The decision of the Supreme Court in Myers v. United States, rendered October 25, 1926, is probably the basis for this action. The exercise of Executive power was strongly challenged by three of the justices of the Supreme Court in that case. The question is directly presented whether the exercise of this power in changing the personnel of the Farm Loan Board thus effected is in violation of the spirit of American institutions and contrary to the American plan and principles of government. Does it not amount to a change of free institutions for what may lead to tyranny?,

We have a Supreme Court as the guardian of the Constitution, to see that the various legislatures do no violence to its principles. That Constitution provides that the Executive is charged with the duty of seeing that the laws are executed. What laws? The laws which Congress enacts, not the laws set up or promulgated by the Executive. The Constitution created a legislative branch, authorized to enact laws. It is not for the President to disregard the laws enacted by Congress and accomplish a change in those laws to conform to his will by a process of administration set up by the Executive.

In England, the source of our common law, founded on principles of justice and freedom, Parliament is supreme and there is no court which has power to declare void an act of Parliament that has been passed with due formalities. The Supreme Court of the United States may declare void an act of Congress if it is found to violate the Constitution. The Executive has no such power. He must conform to the law and enforce it just as Congress has enacted it. He can not circumvent the law by dictating the personnel of its administrators. This Government is not an autocracy. We claim it to be that form of government under which the sovereign political power in a State is distributed among all the citizens of the State and we call it a representative democracy. When the reins of power are in the hands of one man we have a despotism or an oligarchy. Under a democracy every citizen of the State has a share in the government of the State. We have freedom which consists in responsibility and the responsibility which insures freedom. The representatives of the States and of the citizens of the States make the laws which bind the PresiIdent as well as all the people.

The rule of law means the absence of arbitrary power and equality before the law. That is our system; it is the common law system. The exercise of arbitrary power in enforcing the will of the President irrespective of the law is just the opposite of that system. That other and opposite system is familiar on the Continent of Europe, not in the United States, not in England. We have no name for that other system which implies and requires that which is called "droit administratif "-administrative law. Under that system the law is made by Government officials. Administrative bodies decide questions. They are supreme. Are we to have that system set up in this country by assumption of authority or otherwise? Even under our system the tendency is marked and dangerous toward bureaucratic pretensions. The effort and aim seem to be place construction upon statutes conforming to the views of those who administer the laws and to "withdraw more and more matters and topics from the jurisdiction of the courts and to set them apart for purely official determination." Very wise and pertinent observations were made recently on that subject by Lord Chief Justice Hewart of England, who said. "Meantime it seems to be important to watch very carefully the influences which are at work. After all, the price of liberty is unceasing vigilance, and it would be a strange and distasteful paradox if, while we look askance at 'droit administratif' under that name we were to permit the restless arrogance of bureaucracy to establish in our midst what would be in effect a more arbitrary 'droit administratif,' unfettered even by the tribunals, such as they are, which form part of the continental system. The name 'self-government' would be a mockery and an irritating mockery if it should come to mean Government by a vast array of anonymous officials, hidden from view but placed above the law and administering a topsy-turvy system whereby the servants of the public had made themselves its masters."

We have come to that pass when that great and beneficial farm-loan system, designed to benefit agriculture, is to be administered as those in charge see fit to administer it, controlled in a way never designed by Congress, by those not believed to be its friends, who take charge after fruitless efforts of those supporting them to amend the law to bring about that control, now accomplished by the exercise of executive power.

Under the "droit administratif" system the President can make the laws to suit himself. His advisers can do the same. Heads of departments can do

that. The laws of Congress can be superseded in practice. The function of Congress would be decidedly limited. The Constitution, the statutes, the vital principles of our Government, if we recognize that system, will be laid aside. We would have an oligarchy or an autocracy. What you can not do under the Constitution and the laws of Congress you will do by administration and in that process if officials observe the statute, remove them and put in others who will do what you wish and thus accomplish what is desired despite the law Congress has made. In effect, change the law by changing the personnel to administer it. That is the new idea, illustrated in this case, which I submit must be resisted.

The court in Myers v. United States, decided October 25, 1926, that under the Constitution the President has the exclusive power of removing executive officers of the United States whom he has appointed by and with the advice and consent of the Senate. Justices Holmes, McReynolds, and Brandeis dissented, each in very strong dissenting opinions.

Mr. Justice Holmes said:

"We have to deal with an office that owes its existence to Congress and that Congress may abolish to-morrow. Its duration and the pay attached to it while it lasts depend on Congress alone. Congress alone confers on the President the power to appoint to it and at any time may transfer the power to other hands. With such power over its own creation, I have no more trouble in believing that Congress has power to prescribe a term of life for it free from any interference than I have in accepting the undoubted power of Congress to decree its end. I have equally little trouble in accepting its power to prolong the tenure of an incumbent until Congress or the Senate shall have assented to his removal. The duty of the President to see that the laws be executed is a duty that does not go beyond the laws or require him to achieve more than Congress sees fit to leave within his power."

Mr. Justice McReynolds said:

"That the Constitution contains no words which specifically grant to the President power to remove duly appointed officers. And it is definitely settled that he can not remove those whom he has not appointed-certainly they can be removed only as Congress may permit.

"That this court as early as 1803, in an opinion never overruled and rendered in a case where it was necessary to decide the question, positively declared that the President had no power to remove at will an inferior officer appointed with consent of the Senate to serve for a definite term fixed by an act of Congress.

"That the power of Congress to restrict removals by the President was recognized by this court as late as 1903, in Shurtleff v. United States.

"That the proceedings in the Constitutional Convention of 1787, the political history of the times, contemporaneous opinion, common canons of construction, the action of Congress from the beginning, and opinions of this court all oppose the theory that by vesting the executive power' in the President the Constitution gave him an illimitable right to remove inferior officers.

"That this court has emphatically disapproved the same theory concerning 'the judicial power' vested in the courts by words substantially the same as those which vest 'the executive power' in the President."

Mr. Justice Brandeis said:

"Checks and balances were established in order that this should be a government of laws and not of men.' As White said in the House, in 1789, an uncontrollable power of removal in the Chief Executive is a doctrine not to be learned in American Governments.' Such power had been denied in colonial charters, and even under proprietary grants and royal commissions. It had been denied in the Thirteen States before the framing of the Federal Constitution. The doctrine of the separation of powers was adopted by the convention of 1787, not to promote efficiency but to preclude the exercise of arbitrary power. The purpose was not to avoid friction but by means of the inevitable friction incident to the distribution of the governmental powers among three departments to save the people from autocracy. In order to prevent arbitrary executive action, the Constitution provided in terms that presidential appointments be made with the consent of the Senate, unless Congress should otherwise provide; and this clause was construed by Alexander Hamilton in the Federalist, No. 77, as requiring like consent to removals.

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'Limiting further executive prerogatives customary in monarchies, the Constitution empowered Congress to vest the appointment of inferior officers, 'as we think proper, in the President alone, in the courts of law, or in the heads of

departments.' Nothing in support of the claim of uncontrollable power can be inferred from the silence of the convention of 1787 on the subject of removal. For the outstanding fact remains that every specific proposal to confer such uncontrollable power upon the President was rejected. In America, as in England, the conviction prevailed then that the people must look to representative assemblies for the protection of their liberties. And protection of the individual, even if he be an official, from the arbitrary or capricious exercise of power was then believed to be an essential of free government."

But granting the power of removal, why see to "the execution of the laws" in this case by such action?

What was the cause of removal?

Were these officers unfaithful or incompetent?

They were either directly interested in agriculture or closely related to it and in full sympathy with that great industry. They were men of splendid capabilities, competent, experienced, and of the highest standing as to integrity and honor. They favored preserving the independent functioning of the Farm Loan Bureau precisely within the law and as the statutes provided. They were replaced by men whose lives and experiences were unrelated to agriculture. They had no training or experience in connection with the law establishing the farm loan system or the administration of the system.

They possessed no qualifications showing any interest in or sympathy with the fundamental industry of the country this system was designed to serve. They have been identified with the Treasury Department of the Government. Their thought and training were along the lines of finance and are imbued with the policies of the Treasury. They were evidently selected on the recommendation of the Treasury and because they are expected to administer this system according to Treasury ideas and plans. As remaining officers of a liquidating agency under the Treasury their services were soon coming to an end. They found en masse berths created by these removals, and they with one member who came originally from the same organization completely control the Farm Loan Board. The domination of the Treasury is complete. All independent action by that board under the law prescribing their rights, powers, and duties is destroyed. They will get their instructions and directions from the Treasury. The fate of the joint-stock land banks and of the Federal land banks and even of the National Farm Loan Association will depend on the will of the Treasury unaided by any judgment or wisdom of the board created by Congress and given power and authority over these agencies and parts of the farm loan system. The interest of the borrowing farmers, of all those engaged in and concerned about agriculture, will be measured by the hard and fast rules, the strict interpretation of purely financial operations, the stern requirements of commercial institutions, all as laid down by the Treasury.

Congress never intended such control and direction. It is all accomplished, not by Congress, not by the courts, but solely by the exercise of this extraordinary, assumed executive power.

Senator FLETCHER. Now, if Mr. Meyer is ready we will proceed. Senator EDGE (presiding). Mr. Meyer, if you will just move up to the table here.'

STATEMENT OF EUGENE MEYER, FARM LOAN COMMISSIONER, WASHINGTON, D. C.

Senator FLETCHER. Mr. Meyer, are you a Democrat or a Republican?

Mr. MEYER. I am a Republican, Senator Fletcher.

Senator FLETCHER. What is the politics of Messrs. Cooksey and Harrison, if you know?

Mr. MEYER. Mr. Cooksey is a Democrat and Mr. Harrison is a Republican. Of course, I would rather answer for my politics. Senator FLETCHER. I understand.

Mr. MEYER. I have always understood that Mr. Cooksey was recognized as a Democrat. Mr. Harrison was born in Virginia, but he has been living in the District of Columbia for a good many years.

Senator FLETCHER. The law has to do with that subject, which is the reason I inquired. Under the law one of these appointees had to be a Democrat and two could be Republicans.

Mr. MEYER. Yes.

Senator FLETCHER. What has been your occupation in life, Mr. Meyer?

Mr. MEYER. Well, I have been in the investment banking business. I started in and learned the banking business as an apprentice, and then I established a firm for myself. I was in what I might say was the investment banking business.

Senator FLETCHER. For how long?

Mr. MEYER. Sixteen years, until I came to Washington during the World War.

Senator FLETCHER. Were you in New York City?

Mr. MEYER. Yes.

Senator FLETCHER. What other business do you devote time to now?

Mr. MEYER. I devote all my time to the Farm Loan Board, except the small amount of time I give to the work of the War Finance Corporation.

Senator FLETCHER. What is your age?

Mr. MEYER. Fifty-two.

Senator FLETCHER. Have you ever had any practical experience in farming?

Mr. MEYER. Well, I have owned and operated a farm since 1909. Senator FLETCHER. Where is it located?

Mr. MEYER. In Westchester County, N. Y.

Senator FLETCHER. What kind of a farm is it?

Mr. MEYER. It is a country place which was operated as a farm when I bought it, and I have kept up farming operations just as incidental to a country residence. I have never had my picture taken on a Fordson tractor, Senator Fletcher, but I have one.

Senator FLETCHER. Do you make any profit on that farm?

Mr. MEYER. Well, farms in Westchester County are difficult to make profitable, Senator. In the first place, the soil is pretty poor and hard, and my farm was pretty badly run down when I took it. It is in a good deal better condition now than it was when I pur

chased it.

Senator FLETCHER. What do you produce on it?

Mr. MEYER. I do not produce very much to sell. I keep it really as a part of my residence. We keep a small dairy herd, grow some corn, and some grain, and some root crops. We get all our vegetables and have an apple orchard and sell some apples. I do not think we get as good prices as we ought to, but nobody does. The orchard was not planted for standardized production the way they do in Washington and Oregon. It seems that up there in Westchester County they tried to see how many different kinds of apples they could grow. Senator FLETCHER. You do not market any of your produce? Mr. MEYER. Not in any great quantity. Substantially, I would say, that I do not grow products for the market, although I do market a few.

Senator FLETCHER. What is the size of the orchard?

Mr. MEYER. In respect of trees or acres?
Senator FLETCHER. In respect of acres.

Mr. MEYER. Well, the orchard is divided up into three of four parts. There may be 30 acres in the apple orchard in all.

Senator FLETCHER. How many acres in the farm?

Mr. MEYER. About 500 acres, including everything, but a great deal of it is rough ground and forests and rocks. I suppose as to farming land, about 125 acres are being cultivated.

Senator FLETCHER. Are you a director of the War Finance Corporation?

Mr. MEYER. Yes, sir.

Senator FLETCHER. Who are its officers now?

Mr. MEYER. Well, the three directors and the Secretary of the Treasury ex officio as chairman. Mr. Cooksey and Mr. Harrison are directors, and I am managing director. Mr. Burklin is secretary and treasurer now, the two offices being combined. We have a small staff in Washington and three active agencies in the field-one in Atlanta, one in Minneapolis, and one in Santa Fe, where we have a more or less scattered business that has not yet been liquidated. There were formerly 33 agencies.

Senator FLETCHER. What compensation do these various people receive?

Mr. MEYER. Mr. Burklin, the secretary and treasurer, I think, gets $7,500 or maybe it is $7,200 a year. I would rather give you that exactly from the record, if I may. I would like to furnish that information to the clerk of your committee.

Senator FLETCHER. All right, that may be done.

Mr. MEYER. As to the directors' salaries, they are fixed by law at $12,000 a year, but owing to the fact that Mr. Cooksey and Mr. Harrison are members of the Farm Loan Board, which pays them $10,000 a year, they draw only $2,000 from the War Finance Corporation, which is in liquidation, as you know. I do not draw any salary from the War Finance Corporation; I return the salary, and have done so since June 1, 1925. The work has gone down so much that I felt the overhead expense ought to be reduced.

Senator FLETCHER. Since May 31, 1927, you have not drawn any salary from the War Finance Corporation?

Mr. MEYER. No; and, as I stated before, not for two years prior to that time.

Senator FLETCHER. Do these other gentlemen draw $2,000 each a year?

Mr. MEYER. Yes, sir.

Senator FLETCHER. Cooksey and Harrison draw $2,000 a year from the War Finance Corporation?

Mr. MEYER. Yes, sir.

Senator FLETCHER. And your secretary and treasurer gets $7,500? Mr. MEYER. I would like to make sure of that figure. I will say that is right, subject to correction. I think that is the salary he has had for the last several years. Formerly, when the work was at its peak, he was treasurer, and we also had a secretary. And then when the work went down we combined the positions of secretary and treasurer into the one position. He is one of the oldest employees, I think, and knows the business from the beginning.

(NOTE.-Mr. Burklin receives $8,000 per annum for his services, both as secretary and as treasurer.)