Chapter 8: Administrative Agencies and Authorities

CHAPTER 8 Administrative Agencies and Authorities Today, whether we are aware of it or not, our country is largely dominated by government administrative agencies.* TVA is one example in the field of electricity production. There are also administrative agencies for housing, banking, labor, insurance, farming, communications, shipping, railroads, and a host of others covering almost any phase of our economy that you care to mention. The daily decisions made by these administrative agencies directly affect the well-being of everyone. This is due to the fact that the operating rules and regulations decided on by the officials of administrative agencies have as much weight and influence as do laws passed by Congress and state legislatures. And generally speaking, the decisions of these administrative agencies are not subject to the customary checks and balances — and judicial review — that are a fundamental part of our form of government. Most persons of moderate means just don't have the money necessary to test an administrative decision in the courts. Even if they did, the This chapter is based in part on the thought-provoking article written by Roscoe Pound, Dean of Harvard Law School for twenty years, in the April, 1946 issue of American Affairs. In his article, What is Happening to the Law, Dr. Pound develops this same theme by contrasting the operating methods of administrative agencies and the courts.

54 ADMINISTRATIVE AGENCIES AND AUTHORITIES courts generally do not decide whether the administrative decision, in itself, is just or unjust. The courts can — and on rare occasions do — decide that an administrative agency is unconstitutional; that legislative, judicial and executive powers are mutually independent and are not to be combined under one agency. But usually the courts confine themselves only to deciding whether the administrative agency has, or has not, exceeded the broad and vaguely defined powers usually given it. As Dr. Roscoe Pound said in discussing this subject: "We have been coming in practice to a condition of what may well be called administrative absolutism." According to Webster, the definition of absolutism is: "The doctrine of unconditional power vested in an autocrat; despotism." Thus it behooves us to take a close look at just what an administrative agency or authority is.

To repeat a point of utmost importance, administrative rulemaking and regulations have the force of law. In practice they are law. Administrative rules and regulations often affect interests of vital importance to the persons concerned. For instance, TVA has the legal right to approve or disapprove all drainage projects and plans within its area. And that area covers parts of seven states. Theoretically, at least, all property owners must have TVA's permission before building a pond, cutting a ditch, terracing a field, or doing any other project that affects "drainage." No unit of local government within the TVA area can build a road, change the course of a stream, or even build a culvert if TVA decides against the project under its "drainage and flood control powers." Of course, TVA does not always exercise its legal rights in these matters, but it has them to use as its officials think proper. In addition, these administrative decisions by TVA officials directly or indirectly affect farming, shipping by rail and water, soil conservation, sawmills, and a host of other persons and jobs already mentioned in the preceding chapter.

ADMINISTRATIVE TYRANNY; TVA DECREES LAW 55 Usually, because of the nature of administrative rulemaking, the first knowledge that a person has of a new administrative rule is after it is in operation. In practice, his first opportunity to object to this new administrative regulation is likely to come after the agency officials try to enforce their decision against him. Then the person affected by the decision of the administrative agency may ask for the opportunity to question it in court. But by then, serious injury may have been done to him and his livelihood. The advocates of administrative agencies and authorities claim that "simplicity of procedure and nontechnical methods" result from this new type of administrative "justice." Admittedly this "justice" is simple and nontechnical. The authority issues an order, and you must obey — or raise the money for a long court battle. And as an additional trap for the citizen who is honestly trying to obey the law, the administrative decisions that represent law may be changed from day to day, or even from hour to hour. In practice, all that is necessary to bring this about is for an administrative agency official to decide to issue a new regulation. For purposes of "simple nontechnical procedure," the official has been given what amounts to the right to make up laws as he goes along. That is the equivalent of saying that what government does is law. In that case, we would be perfectly correct in referring to policemen as "the law."

Apparently that is what the advocates of government ownership mean by "a decentralized administration of centralized authority [TVA]." In the case of TVA and many other administrative agencies and authorities, it simply means that some persons are given the power to tell other persons what they must do. That is a high price to pay for the alleged efficiency of administrative agencies and authorities. That concept of government is the exact opposite of a Republic where the law is as binding upon government as upon anyone else.

56 ADMINISTRATIVE AGENCIES AND AUTHORITIES For instance, when an administrative agency — FCC, TVA, FTC, ICC, or what you will — receives or instigates a complaint against a person who has allegedly violated one of its decrees, this procedure is often followed: The agency officials begin an investigation. In effect, this often amounts to a prosecution of the accused even before he hears about the investigation. The administrative agency allows its own investigators to act as prosecutors. And quite frequently, the officers of the agency make their decision in secret conference with these same investigators. This procedure is contrary to the most elemental principle of justice. An American court summed it up in these words: "One of the rights secured to an accused person by the law of the land is that his accuser shall not at the same time be his judge; that is a principle of law that is fundamental; it is the first requisite to a fair and impartial trial; it is a privilege that the law of the land guarantees to every man when his life or liberty, good name, fame or property is involved."42 It is claimed that an administrative agency, by its very nature, cannot separate its investigating and judicial duties. That is true.

The key words are "by its very nature." When our forefathers rebelled against the administrative agents of George III, they did so because they knew that justice could not exist when one person or one agency was investigator, prosecutor and judge. Thus they rejected that concept of government. They set up a representative government with distinct divisions of authority. Were they wrong? Should we have regional authorities that have been granted the right to make up their own rules and regulations, and to enforce them upon unwilling citizens? Presuming for the moment that these regional authorities really accomplish their aims, is flood control or navigation or cheap electricity worth this price of administrative absolutism? If so, it might be a good idea to have more TVA's. If not, what about the TVA we already have?