REFERENCES
Linked references are available on JSTOR for this article:
https://www.jstor.org/stable/1116949?seq=1&cid=pdf-reference#references_tab_contents
You may need to log in to JSTOR to access the linked references.
JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide
range of content in a trusted digital archive. We use information technology and tools to increase productivity and
facilitate new forms of scholarship. For more information about JSTOR, please contact support@jstor.org.
Your use of the JSTOR archive indicates your acceptance of the Terms & Conditions of Use, available at
https://about.jstor.org/terms
Columbia Law Review Association, Inc. is collaborating with JSTOR to digitize, preserve and
extend access to Columbia Law Review
This content downloaded from 148.251.171.113 on Fri, 23 Aug 2019 17:34:04 UTC
All use subject to https://about.jstor.org/terms
COLUMBIA LAW REVIEW
VOL. XXXVII JANUARY, 1937 NO. 1
This content downloaded from 148.251.171.113 on Fri, 23 Aug 2019 17:34:04 UTC
All use subject to https://about.jstor.org/terms
COLUMBIA LAW REVIEW
This content downloaded from 148.251.171.113 on Fri, 23 Aug 2019 17:34:04 UTC
All use subject to https://about.jstor.org/terms
ADMINISTRATIVE LAW 3
tion, its own success or failure in carrying out the governmental func-
tion entrusted to it and in doing justice in the specific case.
But this approach in itself is theoretical, unless it takes into ac-
count the way in which our American system of law operates upon
administration. Our boards and commissions are a curious growth. For
the most part, they are called into being by a legislature,8 but they may
be created by a department,9 and analogous tribunals may be developed
by a court.'0 Their general form is fixed partly by judicial determina-
tion, partly by Congressional or State enactment, and partly by internal
development. Their activities may be entirely reviewable by the courts,"
or may be largely non-reviewable.12 We have not, nor are we likely
to have anything comparable to the ordered, logical, Continental system
of a droit admninistratif.'3 Court review of administrative bodies is
This content downloaded from 148.251.171.113 on Fri, 23 Aug 2019 17:34:04 UTC
All use subject to https://about.jstor.org/terms
4 COLUMBIA LAW REVIEW
II
See Gellhorn, Book Review (1936) 36 COLUMBIA LAw REV. 859, 860.
laOwnbey v. Morgan, 256 U. S. 94 (1921).
"6Frankfurter, Book Review (1924) 37 HARV. L. REV. 638, 640. Ernst Freund
defines administrative law, to the same effect, as "the law of official power and
of its subjection to judicial control." 1 ENCYCLOPEDIA OF THE SOCIAL SCIENCES
452. For a collection and criticism of the definitions of Austin, Holland and
others, see PORT, ADMINISTRATIVE LAW (1929) c. 1.
1723 HENRY VIII, c. 5 (1531).
This content downloaded from 148.251.171.113 on Fri, 23 Aug 2019 17:34:04 UTC
All use subject to https://about.jstor.org/terms
ADMINISTRATIVE LAW 5
This content downloaded from 148.251.171.113 on Fri, 23 Aug 2019 17:34:04 UTC
All use subject to https://about.jstor.org/terms
6 COLUMBIA LAW REVIEW
This content downloaded from 148.251.171.113 on Fri, 23 Aug 2019 17:34:04 UTC
All use subject to https://about.jstor.org/terms
ADMINISTRATIVE LAW 7
This content downloaded from 148.251.171.113 on Fri, 23 Aug 2019 17:34:04 UTC
All use subject to https://about.jstor.org/terms
8 COLUMBIA LAW REVIEW
strong possibility that their decision might have been otherwise; the
founding fathers were practical men. But those who argue that con-
stitutional construction depends upon what is written within the four
corners of the instrument, interpreted by the then current political phi-
losophy, must reconcile the undisputed and established constitutionality
of such bodies as the Federal Trade and Interstate Commerce Commis-
sions.
The powers given to the three departments under the Constitution
were not long kept in separate bins. By the Act of June 4, 1794,38 the
President, under stated conditions, was authorized to lay an embargo
whenever he found "that the public safety shall so require." The fol-
lowing year, in certain cases, the President was authorized by Congress
to permit the exportation of arms and articles of commerce.39 In 1798,
he was permitted, under certain circumstances, by proclamation, to dis-
continue the suspension of commercial intercourse between France and
the United States.40 Similar authority was given in the succeeding years
to remit and discontinue restraints and prohibitions imposed by Congress
upon trade with certain countries, and to permit or interdict the entrance
into our waters of armed vessels belonging to foreign nations.41 These
Acts were not the subject of judicial decision. "They afford no adequate
basis for a conclusion that the Congress assumed that it possessed an
unqualified power of delegation."42 In The Aurora, however, it was, in
effect, decided that it was competent for Congress to make the revival
of such an act dependent upon the proclamation of the President.43
Wayman v. Southard44 merely decided that the statutes of Ken-
tucky concerning executions were not applicable to executions on judg-
ments of the Courts of the United States. However, Chief Justice
Marshall considered the question of delegation of powers by Congress to
the Courts, and said:
"The line has not been exactly drawn which separates those important
subjects, which must be entirely regulated by the legislature itself, from those
of less interest, in which a general provision may be made, and power given to
those who are to act under such general provisions to fill up the details."45
This content downloaded from 148.251.171.113 on Fri, 23 Aug 2019 17:34:04 UTC
All use subject to https://about.jstor.org/terms
ADMINISTRATIVE LAW 9
This content downloaded from 148.251.171.113 on Fri, 23 Aug 2019 17:34:04 UTC
All use subject to https://about.jstor.org/terms
10 COLUMBIA LAW REVIEW
by the public, the expenses of which come out of the pockets or earnings of
those engaged in the trade, should be viewed with care and examined with
diligence to ascertain whether such acts and regulatory measures are designed
to safeguard the public welfare, or for other purposes not sanctioned by law
and beyond the limitations prescribed by the letter of the Constitution and by
judicial interpretation."
' Union Bridge Co. v. United States, 204 U. S. 364 (1907); Ex parte Reed,
100 U. S. 13 (1879); Smith v. Whitney, 116 U. S. 167, 181 (1886) ; In re
Kollock, 165 U. S. 526 (1897) ; Buttfield v. Stranahan, 192 U. S. 470 (1904) ;
United States v. Grimaud, 220 U. S. 506 (1911). See FREUND, ADMINISTRATIVE
POWERS OVER PERSONS AND PROPERTY (1928) c. XI.
524 STAT. 379 (1887), 49 U. S. C. ?? 1 et seq. (1934).
534 STAT. 584 (1906), 49 U. S. C. ?? 1, 6, 11, 14, 15, 16, 16a, 18, 20, 41 (1934).
36 STAT. 534 (1910), 49 U. S. C. ?? 1, 4, 6, 10, 13, 15, 16, 20 (1934).
6441 STAT. 474-499 (1920), 49 U. S. C. ?? 1-6, 10-16, 17, 18, 19a, 20a, 25-27
(1934).
5 E.g., Interstate Commerce Comm. v. B. & 0. R. R., 145 U. S. 263 (1892);
Texas & Pacific Ry. v. Interstate Commerce Comm., 162 U. S. 197 (1896) ; Illinois
Cent. Ry. v. Interstate Commerce Comm., 206 U. S. 441 (1907) ; Interstate Com-
merce Comm. v. Goodrich Transit Co., 224 U. S. 194 (1912) ; Interstate Commerce
Comm. v. Louisville & N. Ry., 227 U. S. 88 (1913); Intermountain Rate Cases, 234
U. S. 476 (1914) ; Texas & P. R. R. v. Gulf, C. & S. F. R. R., 270 U. S. 266 (1926) ;
New York Central Securities Corp. v. United States, 287 U. S. 12 (1932) ; United
States v. Baltimore & Ohio R. R., 293 U. S. 454 (1935).
' Sharfman, The Interstate Commerce Commission, 8 ENCYCLOPEDIA OF THE
SOCIAL SCIENCES, 229, 230.
This content downloaded from 148.251.171.113 on Fri, 23 Aug 2019 17:34:04 UTC
All use subject to https://about.jstor.org/terms
ADMINISTRATIVE LAW 11
III
The case of Panama Refining Company v. Ryan63 involved no ques-
tion of constitutional power with respect to interstate commerce and
"Federal Trade Comm. v. Klesner, 280 U. S. 19 (1929) ; Federal Trade
Comm. v. Keppel, 291 U. S. 304 (1934). See dissenting opinion of Mr. Justice
Brandeis in Federal Trade Comm. v. Gratz, 253 U. S. 421, 429 (1920) ; HENDER-
SON, FEDERAL TRADE COMMISSION (1924); Handler, The Jurisdiction of the Federal
Trade Commission over False Advertising (1931) 31 COLUMBIA LAW REV. 527.
58 Federal Radio Comm. v. Nelson Bros. Bond & Mtge. Co., 289 U. S. 266
(1933). See Note, Administrative Control of Radio (1936) 49 HARV. L. REV. 1333.
5 Panama Refining Co. v. Ryan, 293 U. S. 388, 421.
60 10 Wheat. 1, 46 (U. S. 1825).
' Marshall Field v. Clark, 143 U. S. 649, 694 (1892), quoting from Locke's
Appeal, 72 Pa. 491, 499 (1873).
6Z Mutual Film Corp. v. Industrial Comm., 236 U. S. 230, 246 (1915).
`3 293 U. S. 388 (1935).
This content downloaded from 148.251.171.113 on Fri, 23 Aug 2019 17:34:04 UTC
All use subject to https://about.jstor.org/terms
12 COLUMBIA LAW REVIEW
"The Constitution has never been regarded as denying to the Congress the
necessary resources of flexibility and practicality, which will enable it to
perform its function in laying down policies and establishing standards, while
leaving to selected instrumentalities the making of subordinate rules within
prescribed limits and the determination of facts to which the policy as declared
by the legislature is to apply. Without capacity to give authorizations of that
sort we should have the anomaly of a legislative power which in many circum-
stances calling for its exertion would be but a futility."'
4Cf. the Connally Act, passed within a month after the decision in Panama
Refining Co. v. Ryan. 49 STAT. 30 (1935), 15 U. S. C. ?? 715-715 (1) (1935). See
President of United States v. Artex Refineries S. Corp., 11 F. Supp. 189 (S. D.
Texas 1935).
48 STAT. 200 (1933), 15 U.S.C. ?709(c) (1934). Both the majority and
minority opinions considered the bearing of the provisions of the first section of
Title I of the National Industrial Recovery Act. 48 STAT. 195 (1933), 15 U. S. C.
?701 (1934).
" 293 U. S. 388, 421 (1935).
67 Id. at 440, 441.
This content downloaded from 148.251.171.113 on Fri, 23 Aug 2019 17:34:04 UTC
All use subject to https://about.jstor.org/terms
ADMINISTRATIVE LAW 13
Nor do the two opinions disagree as to the first legal necessity for
the validity of authorization by Congress to an executive officer or an
administrative body. There must be a declared legislative policy and a
reasonably clear standard whereby discretion must be governed. This
requirement, which is inherent in most of the cases on administrative
law, is generally stated as one of constitutional limitation. The only
provisions of the Constitution on the subject are Article I, Section 1,
which provides that "all legislative powers herein granted shall be vested
in a Congress of the United States . . . ," and Article I, Section 8,
Paragraph 18, which empowers Congress to make all laws that shall
be necessary and proper for carrying into execution its general powers.
There is nothing expressed in the Constitution as to the right of Con-
gress to delegate any of its authorities. Nor can reference be made to
any section or paragraph of the Constitution which states that, if there
is delegation, it must be to carry out an expressed Congressional policy
within reasonably clear limits. The doctrine results as a matter of con-
stitutional interpretation by the Supreme Court. In a broader sense, it
is a requirement of good government. An agency of the Federal Gov-
ernment can have broad powers, but it cannot and should not be launched
without direction or control.
The first difference between the majority and minority opinions,
which Mr. Justice Cardozo admits is a narrow one, is whether Congress,
in the statute in question, provided such direction and limitation. There
is obviously none in Section 9(c). The dissenting opinion finds policy
and standard implied in Section 1 of Title 1 of the Act. The majority
points out that there is nothing in the latter Section as to the policy of
prohibiting or not prohibiting the transportation of "hot oil," nor as to
the circumstances in which such transportation should be forbidden.
The dissent looks into the whole structure of the statute and thinks there
is a sufficient standard implied to the effect that the President is to pro-
hibit such transportation when he believes that it is necessary to eliminate
unfair competitive practices, to conserve natural resources, or to pro-
mote the fullest possible utilization of the present productive capacity
of industries. The Chief Justice answers that the general objectives of
the Act were numerous and diverse, and that the President was not
required to choose among them.
The question here involved is one of degree. Obviously, to put an
extreme case, Congress could not declare a general policy that it was
necessary to raise a certain amount by taxation and then leave it to the
President or the Board of Tax Appeals to determine what kind of taxes
should be imposed to raise the necessary amount. At the other extreme
is authority to an executive officer to suspend the running of the statute
This content downloaded from 148.251.171.113 on Fri, 23 Aug 2019 17:34:04 UTC
All use subject to https://about.jstor.org/terms
14 COLUMBIA LAW REVIEW
This content downloaded from 148.251.171.113 on Fri, 23 Aug 2019 17:34:04 UTC
All use subject to https://about.jstor.org/terms
ADMINISTRATIVE LAW 15
This content downloaded from 148.251.171.113 on Fri, 23 Aug 2019 17:34:04 UTC
All use subject to https://about.jstor.org/terms
16 COLUMBIA LAW REVIEW
rule only provides for a formal requirement which can be complied with
as a matter of routine.78 The necessity of findings, however, in the
comparatively few cases where it is not already a part of the adminis-
trative machinery provided by statute, should tend to crystallize the rea-
soning of the agencies involved and, even more important, may tend to
canalize judicial review.
Mr. Justice Cardozo believes that the point should be determined
upon the well-established principle that every public officer is presumed to
act in obedience to his duties until the contrary is shown. This rule of
law, it should be noted, applies as much to minor state officials as to the
President of the United States.79 In fact, and as the Supreme Court
has recognized, the President cannot exercise all his functions in per-
son.80 When, therefore, Mr. Justice Cardozo in his dissent points out
that the action is to be taken by the President, he is evidently emphasiz-
ing what he believes to be the reason for applying the rule rather than
any differentiation in the rule itself. The majority opinion does not
question the rule, but holds that it does not apply.
The basic question before the Court on this point, therefore, was
whether the presumption of validity as to executive action includes a
presumption as to the finding of fact. The question of whether a legal
process is legislative, executive or administrative is not a new one; in
the past, the decision often turned upon what sort of official was to do
the particular act.81 In the Panama Refining case, that is the ground on
78In his dissenting opinion on this point, Mr. Justice Cardozo refers to the
question as subsidiary, pointing out that if the statute were valid, another order
with fuller findings or recitals would correct the informality of the one before the
Court. Panama Refining Co. v. Ryan, 293 U. S. 388, 444.
7 Of the cases cited in the minority opinion on this point, only three relate to
Presidential action. Martin v. Mott, 12 Wheat. 19 (U. S. 1827) (right of the
President to call forth the militia when the United States shall be in imminent
danger of invasion) ; The Confiscation Cases. United States v. Clarke, 20 Wall.
92, 109 (U. S. 1873) (confiscation of property of certain classes of persons
during the Civil War) ; United States v. Chemical Foundation, 272 U. S. 1, 14
(1926) (sale of alien property under the Trading with the Enemy Act). The
others deal with similar presumption given to the acts of other officials. Philadel-
phia & T. R. Co. v. Stimpson, 14 Pet. 448, 458 (U. S. 1840) (Secretary of State-
issuance of patent); Rankin v. Hoyt, 4 How. 327, 335 (U. S. 1846) (Collector of
Customs) ; Carpenter v. Rannels, 19 Wall. 138, 146 (U. S. 1874) (Board of Com-
missioners created by Congress to adjudicate certain questions pertaining to land
arising out of part of the Louisiana purchase) ; Knox County v. National Bank,
147 U. S. 91, 97 (1893) (State County Court-local election).
" United States v. Chemical Foundation, 272 U. S. 1, 14 (1926); Confiscation
Cases, 20 Wall. 92 (U. S. 1873). One of the Executive Orders before the Supreme
Court in the Ryan case, that of July 4, 1933, designated the Secretary of the In-
terior to exercise all the powers vested in the President for the purpose of enforc-
ing ? 9(c), "including full authority to designate and appoint such agents, and to
set up such boards and agencies as he may see fit, and to promulgate such rules and
regulations as he may deem necessary." See J. W. Hampton, Jr. & Co. v. United
States, 276 U. S. 394 (1928).
' See Goodnow, The Writ of Certiorari (1891) 6 POL. SCI. Q. 492, 507-510;
GOODNow, THE PRINCIPLES OF THE ADMINISTRATIVE LAW OF THE UNITED STATES
(1925) 9; and RoBSON, JUSTICE AND ADMINISTRATIVE LAW (1928) 6-11.
This content downloaded from 148.251.171.113 on Fri, 23 Aug 2019 17:34:04 UTC
All use subject to https://about.jstor.org/terms
ADMINISTRATIVE LAW 17
which the dissent on this point rests, but the majority opinion looks to
the substance of the process and finds that while the function is entrusted
to the executive, it is in essence a matter of administrative law.
This holding shows the evolutionary process at work. In its de-
cisions on the constitutional question of the validity of the delegation of
legislative power, the Court has relied heavily upon the delegation given
to the President by the first Congresses; indeed, that history is again
given in the majority opinion in the Pantama Refining Company case.
Yet in another aspect of administrative law, involving the due process
clause, the same early statutory precedents are distinguished. There is
an obvious distinction in fact between the power of the President, under
certain stated conditions, to discontinue a restraint imposed by Congress
upon trade with certain countries, and the powers given to federal ad-
ministrative boards, such as the Interstate Commerce Commission. The
validity of the latter may in part rest upon the former, but, in govern-
ment as in biology, a difference in degree and in complexity of organi-
zation, while in the same line of development, may result in a difference
of species. A certain kind of administrative body, in short, has im-
perceptibly come to be a legal organism which the Court will recognize
when it exists, and which the Court will differentiate from its simpler
predecessor.
If an organism of the quasi-legislative or quasi-judicial kind has
been created, its distinctive nature will not be blurred by reason of the
circumstance that Congress may have created it through the device of
empowering the President. Between the two examples, there are many
conceivable situations where the boundary between action which is really
executive in nature and action which is a part of quasi-judicial adminis-
tration may not be clear. That boundary, like the line in questions of
due process of law, cannot be defined by legal survey; it must be estab-
lished by inclusion and exclusion, by specific decisions of the Court on
concrete cases as they arise.82 The present case may well be regarded
as one of the intermediate instances, so that the importance of the de-
cision on this point lies, not in the particular side of the boundary line
upon which the process is held to fall, but upon the action of the Court
in looking through the form of Congressional Act before it and regard-
ing the substance of the process. In holding that, irrespective of the
form, the workings of administrative machinery are to be governed by
the rules of law evolved for that type of government, the Court again
has evinced a realistic view.
82 Green v. Frazier, 253 U. S. 233, 238 (1920) * see Justice Holmes' dissenting
opinion in Haddock v. Haddock, 201 U. S. 562, 631, 632 (1906).
This content downloaded from 148.251.171.113 on Fri, 23 Aug 2019 17:34:04 UTC
All use subject to https://about.jstor.org/terms
18 COLUMBIA LAW REVIEW
IV
The resounding crash with which the unanimous decision in Schech-
ter v. United States83 brought the N.R.A. into ruins, and the far-
reaching nature of that portion of the decision which deals with inter-
state commerce, have tended to obscure the nature of the Court's decision
on the question of administrative law involved. On this phase of the
decision, it becomes important to ascertain just what facts were before
the Court and what the Court did not decide, as well as what it did.
The Live Poultry Code, which was before the Court, applied to the
industry of the metropolitan area in and about the City of New York. It
fixed the number of hours for workdays, a minimum hourly scale of
wages and a minimum number of employees to be employed by slaughter
house operators. Employment of persons under sixteen years of age
was prohibited, and the collective bargaining language of Section 7A of
the N.R.A. was incorporated. It prohibited certain "trade practice
provisions" which were said to constitute "unfair methods of competi-
tion." Provisions were made for such reports as the Secretary of
Agriculture and the Administrator for Industrial Recovery might re-
quire for the protection of consumers, competitors, employees and
others, and for the determination of the extent to which the declared
policy of the Act was being effectuated by the Code. The members of
the industry were required to keep books and records which would
clearly reflect all financial transactions, and to submit weekly reports
showing the range of daily prices and volume for each kind of product.
The Code was to be administered by an "Industry Advisory Committee"
to be selected by trade associations and members of the industry. A
Code Supervisor was to be appointed with the approval of the Com-
mittee by agreement between the Secretary of Agriculture and the Ad-
ministrator for Industrial Recovery. The expenses of administration
were to be borne by members.of the industry upon such basis as the
Committee deemed advisable, subject to the approval of the Secretary of
Agriculture or the Administrator for Industrial Recovery. Application
was made to the President for approval of the Code under Section 3 of
the National Industrial Recovery Act.84 The President found that the
Code imposed no inequitable restrictions on administration to member-
ship, that it was not designed to promote monopolies and would tend
to effectuate the policies of Congrejs as declared in Section 1 of Title 1
of the Act, and thereupon approved it. He also had before him the ap-
proving reports of the Secretary of Agriculture and the Administrator
for Industrial Recovery.
This content downloaded from 148.251.171.113 on Fri, 23 Aug 2019 17:34:04 UTC
All use subject to https://about.jstor.org/terms
ADMINISTRATIVE LAW 19
This content downloaded from 148.251.171.113 on Fri, 23 Aug 2019 17:34:04 UTC
All use subject to https://about.jstor.org/terms
20 COLUMBIA LAW REVIEW
This content downloaded from 148.251.171.113 on Fri, 23 Aug 2019 17:34:04 UTC
All use subject to https://about.jstor.org/terms
ADMINISTRATIVE LAW 21
This content downloaded from 148.251.171.113 on Fri, 23 Aug 2019 17:34:04 UTC
All use subject to https://about.jstor.org/terms
22 COLUMBIA LAW REVIEW
This content downloaded from 148.251.171.113 on Fri, 23 Aug 2019 17:34:04 UTC
All use subject to https://about.jstor.org/terms
ADMINISTRATIVE LAW 23
The Act before the Court set up two different kinds of adminis-
trative machinery. As to price-fixing, it provided for the establishment
in the Department of the Interior of a National Bituminous Coal Com-
mission to be composed of five members appointed by the President,
with the consent of the Senate, for a definite term. There were pro-
visions for rules and regulations, hearings and investigation, and court
review of the orders of the Commission, and, in general, the framework
of the Act, insofar as the Commission was concerned, was in the line of
the federal administrative bodies which the court has upheld. The
Act further required the organization of twenty-three coal districts, each
with a district board, the number and membership of which, subject to
the approval of the Commission, was to be determined upon a produc-
tion or tonnage basis. The rules of these boards were also subject to
the approval of the Commission. The Act provided for the establish-
ment of minimum prices for coal in a Code, under the rules and regu-
lations established by the Commission, and gave the Commission, under
certain circumstances, the right to establish maximum prices. Certain
standards were laid down to which the prices to be fixed must conform.
The Act also provided for a Bituminous Coal Labor Board con-
sisting of three menmbers to be appointed by the President, with the
consent of the Senate, and to be assigned to the Department of Labor,
one of the members of which was to be a representative of the pro-
ducers, one a representative of the organized employees, and the other
to be impartial. The Labor Board was to transmit its findings and
orders to the Commission, but was to be a separate entity. There was
a separate right of appeal from the orders of the Labor Board to the
Circuit Court of Appeals. Authority was conferred upon the Board to
adjudicate labor disputes, to determine whether an organization of em-
ployees was dominated by the employer, and to order code members to
meet representatives of the employees for the purpose of collective bar-
gaining. It was further provided that, whenever the maximum daily
and weekly hours of labor were agreed upon in any contract between the
producers of more than two-thirds of the annual tonnage production for
the preceding year and representatives of more than one-half of the
mine workers employed, those maximum hours must be accepted by all
the code members. Any wage agreement negotiated by collective bar-
gaining in any district or group of districts between similar percentages
of the representatives of the producers and of the mine workers therein
must be filed with the Labor Board and must be accepted as the mini-
mum wages for the code members in such district or districts.
The majority opinion condemns the labor provisions as "legislative
delegation in its most obnoxious form." After this phrase of denunci-
This content downloaded from 148.251.171.113 on Fri, 23 Aug 2019 17:34:04 UTC
All use subject to https://about.jstor.org/terms
24 COLUMBIA LAW REVIEW
"they must be just and equitable; they must take account of the weighted aver-
age cost of production for each minimum price area; they must not be unduly
prejudicial or preferential as between districts or as between producers within
a district; and they must reflect as nearly as possible the relative market value
of the various kinds, qualities and sizes of coal, at points of delivery in each
common consutming market area; to the end of affording the producers in the
several districts substantially the same opportunity to dispose of their coals on
a competitive basis as has heretofore existed. The minimum for any district
shall yield a return, per net ton, not less than the weighted average of the total
costs per net ton of the tonnage of the minimum price area; the maximum
for any mine, if a maximum is fixed, shall yield a return not less than cost
plus a reasonable profit."
"a bench of judges, not experts in the coal business, cannot say with assurance
that members of a commission will be unable, when advised and informed by
others experienced in the industry, to make the standards workable, or to
overcome through the development of an administrative technique many ob-
stacles and difficulties that might be baffling or confusing to inexperience or
ignorance."
This content downloaded from 148.251.171.113 on Fri, 23 Aug 2019 17:34:04 UTC
All use subject to https://about.jstor.org/terms
ADMINISTRATIVE LAW 25
All three of the Justices whose opinion Mr. Justice Cardozo ex-
pressed concurred in the opinion in the Schechter case. No inference
as to whether the other six Justices agreed with what the three said
in the Carter case is to be drawn, but the fact remains that an attempt
made subsequent to the decision in the Schechter case to provide suffi-
cient standards and limitation in a code to govern an important industry
was considered successful by the only three Justices who passed upon
the question. The chief importance of the Carter case in the field of
administrative law, it is submitted, is in this undisputed finding of the
three Justices that Congress can make provisions for a code for industry
when proper standards and administrative machinery are provided.
Just as the Carter case evidences the possibility of valid administra-
tive regulation of prices, the Minimum Wage case89 shows, and even
more strongly, the possibility of valid administrative regulation in the
matter of wages. The Minimum Wage case turns on the power of a
state legislature to establish minimum wages for women. A majority of
the Court, for whom Mr. Justice Butler delivered the opinion, held that
the action was repugnant to the due process of law clause of the Four-
teenth Amendment; MIr. Chief Justice Hughes delivered the dissenting
opinion for himself, Mr. Justice Brandeis and Mr. Justice Stone. Mr.
Justice Cardozo delivered a concurring dissent.
In the majority opinion, it was assumed that the rates were fairly
made in accordance with the procedure prescribed by the Act, "and in
full compliance with the defined standards." The barrier which the
majority found was that the state had no power to enter upon regulation
of the sort undertaken. If the asserted power of the state was incon-
sistent with the due process of law clause, "then plainly it cannot by
diligence to insure the establishment of just minima create power to
enter that field." True, the intimation of diligence is based upon an
assumption, but at least the majority does not express any difference
from the minority on this point.
The Chief Justice, in the dissent, refers to the minimum wages in
question as "defined in the New York statutes and ascertained in a rea-
sonable manner by competent authority." He alludes to the "safe-
guards of the statute," and characterizes its procedural provisions as
"careful and deliberate." Those provisions "at once dispose of any
question of arbitrary procedural action."
The administration provisions so praised by the Chief Justice may
be contrasted with the labor provisions which he condemned in the
Bituminous Coal Conservation Act. The minimum wages in the Coal
Act were to be fixed by majority agreement of the employees and em-
89 Morehead v. New York ex rel. Tipaldo, 56 Sup. Ct. 918 (1936).
This content downloaded from 148.251.171.113 on Fri, 23 Aug 2019 17:34:04 UTC
All use subject to https://about.jstor.org/terms
26 COLUMBIA LAW REVIEW
ployers; in the New York Act,90 only a "fair wage," one defined as
"fairly and reasonably commensurate with the value of the service or
class of service rendered," could be fixed, and could be fixed only when
it was found that a substantial number of women or minors were re-
ceiving "oppressive and unreasonable" wages, which term again was
carefully limited. The two Acts resembled each other in the constitu-
tion of the wage board; in both cases, the board was to be composed of
an equal number of representatives of employees and employers, with
the balance held by disinterested members. In the Coal Act, however,
the Board, on minimum wages, was merely a depository for the agree-
ment between the two groups, which was to control the whole district.
In the New York Act, the Board, after investigation, was to report to
the Commissioner who appointed it. He might approve or disapprove
its report; if he approved, he was to make a "directory order" which
must define minimum wage rates and include appropriate administrative
regulations, the subject matter of which the Act indicated. This di-
rectory order was to be tentative, and while it was in effect, the Commis-
sioner's sole right, after notice and hearing, was to publish the name of
an employer found not to have complied with it. After the tentative
order had been in effect nine months, it could be made mandatory, after
notice and a public hearing. Fine or imprisonment could be imposed
only after the tentative order had been made mandatory. In short, the
Coal Act put the entire wage regulation in the hands of industry with-
out standards or administrative safeguards; the New York Act put it
in the hands of an administrator who could act only according to care-
fully defined standards, and under safeguards of investigation, reports,
tentative orders, notices and public hearings.9'
V
In Rathbun v. United States92 the Court had before it another phase
of administrative law, the status of members of a quasi-judicial adminis-
trative body. William E. Humphrey had been nominated by President
Hoover to succeed himself as a member of the Federal Trade Commis-
sion, and was confirmed by the Senate. President Roosevelt asked him
to resign, disclaiming any reflecting upon him personally or his services,
but because the President did not feel "your mind and my mind go
9 N. Y. Laws 1933, c. 584.
9 This discussion presupposes that constitutional means will be found to keep a
field of necessary social legislation from permanent status as a no-man's land, into
which neither Federal nor State Government has the right to enter.
'a295 U. S. 602 (1935). The Court was unanimous in its decision; Mr. Justice
Sutherland delivered the Court's opinion, with Mr. Justice McReynolds noting his
agreement and referring to his separate opinion in Myers v. United States, 272 U. S.
52, 178 (1926) for a statement of his views.
This content downloaded from 148.251.171.113 on Fri, 23 Aug 2019 17:34:04 UTC
All use subject to https://about.jstor.org/terms
ADMINISTRATIVE LAW 27
This content downloaded from 148.251.171.113 on Fri, 23 Aug 2019 17:34:04 UTC
All use subject to https://about.jstor.org/terms
28 COLUMBIA LAW REVIEW
This content downloaded from 148.251.171.113 on Fri, 23 Aug 2019 17:34:04 UTC
All use subject to https://about.jstor.org/terms
ADMINISTRATIVE LAW 29
VI
The Securities and Exchange Commission, whose functioning was
before the Court in the Jonles case,98 is a new quasi-judicial tribunal, but
one whose inception and structure is strikingly dissimilar to some of the
bodies the Court declared unconstitutional in the cases above considered.
The Securities Act of 193399 was the outgrowth of the experience of
many years of State Blue Sky laws, enacted in some form by forty-six
states.'00 It has many similarities to the British Companies Act of
1928-9.101 Administration, originally given to the Federal Trade Com-
mission, was placed in the Commission, as an independent body, by the
Securities Exchange Act of 1934,102 and this body was subsequently
entrusted with the administration of the Public Utility Holding Com-
pany Act of 1935.103 It consists of commissioners appointed by the
President with the consent of the Senate, who have broad powers of
investigation and rule-making, but who act within familiar administra-
tive safeguards. In general, although it has larger powers, the nature
of the Commission seems in line with State Blue Sky Commissions, of
the kind which the Supreme Court has upheld.104 The Commission has
separate divisions and regional offices; it issues annual reports,'05 and
its decisions are published.'06 The powers of Congress to legislate in
the matters entrusted to the Commission have not been settled, and
questions of the definiteness of the standards of the legislation will al-
most inevitably arise,'07 but, without attempting to anticipate those ques-
tions, the administrative framework of the statutes seems to have been
prepared with lawyer-like care, and with regard to the existing prec-
edents.
This content downloaded from 148.251.171.113 on Fri, 23 Aug 2019 17:34:04 UTC
All use subject to https://about.jstor.org/terms
30 COLUMBIA LAW REVIEW
This content downloaded from 148.251.171.113 on Fri, 23 Aug 2019 17:34:04 UTC
All use subject to https://about.jstor.org/terms
ADMINISTRATIVE LAW 31
This content downloaded from 148.251.171.113 on Fri, 23 Aug 2019 17:34:04 UTC
All use subject to https://about.jstor.org/terms
32 COLUMBIA LAW REVIEW
This content downloaded from 148.251.171.113 on Fri, 23 Aug 2019 17:34:04 UTC
All use subject to https://about.jstor.org/terms
ADMINISTRATIVE LAW 33
VII
The case of Morgan v. United States'16 arose under the Packers
and Stockyard Act.117 Under that Act, the Secretary of Agriculture,
if, after a "full hearing," he is of the opinion that rates, charges or
practices in connection with the furnishing of stockyard services are or
will be unjust, unreasonable or discriminating, may determine and pre-
scribe reasonable ones. His findings of fact, if within the authority of
the Act, and if no constitutional question is involved, are conclusive.'18
The proceeding here was instituted by the Secretary on his own initi-
ative for the fixing of maximum rates, and resulted in affirmative ac-
tion. Fifty concerns brought suits to restrain the enforcement of the
order. The District Court, on motion of the Government, struck out
from the original bills allegations, among others, that, after the con-
clusion of the hearings before the examiner, the Secretary refused to
hear oral arguments himself, and attempted to delegate Acting Secre-
taries to hear the arguments, that the Secretary, at the time he signed
the order, had not personally heard or read any of the evidence pre-
sented at the hearing or heard or considered any arguments or briefs, but
acted only upon information he derived from consultation with em-
ployees of the Department.
The Court unanimously decided that the District Court erred in
striking out these allegations. The Chief Justice, who delivered the
opinion, found that the procedure, in the cases presented to the Court,
violated the statutory requirements for a "full hearing." While the
case is one of statutory construction, there are constitutional overtones
in the opinion. The Court said it was not necessary to go beyond the
terms of the statute to consider the constitutional requirement of due
process as to notice and hearing, and referred to the sort of hearing
"which is required by the principles established by our decisions." The
requirements for such a hearing, the opinion reiterates, are not technical.
Evidence may be taken by an examiner and analyzed by subordinates.
11 56 Sup. Ct. 906 (1936), discussed in (1936) 36 COLUMBIA LAW REV. 1156.
11742 STAT. 159 (1921), 7 U. S. C. ?? 181-229 (1934).
11 Tagg Bros. & Moorhead v. United States, 280 U. S. 420 (1930) ; Acker v.
United States, 56 Sup. Ct. 824 (1936).
This content downloaded from 148.251.171.113 on Fri, 23 Aug 2019 17:34:04 UTC
All use subject to https://about.jstor.org/terms
34 COLUMBIA LAW REVIEW
This content downloaded from 148.251.171.113 on Fri, 23 Aug 2019 17:34:04 UTC
All use subject to https://about.jstor.org/terms
ADMINISTRATIVE LAW 35
pertinent to a proceeding under the statute before us." Yet the hearing
under the Packers and Stockyard Act was, the Court held, judicial in
nature, just as the House of Lords found that the appeal under the
Housing and Town Planning Act was judicial in nature. There may be
a legal potency in the adjective "full" which the Packers Act prefixes
to "hearing," and it is to be noted that the Packers Act provided for a
determination by the Secretary, while the English Act called for a de-
termination by the Board.
While there is no principle of administrative law that the procedure
in the various boards and commissions must be the same, the rule which
the Court announces for the first time in the Morgan case,12' goes to the
fundamentals of the hearing which is necessary in any sort of adminis-
trative proceeding not purely executive. If the person who acts must
be the person who hears, if he cannot rely upon reports of others but
must, in some form, review the evidence and arguments himself, there
will have to be a sharp break from some departmental practices.'22
Comparison will inevitably be made between the refusal of the
House of Lords in the Arlidge case to interfere with administrative
practice, however different from the lawyers' idea of judicial procedure,
and the action of the Supreme Court in the Morgan case. The practical
question, however, is how much the latter decision will hamper the op-
eration of administrative work. From the standpoint of justice to the
individual, the principle set forth by the Supreme Court undoubtedly
is a salutary safeguard.
121 Hannibal Bridge Co. v. United States, 221 U. S. 194 (1911) involved a
criminal prosecution for failure to comply with an order of the Secretary of
War under a statute which gave the Secretary the right to order alterations to
bridges over navigable water, and made failure to comply a misdemeanor. The
Secretary was given the right to pass the order when he had "good reason to be-
lieve" the bridge was an unreasonable obstruction, but could act only after "first
giving the parties reasonable opportunity to be heard." In this case, the first hear-
ing had been before an officer of the Engineer Corps. Later, the bridge company
requested a hearing before the Secretary of War himself. The Secretary con-
sented to the hearing, but said that it must be held before the Judge Advocate
General of the Army. The latter officer heard the case and reported to the Secre-
tary that the action of the War Department should be adhered to. The official
notice to the Bridge Company to make the alterations was signed by an Assistant
Secretary of War. It was held that the statute had been substantially complied
with, and the judgment of conviction was affirmed.
122 Deportations, for example, are on warrants of the Secretary of Labor. "Be-
cause of the vast increase in deportation cases, it became utterly impossible for the
Secretary or even one of his assistants to read so many records, much less digest
and decide upon them. The practical result is that the decision rests in the hands
of the extra-legal advisory board of review, for the assistant to the Secretary
usually accepts the recommendation of the Board." CLARK, DEPORTATION OF ALIENS
(1931) 380. While deportation is not a criminal process, aliens in this country are,
on deportation proceedings, entitled to a fair though summary hearing under the
Fifth Amendment. Yick Wo. v. Hopkins, 118 U. S. 356 (1886) * Zakonaite v.
WVolf, 226 U. S. 272 (1912); Bilokumsky v. Tod, 263 U. S. 149 (1923) ; Mahler
v. Eby, 264 U. S. 32 (1924); The Japanese Immigrant Case, 189 U. S. 86 (1903);
Kwock Jan Fat v. White, 253 U. S. 454, 464 (1920).
This content downloaded from 148.251.171.113 on Fri, 23 Aug 2019 17:34:04 UTC
All use subject to https://about.jstor.org/terms
36 COLUMBIA LAW REVIEW
In this connection, the fact that the authority to act was delegated
to a Board in the Arlidge case, and to a Secretary in the Morgan case,
may represent a fundamental difference. Boards and Commissions are
equipped to hear as well as to decide. Delegation to a Secretary of
quasi-legislative and quasi-judicial duties, which must necessarily be
carried out largely by subordinates, is in part a survival of the early
stages of administrative law. Within a department, as the Supreme
Court has recognized, the process of administrative machinery in quasi-
judicial work should function in the same general way as in those boards
and commissions which are created as independent agencies. In de-
partments, however, the evolutionary process tends to be restricted by
the fact that the functional operations must be mainly performed by
bodies or groups which are not independent of executive authority. The
National Commission on Law Observance and Enforcement, of which
Mr. Wickersham was Chairman, called attention to this in 1931 in its
report on the enforcement of the deportation laws, and urged that the
non-statutory and extra-legal Board of Review, which had been created
in the Department of Labor, should be made an independent tribunal.123
In England, in 1932, the Committee on Ministers' Powers recommended
assignment to a Ministerial Tribunal rather than to a Minister in some
quasi-judicial matters, as well as in some administrative problems when
there exists a clear judicial side.124
There can be no universal mold for the organizations which carry
on quasi-legislative or quasi-judicial functions; the nature of the policy
to be carried out, the difficulties of enforcement, the economic condi-
tions, the persons or industries affected, and all other germane factors
bearing on the particular problem are to be considered in each case. In
all probability, certain kinds of this work can be better carried out by
departments than by independent boards. In other fields of administra-
tive law, however, the reverse may well be true, and it is submitted that
the Morgan decision, instead of interfering with the development of
administrative machinery, may have a wholesome practical effect in
accelerating the process of dichotomy.
VIII
The importance of St. Joseph Stock Yards Co. v. United States'25
does not lie in the actual decision, which unanimously affirms an order
of the Secretary of Agriculture, under the Packers and Stockyard Act.,
1 REP. No. 5. NATIONAL COMMISSION ON LAW OBSERVANCE AND ENFORCEMENT,
DEPORTATION LAWS (1931) 157-167, 178, 179. There is also involved the general
desirability of separating the functions of investigating and prosecuting from the
functions of decision.
'1Z REPORT, supra note 20, ? III.
125298 U.S. 38 (1936).
This content downloaded from 148.251.171.113 on Fri, 23 Aug 2019 17:34:04 UTC
All use subject to https://about.jstor.org/terms
ADMINISTRATIVE LAW 37
This content downloaded from 148.251.171.113 on Fri, 23 Aug 2019 17:34:04 UTC
All use subject to https://about.jstor.org/terms
38 COLUMBIA LAW REVIEW
127 "Six and one half years have elapsed since the Secretary of Agriculture coln-
cluded that the rates of this utility were so high as to justify inquiry into their
reasonableness, and nearly two years since entry of his order prescribing the re-
duced rates." 298 U. S. at 84.
This content downloaded from 148.251.171.113 on Fri, 23 Aug 2019 17:34:04 UTC
All use subject to https://about.jstor.org/terms
ADMINISTRATIVE LAW 39
l-"Ng Fung Ho v. White, 259 U. S. 276, 284 (1922). See also Kwock Jan
Fat v. White, 253 U. S. 454, 464 (1920).
'" The average number of aliens deported during the last five years is in excess
of 14.000 a year. REP. SEC'Y LAROR (1935) 90.
United States v. Ju Toy, 198 U. S. 253 (1905). Cf. Ng. Fung Ho v. White,
259 U. S. 276, 284 (1922). The Ju Toy case, and the case of United States ex ret.
Milwaukee Publishing Co. v. Burleson, 255 U. S. 417 (1921) may be considered
in connection with the St. Joseph Stockyards Co. case.
'"' See cases cited supra note 122.
This content downloaded from 148.251.171.113 on Fri, 23 Aug 2019 17:34:04 UTC
All use subject to https://about.jstor.org/terms
40 COLUMBIA LAW REVIEW
" (a) The apprehension and examination of supposed aliens are often
characterized by methods unconstitutional, tyrannic, and oppressive.
(b) There is strong reason to believe that in many cases persons are de-
ported when further development of the facts or proper construction of the
law would have shown their right to remain.
(c) Many persons are permanently separated from their American families
with results that violate the plainest dictates of humanity...."'
"When in April 1933 the investigations which led to these proposals were
instituted, the deportation law and the methods employed in its enforcement
had earned the censure of the courts, the pulpit, the press, and the public.
A record number of deportations was the chief objective and the measure
of efficiency. Arrests without warrant in violation of law were not the
exception but the rule. Illegal raids on peaceful assemblages and forceful
detention of those present, alien and citizen alike, were of frequent occurrence.
Third-degree methods were employed. Aliens were held in jail for many
months awaiting completion of their trial. Bonds were set in unjustifiable
amounts. In the enforcement of a law designed primarily to rid the country
of the undesirable alien no effort was made to search out criminals for de-
portation. Only 8Y2 percent of all deportations were those of criminals. The
noncriminal was treated with a severity unparalleled in the history of American
law enforcement. No attention was paid to the separation of families or to the
hardships on those left behind, even though they were for the most part
citizens of the United States.
Such of these abuses as could be corrected administratively have been
corrected. Arrests without warrant, illegal detentions, and third-degree
methods have been ended. Bail has been set at a sufficient but not unrea-
sonable figure. Unnecessary detention has been stopped, with a saving of
more than $150,000 per annum to the Government."'M
The Report of the Commission adopting the conclusions quoted in the text,
among others, was signed by George W. Wickersham, Chairman, Newton D.
Baker, Ada L. Comstock, William I. Grubb, William S. Kenyon, Monte M.
Lemann, Frank J. Loesch, Paul J. McCormick and Roscoe Pound. Mr. Henry W.
Anderson and Mr. Kenneth Mackintosh dissented, in whole or in part. See also
Lawless Enforcement of the Law, REPORT OF SUB-COMMITTEE OF CONSTITUTIONAL
RIGHTS COMMITTEE OF THE Los ANGELES BAR ASSOCIATION ON ALLEGED LAW EN-
FORCEMENT IN CONNECTION WITH THE DEPORTATION OF ALIENS (1931) ; CLARK,
DEPORTATION OF ALIENS (1931) ; and VAN VLECK, THE ADMINISTRATIVE CONTROL
OF ALIENS (1932).
"33H. R. Doc. No. 392, 74th Cong., 2d Sess. (1936) 2, 3.
This content downloaded from 148.251.171.113 on Fri, 23 Aug 2019 17:34:04 UTC
All use subject to https://about.jstor.org/terms
ADMINISTRATIVE LAW 41
Ix
This content downloaded from 148.251.171.113 on Fri, 23 Aug 2019 17:34:04 UTC
All use subject to https://about.jstor.org/terms
42 COLUMBIA LAW REVIEW
This content downloaded from 148.251.171.113 on Fri, 23 Aug 2019 17:34:04 UTC
All use subject to https://about.jstor.org/terms