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The Place of the Independent Commission - Bruce Frohnen, The American Nation: Primary Sources 
The American Nation: Primary Sources, ed. Bruce Frohnen (Indianapolis: Liberty Fund, 2008).
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The Place of the Independent Commission
The subject which I am to discuss has roots which run deep into the past. It invites historical research, and discussion will be illuminated thereby. To my regret I have not been able to undertake such research. On the independent commission of which I am a member, namely, the Interstate Commerce Commission, it is a constant struggle to keep abreast of current work. My observations will, therefore, be the product chiefly of such experience as I have had as a member of one particular independent commission, and I shall perforce use that commission by way of illustration in the course of my remarks.
The Federal Government is supposed, popularly at least, to be divided into three separate and quite distinct branches—the executive or administrative, the legislative, and the judicial. To what branch does an independent commission belong? That question is not so simple as it may sound. The best answer that I can give is that the work of such a commission may, and usually does, combine aspects of all three branches. Let me, by way of illustration, cite expressions of the Supreme Court of the United States upon the duties of the Interstate Commerce Commission:
The Interstate Commerce Commission is purely an administrative body. It is true that it may exercise and must exercise quasi judicial duties, but its functions are defined, and, in the main, explicitly directed by the act creating it (Int. Com. Comm. v. Humboldt Steamship Co., 224 U.S. 474, 484).
But awarding reparation for the past and fixing rates for the future involve the determination of matters essentially different. One is in its nature private and the other public. One is made by the Commission in its quasi-judicial capacity to measure past injuries sustained by a private shipper; the other in its quasi-legislative capacity to prevent future injury to the public (Baer Bros. v. Denver & R. G. R. R., 233 U.S. 479, 486).
The Congress may not delegate its purely legislative power to a commission, but, having laid down the general rules of action under which a commission shall proceed, it may require of that commission the application of such rules to particular situations and the investigation of facts, with a view to making orders in a particular matter within the rules laid down by the Congress (Int. Com. Comm. v. Goodrich Transit Co., 224 U.S. 194, 214).
The making of rates is a legislative and not a judicial function. . . . The division of joint rates is also legislative in character (Terminal R. R. Asso. v. U.S., 266 U.S. 17, 30).
In the case at bar, the function exercised by the Commission is wholly legislative. Its authority to legislate is limited to establishing a reasonable rule. But in establishing a rule of general application, it is not a condition of its validity that there be adduced evidence of its appropriateness in respect to every railroad to which it will be applicable. In this connection, the Commission, like other legislators, may reason from the particular to the general (Assigned Car Cases, decided May 31, 1927).
These expressions may seem, perhaps, not altogether consistent. In one case, for example, the Commission is described as “purely an administrative body”; in another case it is pointed out that “Congress may not delegate its purely legislative power to a commission”; but in the most recent case cited a function exercised by the Commission is described as “wholly legislative,” it is stated that its “authority to legislate is limited to establishing a reasonable rule,” and the Commission is classed with “other legislators.” These apparent inconsistencies can, I think, be reconciled, but before I attempt such reconciliation, let us consider for a moment the degree of control which the three branches of the Government exercise over an independent commission.
The commission is created by, and in that sense is the creature of, the Congress. Its powers and duties are determined in the first instance by the Congress. The manner in which those duties are performed, however, depends upon the mental characteristics of the commissioners, and they are selected by the President, although the Senate has a negative power of disapproval. Moreover, the ultimate interpretation of the powers of the commission and the constitutionality of their exercise rest with the courts, and the results are not always such as were anticipated by the Congress. Thus it will be seen that the functioning of an independent commission is to some extent controlled by all three branches of the Government. It may be that this is the reason why these commissions, after they have been created by the Congress, are not always regarded by that body in a wholly paternal light.
Returning to the essential character of the duties of the Interstate Commerce Commission, it is important to bear in mind that prior to the creation of the Commission the public regulation of interstate common carriers lay partly with the courts and partly with the Congress. The powers of the courts, which were far from clear and definite, were apparently limited to the redressing of past wrongs. With the Congress lay the power of protecting the public interest through the control of future conditions. In exercising jurisdiction over what has been done in the past, the Commission is, therefore, doing what the courts used to do and what they may yet do to some extent; but in prescribing rates and rules for the future the Commission is exercising a power which has always been regarded as of a distinctly legislative nature. Strictly speaking its duties of this latter class are administrative, for the general rule or standard is established by the Congress and the Commission’s function is merely to apply that general rule to particular cases. As a practical matter, however, the general rules which the Congress lays down are often so exceedingly broad and general as to afford wide latitude of action, and thus the Commission’s function, while administrative in theory, borders closely in reality upon the legislative. This is, I presume, what the Supreme Court meant when it recently classed the Commission with “legislators.” When I say that the rules laid down by the Congress are broad and general, I have in mind the fact that the standard prescribed is often defined only by such expressions as “just and reasonable,” “consistent with the public interest,” and the like. In addition to these quasi-judicial and quasi-legislative functions, it is also true that the Commission has various duties which may without qualification be described as administrative. Such, for example, are its duties in enforcing various penal provisions of the statutes.
But to my mind the cataloging of the duties of an independent commission by tags representing the three traditional subdivisions of the Government is little more than an interesting mental exercise. It may have legal significance, but for the most part the legal questions which have arisen in that connection are in the realm of decided issues. As a matter of fact the outlines of the three governmental branches are considerably blurred, and there is much merging of functions. It has been intimated, indeed, that even the courts sometimes legislate, and I am not prepared to contest that intimation. The independent commissions are the evolutionary product of public need. The important question is whether they meet that public need in the best practicable way.
The need for a commission arises, it seems to me, when the legislative body finds that particular conditions call for continual and very frequent acts of legislation, based on a uniform and consistent policy, which in themselves require intimate and expert knowledge of numerous and complex facts, a knowledge which can only be obtained by processes of patient, impartial and continued investigation. This may be illustrated by the subject of railroad rates. As we have seen, the fixing of common carrier charges for the future is a legislative function. State legislatures have in the past undertaken to fix such charges directly, without the agency of a commission. But trial and experience demonstrated that the task could not wisely be performed in this way, even within a single State, and the fixing of interstate railroad rates is a far larger and more involved undertaking. It is particularly complicated by the fact that the railroad industry is not wholly monopolistic but is subject to the influence of competition to a very considerable extent. There are a myriad of diverse circumstances and conditions to be taken into consideration, and these circumstances and conditions continually fluctuate. The task of regulating rates is not, therefore, one which can be performed in a single, mighty effort, but rather it is a continuous performance which must be accompanied by continual inquiry and investigation.
Obviously a legislative body like the Congress, with all the other numerous and important duties which it must perform, can not itself undertake the vast and painful detail of railroad rate regulation. Obviously, also, the answer to the problem is the creation of a special agency or tribunal which shall devote its energies to this particular task under the control of general rules laid down by the Congress. Such a device has two other important advantages which should be mentioned.
In the first place this agency or tribunal can be utilized by the Congress as an expert advisory body from which it can from time to time obtain the information necessary to determine what addition to or changes in the general rules of regulation should be made, and which it can direct, if need be, to make special investigations in new but related fields of inquiry. One of the important provisions of the interstate commerce act is that which authorizes the Commission “to inquire into the management of the business of all common carriers” subject to the act and directs it to “keep itself informed as to the manner and method in which the same is conducted.” Another is the provision which requires the Commission in its annual report to Congress to transmit “such information and data collected by the Commission as may be considered of value in the determination of questions connected with the regulation of commerce, together with such recommendations as to additional legislation relating thereto as the Commission may deem necessary.”
In the second place it is possible to provide, and in fact it is provided, that the Commission shall exercise its power, in general, only after investigation conducted with the thoroughness and impartiality of judicial proceedings. This has been done quite simply, as the following quotation from the opinion of the Supreme Court will show:
Congress by using the phrase “whenever the Commission is of opinion, after hearing,” prescribed quasi-judicial action. . . . The provision for a hearing implies both the privilege of introducing evidence and the duty of deciding in accordance with it. To refuse to consider evidence introduced or to make an essential finding without supporting evidence is arbitrary action (Chicago Junction Case, 264 U.S. 258, 265).
No such restriction, of course, circumscribes the acts of the Congress. The Supreme Court, however, has said as to these hearings:
The inquiry of a board of the character of the Interstate Commerce Commission should not be too narrowly constrained by technical rules as to the admissibility of proof. Its function is largely one of investigation and it should not be hampered in making inquiry pertaining to interstate commerce by those narrow rules which prevail in trials at common law where a strict correspondence is required between allegation and proof (Int. Com. Comm. v. Baird, 194 U.S., 25, 44).
The Commission has more freedom than a court in other ways. Thus it can institute an investigation upon its own motion, and even in proceedings which arise upon complaint or petition it can introduce evidence which is not proffered by the parties, and utilize the services of its own staff of employees in this connection. In the more important proceedings the Commission is at times represented by counsel to aid in the development of the facts.
The reasons which impel the Congress to create a commission for the purpose of administering certain general legislative rules are by logical extension the reasons which impel it to impose various duties of a strictly executive or judicial nature upon such commissions. Reverting again to the subject of railroad rates, by way of illustration, the determination of reasonable rates in the past is closely associated with the determination of reasonable rates for the future, notwithstanding that the one may be termed a judicial and the other a legislative act. It follows that if an expert body is to be created for the determination of future rates, it is both logical and appropriate that it be given jurisdiction over past rates; and this has been done, although the courts have to some extent been permitted to retain concurrent jurisdiction in the latter case. And where it is necessary for the Congress to impose upon some agency duties of a strictly executive character, it is both logical and appropriate that an independent commission should be selected as the agency when such duties relate to its sphere of activity. With its expert knowledge and trained staff of employees, the commission can perform these executive duties with maximum economy and efficiency, and in the process it will gain valuable additions to its store of knowledge and experience. Thus the Interstate Commerce Commission, in cooperation with the Department of Justice, can enforce the railroad safety appliance statutes with greater efficiency than would be possible if the Department were obliged to rely wholly upon a staff of local district attorneys and other agents dealing with innumerable other matters, and in the process of enforcement the Commission acquires a knowledge of railroad operating conditions which is of material value in other branches of its work.
It remains to consider whether independent commissions are the best practicable means of meeting the public needs which have led to their creation. Obviously some special agencies or tribunals are necessary, and the only alternative to independent commissions, as I see it, is some form of dependent commissions. Strictly speaking there is, of course, no such thing as an independent commission, for I have already shown that the Congress, the President, and the courts all have some measure of control over their functioning. However, it is quite possible to increase the degree of dependency, and suggestions have from time to time been made to that end.
In general the courts may not now review the acts of the Interstate Commerce Commission except to determine whether there has been a violation of the Constitution, or a failure to conform to statutory authority, or an exercise of power so arbitrary that it virtually transcends the authority conferred, although it may not technically do so. The courts have no concern with the correctness of the Commission’s reasoning, nor with the soundness or wisdom of its conclusions, nor with the consistency or inconsistency of its findings in various cases. In short, they will not consider the facts further than to determine whether there was evidence to support the order. There is a partial exception to this rule in suits to enforce orders of the Commission awarding money damages, where its findings are only prima facie evidence of the facts. Originally the duty of the courts to determine whether an order of the Commission should or should not be enforced carried with it the obligation to consider both the facts and the law. Experience demonstrated the wisdom of the present rule and there are few who are now disposed to question it.
A moment’s reflection will suffice to realize that if the courts were given broad powers of review over the Commission’s findings of fact, the result would be to transfer the duties of common carrier regulation from the Commission to the courts. All proceedings could upon appeal be retried de novo, thus prolonging litigation beyond endurable limits. There would be substituted for the judgment upon complex facts of a special tribunal expert through daily experience with and concentration upon such facts and aided by a trained staff of technicians, the conflicting judgments of district courts throughout the country not equipped for the task in any comparable way and having a multitude of other and diverse duties to perform. No one has more clearly recognized the evils of such a superimposed authority than the Supreme Court itself. In Proctor & Gamble v. United States (225 U.S. 282, 296), it pointed out that the regulations and consequent duties imposed upon carriers by the act to regulate commerce
required, first, for their compulsory enforcement the exercise of official functions of an administrative nature, and, second, for their harmonious development an official unity of action which could only be brought about by a single administrative initiative and primary control.
And later in that opinion it stated that the recognition of a right of complete court review “would of necessity amount to a substitution of the court for the Commission, or at all events would be to create a divided authority on a matter where from the beginning primary singleness of action and unity was deemed to be imperative,” with the result that there would be brought about “contradiction and the confusion which it had been the inflexible purpose of the lawmaker from the beginning to guard against.”
Any suggestion that the so-called independent commissions should be made more dependent upon the judicial branch of the Federal Government may, I think, be dismissed without further discussion.
It has been suggested, however, although I think rather faintly, that these commissions might well be made more dependent upon the executive branch of the Government. One way in which this suggestion is sometimes phrased is that they should be made a “part of the administration.” In considering it, we must start, I think, by appraising again the essential characteristics of these commissions. They are creatures of the Congress sworn to the faithful performance of certain specific duties by impartial, judicial methods. The Supreme Court has said that their powers are “expected to be exercised in the coldest neutrality.” They are clearly non-partisan in their makeup, and party policies do not enter into their activities except to the extent that such policies may be definitely registered in the statutes which they are sworn to enforce. No more than a majority of the members of the Interstate Commerce Commission may belong to any one political party, but I presume that the purpose of this provision is to emphasize the nonpartisan character of the body. Certainly, when once the members are selected their political affiliations cease to be of the slightest consequence, and so far as my knowledge runs the Commission has never divided in its decisions along political lines.
What purpose, then, would be served by bringing an independent commission within the jurisdiction of some executive department or cabinet officer? I can conceive of no purpose except to influence in some way the judgment of the commission or to bring it within the sway of some administration policy. But plainly, it seems to me, the cold neutrality of the commission, to use the expression of the Supreme Court, ought rather to be safeguarded jealously against precisely such extraneous influences. They are as out of place in the case of a commission as they would be in the case of a court. The great majority of those who appear before the Interstate Commerce Commission—I can not, of course, speak for the other independent commissions—appreciate this fact quite clearly. Now and then some litigant forgets the properties and seeks resort in some fashion to “pull” and so-called political influence, but in my judgment he gains nothing from such tactics. And even if this were not the fact, manifestly the remedy is not to make the Commission dependent in any way upon some cabinet officer necessarily influenced by considerations of party polities. I speak, of course, without any disrespect whatsoever, for such political considerations have a very proper place in national affairs. But, as I see it, they have no place so far as the independent commissions are concerned.
Summing up the discussion, the place of the independent commissions in the Federal Government in my judgment is the place which they now occupy. I would not increase their dependence upon any branch of the Government. In this respect, at least, I am a standpatter. As I stated at the outset, they are the evolutionary product of experience in meeting very genuine public needs, and I know of no other way in which such needs can be met. This is not to say that the functioning of these commissions can not be improved. On the contrary, I believe that the functioning of the particular commission of which I am a member can be improved, and in important respects. We are endeavoring to the best of our ability to effect such improvements, and welcome advice and aid to that end. But confining attention to essential characteristics and place in the structure of Government I have no improvements to suggest.
Permit me to say in conclusion that there appears to be some sentiment throughout the country against the multiplication of what are termed “government bureaucracies,” and I presume that the independent commissions are included in that category. Catch-phrases and slogans such as this are dangerous, inflammable substances to be handled with caution, and they are often used for ulterior purposes. Independent commissions ought not to be created without a real public need, and any that are not serving such a need ought clearly to be abolished. But there can not be too many to the extent that they are demanded and required by the public interest. I ask only that before the bureaucracy slogan is accepted at face value, there be some careful consideration of the vital underlying question of public need.
Herbert Hoover (1874-1964) was a mining engineer, self-made millionaire, and leader of a variety of international humanitarian efforts. He served as the secretary of commerce during the administrations of Presidents Warren G. Harding and Calvin Coolidge, whom he succeeded in 1928. A constant proponent of cooperation between government and business in the interests of efficiency, he faced, soon after his inauguration, the worst depression in American history. Brought on by a stock market crash and a sudden, drastic constriction of the supply of money, among other factors, the Great Depression put millions out of work, brought mass foreclosures and bank collapses, and made bunger and homelessness national issues. Hoover responded with a series of actions aimed at increasing public works projects, protecting American businesses from foreign competition, and spurring voluntary relief. Hoover opposed any attempt at direct federal aid for individuals, arguing that such paternalism would deaden individual initiative and private charity. The speech reproduced here announced a nationwide campaign using federal resources to coordinate the raising of local relief funds to maintain the “spirit of mutual help through voluntary giving.”