The term administrative laws is used herein to mean all of those rules, regulations, decrees and enactments of administrative agencies, legislatures and others by which governments regulate and control the economic and social affairs of the community. They include licensing laws by which the state dictates who may and who may not enter into businesses, trades and professions; zoning laws through which it specifies the uses of land and the structure of buildings; welfare state laws under which it collects and redistributes hundreds of billions of dollars in wealth each year; regulatory laws which give it supervision and control over employers and employees, mining and manufacturing, finance and banking, transportation and communication, forestry and agriculture along with a host of other activities.
For many years following the formation of this nation, administrative laws were declared by the courts to be unconstitutional. Not only were they regarded as an infringement of the right of private property and an interference with freedom of contract, but lawmaking by administrative agencies was considered a violation of the constitutional principle of separation of powers which decrees that only legislatures have been authorized by the people to make laws. The federal Constitution, for example provides in Article I, Section I that:
All legislative powers herein granted shall be vested in a Congress of the United States, which shall consist of a Senate and House of Representatives.
That attitude has completely changed in recent years and today the Supreme Court of the United States has in effect taken the position that both Federal and state governments have unlimited power [p. 164] to regulate the people in any manner they choose. With respect to regulation by state governments the Supreme Court has declared:
The day is gone when this Court uses the Due Process Clause ...to strike down state laws, regulatory of business and industrial conditions, because they may be unwise, improvident, or out of harmony with a particular school of thought. (Williamson v. Lee Optical of Oklahoma, 348 U.S. 483, 488 [1955])
And concerning regulation by the Federal Government the Supreme Court has stated:
It is not for this court to reweigh the relevant factors and, perchance, substitute its notion of expediency and fairness for that of Congress ... This court is not a tribunal for relief from the crudities and inequities of complicated experimental economic legislation. (Secretary of Agriculture v. Central Roig Refining Co., 338 U.S. 604, 618 [1949])
The growth of administrative agencies in recent years and the increase in their powers has been nothing short of phenomenal. This growth continues apace as both legislatures and agencies continue to pour forth a veritable flood of new laws, rules and regulations each year. To appreciate the extent of this growth one need only compare the budgets of governments today with those of say 50 years ago. While the effects of inflation serve to distort the picture, the change is still astounding. For example the total annual federal budget in the early 1930s was somewhere between four and five billion dollars. Today it is around 500 billion most of which goes to finance administrative law programs. It is plainly apparent that the impact of such laws on society today are greater than that of all other areas of the law combined.
There is extensive disagreement over the utility of administrative laws and the extent to which they should be adopted. On the one hand are the believers in socialism who favor complete government ownership and control of the instrumentalities for producing and distributing [p. 165] goods and services. At the other extreme are those who advocate no government controls whatsoever and would confine state ownership of property to that amount necessary to enable it to punish crime, settle disputes and provide for the national defense.
The great majority of the people, seem to take a position somewhere between these two views. However, there is hardly any agreement regarding exactly what that position should be. Very few seem able to justify in their own minds why they favor laws of this nature at all nor can they explain why there should not be more or less than the ones they do favor.
It is suspected that at least a part of this confusion and disagreement arises from a belief on the part of some that administrative laws are necessary to punish crime or to enforce individual rights or both. A clear understanding of these laws and of the scope of the criminal, tort and contract laws will reveal that administrative laws have neither of these consequences. Let us observe why.
If, while doing an act which is punishable under administrative law, a person commits a crime or does something evil, he is punishable under the criminal laws. They are sufficiently broad that they cover every type of conduct which is considered evil and punishable. Administrative laws therefore can add nothing to them which would help achieve this purpose. Similarly if a person while doing an act forbidden by an administrative law causes harm either intentionally or negligently, the injured party may recover under either the tort or contract laws. These together with the laws of domestic relations provide restitution for every type of injury considered compensable. From this it is apparent that the adoption of administrative laws to protect rights are as unnecessary as when adopted to punish crime.
Even though the laws of torts, contracts and domestic relations adequately protect the rights of individuals, there is prevalent today a belief that administrative laws are necessary to protect the rights of certain minority groups, who, it is contended, are being discriminated against by the majority. To correct this alleged injustice, anti-discrimination laws and equal rights amendments to constitutions are [p. 166] being widely advocated. The main complaint of those who sponsor these movements seems to be that employers are not allocating jobs and setting wage rates on the basis of race or sex, but are using some other criteria such as the ability of the employee to perform the task. The legislation proposed would deny employers their freedom to choose employees and set their wages according to competency, experience, training or integrity if such choices happened to result in the hiring of a smaller or larger number of the minority groups than government dictates is proper. In other words such laws would give government employees the power to establish hiring policies and wage scales and take it away from the business owner. These laws would also provide for making the employer a criminal and punishing him with a jail sentence or a fine if he selected his employees or paid wages other than as those in government direct.
Are such laws just? Do they protect rights or destroy them? It is obvious that they restrict the employers right to select his own employees and pay them according to merit. But what is the effect upon the rights of the workers whether they belong to the majority group or the minority? Perhaps an illustration will help us visualize the effect more clearly.
Let us assume that an employer has been prosecuted under an antidiscrimination law and found guilty of having hired a disproportionate number of white males in his factory. In addition to being fined or sent to jail, let us also assume that the court or administrative agency which tried the case ordered him to discharge some of his employees so that he can make room for more females or members of a minority race. Will someone explain the justice of this order to the discharged employees who, when they ask for an explanation are told that it is not because they have failed to do their work properly but because they are white and male? Can someone convince a group of white males seeking work at this factory that they are not being discriminated against on the basis of both race and sex?
Anti-discrimination laws do not prevent discrimination, they compel discrimination. They do not protect the rights of either the employer or the employee but on the other hand destroy the rights of both by transferring control over jobs to government. There is no such thing as group justice. There is only individual justice. Rights and duties, punishments and rewards can be dispensed only according to individual merit and not at all according to membership or [p. 167] non-membership in any particular group. The idea of group justice is a mirage or an illusion because justice cannot be administered to groups. It is nothing but a clumsy fraud designed to increase the power of government at the expense of human rights.
Is it not apparent that it is impossible for government to create rights in one person or group without destroying the rights of another? When it gives special privileges to one it must deny them to someone else. This result is unavoidable because when government creates a right in one person, it must at the same time create a duty in someone else. A right is without any substance unless there is someone against whom it can be enforced. But the one against whom it is enforced is saddled with a duty he did not formerly owe. The law compels him to do something or refrain from doing something and punishes him if he refuses. But you cannot compel a person against his will, nor can you punish him, without taking from him either his right to life, his right to liberty or his right to property. Thus the law has destroyed his rights in attempting to create rights in someone else. Under the anti-discrimination law described above, both the rights of the employer and also the rights of the majority were destroyed by attempting to create rights in the minority.
We have undertaken to demonstrate that administrative laws do not have the effect of either punishing crime nor protecting rights. What then is their effect? Like all other laws, they use force and the threat of force on humans. But force cannot be used on humans without moral consequences and therefore to appraise the total effect of these laws we must examine these moral consequences along with any others. For this purpose let us divide administrative laws into these three categories:
(1) Licensing laws
(2) Regulatory laws, and
(3) Welfare state laws
We will then test the moral consequences of each by observing the effect of doing outside of government that which such laws direct be done within its framework. [p. 168]
Assume that some non-governmental group engaged in a particular trade or profession undertook to enforce their own licensing law by threatening to punish anyone who competed against them without first complying with a list of costly and time-consuming requirements similar to those demanded by government enforced licensing laws. Assume further that they actually do physically punish those who compete without their prior permission.
This crude attempt to establish a monopoly would be branded as racketeering, gangsterism and extortion (And it should be.). To forcibly restrain competition and punish a person for no other reason than that he had tried to make an honest living shocks the conscience. Every moral person will agree that this group has committed an evil act for which they should be punished under the criminal laws. But such a use of force should be equally offensive when government employs it because the consequences are much the same. In both instances a monopoly is created, innocent people are threatened and punished and the public is denied their freedom to patronize whom they please.
To illustrate the effect of regulatory laws let us assume that some private group interested in bettering the working conditions of employees were to use violence and the threat thereof to compel employers to raise wages. Let us also assume that, not being satisfied with the working conditions in factories and being critical of how the owners are operating their businesses otherwise, they use violence to impose their own ideas of management. To take over and regulate the affairs of private owners in this manner is not only a denial of the right of private property but is a form of slavery condemned by the laws of every state. But is there any essential difference when government does the same thing?
To test the morality of welfare-state laws we will assume that some private charitable organization such as the Red Cross, the Salvation Army or some church were to undertake to help the poor by using violence to collect all of the contributions they considered necessary for this purpose. Even though their motives may be noble, [p. 169] this would be characterized and punished as robbery or plunder. Like all other administrative laws, welfare-state laws violate the same rules of moral behavior which governments are organized to force the people to obey.
If, as has been concluded, the effect of enforcing administrative laws is to commit crime rather than punish it, to destroy rights rather than to protect them and to violate the rules of private morality rather than enforce them, why are they favored by so many people?
Unquestionably the failure to understand the nature and effect of these laws would explain why some support them who otherwise would not. A second reason closely related to the first is the assumption made by many that: ANYTHING WHICH IS LEGAL IS MORAL, and IF IT IS THE LAW IT IS RIGHT. While it is most desirable that people respect and obey the laws insofar as they are worthy of respect, if we close our eyes to the possibility that laws can be, and ofttimes are, evil and that men in government are as likely to be as wicked and subject to error as others, we suffer from one of the most dangerous delusions possible.
But aside from the fact that many accept administrative laws through blindness or folly, there are others who favor them for reasons which are plainly dishonest. It is obvious why members of a licensed profession, trade or business would, for selfish reasons favor government-enforced monopolies in their field. When competition is thus restricted and the public is compelled to patronize them or go without, they can obtain more business and charge higher prices than would be possible in a free market.
It is equally apparent why indolent and covetous people on welfare would vote for laws which compel others to support them and why greedy employees would support laws forcing their employer to pay higher wages and provide more benefits than he would do if the government allowed him his freedom to contract.
With respect to regulatory laws, no one benefits financially from these except possibly the bureaucrats who administer them and who would lose their jobs if they were repealed. In fact such laws not [p. 170] only deny the people freedom to conduct their own business and private affairs, but increase the tax burden enormously. We must therefore find reasons for the support of these laws other than in greed and covetousness. A partial explanation might be the almost universal disposition to abuse authority. When the mass of the people have the reins of government placed in their hands and nothing to restrain them but their consciences, they are apt to yield to that very prevalent weakness of the human race to exercise unrighteous dominion.
But there is still another explanation for the general acceptance of administrative laws which, while it might include and be an outgrowth of all of the factors mentioned above, is so important that it deserves special attention. This is the deeply imbedded and widespread fear of the free enterprise system on the one hand and an equally widespread and deeply held faith in, and worship of, the state on the other. The belief seems to be quite general that if private enterprise were left free, the wealth of the nation would soon be concentrated in a few hands to the injury of the masses. There is a fear amounting almost to a phobia, that without government intervention, giant monopolies would arise and use their economic power to enslave the people. It is also assumed by many that given economic freedom, the rich would get richer and the poor would get poorer with the latter eventually starving. To prevent such catastrophes the people turn to the state and invest it with power to control the capitalists and take from the haves and give to the have nots. Are these fears and these assumptions justified?
Inasmuch as the greatest fear of an unregulated free enterprise system seems to be that it would permit a small group of greedy and heartless capitalists to acquire ownership and control over certain essential goods and products, let us postulate a situation wherein one person does acquire a large share of some essential form of wealth. Then let us observe whether he could use his monopolistic powers to injure society. [p. 171]
It is probably true that the only type of property without which men cannot survive is land. If one has ownership and control over land, he may raise plants and animals for food and clothing. He can mine ores for his machinery, extract gas, coal and oil for his energy needs, harvest trees for his buildings and provide himself with all other things necessary to sustain and enjoy life. He has a spot on earth whereon he may construct a home and rear a family, build a church and worship God, or erect a school and gain an education. In short, the ownership of land by the people makes them independent and enables them to achieve their purposes regardless of how much of the other forms of wealth are owned by the few.
On the other hand if the people are denied ownership of land and cannot obtain what it produces, they are indeed at the mercy of those who do own it. This being so, let us assume that a single individual is the owner of a large portion of the land area in the nation. To give our illustration realism and to get the reader deeply involved in the problem, let us assume that all of the land in the United States now owned by government except that needed by it for national defense and the exercise of its police powers, were immediately transferred to you. Reputedly this will amount to approximately one-third of the total land mass. Let us also assume that even though you are not a greedy, heartless capitalist, nonetheless you will attempt to strengthen your monopolistic position by acquiring more land and will also try to make huge profits at public expense. In other words let us assume that you set out deliberately to do that which the unregulated capitalist is generally charged with doing abuse economic power to harm the people.
Probably the first problem which will come to your attention as a large land owner is that of taxes. Whereas the property did not help bear the land tax burden while owned by government, to the great delight and benefit of other taxpayers, you must now share their load. Your share may amount to billions of dollars annually. You must immediately face the problem of raising that money by the end of the tax year and each year thereafter.
Another financial problem of perhaps even greater importance is [p. 172] that of managing your vast domain. While you might be able to supervise a few hundred acres, you must hire literally thousands of competent employees to oversee the other millions of acres and protect them against squatters, campers, hunters and other acquisitive souls. You must be prepared to fight fires and diseases in your forests; maintain dams, canals, fences and bridges; establish offices, communication and transportation facilities and do a thousand other things which the ownership of this much land will surely require. The tax burden may seem small indeed when compared with the payroll and other expenses you must meet.
The sheer enormity of your problems may tempt you to sell much of what you own but remember that you are a monopolist at heart and your desire is to increase, not decrease your holdings. And even though you did sell some of your land to private owners, they would face the same problems you are contending with. You might ask yourself how government, the previous owner was able to handle an acreage of this size. How did it meet all of these ownership expenses? And then you recall that in the first place it did not pay taxes and in the second place it could use its taxing powers to compel the public to foot its bills.
It occurs to you that there is one and only one way you can meet all of your ownership expenses and retain your lands and that is by doing what government did get the public to pay the bill. Only your problem is not so simple. While it could compel the people to give it money, you must induce them to do so voluntarily by offering them goods and services which they are both willing and able to purchase. In other words you must make your land productive. You must put it to beneficial use.
You consider the possibilities. Certainly some of it can be farmed. There should be much mineral wealth under it along with huge deposits of coal, gas and oil. The millions of acres of timber land will enable you to enter the lumber business in a big way. The very extensive grazing lands will allow you to go into sheep and cattle ranching and to lease land to private ranchers. There are enormous [p. 173] opportunities to establish recreation facilities and resorts and make profits in that area. You can even become a giant land developer, a home builder and the owner of great shopping centers. The possibilities seem almost endless.
But if you thought you had money problems as a land owner, contemplate the investment capital which will be required to enter even one of the above business ventures not to speak of all of the others. Nonetheless you realize that no matter how much money is required to enter business you must raise it. If you do not there will be no income. And if there is no income it will be impossible to pay your taxes and defray the other enormous expenses which must be borne.
As you contemplate which of the many business opportunities you should select and ponder the amount of capital and management ability which will be required for each, you decide that you must proceed with caution and commence only one business at a time. Just one of those huge enterprises will tax your skill, ingenuity, and management ability to the utmost.
It is at this point in your deliberations that you come face to face with the iron law of stewardships. This law decrees that the private owner of property must use it or lose it. He must produce or perish. He must utilize it for the benefit of the public or surrender it to someone who will. If he lets it lie idle, it will be a burden rather than a benefit. It will not even bear its ownership expenses, much less produce a profit.
There is no escape from this implacable law. It imposes its demands upon every private owner regardless of the size of his holdings. The large landowner as well as the small must either put his property to productive use, dispose of it, or make enough on other operations to cover the loss. No smart businessman will retain idle assets for any length of time. He cannot afford to. They will destroy him if he attempts it. And so you have no alternative other than to immediately put all of your land to productive use or suffer the losses which this unused property always causes.
You ask yourself how government was able to survive the [p. 174] demands of this inexorable law. Upon reflection you see that the law of stewardships does not apply to government. The state does not need to put a single acre to productive use. It does not need to produce one dollar of income or satisfy one customer. It can use its taxing power to finance its losses.
Let us assume that in spite of the tremendous problems which had to be faced and overcome, you were able to establish profitable business operations on all of your land which was susceptible of use.
The reader will have recognized long before now how utterly preposterous it is to assume that he or any other person could manage and control a business operation of this magnitude. The severe limitations each of us have with respect to time, energy and ability makes it inconceivable that this much wealth could be efficiently controlled even by several hundred individuals much less one. But because huge concentrations of wealth in a few hands is what people seem to fear, we have assumed it is possible.
It is so often forgotten by those who fear the free enterprise system that the severe physical limitations each of us has requires that when we accomplish tasks of any magnitude we must employ the services of others. To do this we must pay them what they think they are worth. As soon as they get to that point where they believe they can do better by acquiring their own business or by taking a job with another employer, they will leave. And this is constantly happening.
Every employer finds himself continually in danger of being crushed between the conflicting demands of the employees on the one hand and the buying public on the other. Employees are constantly demanding more pay for the same or less work which forces a raise in selling prices to cover the increased labor costs. On the other hand consumers demand more and better products for less money which compels a lowering of the selling price. Of course the employee and the consumer are very often the same person but whether he is making demands in the one capacity or the other, you must satisfy him or lose him. The overwhelming majority of enterprisers who enter business go under within a relatively short period [p. 175] because they are unable to do this.
But you with your millions of employees and consumers are a very remarkable person. You have been able to attract employees away from other employers with your high wages and at the same time you have been able to win over his consumers with your low selling prices and high quality products. You now have a stranglehold on the production of many of the necessities of life. Can you use your monopoly position to harm the public? Can you raise prices to great heights, gouge the public and make exorbitant profits? You decide to try it. What happens?
According to economic law, with every raise in prices there will be a corresponding decrease in sales. Some of the lower income people you had been serving will be compelled to do without. Others will consume less.
The money formerly being spent on your products and services will not go as far and therefore there will not be as much consumed. But if the public cannot or will not buy, you cannot sell. And if you cannot sell you cannot produce. And if you cannot produce, some of your production facilities must lie idle. And when this occurs they become a burden to you rather than a benefit. You must dispose of them or bear the losses which idle facilities always cause. If you sell them, then the buyer will start using them to serve the public and you will lose your monopoly. Thus your attempt to gouge the public is self-defeating. It cannot be accomplished. The iron law of stewardships operates to prevent you from profiting from your own greed.
And let us observe that the law of stewardships which compels the owner of land to put it to productive use or lose it, operates with even greater rigor with respect to the ownership of depreciable property or property which may become obsolete. The owner of such facilities not only must pay taxes and bear the other ownership expenses incurred by land owners, but he must face the fact that if he allows it to lie idle, the natural agents of decay or the invention of better facilities will likely render it valueless after a relatively short period of time. [p. 176]
Let us assume that in spite of the operation of the law of stewardships you are still able to maintain your prices at a level high enough to produce what might be termed exorbitant profits. Would this harm the public?
Before attempting to answer this question, let us note that there are three main uses to which you can put your profits: (1) Consume them by purchasing consumer goods, (2) Bury them, or (3) Reinvest them. Since, as a wealthy person you are already consuming all that you desire, you will not use profits for this purpose. As a shrewd businessman you realize that only a fool will bury his profits. Like other kinds of property, profits must be put to productive use if they are going to benefit you. This means that your profits will be reinvested. This means that you increase your production facilities so that you may produce more goods and services.
Who is benefitted by this action? The consumers of course. The more you produce, the more you must sell. The more you must sell, the lower must be your prices. The lower your prices the greater the number of people in the lower and middle income brackets who will enjoy your products and services. If you once made large profits by charging your customers high prices, you must now benefit those customers by charging them lower prices which the reinvestment of profits and increased production will bring about.
The same reasons which compel the conclusion that private ownership is to be preferred over ownership by the state also compel the conclusion that private management is to be preferred over state management. To the exact extent that government controls a business the owner does not and to this same extent he is prevented from serving the public as he would do in the absence of such control. As we have observed, the great object of the private business owner is to satisfy the public on their own terms. It is to produce goods and [p. 177] services which the people want and can afford. It is to make profits which can be reinvested to produce even more for public consumption.
Administrative laws interfere with the attainment of this purpose and the operation of the law of stewardships is defeated to this same extent. Not only does this interference restrict production, but it increases the prices the public must pay by: (1) Increasing productions costs and (2) Raising taxes. Both of these costs must be passed on to the buying public in the form of higher prices.
The only monopoly people need fear is that which is created by force, and the worst of all monopolies is that which is created or maintained by the force of government. That is the one organization which can use its ownership and control of property to make slaves and paupers of the people. That is the one owner which can sit on the nations wealth and allow it to lie idle.
In the socialist nation where the state owns the land, the people are literally in bondage to their own government. It was only to be expected that the first of the Ten points of the Communist Manifesto which Marx and Engels suggested be adopted by governments to bring about socialism was:
Abolition of property in land and application of all rents of land to public purposes.
But the abolition of property in land can be achieved not only by outright confiscation by government but also by the adoption of a set of administrative laws which transfer control over land to government. Such laws can, if numerous enough, prevent the operation of the law of stewardships as effectively as state ownership.
On the other hand where the free enterprise system is allowed to operate without regulation, the rich do not get richer while the poor get poorer, but they all become rich together. The rich can neither gain nor retain large amounts of wealth except by serving the public and creating numerous jobs. The same inexorable law of stewardships which prevents a person from owning extensive wealth without [p. 178] making it productive, thus sharing it with many consumers, prevents him from making it productive without sharing it with many employees. And in each case he must share with them on their own terms.
It is strange indeed that the private capitalist which the people should trust, they stand in fear of, while the government owner and regulator which they should fear, they place their trust in.
Some people think it is a dreadful sin for a people like the Latter-day Saints to claim that they believe with all their souls that the world would be better if only the laws of God could be enforced in this world. Some people think that if Gods authority, if Gods law, if Gods righteousness were to be enforced among the children of men that would debase and degrade them. We do not look at this in this way. We believe that Gods will is to exalt men; that the liberty that comes through obedience to the Gospel of Jesus Christ is the greatest measure of liberty that can come to man. There is no liberty that men enjoy or pretend to enjoy in the world that is not founded in the will and in the law of God and that does not have truth for its underlying principle and foundation. It is error that makes bondsmen. It is untruth that degrades mankind. It is error and the lack of knowledge of Gods laws and Gods will that leaves men in the world on a par with the brute creation; for they have no higher instincts, no higher principle, no higher incentive, no higher aspiration than the brute world if they have not some inspiration that comes from a higher source than man himself.
I believe in Gods law, I believe that it is His right to rule in the world. I believe that no man has or should have any valid objection in his mind to the government of God, and the rule of Jesus Christ, in the earth. (President Joseph F. Smith, Conf Rep. Apr. 1904, pp. 3-4)
The Kingdom of God, is the government of God, on the earth, or in the heavens ... If the world be the Lords, He certainly has a right to govern it; for we have already stated that man has no authority, except that which is delegated to him. He possesses a moral power to govern his actions, subject at all times to the law of God; but never is authorized to act independent of God; much less is he authorized to rule on the earth without the call and direction of the Lord; therefore, any rule or dominion over the earth, which is not given by the Lord is surreptitiously obtained, and never will be sanctioned by him. (President John Taylor, Government of God, pp. 1, 58)
The kingdom of God is an order of government established by divine authority. It is the only legal government that can exist in any part of the universe. All other governments are illegal and unauthorized. God having made all beings and worlds, has the supreme right to govern them by his own laws, and by officers of his own appointment. Any people attempting to govern themselves by laws of their own making, and by officers of their own appointment, are in direct rebellion against the kingdom of God. (President Joseph Fielding Smith, Seek Ye Earnestly, p. 22, Deseret Book, 1970)
Next to being one in worshipping God, there is nothing in this world upon which this Church should be more united than upholding and defending the Constitution of the United States. (David O. McKay, Statements on Communism and The Constitution, Deseret Book Co., 1966, p. 6) [p. 179]
Brother Brigham took the stand, and he took the Bible, and laid it down; he took the Book of Mormon, and laid it down; and he took the Book of Doctrine and Covenants, and laid it down before him, and he said: There is the written word of God to us, concerning the work of God from the beginning of the world, almost, to our day. And now, said he, when compared with the living oracles those books are nothing to me; those books do not convey the word of God direct to us now, as do the words of the Prophet or a man bearing the Holy Priesthood in our day and generation. I would rather have the living oracles than all the writing in the books. That was course he pursued. When he was through, Brother Joseph said to the congregation: Brother Brigham has told you the word of the Lord, and he has told you the truth.
(President Wilford Woodruff, CR-10/97:18-9)
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