Mr. Buck. Yes, sir.

Mr. HINSHAW. Now under those circumstances, it is logical that we should correct the error before we pass it again, is it not? Mr. Buck. I think that is right.

Mr. HINSHAW. Well, if the error is to be compounded because it was first committed, why, of course, then those standards presently established if the Secretary did not change them would stay under section 8 and if we place that properly it will come under line 10 after the word "standard" in the present bill, H. R. 2768. I think that is all there is to it. It was just a compounding of errors, and it is not a question of difference or anything else.

The CHAIRMAN. Before I would be willing to agree in full with what has been said, I want to say this, that if a mistake has been made, it should not be compounded. However, in ascertaining first whether, a mistake has been made, I would want to inquire further with respect to the purpose and intention of Senator Johnson in having made that amendment to the bill, so as to be convinced that a mistake has been made.

In the second place, even if it were placed at the point that has been suggested, it raises a question of policy, and I would not want to accept that, because of the questions that have been raised by other witnesses; a policy that I would not want to agree with, even though it were placed at the point where the witness states that it should be, and that is a matter for further consideration, in my opinion-and a very serious one-because it would have the effect of requiring in the future that the Secretary of Commerce could not make any change unless he pursued the procedure which in brief does require that there be 65 percent of the industry in favor of the change that he would wish to make. Therefore there is a question of policy as to whether Congress is to delegate to the Secretary of Commerce the authority in such a limited sense that he can only act with the consent of 65 percent of the industry, which raises to my mind a very serious question of policy that must have consideration.

Now, in that connection I have before me a memorandum of law. I will not read all of it at the moment.

The procedures referred to provide, inter alia, that promulgation of a commercial standard can take place only after written acceptances have been received which represent at least 65 percent of the volume of business, in the absence of valid opposition.

The constitutionality of such a delegation of power might be questioned on four specific points.

At this point I will just read one and, with the consent of the committee, will put the whole memorandum in at this point.

(1) The power conferred in the bill might be objected to on the basis that it is, in effect, a power to regulate the affairs of an unwilling minority of the manufacturers of such fabrics. As such it would come within the language of Carter v. Carter Coal Co., 298 U. S. 238, 311 (1935): "This is legislative delegation in its most obnoxious form; for it is not even delegation to an official or an official body, presumptively disinterested, but to private persons whose interests may be and often are adverse to the interests of others in the same business." See also Eubank v. City of Richmond, 226 U. S. 137 (1912); Seattle Title Trust Co., etc. v. Roberge, 278 U. S. 116 (1928).

If there is no objection on the part of the committee I will introduce this memorandum of law.

Mr. CROSSER. Where does that come from?

The CHAIRMAN. It comes from the Federal Trade Commission and from the Department of Commerce and is signed by the Assistant General Counsel of both.

(The memorandum of law referred to follows:)

MEMORANDUM OF LAW

APRIL 21, 1953.

CONSTITUTIONALITY OF THE DELEGATION OF AUTHORITY PROVISIONS OF H. R. 4159, 3851 AND 4500

By section 4 (b) of the above-mentioned bills the Secretary of Commerce would be authorized to modify or supplement the test methods, procedures, and standards provided in the bills by adopting any revision or amendment to "Flammability of Clothing Textiles, Commercial Standard 191-53" and/or any new applicable commercial standard provided that any such modification or supplement shall have been developed under the same procedures which were in effect and used in connection with the establishment of Commercial Standard 191-53. The procedures referred to provide, inter alia, that promulgation of a commercial standard can take place only after written acceptances have been received which represent at least 65 percent of the volume of business, in the absence of valid opposition.

The constitutionality of such a delegation of power might be questioned on four specific points:1

(1) The power conferred in the bill might be objected to on the basis that it is, in effect, a power to regulate the affairs of an unwilling minority of the manufacturers of such fabrics. As such it would come within the language of Cartre v. Carter Coal Co., 298 U. S. 238, 311 (1935); "This is legislative delegation in its most obnoxious form; for it is not even delegation to an official or an official body, presumptively disinterested, but to private persons whose interests may be and often are adverse to the interests of others in the same business." See also Eubank v. City of Richmond, 226 U. S. 137 (1912); Seattle Title Trust Co., etc. v. Roberge, 278 U. S. 116 (1928).

(2) The courts may examine the delegation of powers more critically when violation may result in criminal punishment. Since provision is made in this proposed legislation that violation of its provisions is punishable as a misdemeanor, language in Panama Refining Co. v. Ryan, 293 U. S. 388, 432 (1934), in that regard is in point:

"If the citizen is to be punished for the crime of violating a legislative order of an executive officer, or of a board or commission, due process of law requires that it shall appear that the order is within the authority of the officer, board or commission, and if that authority depends on determinations of fact, those determinations must be shown."

(3) Under the procedures adopted by reference in this legislation, promulgation shall be effected after written acceptances representing at least 65 percent of volume of business, "in the absence of valid opposition" have been received. The language "valid opposition" is susceptible of many interpretations and might therefore come within the prohibitions of the "void for vagueness" rule as established in Panama Refining Co. v. Ryan, 293 U. S. 388 (1935) and A. L. A. Schecter Poultry Corp. v. U. S., 295 U. S. 495 (1935). Admittedly, the Supreme Court of the United States has not used these decisions since the time they were laid down to declare any provisions of law unconstitutional on the basis of an unlawful delegation of authority, but it is urged that the vagueness of the words "valid opposition" when coupled with the objections to the bill raised in (1) and (2) supra, constitutes a cogent reason for denying the validity of the proviso of 4 (b).

(4) Further, it can be forcefully argued that section 4 (b) would not only attempt to regulate the affars of an unwilling minority of the manufacturers of such fabrics, but also, under certain circumstances, an unwilling majority of the public in derogation of the public welfare for the power which would be entrusted to an interested "65 percent of the volume of business" could be used to defeat

1 Cf. Jaffe, Law Making by Private Groups (1937), 51 Harv. L. Rev. 201.

the very purposes of the bill by allowing dangerous fabrics not proscribed by the standard established by the bill to be shipped in interstate commerce. HENRY MILLER,

Assistant General Counsel, Federal Trade Commission.

KENNETH F. MCCLURE,

Assistant General Counsel for Domestic Affairs, Department of Commerce.

Mr. HESELTON. Mr. Chairman, will you yield at that point?
The CHAIRMAN. Yes.

Mr. HESELTON. I intended to ask you how you arrived at the 65 percent; why not 60 percent or 55 percent; or some other figure.

Mr. BUCK. I think that was-well, it goes back rather far in history in the use of commercial standards. I thing it must have been aimed at two-thirds, and 65 was considered close enough for that.

Mr. HESELTON. Do you think they were aiming at 66% and did not quite get there?

Mr. Buck. That would be my impression; but I do not know, sir. Mr. HESELTON. That is all.

Mr. HINSHAW. Mr. Chairman.

The CHAIRMAN. Mr. Hinshaw.

Mr. HINSHAW. Is the method of establishing standards a matter of law or is it a matter of the establishment of some standard by fiat, or what?

It may be that the staff can answer that question, Mr. Chairman. (After informal discussion between Mr. Hinshaw and members of the staff.)

Mr. HINSHAW. I think that I will carry that question over and ask the question of a witness from the Bureau of Standards or the Federal Trade Commission or the Department of Commerce, as the case may be, when they appear on the stand.

There appears to be an outline of procedure which has been adopted by industry or the trades for voluntary standards.

Now, that voluntary standard apparently is not binding as yet upon any segment of the trade but is merely an establishment of a standard, and there is no penalty for violation, and consequently I think it fair to make some further inquiry before comment is made upon it. Mr. HALE. Mr. Chairman.

The CHAIRMAN. Mr. Hale.

Mr. HALE. Returning, Mr. Buck, just a moment, to this language on page 5, H. R. 2768:

The Secretary of Commerce is authorized and directed to establish test methods.

And so forth.

Would you say, as a matter of fact, that that means that the Secretary of Commerce is authorized and directed "from time to time" to establish?

sir.

Mr. BUCK. I see no reason why it should not be interpreted that way,

Mr. HALE. My own view is that it should be interpreted that way and if we intend to give the Secretary of Commerce a continuing authority to establish standards, I think this phrase "from time to time" should be inserted after the words "authorized and directed." So far as I am concerned, I would say at this stage of the discussion that I would not vote for a bill which delegated to the industry the

authority of regulating itself, because such legislation is virtually no legislation at all. It represents, in the language of the opinion, already quoted, the "most obnoxious form of delegation."

You spoke about the Pharmacopoeia. There is no legislation in connection with the drug industry which permits the drug manufacturers, or 65 percent of them, to modify the standards of purity

at will.

Mr. Buck. This, I believe, sir, does not give the industry authority to make any change in this legislation. It is only to have a voice in the changes, and if I might refer to it, although I am not an attorney, to the opinion read by the chairman, the difference seems to me that while this might be held-well, the use of the commercial standard might be held as forcing something on an unwilling minority of the industry, the other approach is foisting something on an unwilling majority of the industry.

Mr. HALE. Certainly there is no doubt about that. That is what is always done when you regulate industry. When you regulate an industry your regulate them whether they like it or not.

Mr. BUCK. I think that that should be the power of the Government to do that, and I think industry

Mr. HALE. I agree with you.

Mr. BUCK. And I thing industry is willing to concede that, sir; but on an important point like this, don't you think we should have some voice in it? Perhaps you can come up with a suggestion, a better mechanism.

Mr. HALE. I think that industry is amply justified in coming to this committee and to the Congress and saying, "We want a definite objective standard so that we will know what the requirements of the law are." And, I can see very substantial objections to giving the Secretary of Commerce authority from time to time to modify the standard; but that seems to me far less objectionable than giving the industry power from time to time to modify the standards.

Mr. BUCK. The industry would not have that power, sir, without the approval of the Secretary of Commerce.

This wording says that no such test, method, procedure, or standard shall be established or promulgated by the Secretary of Commerce unless in his opinion such test, method, procedure, and standard are adequate for the protection of the public interest.

So you see that is fully binding on any industry or anything that the industry might do in any revision. It has to be a cooperative approach.

Mr. HALE. Well, taking any view of the matter, you see the force of what you are saying is

Mr. Buck. I beg your pardon?

Mr. HALE. Taking any view of the matter you will, you are still giving industry a veto of the Secretary, and in a sense a veto of the Congress.

Mr. Buck. In revisions; yes, sir; not a veto of the Congress, sir. Mr. HALE. Very well.

The CHAIRMAN. A veto of what Congress has already done.

Mr. HALE. Yes.

Mr. CARLYLE. Mr. Chairman.

The CHAIRMAN. Mr. Carlyle.

Mr. CARLYLE. As I understand your statement-and I have tried to follow you carefully-you wish to place two principal restrictions on the Secretary of Commerce; on the power of the Secretary of Commerce.

The first is that he shall not have the authority to set up the standards without restrictions as to the methods that he should use in setting those standard up. Is that correct?

Mr. Buck. Well, I should like to take steps, sir, to see that the standards are set up now.

Mr. CARLYLE. Well, I understood that a little differently, as to what the standards should be; that you were unwilling for the standards to be definitely accepted.

Mr. BUCK. No, sir.

Mr. CARLYLE. Unless there were certain restrictions that would regulate his method of determining those standards.

Mr. BUCK. No; we agree with the standard which is set up now and which this committee has put in the bill. The standard is set up by the Secretary of Commerce. We support it. It is incorporated in the

bill.

Mr. CARLYLE. Well, now, I understood you spoke of some restrictions.

Mr. BUCK. Yes, sir.

Mr. CARLYLE. What were those?

Mr. BUCK. The restrictions we referred to have to do with any changes of these standards to something else.

Mr. CARLYLE. I understood that there were some restrictions relating to the method of determining the standards. That is not correct, is it?

Mr. BUCK. No; just changing the standards.

Mr. CARLYLE. Now you are saying that the Secretary of Commerce should not have the authority to change the standards without first obtaining the consent of 65 percent of the industry.

Mr. BUCK. Well, I submit, sir, that in this bill, H. R. 2768, you are passing, considering legislation which restricts certain fabrics; and, according to this test method referred to in this section 4, we know what fabrics are restricted. They are rayon pile fabrics; certain nitrose, and so on.

If you go on and say that the Secretary of Commerce has authority to set any other standards in place of these, then you are adopting or proposing legislation about which we have no idea of the coverage. We do not know whether you are ruling out the shirt we are wearing here, because you give the Secretary of Commerce that authority, if you say that he can disregard entirely the standards upon which we start. That is what we object to.

Mr. CARLYLE. Is it your thought that when 65 percent of the industry has agreed upon some course of action that they would recommend to the Secretary of Commerce or that the agreement that 65 percent had arrived at, that would be binding upon the Secretary of Commerce?

Mr. BUCK. No, sir; it is not binding upon the Secretary of Com

merce.

Mr. CARLYLE. Well, what force would it have, then?