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I have had enough experience with administrative agencies to realize that Congress on several occasions has had to call a halt to their abuse of discretion. For instance, in one act it used to be that the decision of the board could not be overturned by a court if it was supported by any evidence, and not a preponderance of evidence. Because of the abuse of that, the law subsequently was changed to say that it had to be supported by the evidence, which means the preponderance of the evidence.
I do not think that the Congress should aim at trying to control the discretion of an agency, but I think that it should, where it finds that the discretion has been abused and there is a proper method of putting a stop to that short of abolishing the agency, put a stop to it by legislation.
Mr. Flynt. Then we are again in accord this time, that we want these boards to continue to have their discretion.
Mr. Hanson. That is right.
Mr. Flynt. But the Congress must check any abuse of that discretion.
Mr. HANSON. That is correct.
Mr. FLYNT. And we want to change these hearings to hearings that will be determined by the evidence as it appears rather than making it like a box of Cracker Jack with a prize in every package in every decision that they make.
Mr. BEAMER. Would the gentleman yield at that point? I would also include the fact that they should follow the intent of the Congress and if they do not follow the intent of the Congress we will write it out in black and white for them.
Mr. Flynt. I agree with that absolutely, and also this: In too many instances, as you have stated in words a little bit different from these I am about to use, these administrative boards, agencies, and Commissions were established in the first instance as arms of the Congress of the United States, and yet in the instances to which you have referred and in countless hundreds and perhaps thousands of others they have completely flown into the very teeth of the acts which created them and defined their responsibilities and their authority and their powers.
Mr. HANSON. That is what makes business for us lawyers.
Mr. ROGERS. I have just one other question about this. Do you have any fear or have you thought anything about the possibility of a situation of this kind where the entire mediums were owned by one man or one group of men and it could create a lack of competition to the extent that the rates might be affected or controlled to the extent that the public migh be injured?
Mr. Hanson, Well, I think that that is a remote possibility, but I do not think it is practical today, because again you are talking about the rates offered. In most areas of the United States, if the radio rates got too high or the television rates got too high, the advertisers could not afford to pay them, and would not, for the benefit they got. The same thing is true with newspapers. You can kill any kind of a publication in no time flat if you charge more than it is worth to the fellow who pays for it.
Mr. ROGERS. I will admit that, Mr. Hanson; but now let us be realistic about this situation, because I know of some instances. It is very true that you can get to the point of diminishing returns in any of your charges. But when you are up against competition such as a local merchant is up against in competition with a nationally owned organization, sometimes it is the local independent merchant that goes out of business simply because he cannot afford to advertise and because he cannot afford to advertise on both radio and the newspaper. There are instances in this country where that has been done, and where cheaper rates were given for newspaper advertising if the man would advertise on the radio and newspaper, and vice versa.
Mr. Hanson. I think the Commission has a policy against that. Mr. ROGERS. What I am talking about is what actually happened.
Mr. Hanson. I think it has enforced that policy wherever it has been called to its attention. I may be wrong.
Mr. ROGERS. Well, in some situations that I have in mind the radio station was finally separated from the newspaper, but it was not until after a fight. My fear and the thing I want to know is this: Would there be some sort of safeguard against that sort of situation?
Mr. HANSON. If there has been an instance such as you mention here, it has been a rather exceptional instance, and that has nothing to do with the matter that is before the committee today and could properly be taken care of if it arose through any abuse of combination or joint rates or abuse of monopoly power or anything else when that situation arose. I just do not like to shoot at the strawman that is not here.
Mr. ROGERS. But I think he is here and he is not a strawman. I think he is very realistic. If you open the door to a possibility, you do not have a strawman. You have something that is very real.
Mr. Hanson. You may be quite correct in that, but I would rather see what I am shooting at than shoot in the dark.
As I say, one reason that your rates are so high is because your costs have gone up. Newsprint which 20 years ago could be bought for under $50 a ton now costs in some markets more than $200. Every item of expense that goes into the production of a newspaper has gone up, and yet these rates have not gone up proportionately. The same is true of radio. If you buy the equipment the same is true of television. If you start a television station you have to pay
far more today.
Mr. ROGERS. I am not debating that. That is something that I do not think we have before us. Surely we know that the costs of these things have all gone up. The point I am making is simply this: You take a small man who is operating on a shoestring, a margimal businessman, and if he runs up against a situation of this kind he can be put completely out of business and there is not very much he can do about it.
Now, we can talk about the fact that he can come to the Commission and he can file a lawsuit and he can do this, but you know as well
a as I do that lawyers cost money, or at least I used to charge fees
for that. I do not like to work for my health, and I did not. Some of those fellows cannot pay fees. That is the reason that we are interested in this thing and the reason we have got to have some sort of check on it.
Mr. Hanson. The Commission has authority under the broad provisions of the act to administer with sound discretion. What I say is that it has abused its discretion. If it comes up to the very thing that you are talking about now, monopoly, that injures the community, the Commission can find that as a factor for denying an application for a license by whomsoever it is presented.
Mr. ROGERS. For denying the license in the first instance.
Mr. ROGERS. I do not know about that. That is one thing that is important. Even if the Commission has no power to revoke, the chances are that there would be several people that would be caught in this maelstrom and wiped out of business and they do not have the money or the time or the thought of going further with it. It costs too much.
Mr. HANSON. That may be correct.
Mr. BEAMER. Mr. Chairman, I appreciate the opportunity of appearing with your subcommittee. I am not a member of this subcommittee, but I appreciate the opportunity of coming before it because the chairman of the subcommittee has joined me in presenting this legislation to the committee and to the Congress, we hope.
I want to make a statement, if I may, Mr. Hanson, and for your comment. Since the time is so late, we will have to make it short,
I would like to refer particularly to one point-I think you mentioned it briefly—the fact that the intent of the Congress was quite clear back in the discussion of the McFarland bill. In fact, that bill came before this committee when I first became a member of it. As I remember, when the conference committee between the House and the Senate appeared, they removed this particular feature which we are discussing in this law because the Commission had promised the conference committee and the Congress that they would not discriminate against newspapers or any other agency engaged in gathering or dissemination of news. In 10 out of 12 cases, they have very definitely proven that they are discriminating, and that is the reason, is it not, for this legislation! It is trying to redefine the intent of the Congress. And may I add this: In the previous testimony which I was privileged to give before this committee when I was sitting in the chair you now occupy, I pointed out some of the statements made on the floor of the House, in the committee and in the hearings, that we feel very definitely brings out the intent of the Congress. If the Commission has not followed that intent, do you feel that it is necessary that we spell it out, that it will be there for them to follow?
Mr. HANSON. Well, Mr. Congressman, I do not think that the Congress did express its intent in respect of the McFarland bill, because it did not enact the bill into law. There are many measures that will pass one House or the other, but until they are finalized into law they cannot be taken as expressing an intent of Congress. They are not the law of the land. My comment on the McFarland legislation was this: It was obvious to everybody that it was going to become law until the Commission came up here and said, “We will behave if you do not slap us down with that."
They have not kept their promise.
Mr. BEAMER. May I follow that with one other observation and a question combined: Following that particular time, has it not been rather apparent these last several years then that they have been using precedent upon precedent in order to establish a practice or a policy?
Mr. HANSON. They have rendered so many decisions on this diversification question and they have so frankly stated that newspaper ownership tips the scales against the applicant connected with a newspaper that it is almost unheard of today to expect that a newspaper could get to first base in a contested proceeding down there at the Commission.
Mr. BEAMER. I want to compliment you on the statement. I am not an attorney, and sometimes I wish I had been because you have presented this in such a logical manner. I am looking at it from the consumer point of view and one of those who is concerned with free enterprise and competition as we should have it. If we are going to make it impossible by legislation, or by regulation or policy of some Commission to keep any segment of the economy out of competition, I am wondering how we are going to have competition.
Mr. Hanson. Well, you will not have it, if any agency can come up and just say, in the absence of law, “We do not think that person should be engaged in this business.”
Mr. BEAMER. Is there not a confusion in these terms, that diversification of media which the Commission has been using and the fear that some people have expressed on monopoly !
Mr. HANSON. Well, of course the diversification of media is just something that they have picked up after they were slapped down by the court of appeals in the Stahlman case to give them an excuse for evading that decision and from that they have gone on and proceeded to where today on the matter of diversification they are just discriminating.
Mr. BEAMER. I have taken an interest in this, Mr. Hanson, because I have a point in my own State of Indiana. Some large cities and some small cities exist where this particular policy has permeated down to a point, and in one instance they even refused to appeal because they said the cards were stacked against them. That was one of the Fort Wayne cases. They thought what was the use of appealing when they have been discriminated against, as they have put it. Another Indiana case is pending, and I can frankly tell you it was given to a concern that has no experience in the gathering and dissemination of news and it has no experience of any kind. They had other qualifications but a newspaper was denied it. I can go down to Evansville where it was denied to a radio station that needed it and that did have an excellent reputation. We can multiply other instances besides the cases to which you referred. I just wanted to make that statement, Mr. Chairman, because I feel that the statement should be made in order to explain why we have presented this legislation. It is a simple little thing and I think as the gentleman from Georgia, Mr. Flynt, has indicated, it is getting time that we had better tell the people who makes the laws. Is it the Congress who represents the people, or is it some executive or Federal agency?
Mr. FLYNT. Or some court?
Mr. ROGERS. You are going to make a lot of these agencies mad if you do that. They think that they make the laws.
Mr. BEAMER. I have some other bills to try to reduce that thing. I think Mr. Hanson probably indicated that, after all, the people want to rule this country and we do not want to set up too much of a bureaucracy. I wonder if we are not getting down to the meat of the problem when we can chip a little of that authority, which they have assumed unto themselves which we have not even given to them
as representatives of the people. That is all, Mr. Chairman. I am expressing the philosophy that is behind this proposal.
Mr. Harris. I was informed that you had to leave, Mr. Hanson, to go to New York this afternoon.
Mr. Hanson. That plan has been changed by another obligation, so I do not get away until tomorrow.
I thank you for your courtesy in hearing me.
Mr. Harris. We are glad to have you. I wanted to ask you just 2 or 3 very brief questions. In the first place, I also want to make it denfinite and clear, as Mr. Rogers brought up a moment ago, and as has been explained by Mr. Beamer, that the intent behind a proposal of this kind is not to give preference to newspapers or not to give preference to any applicant but to prohibit any discrimination against any applicant." Is that your understanding ?
Mr. HANSON. It is not only my understanding but, sir, I would not be here advocating a preference for newspapers or anybody else. I do not believe in a preference or a discriminator preference.
Mr. HARRIS. Now, the bills refer on page 2, line 1, toany medium primarily engaged in the gathering and dissemination of information. Do you think that the reference also should be made to the dissemination of advertising?
Mr. Hanson. I do not see why, because advertising is one of the most important forms of information that we have in the country today. When you are dealing with a newspaper specifically, its business is the gathering and disseminating of information, and the information falls into three general classes. It is news, editorial comment, and advertising. The only difference between news and advertising is that advertising is information about the goods, services, or ideas of one who is willing to pay to have it disseminated.
Mr. Harris. Then the dissemination of advertising is another factor that should be taken into consideration in your judgment.
Mr. HANSON. Just as the dissemination of news or the dissemination of editorial comment or comic strips or anything else.
Mr. HARRIS. If in a community a local merchant wants to advertise, he, of course, could choose between newspaper advertising, or radio or television.
Mr. Hanson. Or handbills, or shoppers or direct mail, or what we call junk mail in the newspaper business.
Mr. Harris. He could get out on the street and get him a soapbox, too; could he not?
Mr. Hanson. Surely, he has many mediums.
Mr. HARRIS. If a newspaper and a broadcaster do not compete with each other, and the merchant has to pay more for his advertising because we must assume that competition between them will keep the price of advertising down
Mr. Hanson. I have not had enough experience to give you an answer to that, but I would always assume that competition, if it is live competition, will tend to reduce prices in any field. Frequently it will reduce them below the point of return and somebody goes out.