Here is an essay on the ‘Independent Regulatory Commissions of U.S.A.’ for class 9, 10, 11 and 12. Find paragraphs, long and short essays on the ‘Independent Regulatory Commissions of U.S.A.’ especially written for school and college students.
Essay on Independent Regulatory Commissions
- Essay on the Introduction to Independent Regulatory Commissions
- Essay on the Features of Independent Regulatory Commissions
- Essay on the Functions of Independent Regulatory Commissions
- Essay on the Attempts at Reforms of the Regulatory Commissions
- Essay on the Advantages and Disadvantages of Regulatory Commissions
Essay # 1. Introduction to Independent Regulatory Commissions:
The Independent Regulatory Commissions are peculiar to the constitutional set-up of the United States of America. They are a progeny of the separation of powers and the deep distrust of the Congress in the powers of the American Presidency.
The need for such commissions was felt on account of the growing industrialisation and urbanisation of that country during the nineteenth century when the government felt it imperative to regulate private economic activities. The first independent regulatory commission, set up by the Federal Government, was the Inter State Commerce Commission in 1887.
At present, there are eleven such commissions in the Federal Government of U.S.A., which are as follows:
(i) The Inter-State Commerce Commission, 1887.
(ii) The Board of the Governors of the Federal Reserve System, 1913.
(iii) The Federal Trade Commission, 1914.
(iv) The Federal Communications Commission, 1934.
(v) The Federal Power Commission, 1930.
(vi) The Securities and Exchange Commission, 1934.
(vii) The National Labour Relations Board, 1935.
(viii) The United States Maritime Commission, 1936.
(ix) The Civil Aeronautics Board, 1938 and 1940.
(x) The Nuclear Regulatory Commission.
(xi) The Consumer Product Safety Commission.
Essay # 2. Features of Independent Regulatory Commissions:
These commissions are marked by the following features:
1. The functions of these commissions are of a mixed nature—administrative, quasi-legislative, and quasi-judicial. They frame rules and regulations, execute these rules and hear appeals against their own decisions.
It is on account of the mixed nature of their functions that they have been called ‘the fourth branch of the government’ for they do not fit into any of the three traditional branches of the government, legislative, executive and judicial.
2. These commissions are staffed by experts and are relatively small.
3. They are collegial in character and consist of a group of men discussing and deciding by majority vote.
4. They are relatively independent of the Chief Executive, i.e., the President. They are neither responsible to him nor report to him. They are set up under a statute passed by the Congress laying down their constitutions and functions.
Though the members are appointed by the President with the approval of the Senate, they are not answerable to him. The overlapping or staggered terms of the members strengthen the independence of the members from the President all the more.
Though appointed by the President, the latter cannot remove the members except on grounds specified in the statute creating the commission. The position was established in Humphrey’s executor’s case. It is because of these reasons that these commissions have been described as ‘headless’ for they owe no subordination to the President or any other executive authority.
In fact, they are outside the framework of the departmental organisation under the President and have been rightly called ‘Islands of Autonomy’ within the American administrative set-up. The federal administration of the U.S.A. stands ‘disintegrated’ because of the presence of these commissions.
Independence of these Commissions not Absolute:
It may, however, be mentioned that the independence of these regulatory commissions is relative and not absolute. The question arises why it is so? Firstly, they are controlled by the Civil Service Commission in personnel administration.
Secondly, their budgets are subject to the review of the Bureau of Budget which is a staff agency of the American President. Thirdly, their actions are subject to judicial review and can be declared void.
The judiciary examines their actions from three principal aspects. “In assuring the use of correct procedures in administrative action, in preventing action in excess of powers conferred by the legislature, and, where administrative action depends on a factual record, in making sure that the evidence in the record is sufficient.”
Finally, they are subject to the control of the Congress, which has the power to order an investigation into their working and operations. The Congress can also amend their constitutions, and, even abolish them, although the last step has never been taken.
As a matter of fact, the control of the Congress is only of a general character and these commissions are regarded as ‘the arms of the Congress’. On the whole, we can say that these commissions are largely autonomous.
It will not be out of place to point out that the regulatory work by the administration is to be found in almost all the countries of the world and it is usually done by the various government departments, corporations, local bodies, etc.
Even in the U.S.A. most of the regulatory work is done by the departments, local bodies, etc. In India, we are well familiar with the rules and regulations regarding construction of buildings, zoning, etc., framed by the municipal bodies. What distinguishes these bodies from the independent regulatory commissions is the position and status of the latter in being outside the control of the Chief Executive.
Essay # 3. Functions of Independent Regulatory Commissions:
In order to understand their importance in the American administrative setup, it is essential to have a working knowledge of their functions.
A brief description of the functions of some of the commissions is given below:
1. The Inter-State Commerce Commission:
The main functions of this commission are to develop, co-ordinate and preserve a transport system by rail, water, road and by other means. It has to promote safe, adequate and efficient transport service and to fix up reasonable charges for the same. It has also to prevent discrimination or unfair competitions among the various agencies of transport.
2. The Board of the Governors of the Federal Reserve System:
The Board determines and controls monetary conditions, credit, and operating policies. All the national banks and Federal Reserve banks of the U.S.A. are the members of this body and are supervised by the Board.
3. The Federal Trade Commission:
It has the duty to prevent unfair methods of competition in trade, control false advertisement of food, drugs, etc. The Commission safeguards the entire economic system so as to maintain conditions of free competitive enterprise.
4. The Federal Communication Commission:
It regulates inter-state and foreign wireless, radio and television communication.
5. The Federal Power Commission:
It was originally set up in 1920 as an agency for licensing hydro-electric projects but was later on reorganized as an independent regulatory commission in 1930. At present, its functions extend to the licensing of hydro-electric projects, transmission and sale of electric energy and natural gas.
6. The Securities and Exchange Commission:
The main function of the commission is to protect the interest of the investors against mal-practices in the securities and financial markets.
7. The National Labour Relations Board:
The Board was set up by the National Labour Relations Act, 1935. It investigates unfair labour practices by the labour unions and victimization of the employees by the employers.
8. The United States Maritime Commission:
It encourages the development and maintenance of a merchant marine for commerce and national defence.
9. The Civil Aeronautics Board:
The main functions of the commission are to develop air transport, prescribe safety standards, investigate air crashes, assist development of international transport, etc. It may be mentioned here that these federal level commissions have jurisdiction which extends throughout the territory of the U.S.A.
According to Pfiffner, the functions of the commissions are three:
(i) To inform the industry and other regulated groups as to the objectives of public policy in so far as regulation is concerned;
(ii) To discover and promulgate the rules and regulations which will ensure that this policy is achieved;
(iii) To enforce such regulations either by adjudicating controversies arising between the public and the interest regulated or by prosecuting acts which violate established policy.
According to Willoughby, “These bodies have two prime functions, to formulate rules and regulations having the force of law in determining the rates and conditions of service of public utility corporations, and to pass upon issues affecting public and private rights arising under such rules and regulations, or the statutes authorizing the formulation and promulgation of such rules and regulations.”
The main functions of these commissions can be summarized:
Firstly, they set up standards, rules and regulations to govern the behaviour of a particular industry,
Secondly, they enforce these standards, rules and regulations, and
Thirdly, they prosecute the defaulters.
They, therefore, enjoy both the powers to make administrative legislation and to adjudicate administrative disputes.
They regulate the economic activities by three different procedures:
(a) By rule making which means by elaborating and defining the general norms as laid down in the parent Acts,
(b) By administrative methods such as licensing, inspection, publicity, etc., and
(c) By case-by-case decision method which is used on complaints against the violation of the law or the norms laid down.
The Commissions can hear cases and award decisions either on a regular petition having been made by a private party or on their own initiative. This last power to take initiative is the main distinguishing feature which differentiates the commission from the ordinary courts. As we know, ordinary courts cannot start judicial proceedings on their own initiative.
As soon as a commission takes the initiative on its own or on petition from a private party, it issues notices to the party or parties concerned. The next step is the hearing of the case. The commission is not bound by the formal rules of evidence and whatever relevant evidence can assist it in fact-finding is accepted. Nor it is essential that the petition must be heard by the person who is to ultimately decide the case.
The usual procedure is that the case is heard by over a dozen of examiners and on the basis of relevant evidence, a decision is recommended to the head of the Commission.
Generally, the head of the Commission simply endorses the decision of the examiners. Judicial review of and appeals from these decisions again rest with the Commission which sits as an administrative tribunal in respect of these decisions. Because of the mixed nature of their functions these commission have become target of criticism.
Essay # 4. Attempts at Reforms of the Regulatory Commissions:
The President’s Committee on Administrative Management, popularly known as Brownlow Committee, recommended in its report (1936) that the functions of the regulatory commission should be divided into two groups—non-judicial and judicial.
As far the non-judicial functions are concerned, they should be integrated with other administrative departments of the federal government and as far the judicial functions are concerned, the commissions should continue to act as autonomous adjudicatory boards, within the departments to which they are attached, for handling cases involving administrative adjudication.
Under the arrangement, a special bureau or division was to be set up in each department to do the administrative work of the commission under the control of the secretary and the President.
Such a bureau was to be assigned the commission’s function of rule-making, planning, investigation, prosecution and policy-making, etc. The Congress, however, rejected the recommendations of the Brownlow Committee and refused to allow the President to control the commissions to any degree whatever.
The recommendations of the Committee were criticized by the Attorney-General’s Committee on Administrative Procedure which reported in 1941.
The Committee said, “A separation of functions would seriously militate against what this committee has already noted as being numerically and otherwise the life blood of the administrative process negotiations and informal settlements. Clearly, amicable disposition of cases is far less likely where negotiations are with official devoted solely to prosecution and where the prosecuting officials cannot turn to the deciding branch to discover the law and the applicable procedures.”
The Hoover Commission (1949), however, drew quite the opposite conclusion from that of the Brownlow Committee. It called the regulatory commissions ‘an outstanding development’ in the American federal government.
Of course, it mentioned the haphazard and uncoordinated nature of their growth and emphasized better coordination in response to the needs of the federal government.
It said “It is found that a large part ‘of the work of the Commission is not closely related to that of the rest of the Government and requires active coordination to avoid conflicts.” It also recommended enhancement of the powers of the chairman and increase in the salaries of the commissioners.
From the above, it is clear that there is no unanimity of opinions as to the utility of these commissions. However, they appear impregnable. It appears that the Americans have accepted their existence as a matter of fact.
Under the circumstances, what is needed is that Congressional as well as judicial control over them should be strengthened. James W. Fester has made the following recommendations for the proper functioning of these commissions
“First, the quality of men and women appointed to the commissions is more important than the details of organisations. Second, judicial work should be carried on in an impartial manner, free from the bias characteristic of the prosecution function. Third, coordination of policy formulation and administrative management among government agencies is essential, especially during periods when government plays a positive role in the economy. The chief executive appears to be the only responsible and effective focus for such coordination. And fourth, independent commissions should be subject to the same control by the legislative and judicial branches that applies to all other regulatory and service agencies of government.”
Essay # 5. Advantages and Disadvantages of Regulatory Commissions:
Advantages of Regulatory Commissions:
Regulation of private business activities is not an easy job particularly in America where big business magnates have high purchasing power. Under the circumstances, it is extremely difficult for any organisation to manifest complete impartiality to all the parties concerned. There are serious dangers of corruption, nepotism and unfairness.
“The industries affected by regulation are often powerful and politically influential, and regulation controls their profits, their services and their finances. The combination of a wide administrative discretion, on the one hand, and great private influence, on the other, plus high stakes in the relationships between them, involves serious risks of corruption and unfairness. In this situation, the independent regulatory commission seems most nearly to meet the need.”
The merits of this type of organization were clearly brought out by the Hoover Commission Task Force on regulatory commissions said “The number of members and their security of tenure are intended to assure freedom from partisan control or favouritism. The group is able to resist outside influence more effectively than an individual and each member is free from a threat of removal as a source of pressure. Moreover, since the activities of the commission may be more subject to public scrutiny than would be a single bureau in a large department, there is greater opportunity for exposure of pressures or improper actions. Finally, while provisions for hearings and similar safeguards against arbitrary actions are not peculiar to commissions, they may be more effective when combined with group action.”
To sum up, the advantages of independent regulatory commissions are:
(i) It creates a device which makes it possible to exclude the quasi-legislative and quasi-judicial activities from the hands of bureaucracy.
(ii) It puts the activities of national importance and of a technical nature outside the bane of party politics.
(iii) It is a good device of harmonizing the generalist and specialist administrators’ relationships which are hard to achieve in a Departmental system of organization.
(iv) It brings different shades of opinions and interests together to shoulder a national problem.
(v) It insulates the process of business from partisan political forces by making it plural- headed.
Disadvantages of Regulatory Commissions:
With all the above advantages of the commissions, they have been subjected to severe and varied criticism.
The main indictments are:
(i) It is said that the regulatory commissions owe no responsibility to any constituted authority. They function outside the administrative set-up of the President and have been rightly called as ‘headless’. The President has no power to dismiss any of the members with the result that they can easily stand in the way of effective and integrated administration of the Chief Executive.
Sometimes it is said that, if not responsible to the President, they are the agents of the Congress and are responsible to it, but in practice, the control of the Congress is only nominal. At the most, the Congress can make investigations and obtain reports; it cannot control the details of their policies and actions.
No wonder, they have been called as ‘irresponsible commission’, ‘the fourth branch of the government’, ‘areas of unaccountability’, and so forth.
The Brownlow committee (1937) commented. “They (independent regulatory commissions) are in reality independent governments set up to deal with the rail road problem, the banking problem, or the radio problem. They constitute a ‘headless’ fourth branch of the Government, a haphazard deposit of irresponsible agencies and un-coordinated powers. They do violation to the basic theory of the American Constitution that there should be three branches of the government and only three. The Congress has found no effective way of supervising them, they cannot be controlled by the President, and they are answerable to the courts only in respect of the legality of the activities.”
This Committee further added that “though the commissions enjoy power without responsibility they also leave the President with responsibility without power.”
(ii) The Commissions combine in themselves the functions of the legislator, prosecutor, and the judge, thereby jeopardizing the rights and liberties of the people. The commissions formulate very important policies in the business and industrial fields and with these combined functions, can easily act arbitrarily.
Besides, the commissions do not have that impartiality and neutrality which is essential for the performance of judicial work. The big business magnates with whom the commissions have to deal with are very powerful and usually exert pressures to get their work done to their advantage.
Again, the commissions have their own procedures of hearing appeals and making decisions. They are not bound by the rules of evidence and other procedures normally adopted by the ordinary courts of law. As such, there is no safeguard against the miscarriage of justice.
Although, appeals against their decisions can be made to the regular courts but it is a recourse rarely permitted because of the strict limitations. In the words of Robert E. Cushman, “The Commissions are being asked to perform judicial task interwoven with determination-of policy which at times are the subjects of acute partisan controversy or economic class antagonisms. This is not the atmosphere in which the rights of individuals ought to be judged. It is a vital and inherent weakness of the independent commission system.”
Senator Paul Douglas points out, “There is a tendency of independent regulatory agencies to surrender their regulatory zeal, and to become more and more the protagonists of a clientele industry, and less and less the vigilant defenders of the welfare of the consumers or the general public. All too often, those who are supposedly being regulated, actually regulate their nominal regulators.”
(iii) As these commissions are outside the control of the President, they have served as a great ‘disintegrating’ force in the federal administration of the U.S.A. They can obstruct effective co-ordination of the national policy by non-cooperating with the other departments of the federal government.
Besides, there usually arise conflicts of jurisdiction between these commissions and other executive departments because some of the regulatory functions are common to both these bodies. All this can result in ‘a decentralized and chaotic administration’.
(iv) It is also said that the commissions are unwilling to make use of the auxiliary services such as statistical, economic, legal services, etc., of the other departments. This results in high expenditure and duality of personnel, etc. Perhaps, this is on account of the superiority complex which the commissions want to show off to the other departments.
(v) It is also argued that these commissions have not served the purpose for which they were established. Neither they have been able to protect the public interest nor they have assured the long-term progress of the industry.
The Hoover Commission (1949) commented “The chief criticism that can be made of the regulatory commissions is that they become too engrossed in case-by-case activities and thus fail to plan their roles and to promote the enterprises entrusted to their care. Typical of this is the attitude by which the Civil Aeronautics Board and the Inter-State Commerce Commissions have approached the problem of building a route structure for the nation.”
(vi) It is also said that these regulatory commissions suffer from undue laxity and slackness in the performance of their functions. This is on account of the fact that they are neither responsible to the President nor accountable to the Congress in any effective manner. The fact that their decisions can be reversed by the courts makes them, in the words of Aurthur M. Macmahon, ‘timid’.
The regulatory commissions, it is argued, are inherently weak because of the commission or plural type of their organisation. As far as this criticism is concerned, it can be said that this weakness is common to a commission type of organisation and is not specific characteristic of the regulatory commission. It can be remedied by making the role of the chairman more effective.
Indeed, the Hoover Commission recommended the strengthening of the chairman’s role and some substantial steps have already been taken in this direction.
Thus, the regulatory commissions are under fire from two camps the administrative and the judicial. The administrator condemns them because their existence creates difficulties in integration and coordination. The lawyer is opposed to them because their procedure and methods in adjudication do not satisfy the canons of judicial propriety.