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of the Federal Trade Commission on the subject of justifying differentials in price. I was not able to be there myself, but the young man who had to read it for me read quotations from the Standard Oil Co. of Indiana decision rendered by the Commission last October, which were so lengthy that he just had to cut them down, simply showing that when you are told that the Commission does not render any opinions, it means that the lawyer has not read the findings, because that is the place where they put them.

Mr. REECE. But, Mr. Chairman, I do not want to get Mr. Digges in a position where he is misquoted.

Did you understand him to say that the Commission did not render opinions, or did not give written opinions?

Mr. MONTAGUE. He said-I will quote again

This is the third time.

Mr. REECE. It was written opinions, I am quite sure.
Mr. MONTAGUE. I will read it once more.
Let me read it to you.

Quoting at the bottom of page 41, at the top of page 42 of the stenographic minutes:

Another difficulty which a trial attorney has in his cases before the Commission is that he finds little of value to guide him in prior decisions by that body; as is generally known, the Commission really very rarely renders an opinion to accompany its decisions.

That is what he said. I say that there are findings by the Commission, which are made so voluminous and so extensive, and indicate so absolutely, with perfect clarity, the reasons why they have decided and reached the decision, that any lawyer of law can read them over and find out why they reached their decision. Because they do not label them, "opinions" does not mean anything, because the same intelligence that the lawyer brings to an opinion, when it is applied to Commission's findings of fact, will tell him why they decided it. That further indicates what the reasons for the decisions are. And all of this talk about lack of opinions and stare decisis is a mare's nest, just raising a cloud of dust.

Mr. ROGERS. I would like to ask one question.

I would like to have you answer this question, Mr. Montague: Do you not think that Mr. Digges is just about as good a lawyer as the witness testifying, unless modesty forbids you to answer?

Mr. MONTAGUE. I guess you have sized it up as modesty.

But if you are trying to add sense to Mr. Digges' statement, I can assure you that his statement does not make sense.

Then on page 44, Mr. Digges said this:

An attorney for a private party has no right to assume that in his particular case before the Commission it is going to decide on the preponderance of the evidence when the courts have said it was not necessary

Et cetera.

That is a pretty strong statement. That question has been raised in various forms here, by other lawyers. You say, let us assume that they are all just as good lawyers as I am. But they are lawyers with retainers in their pockets, and it is their business to make just as good a statement as they can, and not to state anything apart from their own business; that is, to state anything on the other side of the case. That is the only difference between those lawyers and me. I am frank to say I have had a lot more experience than

some of them, otherwise some of them would not have stuck their necks out so far.

Mr. REECE. You are not inferring that you do not accept fees for practicing?

Mr. MONTAGUE. On the contrary, I accept fees; but I have reached the age where, frankly, any more fees are more the interest of the internal revenue people than they are to me.

In a situation like this, I am perfectly willing to put in some of my own time to come down to correct some statements by lawyers which ought to be corrected and which, in any other field of the law, I am certain would be corrected by any bar association.

The suggestion is—and I have read it here—that no attorney before the Commission has any right to assume that the Commission is going to decide on the preponderance of the evidence. That absolutely is not true, and every case that Mr. Digges has had before the Commission, and every case which has ever been handled before the Commission by Mr. Hoge or by anybody else when they came to argue before the Commission, their briefs and their arguments discussed the question of the preponderance of the evidence. The Commission's counsel's briefs and arguments discussed the preponderance of the evidence. The whole argument before the Commission was as to what the preponderance of the evidence was. And that is all they were talking about. And you can go through the briefs of every one of these lawyers who has ever had a case before the Commission, and you will see that, far from going on the assumption that there was not any use of talking of the preponderance of the evidence, they talked about it all of the time.

Now, there has been a very broad statement to the effect that there is not anything in the law that requires the Federal Trade Commission to weigh the evidence before they make an order.

I would like to call your attention to some of the provisions in the law as it has stood since 1914, and then call your attention to Supreme Court decisions that came along in 1936 and 1940 and 1941, and see whether it is or is not the fact that there is any duty on the Federal Trade Commission to weigh the evidence before it arrives at its orders. In section 5 (b) of the act, and this has been the law since 1914, that whenever the Commission shall have reason to believe that there has been any unfair method of competition, and if it shall appear to the Commission that a proceeding would be to the interest of the public, it should issue and serve a complaint and the person complained of shall have the right to appear and show cause why an order should not be entered. The testimony in any such proceeding shall be reduced to writing. And I call attention to this, particularly that if upon such hearing the Commission shall be of the opinion that the method of competition or the act or practice in question is prohibited by this act, it shall make a report in writing in which it shall state its findings as to the facts, and then issue an order.

That is very comparable to the provisions in the act under which the Secretary of Agriculture can fix rates in stockyards, whereas here the act simply says he has got to give a hearing. And the question came up in the Morgan cases which went up to the Supreme Court, the first one, Morgan vs. United States (298 U. S. 468) in 1936, and then in 1941, again, in 304 U. S. 1, as to what the general statement

that there should be a hearing meant should be the duty of the person who was conducting the hearing.

Chief Justice Hughes, in writing the opinion in the 304 U. S., page 19, said that this duty comprised all this

fundamental requirements of fairness which are of the essence of due process in a proceeding of a judicial nature-

and that this duty must be inferred and implied and must be complied with.

Now, the language in the Federal Trade Commission law, stating that if upon such hearing the Commission shall be of the opinion that the method or the practice in question is prohibited by the act it shall make report and an order, necessarily implies, it cannot mean anything else, than that the members of the Federal Trade Commission have to weigh the evidence. And, of course, it is their duty to find out what the preponderance of the evidence is. That is the duty under which they are actually holding the hearings, and every brief and every argument which any of those lawyers ever made before the Commission was on the basis of what was the general weight of the evidence, one way or the other, and nowhere in any of those arguments, or any of those briefs, did anybody suggest, from the Commission or from anywhere else, that because there was a mere piece of evidence here and there, therefore the Commission could find this way or that way. Everybody assumed, contrary to what Mr. Digges said, that weighing the evidence was the only way in which they could decide, and applying the decisions in the Morgan cases to the very language which I have read to you from section 5 (b) of the Federal Trade Commission law as it has stood since 1914, places upon the Commission the absolute duty to find the preponderance, and if anywhere there should ever be an admission by any member of the Commission that he had not weighed the evidence, after hearing Brother Digges or after hearing Brother Hoge, and that he had not tried to find the preponderance of the evidence, it would be sufficient grounds for immediately getting a reversal, and it would also be grounds, probably, for impeaching that member of the Federal Trade Commission.

In the Morgan cases, it was disclosed that the Secretary, Mr. Wallace, had admitted that he had not read the entire record. This is far less heinous than deciding against the preponderance of the evidence, but Chief Justice Hughes and the rest of the Court sent it back, saying, of course, it was his duty to consider the whole case. Why, preponderance of the evidence, and the weighing of the preponderance of the evidence, and the decision as to whether it is or is not according to the preponderance of the evidence, is, necessarily one of the fundamental duties which, of course, the Commission must perform. And when Mr. Digges says that no one has a right to assume that it is going to decide on the preponderance of the evidence, he is simply stating what is not true.

Of course, the Commission may not decide what Brother Digges thinks is the preponderance of the evidence, or what Brother Hoge thinks is the preponderance of the evidence, but it is the Commission's duty to find the preponderance of the evidence, and that is exactly what

the Commission does, and it is what you will find the Commission is doing in every case that it has ever had.

I see, because of my interruptions, I have still about half an hour more to go, and, therefore, I am prefectly willing to stay over until tomorrow, if you will let me finish then.

You will have to admit we have had a great many interruptions.

Mr. SADOWSKI. We have the consent calendar coming up this afternoon, and we would rather sit here and have you complete your statement today.

We will refrain from interrupting until you finish the statement. Mr. MONTAGUE. The same question comes at another point which is raised very rhetorically by Mr. Digges, page 54, where Mr. Digges asks: What did Congress intend when it enacted the Federal Trade Commission Act? Did it intend this fact-finding agency was to have the right to determine questions of fact, or did it intend that the reviewing court had the right to reweigh the whole record?

Insofar as the court looks at the whole record for legal errors, that is, of course, a fact. Insofar as Mr. Digges asks if there was any intention on the part of Congress that they should give to the reviewing court no right to reverse if there was any substantial evidence, it is conclusive that that is just what Congress did intend. I happen to know because I was here during the hearings on that act, and I have read, reread, all of the hearings relating to that act.

Congress had the precedent of the seventh amendment of the Constitution, that if there was any substantial evidence it could not be upset by the courts. And that is just what Congress put in, and what Congress intended to put in, and while every conceivable argument was made on every other part of the Federal Trade Commission Act, that part was never contested, because everybody assumed it was proper. So there can be no confusion what the intention was.

Now, I come to a few statements of Mr. Hoge. I am trying not to get too much duplication.

Mr. Hoge, on page 113, says:

There is now no assurance that issues of fact are determined by the weight of the evidence. The Commission may say that when it decides a case it weighs the evidence and decides on the basis of the preponderance of the evidence * * * there is nothing in this act as it now stands which compels the Commission to decide the case in the first instance by the preponderance of the evidence.

I contend that the phraseology which I have read from section 5 (b) of the Federal Trade Commission Act, plus the Morgan decisions which were rendered in 1936 and 1941 by the Supreme Court, absolutely make it the duty of the Commission to decide according to the preponderance of the evidence. But that is not the test of the reviewing court.

I am going to come to the reviewing court later, because I can see that is just what Mr. Reece is trying to ask me.

I am going to tell you why, too. And quoting Mr. Hoge once more, I will then come right to the answer, Mr. Reece, because I am getting to be almost a mind reader—

Mr. REECE. Get around to Judge Martin's opinion in the Segal case.

Mr. MONTAGUE. Mr. Hoge said, at the foot of page 114-which, of course, is contradicted by section 5 (b) of the law, and by the Morgan decisions that I have read

The Commission says that it applies the preponderance rule, but I say to you that there is nothing in the act which requires it and no way in which the respondent can compel it.

If any Commissioner ever made an admission that he had ever departed from the preponderance rule, you could get him impeached and get the Commission's ruling set aside.

Mr. Hoge quotes from the statement of Judge Martin, which is contained in the American Bar Association Journal of December, 1945. It is just too bad that Mr. Hoge should have begun quoting only from page 625 of that issue, because if he had only quoted pages 614 to 624, and 629 and 643 and 644, he would have had quoted such a complete answer to everything that Mr. Hoge and Judge Martin have said about preponderance of evidence-and if I may add, with all due respect, a complete answer to everything which has been inquired by Congressman Reece, as to why a court review of the preponderance of the evidence was not put into the act-that it would not have been necessary for any one to go any farther. It is curious that Mr. Hoge should be quoting from 625, and should have omitted all these other pages, because all these other pages contain a statement as to administrative procedure which has been unanimously approved by the Administrative Law Committee of the American Bar Association, and in which it is stated what the American Bar Association, which has been discussing this question for ten years, wants to have as the proper rule for the review of cases, and they absolutely decide in favor of the substantial-evidence rule, and not the preponderance of evidence rule.

There is nothing radical about the American Bar Association. Every point which has been raised, and every question which Mr. Reece has asked me today, or ever before in these hearings, on the question of preponderance of evidence, has been threshed out in that Committee of the American Bar Association, and the final conclusion in the bill which they aproved and in the bill which was approved by the House of the Delegates of the Association in their December 1945 meeting, has absolutely nothing in it in respect of a review on preponderance of evidence, but they have provisions entirely endorsing the substantial-evidence rule.

And simply to save my voice, I am going to ask leave to put in, after I will close, some statements on the preponderance of evidence rule which have been coming in recently.

(The statements referred to are as follows:)

ADMINISTRATIVE PROCEDURE IN GOVERNMENT AGENCIES-REPORT OF THE COMMITTEE
ON ADMINISTRATIVE PROCEDURE, APPOINTED BY THE ATTORNEY GENERAL, AT THE
REQUEST OF THE PRESIDENT, TO INVESTIGATE THE NEED FOR PROCEDURAL REFORM
IN VARIOUS ADMINISTRATIVE TRIBUNALS AND TO SUGGEST IMPROVEMENTS
THEREIN
[January 22, 1941, S. Doc. No. 8, 77th Cong., 1st sess.]

APPENDIX TO STATEMENT OF ADDITIONAL VIEWS AND RECOMMENDATIONS OF MESSRS. M'FARLAND, STASON, AND VANDERBILT A CODE OF STANDARDS OF FAIR ADMINISTRATIVE PROCEDURE (217)

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(e) Scope of review.-As to the findings, conclusions, and decisions in any case, the reviewing court, regardless of the form of the review proceeding, shall

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