Regulatory agencies and power politics : the Leland Olds case reconsidered

A case study of Leland Olds, a consumer-minded utility economist who served as a Federal Power Commissioner from 1939 to 1949, was used to illustrate the hazards faced by the regulator who alienates a regulated industry on an important issue. Olds stood in the way of an objective desired by the Federal Power Commission-regulated natural gas industry, and when there appeared to be no other way for the industry to accomplish its goals, it lobbied its supporters in Congress for Olds' removal from the FPC, a task which was successfully completed when the Senate refused to confirm Olds' second reappointment to the commission in October 1949.

The major finding of this research was that Olds' Senatorial rejection represented the far end of a continuum of action pursued by a regulated industry seeking relief from a policy it felt was not in its best interests. The gas industry first sought relief through the courts; failing there, it lobbied in Congress for legislative assistance, but it met initially with only partial success. When President Truman indicated he was opposed to the industry's objective, the industry then mustered its resources for an attack on a regulator who was believed to be a major cause of the industry's lack of total success in reaching its desired goal.

Thus far the regulatory literature has failed to account for the aspects of the regulatory process noted above. A thorough understanding of that process is needed as scholars, regulators, and politicians attempt to deal with the policy conflicts arising from agency/interest group interaction. The goal of this study was to contribute to a greater understanding of that interaction in the context of the American political process.