The Racine Journal-Times Sunday Bulletin from Racine, Wisconsin on July 4, 1965 · Page 16
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July 4, 1965

The Racine Journal-Times Sunday Bulletin from Racine, Wisconsin · Page 16

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Racine, Wisconsin
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Sunday, July 4, 1965
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IF I L A RACINE SUNDAY BULLETIN I OM SMndfly, July 4, 1965 No One Regulates the Regulatory Agencies '4fh Branch' of Government Affects Every Phase of Your Daily Life Editor's Note: The Constitution sets up three branches of government— legislative, executive and judicial. But there's a fourth one—^tlie regulatory agencies—^and their influence on your daily life and livelihood is tremendous. They have been cursed and cheered, and they can break you or make you a millionaire. By Jules Loh WASHINGTON—(AP)— 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 mention a "fourth branch" of government, but one exists. Not only exists, but within its control are all the powers and functions of the other three branches—legislative, executive and judicial—a circumstance Madison to himself once characterized forbodingly as "the very definition of tyranny." Nor is this fourth branch some insignificant appendage to the federal structure. List Big Seven The fact is, from the mo ment a citizen awakens his electric alarm clock, lights a well-advertised cigar et, brushes with a particular brand of toothpaste, shaves^ eats his bacon and grade eggs, catches the bus to his wage-earning job, phones his broker, pays his gas bill, takes an aspirin, confirms an airplane reservation, buys a spe cifically priced quart of milk on the way home, or a six pack of beer, enjoys a choice steak and then settles down to watch television — nearly every routine action he took during the day falls within the influence of one of his government 's regulatory agencies. These, 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, privileges 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 influence over Americans' daily lives centers in seven agencies. Known as the Big Seven, they are: —The Federal Trade Commission (FTC), set up to prevent price-fixing, deceptive advertising, monopoly and other practices that hurt business competition. It is the FTC which now is demanding a health warning on cigaret packages. —^The Federal Communica- t i o n s Commission (FCC), which licenses radio and television stations, since the airwaves belong to everybody, and regulates all interstate and foreign communications. —The Interstate Commerce Commission (ICC), granddaddy 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 commercial operations on inland waterways. Right now the ICC is wrestling over proposals for huge railroad mergers. —The Civil Aeronautics Board (CAB), which approves airline routes, fares and freight charges, authorizes subsidies and investigates accidents. —The Federal Aviation Agency (FAA), which takes over after the takeoff. It writes flying rules, certifies pilots, inspects airplanes for safety and operates control towers. Two years ago, when the FAA celebrated its fifth anniversary, its 45,000 em­ ployes outnumbered the State Department, —The Securities and Exchange Commission (SEC), which patrols the stock exchanges, registers new issues of stocks and bonds and generally enforces the "truth in securities" laws of the early New Deal. —Federal Power Commission (FPC), which licenses hydroelectric projects and interstate pipelines and ocntrols their rates and operation. Those are the Big Seven. In a 1937 report to Cong r e s s, Pres. Franklin D. Roosevelt styled them "miniature independent g o ve r n - ments." He also called them "a haphazard deposit of irresponsible agencies and un- co-ordinated powers," through more were hatched during his years in the hWite House than any administration before or since. It 's easy to see how the agencies came to be. Population has increased nearly 50-fold since Madison 's day, and technical and economic 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 oublic interest. The agencies are, as F.D.R. said, independent—or, as one businessman described them, "independent as hell." Senate Approval The commissions aren't responsible to the president yet he appoints all commissioners, 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 removed except for incompetence or misconduct which are hard to prove and have nothing to do with the popularity of his decisions The president names the chairman of each agency except the ICC, which gets together once a year and elects its own. Haphazard and unco-ordi- nated they may also be, but the trouble 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 decised except for all the others. Back in 1908, university Prof. Woodrow Wilson said 'regulation by commission is not regulation by law but control according to the discretion of government 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. Wide and Flexible But Wilson piainly had a point. Two years ago a lead- ng business magazine (Fortune) complained in an editorial 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." The fact is. Congress has iven most of the agencies no more precise a standard to bllow than to act "in the ublic interest." Supreme Court Justice William O. Douglas, a former head of the SEC and no foe of government by administration, wrote in a 1951 dissenting opinion: Unless we make the requirements for administrative action strict and demanding, expertise, the strength of modern government, can become a monster which rules with no practical limits on ts discretion." "Absolute discretion," he continued, "like corruption, marks the beginning of the end of liberty." Hands-off Policy What Douglas was objecting to was that the Supreme Court, especially in later years, has generally taken a hands-off policy toward agency decisions. The justices seem to feel that a detailed prescription of standards would weaken the agsncies' autonomy and make effective administration impossible. "The administrative agencies were set up," says Mark S. Massel, a lawyer \vlio has studied the regulatory process for the Brookings Institution, "precisely because it was ::cognized that the Congress and the courts could not cope with the regulatory problems." As a result the functions of both branches, as well as the third, have been lodged in the agencies, Madison's warning notwithstanding. Congress has given the commissions power to make rules, apply them, then sit as judges of their own decisions when they accuse someone of violating them. "Quasi-Judicial" Some make an attempt to soften this fact by calling these powers "quasi-legislative" and "quasi-judicial." But, as law Prof. Bernard Schwartz observes, when an agency judges someone guilty of violating its rule "we may be certain that they do not incarcerate him in a quasi-cell." In 1948 the FTC, in its watchdog role, investigated the cement industry and concluded its pricing system was unfair. Could the agency commissioners then, at a later date when the companies were charged before them with committing an unfair method of competition, sit as impartial judges? They could, and the Supreme Court said it was proper. Appeal to the federal courts is open to anyone affected by an agency decision. But given the courts' tendency to go along with the agency and the fact that appeal often is a costly and laborious ordeal, many smaller companies complain they rarely have any alternative except to bow. 17-Year Ordeal John E. Swearingen, president of Standard Oil of Indiana, says his company once KORTH i • K42 ¥AQ4 • A106 WEST EAST 4J10 98 4753 VJ972 V63 • Q8542 tJ? 4i None 4i Q 9 7 5 4 2 SOUTH (D) ^AQ6 VK1085 • K93 4> A J8 Both vulnerable South West North East IN.T. Pass 4N .T. Pass 6N .T. Pass Pa'ss Pass Opening lead— 4k J. Gerber Slam Bid Is Handy By Jacoby & Son The Gerber convention, invented by John Gerber of Houston, Texas, uses four clubs as a demand that partner show aces in accordance with this formula: Four diamonds—no aces or four. Four hearts—one ace. Four spades—two aces. Four no-trump—three aces. The convention has never reached general popularity because there are too many natural uses for a four club bid, but every experts keeps t in his bidding kit and uses it when it is obvious. One place it is obvious is the immediate four club response to an opening no- trump so that North's four no-trump call with today's hand was a strong no-trump raise. North and South were play- mg a 15-17 point no-trump so that when North added his 16 points to his partner's maximum and minimum he reached a 31-33 point total. With the mamixum 17 South went right to the slam and West opened the jack of spades. South won in his own hand and laid down the ace of clubs only to get the bad news about the suit. He continued with the jack and let East take h is queen. East led back a spade and South could only count 11 sure tricks. You readers can see that the jack of hearts is guarded in back of the king- ten but South had no trouble making the rest of the tricks anyway. He simply ran off dummy's two remaining clubs and discarded a diamond from his own hand. Then he cashed the last high spade and West was squeezed in hearts and diamonds and had to unguard either the diamond queen or the heart jack. CARD SENSE Q—^The bidding has been: East South West North 1D. ? You, South, hold: Spades A Q 7 6, Hearts K J 7 6, Diamonds 3 2, Clubs K 9 4. What do you do? A—Double. You have 13! high card points, good support for either major suits andi some support for clubs. TODAY'S QUESTION Your partner responds one! spade to your double. What do you do? Answer Tuesday took 17 years and two trips to the Supreme Court to win an FTC case. If this was unusually long, a Senate subcommittee reported last year that five years to settle case wasn't, and the situation is getting worse. The combined caseload of the agencies jumped from 68,000 to 83,000 in the two years ending in 1963. To cite only one area of agency policing, 10 years ago there were 1,500 items on supermarket shelves, today there are 7,500. Administrative legislating is no small matter. The Federa Register, in which agency rules are published, vastly exceeds in size the Annual Book of Statutes enacted by Congress. Agencies make decisions on matters involving many times the amounts of money involved in federal court judgments. An FCC decision to grant a TV license to one person instead of another can mean millions for the winner. The National Labor Relations Board, an executive branch agency not usually listed among the Big Seven, decides more cases each year than all the federal courts of appeals combined. The Agriculture Department, another executive agency, adminsters more than 50 regulatory acts. Anonymous Staff Men This enormous caseload makes it impossible for each commissioner to hear every case—another fault many find with the whole system. Most agency decisions actually are made by one or more anonymous staff men. Former Sec. of State Dean Acheson, now a Washington lawyer with much experience before the regulatory tribunals, regards an agency as "absolutely amorphous ... a m e t a p h ysical, omniscient, brooding thing which sort of floats around the air and is not a human being." A case of litigation, says Acheson, "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 industries they regulate. They must hobnob with industry officials, attend 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. Resigned Under Fire Ted McCormick, a bright lawyer, went from the SEC staff to the presidency of the American Stock Exchange' then resigned under tire from the latter after an SEC investigation of the exchange. Agency officials see nothing wrong with swapping personnel, nor do industrialists. Both feel they benefit from the other 's experience. Most agencies exercise their functions through negotiation 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 contamination 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 Morgan, "can be cruel." "I Feel Lonely" "I don't Jhink we have the serious lobbying problem that we had before," says FPC Chairman Joseph Swidler, "I don't trip over lobbyists anymore. Sometimes I feel onely." Commissioner Morgan agrees, to an extent. "The pressures are not crude," he says, "Nobody holds $10,000 under your nose or warns you'll be smashed if you don't obey. But the pressures are there nevertheless." FTC Chairman Paul Fland Dixon, a colorful, outspoken 'ennesseean whose 1,150-em- ploye agency has been transformed from one of the dullest to one of the liveliest under his hand, says "If I were coward I wouldn't belong here." Dixon says pressures can come not only from industry but from Capitol Hill and the White House as well. The agencies' budget requests, for example, go through the president's Budget Bureau. The pressures from so many directions, he feels, are themselves checks and balances against the concentration of government functions in the agencies. "Quite Ineffective" "Power?" Dixon said, slapping a heavy palm on his cluttered desk. "That's the last thing I think of as having. Sometimes I feel quite ineffective." Dixon is opposed to what he calls "the squirrel gun approach" to regulation. "We try to move against prob- Has the wool been pulled over your eyes lately? No doubt you've seen ads, maybe even bought some yourself—Kodachrome film "with processing included"—at real "bargain" prices. Well, what you didn't know was that you bought "cut-rate" processing; processing done NOT by Kodak, but by a second or third-rate firm that is giving you cut-rate quality for your cut-rate price. That may have been the roll that you THOUGHT you didn't expose properly or you THOUGHT was defective because all the slides had an off- color-cast. It may have been the movies that didn't thread through the projector properly because it wasn't slit just right. If you use Kodachrome film (movies or slides) we believe that Kodak offers the finest processing. If you can't tell whether or not your films were processed by Kodak, bring them to us—we can tell you. If they weren't you may be getting cheated. We offer 24 hour service on Kodak processing of slides and movies. Or, if you prefer, we also have genuine Kodak prepaid processing mailers. If your slides or movies are at all precious to you insist on processing by Kodak. The few cents you might save on "bargain" processing could result in the loss of your total investment—plus the pictures. REMEMBER THIS: The Eastman Kodak Company does not sell Kodachrome film in the U.S. with processing by Kodak included in the price when you buy the film. It Costs NO More to Bring Your Film to Wick's For Guaranteed Processing by Kodak Wick's PHOTO CENTER DOWNTOWN — NEXT TO RIALTO THIATER lems," he said, "not individuals, I'm not here to harass business, or to act cute. I'm here to see that the worst in our system of free enterprise is eliminated because it's not good for the system, I think that's a worthwhile thing to do," Dixon notes that while businessmen utter the loudest laments about how his agency restricts them, they also submit about half the complaints the FTC processes — mostly claims that a competitor is unfair. The late Justice Robert Jackson made a similar observation: "The regulatory commission is the very heart of social and economic legislation," he said, "and if the heart fails the whole body perishes. So some of the striking at the commissions has really been striking at the reforms." Overseer Proposed All the same, there have been repeated efforts over the years to figure out some way to regulate the regulators. The latest is approval by Congress of a permanent "administrative conference" to act as overseer of the agencies, a plan devised by Pres. John F. Kennedy. 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 Marison has observed that Madison at least "predicted that only a federal government over a large area could reconcile conflicting economic interests and suror- dinate 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 light. Racine Health Fund The many questions about past ailments, about the health of your parents and brothers and sisters, about your work, which the doctor asks, especially on a first visit to him, are part of his way of developing a picture of you as a whole person. The "history" which you relate, like the reports of scholars on the events in the affairs of nations and civilizations are imoprtant in helping understand the present and in predicting the future. Helpful to Doctor The Racine Health Fund, a United Fund agency, points out that the doctor uses the information provided by the patient together with the find- ng of his own examinations and his experience and knowledge of medicine in reaching a diagnosis and plan for care. The dialogue which the doctor engages you in is not a haphazard one. It is planned to reveal you and your many facets to him. We so often say about a sick or fretful infant "he can't tell us where it hurts" and know that the doctor must proceed with fewer facts than he would like. The adult can help the doctor develop a complete personal and family history and can present a picture of the onset of a disorder. New Treatments Fortunately, while family and personal history may shape the present and future, they need not determine it. New drugs, new treatments, new preventive measures have been developed so that a condition "in the family" may have quite a different course and outcome than was the case a generation ago. Hpwever, the physician needs to be aware of the tendency so that he can interpret small changes and be in a position to recommend and institute preventive and corrective measures. For a free copy of the pamphlet "Your Health Examination" write to the Racine Health Fund, 818 Sixth St. '0 *:'|i^S|fSp;6fi5;;|:|^^ msfepj-i,-- RACINE WASHINGTON UNGTION SAVINGS Phone

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