would give the President the power to ap point the Chairman of the Civil Aeronautics Board and transfers certain powers to the Chairman, is also objectionable on general principles similar to those outlined above in connection with Plan No. 7. Reorganization Plan No. 21 would transfer the functions of the Maritime Commission to the Department of Commerce and create an Under Secretary of Commerce for Transportation. This plan, if adopted, would transfer the functions of the Maritime Commission from a regulatory Commission created by the Congress for the purpose of regulation, to the Department of Commerce, a part of the executive branch of our Government. This plan is also objectionable for the reasons outlined in connection with plan No. 7 above as to the Interstate Commerce Commission, as it would transfer from an arm of Congress to the executive branch f the Government certain functions which we believe under the commerce clause of the Constitution rest only with the Congress. We, therefore, believe that Reorganization Plan No. 21 also would not be in the public interest and should be rejected by the Congress. We respectfully urge that you use your influence to bring about this result. It no doubt will be claimed by the sponsors of the proposed reorganization plans that they are in accordance with the recommendations of the Hoover Commission. However, we are informed that, while the task force of the Hoover Commission made some suggestions with reference to the appointment of Chairmen of various Commissions, the Hoover Commission in its report made no such recommendation. The control of these regulatory Commissions should be retained by the Congress and not transferred to the executive branch of the Government and it is respectfully urged that the Resolutions providing for the rejection of the Reorganization Plans referred to above, be approved. Yours very truly, I. M. HERNDON, Manager, Transportation Department. CHAMBER OF COMMERCE OF THE Hon. JOHN L. MCCLELLAN, UNITED STATES OF AMERICA, Chairman, Committee of Expenditures in the Executive Departments, DEAR SENATOR MCCLELLAN: The Chamber of Commerce of the United States urges the adoption of Senate Resolution 265, which would place the Senate on record in opposition to Reorganization Plan No. 21 of 1950, affecting the United States Maritime Commission. The organization of Federal transportation agencies has been given serious consideration by the transportation committee of the chamber over a period of several years. A year ago the committee recommended, and the membership of the chamber adopted, a position advocating (1) that all Federal transportation regulatory bodies, permanent or temporary, should report direct to Congress, and that (2) Federal regulatory agencies having jurisdiction over transportation should use every effort to separate their judicial and administrative functions and delegate details to commissioners, members, or staff. The chamber therefore believes that Federal transportation regulatory agencies should be independent of the executive branch of the Government and that internal reorganization necessary to increase efficiency in the performance of their respective functions can best be brought about through actions of the agencies themselves. These views were further emphasized in studies made by the chamber's transportation committee during the past 12 months. As the result of studies of the recommendations of the Hoover Commission, and of the more recently submitted Reorganization Plan No. 21 of 1950, the committee recommended, on March 23, that the chamber oppose the transfer of the nonregulatory functions of Federal transn n regulatory agencies to any department of the executive branch This recommendation was adopted as chamber policy by t its recent annual meeting, on May 3. of + ont. ng adoption of this declaration, the committee pointed out: The of quasi-judicial transportation regulatory agencies as arms of Congress; the dangers of dominance of such agencies by the executive branch of the Government; the close relationship between many of the nonregulatory functions and the regulatory functions; the difficulty of segregating these functions; the practical impossibility of a Maritime Administrator, subject to the Secretary of Commerce and carrying out the plans and programs of the Department of Comemrce, to disassociate himself from such activities and act impartially as Chairman of the Federal Maritime Board in the performance of regulatory functions; the precedent that would be created for the reorganization of all Federal transportation regulatory agencies; and the apparent plans for the future reorganization of these agencies as indicated by the provision for an Under Secretary of Commerce for Transportation. The chamber therefore urges defeat of Reorganization Plan No. 21 of 1950 through adoption of Senate Resolution 265. It will be appreciated if this letter is included in the record of the hearings now being conducted in this regard. Cordially yours, CLARENCE R. MILES, STATEMENT OF DETROIT BOARD OF COMMERCE The Detroit Board of Commerce transportation policy is guided and directed by its shippers transportation committee. This committee is composed of 55 traffic representatives of all types and sizes of commercial activities in the Detroit industrial area. Upon approval of the board of directors, the board is authorized to support Senate Resolution 265 in opposition to Reorganization Plan No. 21. The objectionable principle of plan No. 21 is the possible transfer of the regulatory functions of the Maritime Commission to the executive branch of the Government and the breaking down of the independence of this Commission. The same undesirable feature is contained in plan No. 7 as it pertains to the Interstate Commerce Commission and in plan No. 13 as it pertains to the Civil Aeronautics Board. Thus what is said about plan No. 21 herein, applies with equal force to plans No. 7 and No. 13. In transmitting Reorganization Plan No. 21, the President stated, "Without question the Department of Commerce is now the appropriate center for transportation programs * * * It is my purpose to look to the Secretary of Commerce for leadership with respect to transportation problems and for the development of an over-all transportation policy within the executive branch." As you well know, section 8, article I, of the Constitution of the United States gives Congress the right "to regulate commerce with foreign nations and among the several States and with the Indian tribes." Section 2, article II, gives the President the power to require from the executive officer of any department a written opinion on any subject covered by that department. The Detroit Board of Commerce fails to realize what economies and greater efficiencies could be realized from the creation of an Under Secretary of Commerce for Transportation as suggested in plan No. 21. We are also fearful of what powers and duties might be transferred to this Under Secretary in future reorganization plans. The board also believes policies and programs should continue to emanate in the legislative branch of the Government. Congress should be extremely sensitive to plans designed to transfer purely legislative functions to the executive department. * One purpose of appointing the Under Secretary of Commerce for Transportation is: "* * to look to the Secretary of Commerce for leadership with respect to transportation problems and for the development of an over-all transportation policy within the executive branch." We submit policy making is purely a legislative power placed by the Constitution in Congress. The executive department is under the President who has, in this respect, only the right of recommending for the consideration of Congress, such measures as he deems necessary and expedient. It seems that the several regulatory commissions are now closer to the source of policy making than they would be under the executive department. Such an authority as Professor Sharfmann in his monumental work, the Interstate Commerce Commission, vigorously assailed the wisdom of any change which would put the Commission and its functions under the executive department. Not to be overlooked is that many attempts to transfer the Interstate Commerce Commission to the executive department have failed. In the original act to regulate commerce, the ICC was made dependent on the Secretary of Interior for offices, supplies, and expenses. The Commission also made its annual report not to Congress but to the Secretary of the Interior. It is significant that the first amendment to the act in 1889 changed this and made the Commission completely independent. You are undoubtedly familiar with the many legal cases finding that regulatory bodies are lawfully a part of the legislative branch. Moreover, you are undoubtedly thoroughly familiar with many court decisions, saying regulatory bodies should be independent. I should like to submit for your consideration the views of a few of our outstanding leaders in transportation on these matters. The Honorable Burton K. Wheeler once voiced his opinion on which branch of the Government the ICC should be under. He said: "The Commission is an administrative body created by Congress to carry into effect legislative policies embodied in the statute in accord with the legislative standard therein prescribed, and to perform other duties as a legislative or judicial aid. Such a body cannot in any sense be characterized as an arm or an eye of the Executive. Its duties are performed without Executive leave and must be free from Executive control." In an address before the Boston Chamber of Commerce, the late Commissioner Joseph B. Eastman stated, "Not all understand what kind of an agency the Commission is. It is primarily an arm, not of the executive branch of the Government, but of the legislative." Point 1 of the 12-Point Primer compiled by the late Mr. Joseph B. Eastman as guiding principles for administrative tribunals reads: 66* * * Administrative tribunals like the Interstate Commerce Commission are necessities-to be successful, they must be masters of their own souls and known to be such. It is the duty of the President to determine their personnel through the power of appointment and it is the duty of Congress to determine by statute the policies which they are to administer but in the administration of those policies these tribunals must not be under the domination or influence of either the President or Congress or of anything else than their own independent judgment of the facts and the law * * * Political domination will ruin such a tribunal * * The Honorable B. H. Meyer also voiced the importance of keeping the ICC an independent body. He said: "I say without the slightest hesitation, that if the ICC is to be influenced and controlled by external and political suggestions, rather than by considerations which have heretofore always controlled its official acts, it should be abolished." In conclusion, it is felt that the Under Secretary of Commerce for Transportation is not necessary nor will it produce any economy or efficiency. On the other hand, it is felt such an appointment would seriously impede and interfere with the independence of such regulatory commissions as the Interstate Commerce Commission, Civil Aeronautics Board, and Maritime Commission. Respectfully submitted. GRANT ARNOLD, Manager, Transportation Bureau, Detroit Board of Commerce. COMMITTEE ON INTERSTATE AND FOREIGN COMMERCE, Hon. JOHN L. MCCLELLAN, UNITED STATES SENATE, May 11, 1950. Chairman, Expenditures in the Executive Departments. DEAR SENATOR: Attached is a copy of a statement I have prepared on the President's Reorganization Plan No. 21. I would like this statement and the attachments made a part of the official committee record on this subject. While the statement sets forth my own personal views on the plan I believe those views are shared by a majority of the Subcommitee on Merchant Marine and Maritime Matters. I want it understood, however, that I do not purport to speak for all members of the subcommittee; but, by the same token, it is my conviction that no other member of the subcommittee who may have appeared before you can speak for the whole committee. Best personal regards, Sincerely, WARREN G. MAGNUSON, United States Senator. STATEMENT OF SENATOR WARREN G. MAGNUSON, CHAIRMAN OF THE SUBCOMMITTEE ON MERCHANT MARINE AND MARITIME MATTERS OF THE INTERSTATE AND FOREIGN COMMERCE COMMITTEE Reorganization Plan No. 21 in its basic concepts conforms to the recommendations of the Hoover. Commission. By divorcing the regulatory functions of the Maritime Commission from its executive tasks of managing a huge businesstwo fundamentally different types of functions requiring different types of organizations the plan also conforms to the suggestions made in the reports of the President's Advisory Committee on the Merchant Marine and the Senate Committee on Expenditures in Executive Departments (80th Cong.). In 1948, the Senate committee found: "It is an anomaly that a regulatory commission should also conduct the executive function of managing a huge business; that executive functions should be carried on by an agency that is not subject to presidential direction." Although the plan departs in a small measure from the Hoover Commission recommendations in abolishing the Maritime Commission and creating a new Maritime Board I believe this is not a defect. Considering the strained relations of the Maritime Commission with Congress, the press, and the public, I deemed this to be a salutary provision. At first I was somewhat concerned this change might operate to curtail the independence of the Maritime Board in the exercise of its regulatory functions. However, on further study, I became convinced that the intent and proper interpretation of the plan is to preserve the independent status of the Board in regulatory matters. With respect to the authority of the Board in reaching decisions regarding the making, altering, or terminating of subsidy contracts, I am of the opinion that decisions of the Board will be reached on the basis of the discretion vested in the members and once arrived at will be final. I am attaching hereto copies of an exchange of letters with the Secretary of Commerce. Some question has been raised relative to the authority granted by the plan to the Secretary of Commerce to determine the trade-route pattern. Congress in the Merchant Marine Act, 1936, and other shipping acts has specifically directed that the trade routes essential to serve the commerce of the United States-and that means in all of our trades-shall be established. The Secretary is bound by these legislative mandates. He would be derelict in his duties if he were to disregard the soundly declared policies of Congress. It does not seem to me that he would abandon any of our essential trade routes. This conclusion is confirmed by the Secretary's statements in the letter already referred to. Committees of Congress concerned with supervision of the work of the Maritime Commission agree that the present organization has not lent itself to the proper administration of our shipping laws. From time to time during the past several years, they have sharply criticized the Maritime Commission. The President's Advisory Committee and the Hoover Commission reached the same conclusions. Other agencies of the Government have repeatedly pointed out the deficiencies of the Maritime Commission. In the light of the facts, I am satisfied that plan 21 will materially assist in correcting an organizational and administrative situation which is materially hampering the development of our merchant marine. I know that most of the shipping interests are with me in voicing concern over the future of our national maritime policy. In my opinion, plan 21 is a constructive forward step. Furthermore we should bear in mind that Congress does not abdicate its legislative powers by approving any reorganization plan. We can always pass corrective legislation if some particular aspect of a plan does not work out as anticipated. As chairman of the subcommittee having jurisdiction in this instance, I assure you we will be most vigilant in our scrutiny of the plan in actual operation. APRIL 5, 1950. Hon. CHARLES SAWYER, Secretary of Commerce, Department of Commerce, Washington, D. C. MY DEAR MR. SECRETARY: There is now before Congress for approval Reorganization Plan No. 21 of 1950 abolishing the Maritime Commission and creating a Federal Maritime Board and a Maritime Administration within the Department of Commerce. It transfers the regulatory functions of the Commission to the newly created Board together with certain responsibilities with respect to making, amending, and terminating subsidy contracts. In the case of regulatory matters, the plan provides the Board "shall be independent of the Secretary of Commerce." Since it is not clear from the languageused, particularly when used in its context with other provisions, whether the Board in the regulatory field is to continue to be an independent arm of Congress or whether it is to report to you as Secretary and become a part of the executive branch, we will be pleased if you will give us your interpretation of the prospective legal and factual status of the new Board. The provisions relating to the subsidy authority of the Board provide that the actions of the Board in making, amending, and terminating subsidy contracts "shall be final." Your opinion as to the authority and responsibility of the Board to make decisions on subsidy contracts without prior consultation with, or direction from your Department or from other executive agencies is also solicited. Considering the fact that the general maritime policy as set forth by Congress in the several maritime acts is to be under your guidance and administration, the Subcommittee on Merchant Marine and Maritime Matters of the Committee on Interstate and Foreign Commerce is further interested in having your full views relative to a program for the development and protection of our merchant marine. Your comments as to plans for the future would be of great interest to the committee. In this connection an expression of your thinking of the part which waterborne transportation has in the development of a unified and coordinated Federal program for transportation will be most helpful. In view of the fact that the plan provides for the post of an Under Secretary of Commerce for Transportation, a summary of the respective duties to be assigned to and the spheres of authority to be exercised by yourself, the Under Secretary and the Maritime Administrator will be appreciated. A statement of your contemplated general policy in this regard will be sufficient. Because of the short time remaining before Congres must act on the proposal, it is requested that your reply be given us on or before April 15, 1950. Your cooperation will be deeply appreciated. Sincerely, WARREN G. MAGNUSON, and Maritime Matters. Chairman, Subcommittee on Merchant Marine Hon. WARREN G. MAGNUSON, THE SECRETARY OF COMMERCE, Washington 25, D. C., April 14, 1950. Chairman, Subcommittee on Merchant Marine and Maritime Matters, United States Senate, Washington, D. C. DEAR MR. CHAIRMAN: In your letter of April 5, 1950, you asked for my views on certain aspects of the transfer of the functions of the Maritime Commission under Reorganization Plan No. 21 of 1950. This plan establishes a Federal Maritime Board and a Maritime Administration in the Department of Commerce. The Board would have two principal functions: Regulatory powers relating generally to rates and services, to agreements among carriers, and to trade practices; and powers to award subsidies for the construction and operation of ships. The other functions now lodged in the Maritime Commission would be transferred to the Secretary of Commerce, subject to delegation to the Maritime Administrator, who would also be the Chairman of the Board. In the exercise of its regulatory powers over rates and services, over agreements between carriers, and over trade practices, the Board would, under section 106 of the plan, be independent of the Secretary of Commerce and would be free to report directly to the Congress. The present independence of decision enjoyed by the Maritime Commission would, therefore, in all respects be continued in the Board, with respect to these quasi-legislative or quasi-judicial regulatory functions. If, in the exercise of these functions, the Board should wish to avail itself of any of the facilities of the Department, I should of course be glad to see that the Board is accorded full cooperation. However, such cooperation would not, in my opinion, interfere with the independence of the Board in the exercise of its regulatory functions. On the contrary, the decisions of the Board on regulatory matters would be made with complete independence, on the basis of the facts before the Board, subject only to court review. Its consideration of |