followed by the Erdman Act of 1898; which was followed by the Newlands Act of 1913; and the conditions adopted during the United States Railroad Administration, during World War I; which was next followed by the Transportation Act of 1920, title III; which was next followed by the Railway Labor Act of 1926; and this by the present Railway Labor Act of 1934-there should be some proper consideration given the interest which the railroads of the Nation and the employees of those railroads have had, and continue to have, in the provisions of the Railway Labor Act. The present Railway Labor Act provides for a certain procedure, or procedures, for the handling of controversies which may arise between the managements of the American railroads and their employees. It is doubtful if there has been any more successful procedure adopted than may be found in the Railway Labor Act's provisions for the handling of "grievances" between management and employees, in the prevention of strikes, or in the settlement of controversies arising over wages and/or working conditions. There are two agencies, the National Mediation Board and the National Adjustment Board, provided for under the Railway Labor Act which have been in the continuous services for which they were created since 1936, which we believe should be specifically exempted from the provisions of this legislation, and it is respectfully requested that they shall be made exempt from the provisions of the bill. I have heard no specific references to any particular agency of the Government under which either of those agencies might be placed or to which they should be transferred. We write no brief that perfection has been attained or that no further improvements might be desired or worked out, but we do submit the fact that we have been unusually successful in providing continuous and continued transportation services never previously known of, under conditions never anticipated or planned for, without any noticeable delays or breaks in the continuity of services-largely because of the provisions of the Railway Labor Act and the recognition of the requirements of that act's provisions by the managements of the Nation's railroads and the employees of those railroads. I have heard no statement that there may be certain improvements provided the general public by some new transfer of either or both of those Boards to some department of the Government. We are of the opinion that they should be left as they are, and we respectfully request that the bill be amended to provide for such exemptions. Nearly 60 years ago certain railroads of the Nation began investigations which might provide for the continued services of their employees, and there arose the creation of pension systems for such employees as might have remained in services for long periods of years and with no voluntary breaks in the continuity of their services. One of the first of the American railroads to provide a so-called retirement. pension plan was the Baltimore & Ohio Railroad, about 1884. Other railroads adopted similar retirement plans; but, as those plans, generally, were gratuitous and could be changed according to the wishes of the railroads' officers, there arose amongst railroad employees the desire to secure Federal legislation which might pro 76924-45- -9 vide all railroad employees with some financial retirement benefits after their services with the railroads might have been completed. The present Railroad Retirement Act was approved by the Congress as the result of joint requests made the Congress by representatives of the railroads and representatives of the employees of those railroads, and the legislation was prepared as the result of some months of collective-bargaining conferences between the managements of the railroads and representatives of the employees. The provisions of the act require that it shall be administered as a Government board. All expenses are paid for by funds secured from taxes levied upon the railroads and upon the wages of their employees. The taxes are collected by the Internal Revenue Department and the funds are deposited in the Treasury of the United States. Cumulative through June 1945, some $1,425,688,000 had been appropriated to the railroad retirement account funds and some $965,389,359 in benefits had been provided. Up to the present, the costs of these retirement benefits and the administrative costs of the Railroad Retirement Board have been paid from funds which have been provided from the taxes levied upon the wages of the employees and upon the employers subject to the provisions of the Railroad Retirement Act. This is another of the independent agencies of the Government which we believe should be exempted from the provisions of this present legislation, bill S. 1120, and we shall respectfully request that the committee and the Congress may give favorable consideration to the request that a proper amendment exempting this Board from the provisions of the legislation may be provided. I thank you, Mr. Chairman. Senator MCCARRAN. Thank you very much, Mr. Corbett. Senator HATCH. I think those agencies were exempted in the last reorganization bill, were they not? Mr. CORBETT. Yes, sir; I think so. Senator MCCARRAN. Yes. Mr. CORBETT. What I was going to say: I do not know that they were exempted by the committee on the floor, but I am sure they were exempted, and they were exempted under the proposed legislation for administrative procedure. Senator MCCARRAN. Any further questions? Senator MCCARRAN. Thank you very much. I have here a letter from the Federal Reserve System, Board of Governors, an interesting statement. I am going to insert the full letter in the record: Hon. PATRICK A. MCCARRAN, SEPTEMBER 12, 1945. Chairman, Committee on the Judiciary, United States Senate, Washington 25, D. C. MY DEAR MR. CHAIRMAN: The Board has noted with approval the endorsement by the Comptroller General and by the Director of the Budget of reorganization legislation without exemption of any Government agency or department, excepting the General Accounting Office. The Board desires to call the attention of the committee to the enclosed excerpts from the Board's annual report of 1938 emp hasizing the need for reorganization of the Federal banking agencies, in view of the confusions and conflicts inherent in the existing diffusion of powers and authority in the Federal bank supervisory and regulatory agencies. The Board has long favored enactment of a reorganization measure that would give the President a free hand, subject to congressional approval, to initiate necessary reorganizations in the executive branch. The Board had not previously requested and does not now wish exemption from the operation of such a measure. The Board, therefore, favors enactment of a reorganization bill which does not include exemptions, except for the General Accounting Office. Such a measure would make possible a reorganization of the Federal banking agencies which the Board feels is urgently needed to meet the needs of the postwar world. Sincerely yours, M. S. ECCLES, Chairman. I have here also the letter of the American Farm Bureau Federation of date September 7, 1945, over the signature of Mr. Edward A O'Neal, president. The letter will be inserted in the record. Hon. PAT MCCARRAN, AMERICAN FARM BUREAU FEDERATION, Chairman, Subcommittee of Judiciary Committee, United States Senate, Washington, D. C. MY DEAR CHAIRMAN MCCARRAN: Pursuant to action of the board of directors of the American Farm Bureau Federation, I wish to submit the following recommendations concerning pending legislation for the reorganization of governmental departments and agencies: We strongly favor greater economy and efficiency in government through elimination of unnecessary governmental bureaus, agencies, personnel and expenditures, but we do not favor conferring permanent blanket authority to the President of eliminate, transfer, consolidate, and reorganize all governmental departments and agencies. We believe that the reorganization of any departments or agencies of government which have been established by acts of Congress should be made by Congress and not by Executive order. Necessarily, the President should make recommendations to Congress with respect to reorganization of such agencies, but the responsibility for changing these statutory agencies should remain in the hands of Congress. We therefore respectfully urge that S. 1120 be amended in line with these recommendations. We would appreciate it if you would include this statement in the record of the hearings on this legislation. Sincerely yours, EDWARD A. O'NEAL, President. Mr. Sourwine, are there any other requests to be heard? Senator MCCARRAN. All of the departments have been notified? Senator MCCARRAN. And I read into the record just the other day those who declined to be heard, those who did not care to express themselves. And those who did care have been heard; is that correct? Mr. SOURWINE. Every witness who asked an opportunity to be heard has been heard, Senator. Senator MCCARRAN. Is there anyone here present today who would care to be heard? (No response.) Senator MCCARRAN. Have the committee members any suggestion as to those that would care to be heard in addition to those who have been heard? Senator FERGUSON. Mr. Chairman, could we, for instance, hold it open a couple of days so that if somebody did want to come in, that would be possible? Senator MCCARRAN. I do not see why not. It would take that long to have it printed. Senator FERGUSON. And that would indicate that it is held open, and if anyone wanted to come in they could do so in the next few days. Senator MCCARRAN. I think it would be well to hold it open until Friday, at least. So that will be the order: That anyone who cares to be heard on this bill may notify the clerk of the committee on or before Friday, and then we will have the hearings printed and proceed in executive session thereafter. I am very grateful to you gentlemen for your attendance. (Whereupon, at 2:35 p. m., Tuesday, September 18, 1945, the committee adjourned, subject to the call of the chairman.) APPENDIX Hon. PAT MCCARRAN, FEDERAL POWER COMMISSION, United States Senate, Washington, D. C. DEAR SENATOR MCCARRAN: In response to your letter of August 30, the Commission has considered S. 1120, to be cited as the "Reorganization Act of 1945," which would authorize reoorganization of the Federal Government by reorganization plans proposed by the President, subject to an opportunity for review by Congress. We note that the bill (S. 1120) contains no exemptions of specified agencies such as were contained in the Reorganization Act of 1939, such exemptions including the Federal Power Commission, as well as the Interstate Commerce Commission, the Federal Trade Commission, and the Securities and Exchange Commission. We are convinced that the long-established congressional policy, under which regulatory agencies are independent agencies directly responsible to Congress, is a sound one. And we would call attention to the fact that the distinction between such agencies which serve as an arm of the legislature and those departments of the Government which exercise administrative or executive functions was discussed in some detail during the debate in the United States Senate on the reorganization bill of 1939. Thus, Senator Clark pointed out that "the principal functions of such commissions as the Interstate Commerce Commission, the Federal Trade Commission, and the Communications Commission are as agencies of the legislative branch of the Government and as extensions of the legislative power," and that "the important function which has been conferred on such commissions is the ascertainment of particular facts in order to carry out a policy of Congress enunciated in a statute," and "they are legislative rather than executive or administrative in character" (83 Congressional Record 3235). Senator Barkley, during the debate, referred to the Interstate Commerce Commission, the Federal Trade Commission, the Federal Communications Commission, and the Federal Power Commission as "quasi-judicial and quasi-legislative." He continued: "They are quite different * * * from a commission which is created merely to aid the President in determining how he shall perform his executive duty of appointing people to office, in the way of testing their qualifications (the Civil Service Commission). One is an executive function, the others are legislative and judicial and the only reason * * * why the Interstate Commerce Commission was set up and why the Federal Trade Commission and the Power Commission and the Communications Commission were set up under the authority to regulate commerce among the States and with foreign governments was the knowledge that Congress itself could not do that. It has neither the time nor the opportunity to gather the facts which would enable it to fix railroad rates or practices by statute, or to fix rates for communications across State lines, or to do the things which are enjoined upon the Federal Trade Commission as the agency of Congress, in attempting to keep the channels of interstate commerce unchoked in order that business might go forward and progress" (83 Congressional Record 3364). In the same debate Senator Wheeler emphasized the same point when he referred to such commissions as "specific arms of the legislative branch of the Government.' He continued: "They are not arms of the executive branch of the Government. So I say to my distinguished leader that there is a vast difference between the functions of an arm of the legislative branch of the Government and those of an arm of the executive branch of the Government” (84 Congressional Record 2946). |