THE MICHIGAN DAILY' u av-- Y a a _ aTUSDAY, JUNE 29 THE TCHTAN IAIT. 1965 r legulatory Agencies 'Big Seven' By JULES LOH sociated Press Newsfeatures Writer WASHINGTON - Even - old James Madison, man of vision that he was, might wince today if he saw what has become of that tidy three-branch government for which he labored so passionately. Nowhere does the Constitution mpention a "fourth branch" of government, but one exists. It not only exists, but within its ontrol are all the powersand -functions of the other three .ranches - legislative, executive and judicial - a circumstance Madison himself once character- ized forbodingly as "the very def- inition of tyranny." Not Insignificant Nor is this fourth branch some Insignificant appendange to the federal structure. The federal regulatory agencies are the powerful fourth branch of American government. By generally accepted count there are 33 agencies involved in "the determination of rights, priv- ileges and obligations of private individuals through adjudication and rulemaking," the definition made by a commission set up to study them. But most of their broad in- fluence over Americans' daily lives centers in seven agencies. Known as the Big Seven, they * The Federal Trade Commis- .sion (FTC), set up to prevent price fixing, deceptive advertising, monopoly and other practices that urt business competition. It is the FTC which now is demanding a health warning on cigarette p ckages. * The Federal Communications Commission (FCC), which licenses radio and television stations, since the airwaves belong to everybody, and regulates all interstate and foreign communications. J The Interstate Commerce Commission (ICC), grandaddy of all the alphabet agencies, which ,Was set up in 1887 to regulate the railroads. It still does, as well as bus and truck lines and commer- cial operations on inland water- ways. Right now the ICC is wrest- ,ling over proposals for huge rail- road mergers. 4 The Civil Aeronautics Board (CAB), which approves airline routes, fares and freight charges, authorizes subsidies and inves- tigates accidents * The Federal Aviation Agency (FAA), which takes over after the takeoff. It writes flying rules, cer- tifies pilots, inspects airplanes for safety and operates control towers. Two years ago, when the FAA celebrated its fifth anniversary, its 45,000 employes outnumbered those of the state department. * The Securities and Exchange Commission (SEC), which patrols the stock exchanges, registers niew issues of stocks and bonds and generally enforces the "truth in securities" laws of the early New D)eal. *Federal Power Commission (FPC), which licenses hydroelec- tric projects 'and interstate pipe- lines and controls their rates and operation. Those are the Big Seven. In a 1937 report to Congress, resident Franklin D. Roosevelt styled them "miniature indepen- dent governments." He also called them "a haphazard deposit of ir- responsible agencies and unco- Ordinated powers," though more were hatched during his years in #he White House than any ad- ministration before or since. It's easy to see how the agencies came to be. Population has in- creased nearly 50-fold since Madi- eon's day, and technical and eco- nomic change has engulfed these multiplying legions at an even swifter rate. Each new field of technology or economics has spawned a corresponding federal agency with its army of experts to guard the public interest. The commissions aren't respon- sible to the President, yet he ap- points allhcommissioners, with the approval of the Senate, to five, six or seven-year terms, which thus extend beyond his own. Only a one-man majority from either political party may serve on the same commission. A commissioner can't be remov- ed except for incompetence or misconduct, which are hard to prove and have nothing to do with the popularity of his de- cisions. The president names the chairman of each agency except the ICC, which gets together once a year and elects its own Haphazard and uncoordinated they may also be, but the trouble tonal that "the discretionary scope of federal officials is now so wide and so flexible that they can arbitrarily grant or withhold prosperity from most of the larger businesses now operating in the U.S "' V F.JTN ot P recise The fact is Congress has given most of the agencies no more precise a standard to follow than to act "in the public interest." Supreme Court Justice William 0. Douglas, a former head of the SEC and no foe of government by administration, wrote in a 1951 dissenting opinion: "Unless we make the require- ments for administrative action strict and demanding, expertise, the strength of modern govern- ment, can become a monster which rules with no practical limits on its discretion." "Abso- lute discretion," he continued, "like corruption, marks the be- an agency as "absolutely amor- phous ., . a metaphysical, omnis- cient, brooding thing which sort of floats around the air and is not a human being." A Bother A case of litigation, says Ache- son, "goes into this great building and mills around and comes out with a commissioner's name on it, but what happens in between is a mystery. That's what bothers people." Commissioners must have an intimate knowledge of the indus- tries they regulate. They must hobnob with industry officials, at- tend their conventions, listen to their problems. Chumminess is the rule, not the exception, between those in the industries and the agencies. Agency personnel often come from the industries they are hired to regulate, and vice versa. Agency officials see nothing wrong with swapping personnel, nor do industrialists. Both feel they benefit from the other's ex- perience. Most agencies exercise their functions through negotia- tion with the industries rather than adjudication. Last year, the NLRB settled 24 per cent of its cases without litigation. Staff members feel prior experience on the other side of the fence does more to help the cause than hurt. But the problem of contamina- tion isn't limited to the honest difficulty a commissioner might face in trying to be impartial. Pressure from industry, in the phrase of FPC head Howard Mor- gan, "can be cruel." Pressures Dixon says pressures can come not only from industry but from Capitol Hill and the White House as well. The agencies' budget re- quests, for example, go through the President's budget bureau. The pressures from so many di- rections, he feels, are themselves checks and balances against the concentration of government func- tions in the agencies There have been repeated ef- forts over the years to figure out some way td' regulate the regula- tors. l The latest is approval by Congress of a permanent "ad- ministrative conference" to act as overseer of the agencies, a plan devised by President John F. Ken- nedy. James Madison, back at the birth. of the nation, may never have dreamed there could be a fourth branch of government. But historian Samuel Eliot Morison has observed that Madison at least "predicted that only a federal government over a large area could reconcile conflicting economic in- terests and subordinate private to public welfare." However clumsily, or arbitrarily, the federal regulatory agencies may seem to some to be doing the job. It appears Madison was right. RIVALS SUCH AS UNION LEADER David McDonald (left) and Max Zivian, president of the Detroit Steel Co., have one over- riding thing in common-both are often subject to control by federal regulatory agencies. is nobody has figured out a better way. What Churchill said about democracy seems also, to apply to the federal regulatory process: The poorest system yet devised except for all the others. control by Whim? Back in 1908, University Pro- fessor Woodrow Wilson said "reg- ulation by commission is not reg- ulation by law but control ac- cording to the discretion of gov- ernment officials." But six years later, as President, he urged Congress to create the Federal Trade Commission, which supervises a broader area of the economy than any other agency. But Prof. Wilson plainly had a point. Two years ago a leading business magazine said in an edi- ginning of the end of liberty." Appeal to the federal courts is open to anyone affected by an agency decision. But given the courts' tendency to go along with the agencydand the fact that ap- peal often is a costly and laborious ordeal, many smaller companies complain they rarely have any alternative except to bow. The enormous caseload makes it impossible for each commission- er to hear every case-another fault many find with the whole system. Most agency decisions ac- tually are made by one or more anonymous staff men. Former Secretary of State Dean Acheson, now a Washington law- yer with much experience before the regulatory tribunals, regards presents the UNIVERSITY PLAYERS x<'V "OPENING TOMORROW + THE THREEPENNY OPERA by Bertolt Brecht & Kurt Well!I TOMORROW thru Saturday' July 74-17 SUMMER PLAYBILL i 1 The Confidential Clerk -. COMPACTS SEDANS front 399 CONVER T IBL ES WAGONS Plus mileage Ga/I ECONO -CAR 663-2033 FREE PICK-UP AND DELIVERY r. __ ____________ i SINCE 1883 NEW and USED TEXTBOOKS and SUPPLIES for all University courses for the Summer Term The Private Ear The Public Eye by T. 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