formal hearings, on the other hand, would frequently delay regulations designed to halt a threatened price increase until the increases had already materialized. Lengthy hearings would also encourage speculators who would be assured of ample opportunity to adjust their holdings between the time of original notice of hearing and final order. Furthermore, after a price ceiling has been established, sudden changes in such factors as the cost of labor, raw materials, or transportation, may require immediate adjustment of price schedules without the formality of a hearing in order to avoid injustice to the industry itself.

The statutory provisions with respect to the filing and disposition of protests against price or rent ceilings are also drawn so as to facilitate the consideration of all relevant arguments and information in the shortest possible time. The provisions that the protest may be accompanied by written evidence affords the protestant an opportunity to bring immediately to the attention of the price administrator any material which the protestant believes will support his objections to the ceiling. In preparing his protest and supporting materials, the protestant will have the benefit of the statement originally issued by the administrator indicating the grounds upon which the ceiling order was based. In considering the protest, the administrator will have available in addition to this written evidence such statements as may be submitted by interested parties and other facts of which he may take official notice. The administrator may also supplement the record by calling for additional written evidence or briefs or may schedule the protest for oral hearing.

These provisions assure the protestant, at the very least, of an opportunity to present his case through the presentation of written evidence and argument. Such proceedings will closely resemble the "shortened procedure" developed by the Interstate Commerce Commission. Proceedings of this character have been found particularly appropriate when the matters in dispute involve the application of expert and informed judgment to complex economic facts, especially where, as in the determination of price schedules, there is no dispute over the primary data and the demeanor of witnesses is of little significance. The protestant is also assured of the administrator's careful consideration of the written evidence by statutory provisions that the transcript of the proceedings on the protest shall constitute the basic record for judicial review and that the reviewing court may order the administrator to include in the transcript and to reconsider any evidence which the administrator has rejected and which the court considers material.

It is true that the proposed statute does not require the holding of elaborate oral hearings of quasi-judicial or adversary character, similar to those usually employed in rate-regulation proceedings. Such proceedings would involve extended examination and cross-examination of witnesses and would exhaust in litigation time and energies which should be husbanded for the prosecution of the defense effort itself. Furthermore, if every protest were to be the subject of extended oral proceedings, so much attention would have to be directed to frivolous complaints that adequate and immediate consideration could not be given to the more meritorious ones. Protracted administrative hearings would also delay the final judicial determination of the validity of ceiling regulations in a situation where finality is especially important to the business community affected. Finally, a requirement of elaborate oral hearings in the administration of the statute would necessitate the employment of an administrative staff of staggering size.

The impossibility of achieving effective price control if the quasi-judicial procedures customary in utility rate regulation were required in the administration of the proposed act may be illustrated by several studies of the time consumed by such procedures. A study by the Attorney General's Committee on Administrative Procedure reveals that an average time of 11 months and 10 days was required for the disposition of the nine rate investigations completed by the Federal Power Commission during June and July 1940 (Final Report of the Attorney General's Committee, p. 358). Another study by this committee reveals that of the two rate orders issued in 1940 by the Department of Agriculture under the Packers and Stock Yards Act, one took 5 years, 6 months, and 30 days from original notice of hearing to final disposition, while the other required 1 year, 9 months, and 18 days (Final Report, p. 348). The quasi-judicial proceedings conducted for the determination of coal prices under the Bituminous Coal Act, which were modeled somewhat after utility rate proceedings, consumed more than 2 years before minimum price schedules could be established for a single industry

See Monograph No. 24 of the Attorney General's Committee on Administrative Procedure, pp. 51–57.

(Final Report, p. 110). Obviously the adoption of similar procedures in the administration of the proposed statute would render hopeless any serious attempt to prevent a runaway inflation during the present emergency.

Other considerations which render inadvisable the requirement of elaborate quasi-judicial or adversary hearings in connection with the issuance or reconsideration of price or rent regulations are well summarized in the Report of the Attorney General's Committee on Administrative Procedure. The report states: "The application of the procedures of a judicial trial to administrative rule making is limited, however, by the distinctive characteristics of rule-making proceedings. The issues are normally complex and numerous, the parties may be diverse and not alignable into classes; the outcome will involve a judgment concerning the consequences of rules to be prescribed for the future and a discretion in devising measures to effectuate the policies of the statute. These factors differentiate these proceedings from the normal judicial trial in which adversary hearings are traditionally employed and accordingly limit the possibility of defining issues in advance, of addressing evidence to them, of permitting systematic cross-examination, and of stating the findings and conclusions fully" (Final Report, p. 109).

There is no doubt of the constitutionality of the provisions of the statute authorizing the President to dispense with formal hearings in connection with the establishment of price or rent ceilings and to limit proceedings on protests against such ceiling regulations to written evidence. Under the proposed statute, the President exercises legislative powers delegated to him by the Congress. In delegating such power to the President, the Congress may properly grant to him the same freedom of choice that is enjoyed by the Congress itself in gathering information as the basis for legislative action. The propriety of this practice is witnessed by many statutes authorizing the issuance of rules and regulations by the President and other administrative officers and agencies without any requirement as to notice and hearing. The Securities and Exchange Commission and the Federal Reserve Board, to name but two, exercise extensive powers of delegated legislation essentially similar to those provided for in the proposed statute. Neither of these agencies is required by law to hold formal hearings before the issuance of their rules and regulations or even to consider protests thereafter. Although a few Federal statutes have required notice and hearing preparatory to the exercise of delegated legislative power, this has been because Congress considered it desirable in those particular instances and not because the Constitution required it.3

The opinion of Mr. Justice Cardozo in Norwegian Nitrogen Products Co. v. United States (288 U. S. 294), contains an illuminating discussion of the nature of the hearing which may properly be used in connection with the exercise of delegated legislative power by an administrative agency. In this case an importer contended that it had been denied a fair hearing because the Tariff Commission refused to disclose to it information concerning the cost of production received by the Commission from American producers under pledge of secrecy. In holding that the hearings prescribed by statute did not require such disclosure, Mr. Justice Cardozo said:

"The process of tariff making by Congress and congressional committees is not different in essentials from that for legislation generally. If the bill has gone to a committee, the practice has been general to give the privilege of a hearing to businessmen and others affected by its provisions. The hearing is not one that may be demanded as of right. A change of the tariff laws like a change of any 2 A monograph of the Attorney General's committee described the procedure of the Federal Reserve Board as follows: "Procedure for policy determination.-Despite these broad powers (which, as pointed out, may or may not, for the present at least, be practically effective), their exercise is informal in the procedural sense of the word. Determination is not preceded by a hearing of any character. Rather it is almost wholly internal, based upon the special knowledge and research of the Board and its staff. Credit conditions are under constant scrutiny and study. Banks are required frequently to report such conditions, and a staff of economists in Washington, generally regarded as highly expert and able, analyzes credit and business conditions from day to day. By means of graphs, and indices and general reports prepared by its staff, the Board is constantly informed of current situations and considers whether and what steps ought to be taken." Administrative Procedure in Government Agencies, Monograph of the Attorney General's Committee, No. 9, The Federal Reserve System, p. 9. See, too, Final report, p. 104.

3 In commenting on the provision of adversary hearings contained in the Bituminous Coal Act, the Fair Labor Standards Act, and the Food, Drug, and Cosmetic Act, the Attorney General's Committee on Administrative Procedure makes the following observation: "Thus far the resulting procedure has been cumbersome and expensive. The record and exhibits lying back of the recent bituminous-coal price order totaled over 50,000 pages; the trial examiner's report embraced approximately 2,800 pages in addition to exhibits, and the Director's report consisted of 545 single-spaced legal-size pages, exclusive of indices, annexes, and price appendices. Wage-order records under the fair-labor standards run from 600 to 10,000 pages each. The hearings process under Food, Drug, and Cosmetic Act has required from 5 to 11 months for completion The bituminous-coal price order was issued more than 2 years after the present phase of the procedure lead ing to it was begun." (Final report, p. 110.)

other statute is not subject to impeachment on the score of invalidity though notice to those affected has been omitted altogether. * * * Even so, the privilege is now so fortified by practice that it may fairly be taken for granted. But the hearing when given is not similar to a trial as conducted in a court. The proponents of a bill and the contestants make their statements for and against, bringing forward such confirmatory documents, trade journals, letters, governmental reports, and what not, as they believe to be important. * * * In none of these congressional hearings has the practice ever prevailed of permitting the advocates of a measure to cross-examine the opponents, or the opponents the advocates, or of compelling the committee itself to submit to an inquisition as to data collected by its members through independent investigation." (p. 304) Mr. Justice Cardozo went on to say that since what the Tariff Commission and the President did in changing the tariff rates was in substance the exercise of delegated legislative power

"the inference is, therefore, a strong one that the kind of hearing assured by the statute * * * is a hearing of the same order as had been given by congressional committees when the legislative process was in the hands of Congress and no one else. * * * What was once a mere practice has been converted into a legal privilege. But the limits of the privilege were not meant to be greatly different from those of the ancient practice that had shaped the course of legislation" (p. 305).

The absence of any constitutional requirement of notice and hearing in connection with the exercise of delegated legislative power is also explained by Mr. Justice Holmes in the leading case of Bi-Metallic Investment Co. v. Colorado (239 U. S. 441). There a taxpayer sought to enjoin the enforcement of an order issued by the State Tax Commission increasing the tax valuation of all Denver property. In sustaining the order against the objection that the plaintiff had no opportunity to be heard, Mr. Justice Holmes said:

"The question then is whether all individuals have a constitutional right to be heard before a matter can be decided in which all are equally concerned * * *

"Where a rule of conduct applies to more than a few people it is impracticable that everyone should have a direct voice in its adoption. The Constitution does not require all public acts to be done in town meeting or an assembly of the whole. General statutes within the State power are passed that affect the person or property of individuals, sometimes to the point of ruin, without giving them a chance to be heard. Their rights are protected in the only way that they can be in a complex society, by their power, immediate or remote, over those who make the rule" (p. 445).

So, too, in the Assigned Car Cases (274 U. S. 564 (1927)), an Interstate Commerce Commission rule for the distribution and allocation of coal cars was attacked on the ground that it was not supported by evidence applicable to each carrier separately. In upholding the order, Mr. Justice Brandeis said:

"In the case at bar, the function exercised by the Commission is wholly legislative. Its authority to legislate is limited to establishing a reasonable rule. But in establishing a rule of general application, it is not a condition of its validity that there be adduced evidence of its appropriateness in respect to every railroad to which it will be applicable. In this connection, the Commission, like other legislators, may reason from the particular to general" (p. 583).

The establishment of price schedules which are general rules equally applicable to all is no less legislative in character than the administrative rules considered in the preceding cases, and the consequent absence of any constitutional requirement of notice and hearing in connection with such price regulations has been recognized by the courts. In New Jersey v. Newark Milk Co. (118 N. J. Eq. 504, 179 A. 116), the court explicitly rejected the contention that a price order was invalid because it had not been preceded by notice and hearing. The court said:

* As pointed out, the respondent board merely exercises the adininistrative function to effectuate the definitely declared legislative policy. Such

Another decision of the Supreme Court, holding that notice and hearing need not precede the adoption of administrative regulations is to be found in Butterfield v. Stranahan (192 U. S. 470). A test, based upon standards established by the Secretary of the Treasury had resulted in the exclusion of the plaintiff's tea under the Tea Inspection Act. The court rejected the contention that "there was a denial of due process of law in failing to accord plaintiff in error a hearing before the Board of Tea Inspectors and the Secretary of the Treasury in establishing the standard in question, and before the general appraisers upon the reexamination of the tea" (p. 497).

regulation is purely a legislative function; and, even when exercised by a subordinate body, upon which it is conferred, the notice of hearing essential in judicial proceedings is not indispensable to a valid exercise of the power. If the regulation undertaken is arbitrary or unreasonable, and in the case of rates and charges, imposed upon a business clothed with a public interest, confiscatory relief may be had in the courts. A judicial review of administrative proceedings, on notice, satisfies the demand of the due process clauses" (118 N. J. Eq. 523, 179 A. 126).

In Highland Farms Dairy v. Agnew (16 F. Supp. 575) (affirmed by the Supreme Court in 300 U. S. 608), a three judge court upheld the validity of a price regulation against the objection that the Virginia Milk Control Board, which was by statute required to hold hearings, had gone outside the record of its public hearings, and acted upon evidence not there presented. The court rejected this objection on the ground that the Milk Control Board's function was legislative and that legislative agencies could inform themselves by hearings or by other methods in addition to hearings. The Court said:

"The proceeding * * * was not quasi-judicial, but legislative The Commission was undoubtedly justified in the exercise of its legislative function in taking into consideration not only facts presented at the public hearing, but those which came to it subsequently * * * or were disclosed by its own investigation into the facts and the literature bearing upon the subject" (p. 587).

The legislative function involved in the promulgation of price ceilings by an administrative agency is closely paralleled by the issuance of minimum wage orders under minimum wage statutes: here, too, it has been held that there is no constitutional requirement of notice and hearing. In Spokane Hotel Co. v. Younger (113 Washington 359), the Supreme Court of Washington rejected the contention that notice and hearing were essential to the validity of a minimum wage order. The Court said:

66* * * counsel for appellants cite a large number of cases from the Supreme Court of the United States and other courts to the effect that * * * there must be notice and an opportunity to be heard. Most of these cases, if not all of them, are cases affecting the rates to be charged by common carriers and are judicial in their nature. These cases are readily distinguishable from the case before us, because the duties of the industrial welfare commission as fixed by the act under consideration are administrative and not judicial *"" (p. 363). It is true that under the Fair Labor Standards Act hearings are required before the issuance of a minimum wage order. This requirement, however, was in response to considerations of legislative policy rather than constitutional necessity. See Opp. Cotton Mills v. Administrator of Wage and Hour Division (61 Sup. Ct. 524).

* *

5

It is true that there are intimations in some Supreme Court opinions that quasi-judicial hearings are essential to the validity of public utility rate orders. Ohio Bell Telephone Co. v. Public Utilities Commission (301 U. S. 292); Railroad Commission of California v. Pacific Gas & Electric Co. (302 U. S. 388). These intimations, however, must be read in the context of the particular statutes involved and the special character of public utility rate regulation; they have no application to the problems presented by the establishment of price or rent ceilings under the price control bill. The principal issues involved in public utility rate proceedings are traditionally subjects for judicial determination, revolving about the common law right of the public to receive the services of the utility at a just and reasonable charge and the constitutional right of the utility to earn a fair return on the fair value of its property. The same questions are not involved in the price control bill. Furthermore, public utility rate proceedings culminate in an order directed only at those particular individuals or groups of individuals

In Morgan v. United States (304 U. S. 1), the Court held invalid for lack of "full hearing" an order issued by the Secretary of Agriculture establishing just and reasonable charges for market agencies in accordance with the Packers and Stock Yards Act. Here the statute itself created the standard of "full hearing" which was interpreted by the Court to require "administrative proceedings of quasi-judicial character." Furthermore, although no issue of confiscation was involved, the statute treated the market agencies as public utilities by flatly prohibiting any "unjust, unreasonable, or discriminatory rate or charge" (42 Stat. 164, 7 U. S. C. § 206).

See memorandum in support of the substantive provisions of the price-control bill, showing that the questions involved in price regulation are different from those involved in public utility rate regulation, and that precedents derived from rate-regulation cases are not controlling here.

represented in the proceedings; price and rent ceilings, on the other hand, are general rules applicable to all who fall within the ambit of their provisions.

It is clear, therefore, that there is no constitutional requirement for the holding of a quasi-judicial hearing, or, indeed, any other kind of hearing, in connection with the establishment of a price or rent ceiling under the proposed statute. Nevertheless, the provisions for the filing and consideration of protests assure that an opportunity for at least a shortened form of hearing will be afforded; these provisions are also sufficiently flexible to authorize the holding of more elaborate quasi-judicial hearings when time and circumstances permit. Whatever the details of the procedure adopted, the bill makes certain that those subject to a ceiling regulation will have the opportunity of knowing the basis on which it was issued and of presenting evidence in support of their objections to it, and that all relevant data will be included in a formal transcript which will be subject to judicial review in the manner provided for by the statute.

B. JUDICIAL REVIEW

For the purpose of judicial review of ceiling regulations or orders, the statute creates a special emergency court of appeals of not less than three members whose membership is to consist of judges selected from the courts of the United States by the Chief Justice of the Supreme Court. The chief judge of the emergency court, who is also to be selected by the Chief Justice of the Supreme Court, is authorized to divide the court into divisions of three or more members and these divisions may hold their sessions in such places throughout the country as public convenience requires. The emergency court is granted exclusive jurisdiction to consider both constitutional and other objections to any regulation or order prescribing price or rent ceilings and to affirm or set aside such regulations or orders in whole or in part. The judgment of the emergency court is subject to review by petition for certiorari to the Supreme Court of the United States. The record in the Emergency Court is to consist primarily of a complete transcript of the proceedings on the protest, including a statement by the President of all materials of which he took official notice in disposing of the protest. If application is made to the court for permission to introduce evidence which was rejected by the President or which could not reasonably have been offered to him, and the court determines that such evidence is necessary to the disposition of the complaint, the court is directed to order the evidence to be presented to the President. The President is directed to receive this evidence, and such other evidence as he deems necessary or proper, and to file with the court a transcript of the additional evidence and any modification made by him in the original regulation or order. The President is also authorized to direct such additional evidence to be presented directly to the court without previous consideration by him. The statute also provides that no regulation or order shall be set aside unless the court is satisfied that it is arbitrary or capricious or not in accordance with law.

The statutory provisions for judicial review assure every protestant of his full day in court if his protest is denied. The provision for an Emergency Court which will have exclusive jurisdiction of all complaints under the statute is essential in order to permit expeditious determination of controversies with respect to ceiling regulations without unduly interfering with the work of the regular courts. The complete impartiality of the tribunal is assured by the provisions that the Emergency Court shall consist of district and circuit judges selected by the Chief Justice of the Supreme Court of the United States. The provisions that the court may sit in divisions and in such places as public convenience requires, also assures that a real opportunity for judicial reviews will not be confined to wealthy litigants or to particular sections of the country.

Even in rate regulation, the necessity for occasional summary action in advance of hearings has been recognized. The Interstate Commerce Act permits new tariffs to be summarily suspended for a period of 7 months (sec. 15 (7) of the Interstate Commerce Act). Compare similar provisions of the Civil Aeronautics Act, see. 1002 (g), and the Federal Communications Act (sec. 204), authorizing the agencies concerned to suspend the operation of a proposed rate schedule without prior notice or hearing.

In certain aspects of rate regulation the Supreme Court has recognized the necessity abandoning some of the characteristics of private litigation. In the New England Divisions case (261 U. S. 184) an Interstate Commerce Commission order directing a change in the division of joint rates was attacked on the ground that each carrier was not considered individually. Mr. Justice Brandeis said: "Obviously, Congress intended that a method should be pursued by which the task which it imposed upon the Commission could be performed. The number of carriers which might be affected by an order of the Commission, if the power granted were to be exercised fully, might far exceed 600; the number of rates involved, many millions. The weak roads were many. The need to be met was urgent. To require specific evidence, and separate adjudication, in respect to each division of each rate of each carrier would be tantamount to denying the possibility of granting relief" (p. 197). See, too, United States v. Louisiana (290 U. S. 70).