340 U.S. 474 (1951)2
Supreme Court of United States.
Argued November 6-7, 1950.
Decided February 26, 1951.
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT.5
 By special leave of Court, Frederick R. Livingston, pro hac vice, argued the cause for petitioner. With him on the brief was James S. Hays.6
 Mozart G. Ratner argued the cause for respondent. With him on the brief were Solicitor General Perlman, David P. Findling and Bernard Dunau.7
The essential issue raised by this case and its companion, Labor Board v. Pittsburgh Steamship Co., post, p. 498, is the effect of the Administrative Procedure Act and the legislation colloquially known as the Taft-Hartley Act on the duty of Courts of Appeals when called upon to review orders of the National Labor Relations Board.9
The Court of Appeals for the Second Circuit granted enforcement of an order directing, in the main, that petitioner reinstate with back pay an employee found to have been discharged because he gave testimony under the Wagner Act and cease and desist from discriminating against any employee who files charges or gives testimony under that Act. The court below, Judge Swan dissenting, decreed full enforcement of the order. 179 F. 2d 749. Because the views of that court regarding the effect of the new legislation on the relation between the Board and the Courts of Appeals in the enforcement of the Board's orders conflicted with those of the Court of Appeals for the Sixth Circuit we brought both cases here. 339 U. S. 951 and 339 U. S. 962. The clash of opinion obviously required settlement by this Court.10
Want of certainty in judicial review of Labor Board decisions partly reflects the intractability of any formula to furnish definiteness of content for all the impalpable factors involved in judicial review. But in part doubts as to the nature of the reviewing power and uncertainties in its application derive from history, and to that extent an elucidation of this history may clear them away.12
The Wagner Act provided: "The findings of the Board as to the facts, if supported by evidence, shall be conclusive." Act of July 5, 1935, § 10 (e), 49 Stat. 449, 454, 29 U. S. C. § 160 (e). This Court read "evidence" to mean "substantial evidence," Washington, V. & M. Coach Co. v. Labor Board, 301 U. S. 142, and we said that "[s]ubstantial evidence is more than a mere scintilla. It means such relevant evidence as a reasonable mind might accept as adequate to support a conclusion." Consolidated Edison Co. v. Labor Board, 305 U. S. 197, 229. Accordingly, it "must do more than create a suspicion of the existence of the fact to be established. . . . it must be enough to justify, if the trial were to a jury, a refusal to direct a verdict when the conclusion sought to be drawn from it is one of fact for the jury." Labor Board v. Columbian Enameling & Stamping Co., 306 U. S. 292, 300.13
The very smoothness of the "substantial evidence" formula as the standard for reviewing the evidentiary validity of the Board's findings established its currency. But the inevitably variant applications of the standard to conflicting evidence soon brought contrariety of views and in due course bred criticism. Even though the whole record may have been canvassed in order to determine whether the evidentiary foundation of a determination by the Board was "substantial," the phrasing of this Court's process of review readily lent itself to the notion  that it was enough that the evidence supporting the Board's result was "substantial" when considered by itself. It is fair to say that by imperceptible steps regard for the fact-finding function of the Board led to the assumption that the requirements of the Wagner Act were met when the reviewing court could find in the record evidence which, when viewed in isolation, substantiated the Board's findings. Compare Labor Board v. Waterman Steamship Corp., 309 U. S. 206; Labor Board v. Bradford Dyeing Assn., 310 U. S. 318; and see Labor Board v. Nevada Consolidated Copper Corp., 316 U. S. 105. This is not to say that every member of this Court was consciously guided by this view or that the Court ever explicitly avowed this practice as doctrine. What matters is that the belief justifiably arose that the Court had so construed the obligation to review.14
Criticism of so contracted a reviewing power reinforced dissatisfaction felt in various quarters with the Board's administration of the Wagner Act in the years preceding the war. The scheme of the Act was attacked as an inherently unfair fusion of the functions of prosecutor and judge. Accusations of partisan bias were not wanting. The "irresponsible admission and weighing of hearsay, opinion, and emotional speculation in place of factual evidence" was said to be a "serious menace." No doubt  some, perhaps even much, of the criticism was baseless and some surely was reckless. What is here relevant, however, is the climate of opinion thereby generated and its effect on Congress. Protests against "shocking injustices" and intimations of judicial "abdication" with which some courts granted enforcement of the Board's orders stimulated pressures for legislative relief from alleged administrative excesses.15
The strength of these pressures was reflected in the passage in 1940 of the Walter-Logan Bill. It was vetoed by President Roosevelt, partly because it imposed unduly rigid limitations on the administrative process, and partly because of the investigation into the actual operation of the administrative process then being conducted by an experienced committee appointed by the Attorney General. It is worth noting that despite its aim to tighten control over administrative determinations of fact, the Walter-Logan Bill contented itself with the conventional formula that an agency's decision could be set aside if "the findings of fact are not supported by substantial evidence."16
 The final report of the Attorney General's Committee was submitted in January, 1941. The majority concluded that "[d]issatisfaction with the existing standards as to the scope of judicial review derives largely from dissatisfaction with the fact-finding procedures now employed by the administrative bodies." Departure from the "substantial evidence" test, it thought, would either create unnecessary uncertainty or transfer to courts the responsibility for ascertaining and assaying matters the significance of which lies outside judicial competence. Accordingly, it recommended against legislation embodying a general scheme of judicial review.17
 Three members of the Committee registered a dissent. Their view was that the "present system or lack of system of judicial review" led to inconsistency and uncertainty. They reported that under a "prevalent" interpretation of the "substantial evidence" rule "if what is called `substantial evidence' is found anywhere in the record to support conclusions of fact, the courts are said to be obliged to sustain the decision without reference to how heavily the countervailing evidence may preponderate—unless indeed the stage of arbitrary decision is reached. Under this interpretation, the courts need to read only one side of the case and, if they find any evidence there, the administrative action is to be sustained and the record to the contrary is to be ignored." Their view led them to recommend that Congress enact principles of review applicable to all agencies not excepted by unique characteristics. One of these principles was expressed by the formula that judicial review could extend to "findings, inferences, or conclusions of fact unsupported, upon the whole record, by substantial evidence." So far as the  history of this movement for enlarged review reveals, the phrase "upon the whole record" makes its first appearance in this recommendation of the minority of the Attorney General's Committee. This evidence of the close relationship between the phrase and the criticism out of which it arose is important, for the substance of this formula for judicial review found its way into the statute books when Congress with unquestioning—we might even say uncritical—unanimity enacted the Administrative Procedure Act.18
 One is tempted to say "uncritical" because the legislative history of that Act hardly speaks with that clarity of purpose which Congress supposedly furnishes courts in order to enable them to enforce its true will. On the one hand, the sponsors of the legislation indicated that they were reaffirming the prevailing "substantial evidence" test. But with equal clarity they expressed disapproval of the manner in which the courts were applying  their own standard. The committee reports of both houses refer to the practice of agencies to rely upon "suspicion, surmise, implications, or plainly incredible evidence," and indicate that courts are to exact higher standards "in the exercise of their independent judgment" and on consideration of "the whole record."19
Similar dissatisfaction with too restricted application of the "substantial evidence" test is reflected in the legislative history of the Taft-Hartley Act. The bill as reported to the House provided that the "findings of the Board as to the facts shall be conclusive unless it is made to appear to the satisfaction of the court either (1) that the findings of fact are against the manifest weight of the  evidence, or (2) that the findings of fact are not supported by substantial evidence." The bill left the House with this provision. Early committee prints in the Senate provided for review by "weight of the evidence" or "clearly erroneous" standards. But, as the Senate Committee Report relates, "it was finally decided to conform the statute to the corresponding section of the Administrative Procedure Act where the substantial evidence test prevails. In order to clarify any ambiguity in that statute, however, the committee inserted the words `questions of fact, if supported by substantial evidence on the record considered as a whole . . . .' "20
This phraseology was adopted by the Senate. The House conferees agreed. They reported to the House: "It is believed that the provisions of the conference agreement  relating to the courts' reviewing power will be adequate to preclude such decisions as those in N. L. R. B. v. Nevada Consol. Copper Corp. (316 U. S. 105) and in the Wilson, Columbia Products, Union Pacific Stages, Hearst, Republic Aviation, and Le Tourneau, etc. cases, supra, without unduly burdening the courts." The Senate version became the law.21
 It is fair to say that in all this Congress expressed a mood. And it expressed its mood not merely by oratory but by legislation. As legislation that mood must be respected, even though it can only serve as a standard for judgment and not as a body of rigid rules assuring sameness of application. Enforcement of such broad standards implies subtlety of mind and solidity of judgment. But it is not for us to question that Congress may assume such qualities in the federal judiciary.22
From the legislative story we have summarized, two concrete conclusions do emerge. One is the identity of aim of the Administrative Procedure Act and the Taft-Hartley Act regarding the proof with which the Labor Board must support a decision. The other is that now Congress has left no room for doubt as to the kind of scrutiny which a Court of Appeals must give the record before the Board to satisfy itself that the Board's order rests on adequate proof.23
It would be mischievous word-playing to find that the scope of review under the Taft-Hartley Act is any different from that under the Administrative Procedure Act. The Senate Committee which reported the review clause of the Taft-Hartley Act expressly indicated that the two standards were to conform in this regard, and the wording of the two Acts is for purposes of judicial administration identical. And so we hold that the standard of proof specifically required of the Labor Board by the Taft-Hartley Act is the same as that to be exacted by courts reviewing every administrative action subject to the Administrative Procedure Act.24
Whether or not it was ever permissible for courts to determine the substantiality of evidence supporting a Labor Board decision merely on the basis of evidence which in and of itself justified it, without taking into account contradictory evidence or evidence from which conflicting inferences could be drawn, the new legislation  definitively precludes such a theory of review and bars its practice. The substantiality of evidence must take into account whatever in the record fairly detracts from its weight. This is clearly the significance of the requirement in both statutes that courts consider the whole record. Committee reports and the adoption in the Administrative Procedure Act of the minority views of the Attorney General's Committee demonstrate that to enjoin such a duty on the reviewing court was one of the important purposes of the movement which eventuated in that enactment.25
To be sure, the requirement for canvassing "the whole record" in order to ascertain substantiality does not furnish a calculus of value by which a reviewing court can assess the evidence. Nor was it intended to negative the function of the Labor Board as one of those agencies presumably equipped or informed by experience to deal with a specialized field of knowledge, whose findings within that field carry the authority of an expertness which courts do not possess and therefore must respect. Nor does it mean that even as to matters not requiring expertise a court may displace the Board's choice between two fairly conflicting views, even though the court would justifiably have made a different choice had the matter been before it de novo. Congress has merely made it clear that a reviewing court is not barred from setting aside a Board decision when it cannot conscientiously find that the evidence supporting that decision is substantial, when viewed in the light that the record in its entirety furnishes, including the body of evidence opposed to the Board's view.26
There remains, then, the question whether enactment of these two statutes has altered the scope of review other than to require that substantiality be determined in the light of all that the record relevantly presents. A formula for judicial review of administrative action may afford grounds for certitude but cannot assure certainty of application.  Some scope for judicial discretion in applying the formula can be avoided only by falsifying the actual process of judging or by using the formula as an instrument of futile casuistry. It cannot be too often repeated that judges are not automata. The ultimate reliance for the fair operation of any standard is a judiciary of high competence and character and the constant play of an informed professional critique upon its work.27
Since the precise way in which courts interfere with agency findings cannot be imprisoned within any form of words, new formulas attempting to rephrase the old are not likely to be more helpful than the old. There are no talismanic words that can avoid the process of judgment. The difficulty is that we cannot escape, in relation to this problem, the use of undefined defining terms.28
Whatever changes were made by the Administrative Procedure and Taft-Hartley Acts are clearly within this area where precise definition is impossible. Retention of the familiar "substantial evidence" terminology indicates that no drastic reversal of attitude was intended.29
But a standard leaving an unavoidable margin for individual judgment does not leave the judicial judgment at large even though the phrasing of the standard does not wholly fence it in. The legislative history of these Acts demonstrates a purpose to impose on courts a responsibility which has not always been recognized. Of course it is a statute and not a committee report which we are interpreting. But the fair interpretation of a statute is often "the art of proliferating a purpose," Brooklyn National Corp. v. Commissioner, 157 F. 2d 450, 451, revealed more by the demonstrable forces that produced it than by its precise phrasing. The adoption in these statutes of the judicially-constructed "substantial evidence" test was a response to pressures for stricter and more uniform practice, not a reflection of approval of all existing practices.  To find the change so elusive that it cannot be precisely defined does not mean it may be ignored. We should fail in our duty to effectuate the will of Congress if we denied recognition to expressed Congressional disapproval of the finality accorded to Labor Board findings by some decisions of this and lower courts, or even of the atmosphere which may have favored those decisions.30
We conclude, therefore, that the Administrative Procedure Act and the Taft-Hartley Act direct that courts must now assume more responsibility for the reasonableness and fairness of Labor Board decisions than some courts have shown in the past. Reviewing courts must be influenced by a feeling that they are not to abdicate the conventional judicial function. Congress has imposed on them responsibility for assuring that the Board keeps within reasonable grounds. That responsibility is not less real because it is limited to enforcing the requirement that evidence appear substantial when viewed, on the record as a whole, by courts invested with the authority and enjoying the prestige of the Courts of Appeals. The Board's findings are entitled to respect; but they must nonetheless be set aside when the record before a Court of Appeals clearly precludes the Board's decision from being justified by a fair estimate of the worth of the testimony of witnesses or its informed judgment on matters within its special competence or both.31
From this it follows that enactment of these statutes does not require every Court of Appeals to alter its practice. Some—perhaps a majority—have always applied the attitude reflected in this legislation. To explore whether a particular court should or should not alter its practice would only divert attention from the application of the standard now prescribed to a futile inquiry into the nature of the test formerly used by a particular court.32
Our power to review the correctness of application of the present standard ought seldom to be called into action.  Whether on the record as a whole there is substantial evidence to support agency findings is a question which Congress has placed in the keeping of the Courts of Appeals. This Court will intervene only in what ought to be the rare instance when the standard appears to have been misapprehended or grossly misapplied.33
Our disagreement with the view of the court below that the scope of review of Labor Board decisions is unaltered by recent legislation does not of itself, as we have noted, require reversal of its decision. The court may have applied a standard of review which satisfies the present Congressional requirement.35
The decision of the Court of Appeals is assailed on two grounds. It is said (1) that the court erred in holding that it was barred from taking into account the report of the examiner on questions of fact insofar as that report was rejected by the Board, and (2) that the Board's order was not supported by substantial evidence on the record considered as a whole, even apart from the validity of the court's refusal to consider the rejected portions of the examiner's report.36
The latter contention is easily met. It is true that two of the earlier decisions of the court below were among those disapproved by Congress. But this disapproval, we have seen, may well have been caused by unintended intimations of judicial phrasing. And in any event, it is clear from the court's opinion in this case that it in fact did consider the "record as a whole," and did not deem itself merely the judicial echo of the Board's conclusion. The testimony of the company's witnesses was inconsistent, and there was clear evidence that the complaining  employee had been discharged by an officer who was at one time influenced against him because of his appearance at the Board hearing. On such a record we could not say that it would be error to grant enforcement.37
The first contention, however, raises serious questions to which we now turn.38
The Court of Appeals deemed itself bound by the Board's rejection of the examiner's findings because the court considered these findings not "as unassailable as a master's." 179 F. 2d at 752. They are not. Section 10 (c) of the Labor Management Relations Act provides that "if upon the preponderance of the testimony taken the Board shall be of the opinion that any person named in the complaint has engaged in or is engaging in any such unfair labor practice, then the Board shall state its findings of fact . . . ." 61 Stat. 147, 29 U. S. C. (Supp. III) § 160 (c). The responsibility for decision thus placed on the Board is wholly inconsistent with the notion that it has power to reverse an examiner's findings only when they are "clearly erroneous." Such a limitation would make so drastic a departure from prior administrative practice that explicitness would be required.40
The Court of Appeals concluded from this premise "that, although the Board would be wrong in totally disregarding his findings, it is practically impossible for a  court, upon review of those findings which the Board itself substitutes, to consider the Board's reversal as a factor in the court's own decision. This we say, because we cannot find any middle ground between doing that and treating such a reversal as error, whenever it would be such, if done by a judge to a master in equity." 179 F. 2d at 753. Much as we respect the logical acumen of the Chief Judge of the Court of Appeals, we do not find ourselves pinioned between the horns of his dilemma.41
We are aware that to give the examiner's findings less finality than a master's and yet entitle them to consideration in striking the account, is to introduce another and an unruly factor into the judgmatical process of review. But we ought not to fashion an exclusionary rule merely to reduce the number of imponderables to be considered by reviewing courts.42
The Taft-Hartley Act provides that "The findings of the Board with respect to questions of fact if supported by substantial evidence on the record considered as a whole shall be conclusive." 61 Stat. 148, 29 U. S. C. (Supp. III) § 160 (e). Surely an examiner's report is as much a part of the record as the complaint or the testimony. According to the Administrative Procedure Act, "All decisions (including initial, recommended, or tentative decisions) shall become a part of the record . . . ." § 8 (b), 60 Stat. 242, 5 U. S. C. § 1007 (b). We found that this Act's provision for judicial review has the same meaning as that in the Taft-Hartley Act. The similarity of the two statutes in language and purpose also requires that the definition of "record" found in the Administrative Procedure Act be construed to be applicable as well to the term "record" as used in the Taft-Hartley Act.43
It is therefore difficult to escape the conclusion that the plain language of the statutes directs a reviewing court to determine the substantiality of evidence on the record including the examiner's report. The conclusion  is confirmed by the indications in the legislative history that enhancement of the status and function of the trial examiner was one of the important purposes of the movement for administrative reform.44
This aim was set forth by the Attorney General's Committee on Administrative Procedure:45
"In general, the relationship upon appeal between the hearing commissioner and the agency ought to a considerable extent to be that of trial court to appellate court. Conclusions, interpretations, law, and policy should, of course, be open to full review. On the other hand, on matters which the hearing commissioner, having heard the evidence and seen the witnesses, is best qualified to decide, the agency should be reluctant to disturb his findings unless error is clearly shown."
Apparently it was the Committee's opinion that these recommendations should not be obligatory. For the bill which accompanied the Final Report required only that hearing officers make an initial decision which would become final in the absence of further agency action, and that agencies which differed on the facts from their examiners give reasons and record citations supporting their conclusion. This proposal was further moderated by the Administrative Procedure Act. It permits agencies to use examiners to record testimony but not to evaluate it, and contains the rather obscure provision that an agency which reviews an examiner's report has "all the powers which it would have in making the initial decision."47
 But this refusal to make mandatory the recommendations of the Attorney General's Committee should not be construed as a repudiation of them. Nothing in the statutes suggests that the Labor Board should not be influenced by the examiner's opportunity to observe the witnesses he hears and sees and the Board does not. Nothing suggests that reviewing courts should not give to the examiner's report such probative force as it intrinsically commands. To the contrary, § 11 of the Administrative Procedure Act contains detailed provisions designed to maintain high standards of independence and competence in examiners. Section 10 (c) of the Labor Management Relations Act requires that examiners "shall issue . . . a proposed report, together with a recommended order." Both statutes thus evince a purpose to increase the importance of the role of examiners in the administrative process. High standards of public administration counsel that we attribute to the Labor Board's examiners both due regard for the responsibility which Congress imposes on them and the competence to discharge it.48
 The committee reports also make it clear that the sponsors of the legislation thought the statutes gave significance to the findings of examiners. Thus, the Senate Committee responsible for the Administrative Procedure Act explained in its report that examiners' decisions "would be of consequence, for example, to the extent that material facts in any case depend on the determination of credibility of witnesses as shown by their demeanor or conduct at the hearing." The House Report reflects the same attitude; and the Senate Committee Report on the Taft-Hartley Act likewise indicates regard for the responsibility devolving on the examiner.49
We do not require that the examiner's findings be given more weight than in reason and in the light of judicial experience they deserve. The "substantial evidence" standard is not modified in any way when the Board and its examiner disagree. We intend only to recognize that evidence supporting a conclusion may be less substantial when an impartial, experienced examiner who has observed the witnesses and lived with the case has drawn conclusions different from the Board's than when he has reached the same conclusion. The findings of the examiner are to be considered along with the consistency and inherent probability of testimony. The significance of his report, of course, depends largely on the importance of credibility in the particular case. To give it this significance does not seem to us materially more difficult  than to heed the other factors which in sum determine whether evidence is "substantial."50
The direction in which the law moves is often a guide for decision of particular cases, and here it serves to confirm our conclusion. However halting its progress, the trend in litigation is toward a rational inquiry into truth, in which the tribunal considers everything "logically probative of some matter requiring to be proved." Thayer, A Preliminary Treatise on Evidence, 530; Funk v. United States, 290 U. S. 371. This Court has refused to accept assumptions of fact which are demonstrably false, United States v. Provident Trust Co., 291 U. S. 272, even when agreed to by the parties, Swift & Co. v. Hocking Valley R. Co., 243 U. S. 281. Machinery for discovery of evidence has been strengthened; the boundaries of judicial notice have been slowly but perceptibly enlarged. It would reverse this process for courts to deny examiners' findings the probative force they would have in the conduct of affairs outside a courtroom.51
We therefore remand the cause to the Court of Appeals. On reconsideration of the record it should accord the findings of the trial examiner the relevance that they reasonably command in answering the comprehensive question whether the evidence supporting the Board's order is substantial. But the court need not limit its reexamination of the case to the effect of that report on its decision. We leave it free to grant or deny enforcement as it thinks the principles expressed in this opinion dictate.52
Judgment vacated and cause remanded.53
MR. JUSTICE BLACK and MR. JUSTICE DOUGLAS concur with parts I and II of this opinion but as to part III agree with the opinion of the court below, 179 F. 2d 749, 753.54
 Labor Board v. Pittsburgh Steamship Co., 180 F. 2d 731, affirmed, post, p. 498. The Courts of Appeals of five circuits have agreed with the Court of Appeals for the Second Circuit that no material change was made in the reviewing power. Eastern Coal Corp. v. Labor Board, 176 F. 2d 131, 134-136 (C. A. 4th Cir.); Labor Board v. La Salle Steel Co., 178 F. 2d 829, 833-834 (C. A. 7th Cir.); Labor Board v. Minnesota Mining & Mfg. Co., 179 F. 2d 323, 325-326 (C. A. 8th Cir.); Labor Board v. Continental Oil Co., 179 F. 2d 552, 555 (C. A. 10th Cir.); Labor Board v. Booker, 180 F. 2d 727, 729 (C. A. 5th Cir.); but see Labor Board v. Caroline Mills, Inc., 167 F. 2d 212, 213 (C. A. 5th Cir.).55
 See the testimony of Dean Stason before the Subcommittee of the Senate Committee on the Judiciary in 1941. Hearings on S. 674, 77th Cong., 1st Sess. 1355-1360.56
 See, for example, the remarks of Laird Bell, then Chairman of the Committee on Administrative Law of the Chicago Bar Association, writing in 1940 in the American Bar Association Journal. 26 A. B. A. J. 552.57
 See Gall, The Current Labor Problem: The View of Industry, 27 Iowa L. Rev. 381, 382.58
 This charge was made by the majority of the Special Committee of the House appointed in 1939 to investigate the National Labor Relations Board. H. R. Rep. No. 1902, 76th Cong., 3d Sess. 76.59
 Professor Gellhorn and Mr. Linfield reached the conclusion in 1939 after an extended investigation that "the denunciations find no support in fact." Gellhorn and Linfield, Politics and Labor Relations, 39 Col. L. Rev. 339, 394. See also Millis and Brown, From the Wagner Act to Taft-Hartley, 66-75.60
 Wilson & Co. v. Labor Board, 126 F. 2d 114, 117.61
 In Labor Board v. Standard Oil Co., 138 F. 2d 885, 887, Judge Learned Hand said, "We understand the law to be that the decision of the Board upon that issue is for all practical purposes not open to us at all; certainly not after we have once decided that there was `substantial' evidence that the `disestablished' union was immediately preceded by a period during which there was a `dominated' union. . . .62
"[W]e recognize how momentous may be such an abdication of any power of review . . . ."63
 86 Cong. Rec. 13942-13943, reprinted as H. R. Doc. No. 986, 76th Cong., 3d Sess.64
 S. 915, H. R. 6324, 76th Cong., 1st Sess., § 5 (a).65
 Final Report, 92.66
 Referring to proposals to enlarge the scope of review to permit inquiry whether the findings are supported by the weight of the evidence, the majority said:67
"Assuming that such a change may be desirable with respect to special administrative determinations, there is serious objection to its adoption for general application.
"In the first place there is the question of how much change, if any, the amendment would produce. The respect that courts have for the judgments of specialized tribunals which have carefully considered the problems and the evidence cannot be legislated away. The line between `substantial evidence' and `weight of evidence' is not easily drawn—particularly when the court is confined to a written record, has a limited amount of time, and has no opportunity further to question witnesses on testimony which seems hazy or leaves some lingering doubts unanswered. `Substantial evidence' may well be equivalent to the `weight of evidence' when a tribunal in which one has confidence and which had greater opportunities for accurate determination has already so decided.
"In the second place the wisdom of a general change to review of the `weight of evidence' is questionable. If the change would require the courts to determine independently which way the evidence preponderates, administrative tribunals would be turned into little more than media for transmission of the evidence to the courts. It would destroy the values of adjudication of fact by experts or specialists in the field involved. It would divide the responsibility for administrative adjudications." Final Report, 91-92.
 Id., 210-211.69
 The minority enumerated four "existing deficiencies" in judicial review. These were (1) "the haphazard, uncertain, and variable results of the present system or lack of system of judicial review," (2) the interpretation permitting substantiality to be determined without taking into account conflicting evidence, (3) the failure of existing formulas "to take account of differences between the various types of fact determinations," and (4) the practice of determining standards of review by "case-to-case procedure of the courts." They recommended that70
"Until Congress finds it practicable to examine into the situation of particular agencies, it should provide more definitely by general legislation for both the availability and scope of judicial review in order to reduce uncertainty and variability. As the Committee recognizes in its report, there are several principal subjects of judicial review— including constitutional questions, statutory interpretation, procedure, and the support of findings of fact by adequate evidence. The last of these should, obviously we think, mean support of all findings of fact, including inferences and conclusion of fact, upon the whole record. Such a legislative provision should, however, be qualified by a direction to the courts to respect the experience, technical competence, specialized knowledge, and discretionary authority of each agency. We have framed such a provision in the appendix to this statement." Id., 210-212.
The text of the recommended provision is as follows:72
"(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 consider and decide so far as necessary to its decision and where raised by the parties, all relevant questions of: (1) constitutional right, power, privilege, or immunity; (2) the statutory authority or jurisdiction of the agency; (3) the lawfulness and adequacy of procedure; (4) findings, inferences, or conclusions of fact unsupported, upon the whole record, by substantial evidence; and (5) administrative action otherwise arbitrary or capricious. Provided, however, That upon such review due weight shall be accorded the experience, technical competence, specialized knowledge, and legislative policy of the agency involved as well as the discretionary authority conferred upon it." Id., 246-247.
 60 Stat. 237, 5 U. S. C. § 1001 et seq. The form finally adopted reads as follows:74
"SEC. 10. Except so far as (1) statutes preclude judicial review or (2) agency action is by law committed to agency discretion—
"(e) SCOPE OF REVIEW.—So far as necessary to decision and where presented the reviewing court shall decide all relevant questions of law, interpret constitutional and statutory provisions, and determine the meaning or applicability of the terms of any agency action. It shall (A) compel agency action unlawfully withheld or unreasonably delayed; and (B) hold unlawful and set aside agency action, findings, and conclusions found to be (1) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law; (2) contrary to constitutional right, power, privilege, or immunity; (3) in excess of statutory jurisdiction, authority, or limitations, or short of statutory right; (4) without observance of procedure required by law; (5) unsupported by substantial evidence in any case subject to the requirements of sections 7 and 8 or otherwise reviewed on the record of an agency hearing provided by statute; or (6) unwarranted by the facts to the extent that the facts are subject to trial de novo by the reviewing court. In making the foregoing determinations the court shall review the whole record or such portions thereof as may be cited by any party, and due account shall be taken of the rule of prejudicial error." 60 Stat. 243-244, 5 U. S. C. § 1009 (e). (Italics ours.)
In the form in which the bill was originally presented to Congress, clause (B) (5) read, "unsupported by competent, material, and substantial evidence upon the whole agency record as reviewed by the court in any case subject to the requirements of sections 7 and 8." H. R. 1203, 79th Cong., 1st Sess., quoted in S. Doc. No. 248, 79th Cong., 2d Sess. 155, 160. References to competency and materiality of evidence were deleted and the final sentence added by the Senate Committee. S. Rep. No. 752, 79th Cong., 1st Sess. 28; S. Doc. No. 248, supra, 39-40, 214. No reason was given for the deletion.76
 A statement of the Attorney General appended to the Senate Report explained that the bill "is intended to embody the law as declared, for example, in Consolidated Edison Co. v. National Labor Relations Board (305 U. S. 197)." Section 10 (e) of Appendix B to S. Rep. No. 752, supra, reprinted in S. Doc. No. 248, supra, 230. Mr. McFarland, then Chairman of the American Bar Association Committee on Administrative Law, testified before the House Judiciary Committee to the same effect. Id., 85-86.77
 The following quotation from the report of the Senate Judiciary Committee indicates the position of the sponsors. "The `substantial evidence' rule set forth in section 10 (e) is exceedingly important. As a matter of language, substantial evidence would seem to be an adequate expression of law. The difficulty comes about in the practice of agencies to rely upon (and of courts to tacitly approve) something less—to rely upon suspicion, surmise, implications, or plainly incredible evidence. It will be the duty of the courts to determine in the final analysis and in the exercise of their independent judgment, whether on the whole record the evidence in a given instance is sufficiently substantial to support a finding, conclusion, or other agency action as a matter of law. In the first instance, however, it will be the function of the agency to determine the sufficiency of the evidence upon which it acts—and the proper performance of its public duties will require it to undertake this inquiry in a careful and dispassionate manner. Should these objectives of the bill as worded fail, supplemental legislation will be required." S. Rep. No. 752, supra, 30-31. The House Committee Report is to substantially the same effect. H. R. Rep. No. 1980, 79th Cong., 2d Sess. 45. The reports are reprinted in S. Doc. No. 248, supra, 216-217, 279.78
See also the response of Senator McCarran in debate, to the effect that the bill changed the "rule" that courts were "powerless to interfere" when there "was no probative evidence." Id., 322. And see the comment of Congressman Springer, a member of the House Judiciary Committee, id., 376.79
 61 Stat. 136, 29 U. S. C. (Supp. III) § 141 et seq.80
 H. R. 3020, 80th Cong., 1st Sess., § 10 (e), reprinted in 1 Legislative History of the Labor Management Relations Act, 1947, p. 71.81
 The history of the evolution of the Senate provision was given by Senator Morse. 93 Cong. Rec. 5108, reprinted in 2 Legislative History 1504-1505. The prints were not approved by the Committee.82
 S. Rep. No. 105, 80th Cong., 1st Sess. 26-27, reprinted in 1 Legislative History 432-433. The Committee did not explain what the ambiguity might be; and it is to be noted that the phrase it italicized is indistinguishable in content from the requirement of § 10 (e) of the Administrative Procedure Act that "the court shall review the whole record or such portions thereof as may be cited by any party . . . ."83
Senator Taft gave this explanation to the Senate of the meaning of the section: "In the first place, the evidence must be substantial; in the second place, it must still look substantial when viewed in the light of the entire record. That does not go so far as saying that a decision can be reversed on the weight of the evidence. It does not go quite so far as the power given to a circuit court of appeals to review a district-court decision, but it goes a great deal further than the present law, and gives the court greater opportunity to reverse an obviously unjust decision on the part of the National Labor Relations Board." 93 Cong. Rec. 3839, reprinted in 2 Legislative History 1014.84
 H. R. Rep. No. 510, 80th Cong., 1st Sess. 56, reprinted in 1 Legislative History 560. In Labor Board v. Nevada Consolidated Copper Corp., 316 U. S. 105, 107, we reversed a judgment refusing to enforce a Board order because "upon an examination of the record we cannot say that the findings of fact of the Board are without support in the evidence." The sufficiency of evidence to support findings of fact is not involved in the three other decisions of this Court to which reference was made. Labor Board v. Hearst Publications, Inc., 322 U. S. 111; Republic Aviation Corp. v. Labor Board and Labor Board v. Le Tourneau Co., 324 U. S. 793. The language used by the court offers a probable explanation for including two of the decisions of Courts of Appeals. In Wilson & Co. v. Labor Board, 126 F. 2d 114, 117, the Court of Appeals for the Seventh Circuit sustained a finding that the employer dominated a company union after stating that it had "recognized (or tried to) that findings must be sustained, even when they are contrary to the great weight of the evidence, and we have ignored, or at least endeavored to ignore, the shocking injustices which such findings, opposed to the overwhelming weight of the evidence, produce." Labor Board v. Columbia Products Corp., 141 F. 2d 687, 688, is a per curiam decision of the Court of Appeals for the Second Circuit sustaining a finding of discriminatory discharge. The court said of the Board's decision on a question of fact, "Though it may strain our credulity, if it does not quite break it down, we must accept it . . . ." The reason for disapproval of Labor Board v. Union Pacific Stages, 99 F. 2d 153, is not apparent. The Court of Appeals for the Ninth Circuit there enforced the portion of the Board's order directing the company to disavow a policy of discrimination against union members, on the ground that there appeared "to be evidence, although disputed," that some company officials had discouraged employees from joining. 99 F. 2d at 179. The bulk of the lengthy opinion, however, is devoted to a discussion of the facts to support the court's conclusion that the Board's findings of discriminatory discharges should not be sustained.85
 Labor Board v. Standard Oil Co., 138 F. 2d 885; Labor Board v. Columbia Products Corp., 141 F. 2d 687. See notes 8 and 22, supra.86
 Rule 53 (e) (2), Fed. Rules Civ. Proc., gives finality to the findings of a master unless they are clearly erroneous.87
The court's ruling excluding from consideration disagreement between the Board and the examiner was in apparent conflict with the views of three other circuits. Labor Board v. Ohio Calcium Co., 133 F. 2d 721, 724 (C. A. 6th Cir.); A. E. Staley Mfg. Co. v. Labor Board, 117 F. 2d 868, 878 (C. A. 7th Cir.); Wilson & Co. v. Labor Board, 123 F. 2d 411, 418 (C. A. 8th Cir.); cf. International Assn. of Machinists v. Labor Board, 71 App. D. C. 175, 180, 110 F. 2d 29, 34 (C. A. D. C. Cir.).88
 Final Report, 51.89
 §§ 308 (1) and 309 (2) of the proposed bill, quoted in Final Report, 200, 201.90
 § 8 (a), 60 Stat. 242, 5 U. S. C. § 1007 (a). The quoted provision did not appear in the bill in the form in which it was introduced into the Senate. S. 7, 79th Cong., 1st Sess., § 7. It was added by the Senate Judiciary Committee. The Committee published its reasons for modifying the earlier draft, but gave no explanation for this particular change. See S. Doc. No. 248, supra, 32-33. It is likely that the sentence was intended to embody a clause in the draft prepared by the Attorney General's Committee, which provided that on review of a case decided initially by an examiner an agency should have jurisdiction to remand or to "affirm, reverse, modify, or set aside in whole or in part the decision of the hearing commissioner, or itself to make any finding which in its judgment is proper upon the record." § 309 (2), Final Report, 201. The substance of this recommendation was included in bills introduced into the House. H. R. 184, 79th Cong., 1st Sess., § 309 (2), and H. R. 339, 79th Cong., 1st Sess., § 7 (c), both quoted in S. Doc. No. 248, supra, 138, 143.91
 Salaries of trial examiners range from $7,600 to $10,750 per year. See Appendix to the Budget of the United States Government for the fiscal year ending June 30, 1952, p. 47.92
 S. Rep. No. 752, supra, 24, reproduced in S. Doc. No. 248, supra, 210.93
 H. R. Rep. No. 1980, 79th Cong., 2d Sess. 38-39, reprinted in S. Doc. No. 248, supra, 272-273. The House Report added that "In a broad sense the agencies' reviewing powers are to be compared with that of courts under section 10 (e) of the bill." The language of the statute offers no support for this statement.94
 S. Rep. No. 105, 80th Cong., 1st Sess. 9, quoted in 1 Legislative History of the Labor Management Relations Act, 1947, p. 415.
745 F.2d 677 (1984)2
Nos. 82-1910, 82-2108.
United States Court of Appeals, District of Columbia Circuit.
Argued April 26, 1983.
Decided October 2, 1984.
   P. Michael Nugent, Arlington, Va., with whom Milton R. Wessell, Ronald J. Palenski and David R. Wormser, Arlington, Va., were on the brief for petitioners.5
Richard M. Ashton, Atty., Board of Governors of the Federal Reserve System, Washington, D.C., with whom Jennifer Johnson, Attorney, Board of Governors of the Federal Reserve System and J. Paul McGrath, Asst. Atty. Gen., U.S. Dept. of Justice, Washington, D.C., were on the brief for respondent.6
Richard A. Whiting, Washington, D.C., with whom Charles G. Cole and David L. Roll, Washington, D.C., were on the brief for intervenor Citicorp.7
Alan K. Palmer, Washington, D.C., with whom Steven S. Rosenthal, Henry D. Levine, Washington, D.C., and Deborah L. Leon, San Francisco, Cal., were on the brief for intervenors California Bankers Clearing House Association, et al., in No. 82-2108.8
Before GINSBURG and SCALIA, Circuit Judges, and VAN PELT, Senior Judge of the United States District Court for the District of Nebraska.9
Opinion for the Court filed by Circuit Judge SCALIA.10
The Association of Data Processing Service Organizations, Inc. ("ADAPSO"), a national trade association representing the data processing industry, and two of its members petition this court for review of two orders of the Board of Governors of the Federal Reserve System, pursuant to 12 U.S.C. § 1848 (1982). In No. 82-1910, they seek review of the Board's July 9, 1982 order approving Citicorp's application to establish a subsidiary, Citishare, to engage in certain data processing and transmission services. Order Approving Engaging in Data Processing and Data Transmission Activities, 68 Fed.Res.Bull. 505 (1982) ("Citicorp Order"). In No. 82-2108, they seek review of the Board's August 23, 1982 order, entered after notice and comment rulemaking, amending those portions of Regulation Y which dealt with the performance of data processing activities by bank holding companies. Data  Processing and Electronic Funds Transfer Activities, 47 Fed.Reg. 37,368 (1982) (as set forth at 12 C.F.R. §§ 225.4(a)(8), 225.123(e) (1983) ("Regulation Y Order"). We consolidated the two appeals.12
The Bank Holding Company Act of 1956, ch. 240, 70 Stat. 133 (codified as amended at 12 U.S.C. §§ 1841-50 (1982)) (the "Act"), requires all bank holding companies to seek prior regulatory approval before engaging in nonbanking activities. The restrictions do not apply to:13
activities ... which the Board after due notice and opportunity for hearing has determined (by order or regulation) to be so closely related to banking or managing or controlling banks as to be a proper incident thereto.... In determining whether a particular activity is a proper incident to banking or managing or controlling banks the Board shall consider whether its performance by an affiliate of a holding company can reasonably be expected to produce benefits to the public, such as greater convenience, increased competition, or gains in efficiency, that outweigh possible adverse effects, such as undue concentration of resources, decreased or unfair competition, conflicts of interests, or unsound banking practices.
12 U.S.C. § 1843(c)(8). Section 1848, the source of our review authority, provides that "[t]he findings of the Board as to the facts, if supported by substantial evidence, shall be conclusive." Id. at § 1848.15
On February 23, 1979, Citicorp applied for authority to engage, through its subsidiary Citishare, in the processing and transmission of banking, financial, and economic related data through timesharing, electronic funds transfer, home banking and other techniques. It also sought permission to sell its excess computing capacity and some computer hardware. The Board published notice of Citicorp's application, which was protested by ADAPSO, and set it for formal hearing. 45 Fed.Reg. 41,533 (July 19, 1980). Before the hearing was held, Citicorp amended its application to add certain activities and to request amendment of Regulation Y to permit the activities it had specified. The Board published an Amended Order for Hearing and invited public comments and participation. 45 Fed.Reg. 76,515 (Nov. 19, 1980). A formal hearing was held before an Administrative Law Judge in which the merits of both the application and the proposed rule were considered. In addition, more than sixty companies and individuals submitted written comments on the proposed rule. On March 29, 1982, the ALJ decided that the activities proposed by Citicorp were closely related to banking and would produce benefits to the public which would outweigh their costs. In re: Application of Citicorp to Engage in Data Processing and Transmission Activities, ALJ Recommended Decision, J.A. B-68 to B-123 ("Recommended Decision"). The ALJ also recommended amendments to Regulation Y that would permit those activities contained in the Citicorp application. On July 9, 1982, the Board adopted the ALJ's recommendation to approve the Citicorp application, with certain restrictions. On August 23, 1982, the Board adopted the ALJ's recommended amendments to Regulation Y, again with certain restrictions. ADAPSO, and two of its members, participants in the actions below, filed these petitions for review.16
We are faced at the outset with a dispute regarding the proper standard of review. These consolidated appeals call for us to review both an on-the-record adjudication and an informal notice and comment rulemaking. Petitioners contend that the substantial evidence standard, which presumably authorizes more rigorous judicial review, should govern our review of both orders. Petitioners' Reply Brief at 26-28. The Board agrees, noting that § 1848 applies a substantial evidence standard to factual  determinations. Respondent's Brief at 22. Intervenor Citicorp contends that while the substantial evidence standard should govern review of the Citicorp order, Regulation Y should be upset only if arbitrary or capricious. Citicorp Brief at 16-17. Intervenor California Bankers Clearing House Association, addressing only Regulation Y, also advocates review under the arbitrary or capricious review standard. CBCHA Brief at 8-14. The parties' submissions on this point reflect considerable confusion, which is understandable when one examines decisions defining the standard of review under this statute.18
Both of the Supreme Court's opinions reviewing action of the Board in amending Regulation Y noted that the Board's determination "is entitled to the greatest deference," Board of Governors of the Federal Reserve System v. Investment Company Institute, 450 U.S. 46, 56, 101 S.Ct. 973, 981-82, 67 L.Ed.2d 36 (1981) ("ICI"); Securities Industry Association v. Board of Governors of the Federal Reserve System, ___ U.S. ___, 104 S.Ct. 3003, 3009, 82 L.Ed.2d 158 (1984) ("SIA"), but neither of them discussed the applicable standard of review, or even referred to § 1848. The courts of appeals, however, have applied the substantial evidence standard of § 1848 to Board adjudications such as the authorization in the first order here under review, Securities Industry Association v. Board of Governors of the Federal Reserve System, 716 F.2d 92, 101-02 (2d Cir.1983), aff'd, ___ U.S. ___, 104 S.Ct. 3003, 82 L.Ed.2d 158 (1984), while applying the arbitrary or capricious standard, despite § 1848, to Board rules, including specifically amendments of Regulation Y, National Courier Association v. Board of Governors of the Federal Reserve System, 516 F.2d 1229 (D.C.Cir.1975); Association of Bank Travel Bureaus v. Board of Governors of the Federal Reserve System, 568 F.2d 549 (7th Cir.1978); see Investment Company Institute v. Board of Governors of the Federal Reserve System, 551 F.2d 1270, 1281 (D.C.Cir.1977) (dicta). In fact one appellate opinion has, like this one, addressed precisely the situation in which both an adjudicatory authorization and an amendment of Regulation Y were at issue in the same case — and applied the § 1848 substantial evidence standard to the former but the arbitrary or capricious standard to the latter. Compare Alabama Association of Insurance Agents v. Board of Governors of the Federal Reserve System, 533 F.2d 224, 246 (5th Cir.1976), with id. at 240. This would make a lot of sense if, as the Board has argued in some cases, § 1848 in its totality applies only to adjudication rather than rulemaking, since it is limited to "orders" of the Board, a word which the Administrative Procedure Act ("APA") defines to mean the product of an adjudication. See 5 U.S.C. § 551(4), (6) (1982). Such a technical interpretation of the provision, however, has been uniformly and quite correctly rejected. See Investment Company Institute, supra, 551 F.2d at 1276-78; Alabama Association of Insurance Agents, supra, 533 F.2d at 234-35. That leaves the courts with the difficult task of explaining why the last sentence of § 1848, unlike all the rest of it, should be deemed to apply only to adjudication and not to rulemaking. Difficult, because there is nothing in either the text or the  legislative history of the section to suggest such a result. The courts applying the arbitrary or capricious standard to Board rulemaking (which, as stated above, include all the courts that have confronted the issue) dispose of this problem either by totally ignoring it, see Alabama Association of Insurance Agents, supra, 533 F.2d at 240, 246; cf. Investment Company Institute, supra, 551 F.2d at 1281, or by noting that the parties "do not appear to contest" the point, National Courier, supra, 516 F.2d at 1235 n. 8, or by the ipse dixit that "[w]e interpret [the last sentence of § 1848] to apply to findings of fact `on the record' in an adjudicatory hearing as contrasted with a rulemaking proceeding," Association of Bank Travel Bureaus, supra, 568 F.2d at 552 n. 5.19
We think that there is no basis for giving the last sentence of § 1848 anything less than the general application given to the rest of the section. The Supreme Court's pronouncement that the "greatest deference" is to be given to the determinations of the Board, and the court of appeals decisions applying the arbitrary or capricious test to Board rulemaking, seem to us explicable on quite different grounds — namely, that in their application to the requirement of factual support the substantial evidence test and the arbitrary or capricious test are one and the same. The former is only a specific application of the latter, separately recited in the APA not to establish a more rigorous standard of factual support but to emphasize that in the case of formal proceedings the factual support must be found in the closed record as opposed to elsewhere. We shall elaborate upon this point because it is not uncommon for parties to expend great effort in appeals before us to establish which of the two standards is applicable where in fact their operation is precisely the same.20
The "scope of review" provisions of the APA, 5 U.S.C. § 706(2), are cumulative. Thus, an agency action which is supported by the required substantial evidence may in another regard be "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law" — for example, because it is an abrupt and unexplained departure from agency precedent. Paragraph (A) of subsection 706(2) — the "arbitrary or capricious" provision — is a catchall, picking up administrative misconduct not covered by the other more specific paragraphs. Thus, in those situations where paragraph (E) has no application (informal rulemaking, for example, which is not governed by §§ 556 and 557 to which paragraph (E) refers), paragraph (A) takes up the slack, so to speak, enabling the courts to strike down, as arbitrary, agency action that is devoid of needed factual support. When the arbitrary or capricious standard is performing that function of assuring factual support, there is no substantive difference between what it requires and what would be required by the  substantial evidence test, since it is impossible to conceive of a "nonarbitrary" factual judgment supported only by evidence that is not substantial in the APA sense — i.e., not "`enough to justify, if the trial were to a jury, a refusal to direct a verdict when the conclusion sought to be drawn ... is one of fact for the jury,'" Illinois Central R.R. v. Norfolk & Western Ry., 385 U.S. 57, 66, 87 S.Ct. 255, 260, 17 L.Ed.2d 162 (1966) (quoting NLRB v. Columbian Enameling & Stamping Co., 306 U.S. 292, 300, 59 S.Ct. 501, 505, 83 L.Ed. 660 (1939)).21
We have noted on several occasions that the distinction between the substantial evidence test and the arbitrary or capricious test is "largely semantic," Aircraft Owners and Pilots Association v. FAA, 600 F.2d 965, 971 n. 28 (D.C.Cir.1979); Pacific Legal Foundation v. Department of Transportation, 593 F.2d 1338, 1343 n. 35 (D.C.Cir.1979); American Public Gas Association v. FPC, 567 F.2d 1016, 1028-29 (D.C.Cir.1977), and have indeed described that view as "the emerging consensus of the Courts of Appeals," Pacific Legal Foundation, supra, 593 F.2d at 1343 n. 35. See Associated Industries v. Department of Labor, 487 F.2d 342, 349-50 (2d Cir. 1973) (Friendly, J.); National Nutritional Foods Association v. Weinberger, 512 F.2d 688, 705 (2d Cir.1975) (Lumbard, J., concurring); Paccar, Inc. v. NHTSA, 573 F.2d 632, 636 (9th Cir.1978) (purporting to avoid the issue, but seemingly not doing so). Leading commentators agree:22
Does the extent of required factual support for rules depend in part on whether the standard for review is "substantial evidence" or "arbitrary and capricious"? Although from 1946 until some time during the 1970s the dominant answer probably was yes, a change to a no answer has probably occurred during the 1970s ....
1 K. DAVIS, ADMINISTRATIVE LAW TREATISE § 6:13 at 512 (2d ed. 1978).24
In review of rules of general applicability made after "notice and comment" rulemaking, [substantial evidence and arbitrary or capricious] criteria converge into a test of reasonableness.
. . . .
Review without an agency record thus comes down to review of reasonableness. [T]he question of reasonableness is also the one which the court must now ask itself in reviewing findings of fact under the post-APA substantial evidence rule.
B. SCHWARTZ, ADMINISTRATIVE LAW 604, 606 (1976).26
As noted earlier, this does not consign paragraph (E) of the APA's judicial review section to pointlessness. The distinctive function of paragraph (E) — what it achieves that paragraph (A) does not — is to require substantial evidence to be found within the record of closed-record proceedings to which it exclusively applies. The importance of that requirement should not be underestimated. It is true that, as the Supreme Court said in Camp v. Pitts, 411 U.S. 138, 142, 93 S.Ct. 1241, 1244, 36 L.Ed.2d 106 (1973), even informal agency action (not governed by paragraph (E)) must be reviewed only on the basis of "the administrative record already in existence." But that is quite a different and less onerous requirement, meaning only that whether the administrator was arbitrary must be determined on the basis of what he had before him when he acted, and not on the basis of "some new record made initially in the reviewing court," id. That "administrative record" might well include crucial material that was neither shown to nor known by the private parties in the proceeding — as indeed appears to have been the situation in Camp v. Pitts itself. It is true that, in informal rulemaking, at least the most critical factual material that is used to support the agency's position on review must have been made public in the proceeding and exposed to refutation. That requirement, however, does not extend to all data, see Administrative Conference of the United States, Recommendation No. 74-4, Preenforcement Judicial Review of Rules of General Applicability, 1 C.F.R. § 305.74-4 (1975); Verkuil, Judicial Review of Informal Rulemaking, 60 VA.L.  REV. 185 (1974); and it only applies in rulemaking and not in other informal agency action, since it derives not from the arbitrary or capricious test but from the command of 5 U.S.C. § 553(c) that "the agency ... give interested persons an opportunity to participate in the rule making." See Portland Cement Association v. Ruckelshaus, 486 F.2d 375, 393 n. 67 (D.C.Cir. 1973).27
Consolidated cases such as those before us here — involving simultaneous review of a rule (whose factual basis is governed only by paragraph (A)'s catch-all control against "arbitrary or capricious" action) and of a formal adjudication dealing with the same subject (whose factual basis is governed by paragraph (E)'s requirement of substantial evidence) — demonstrate why the foregoing interpretation of the two standards is the only interpretation that makes sense. If the standards were substantively different (and leaving aside for the moment consideration of any special effect of § 1848), the Citicorp order, authorizing one bank holding company's data processing services, would be subject to more rigorous judicial review of factual support than the Regulation Y order which, due to its general applicability, would affect the operations of every bank holding company in the nation. Or, to put the point another way: If the Board had never issued any Regulation Y, and simply determined in the context of a particular application that the provision of timesharing services is "closely related" to banking, that determination, which could be reconsidered and revised in the context of the next adjudication, would require more factual support than the same determination in a rulemaking, which would have immediate nationwide application and, until amended by further rulemaking, would have to be applied to all subsequent applications.28
This seemingly upside-down application of varying standards is not an issue in the present case since, as we have observed, § 1848 makes it clear that only one standard — the substantial evidence test — applies to review of all Board actions. The relevance of the foregoing discussion here is to determine what that standard means. What we have said suggests that the normal (APA) meaning of the "substantial evidence" terminology connotes a substantive standard no different from the arbitrary or capricious test. One cannot dismiss out of hand, however, the possibility that, in this particular statute, a different meaning was intended — in which case that different standard would govern review of both rulemaking and adjudication. A number of "substantial evidence" review provisions have been attached to rulemaking authority, particularly in recent years. See, e.g., 29 U.S.C. § 655(f) (1982) (Occupational Safety and Health Act); 30 U.S.C. § 816(a) (1982) (Federal Coal Mine Health and Safety Act); 15 U.S.C. § 1193(e)(3) (1982) (Flammable Fabrics Act); 15 U.S.C. § 57a(e)(3)(A) (1982) (FTC Improvement Act of 1975). It is conceivable that some of these were intended, as the Fifth Circuit found with regard to such a provision in the Consumer Product Safety Act, 15 U.S.C. § 2060 (1982), to require the courts "to scrutinize [agency] actions more closely than an `arbitrary and capricious' standard would allow." Aqua Slide `N' Dive Corp. v. CPSC, 569 F.2d 831, 837 (5th Cir.1978). Congress's unpropitious use of the "substantial evidence" APA language for such a purpose is plausible, since the standard has acquired a reputation for being more stringent. One should not be too quick, however, to impute such a congressional intent. There is surely little appeal to an ineffable review standard that lies somewhere in-between the quantum of factual support required to go to a jury (the traditional "substantial evidence" test) and the "preponderance of the evidence" standard that would apply in de novo review. Moreover, 5  U.S.C. § 559 provides that a subsequent statute shall not be held to supersede or modify the APA provisions "except to the extent that it does so expressly." While the provision for "substantial evidence" review where the APA would otherwise require only "arbitrary or capricious" review is unquestionably an "express" alteration, surely the import of the § 559 instruction is that Congress's intent to make a substantive change be clear. This can lead to some fairly convoluted inquiries. Suppose, for example, that Congress clearly intended to switch to a stricter test, but was also clearly operating on the mistaken belief that the existing test ("arbitrary or capricious") was more lenient than the "substantial evidence" standard. Should one give effect to the congressional intent to adopt a stricter standard, or rather to the congressional intent to adopt the "substantial evidence" standard (which is in fact, as we have discussed, no stricter)? Several decisions of this court stand for the proposition that a "substantial evidence" provision in the substantive statute under consideration did not have the effect of requiring increased factual support beyond that demanded by the normal "arbitrary or capricious" rulemaking standard of review. Public Systems v. FERC, 606 F.2d 973, 980 n. 34 (D.C.Cir.1979) (interpreting the predecessors of § 19(b) of the Natural Gas Act, 15 U.S.C. § 717r(b) (1982), and the corresponding provision of the Federal Power Act, 16 U.S.C. § 825l (b) (1982)); American Public Gas Association v. FPC, supra, 567 F.2d at 1028-29 (interpreting the predecessor of § 19(b) of the Natural Gas Act). See also Aircraft Owners and Pilots Association v. FAA, supra, 600 F.2d at 971 n. 28 (not deciding the issue with regard to the "substantial evidence" provision of the Federal Aviation Act, 49 U.S.C. § 1486(e) (1976)).29
Fortunately, it is not necessary to engage in these speculations with regard to the "substantial evidence" provision of § 1848. The Supreme Court has evidently rejected the notion that it alters normal APA review requirements, since the Court's opinions reviewing Board action deem the provision unworthy of mention, and specifically accord the Board "the greatest deference." See, e.g., SIA, supra, 104 S.Ct. at 3009; ICI, supra, 450 U.S. at 56-57, 101 S.Ct. at 981-982. See also National Courier, supra, 516 F.2d at 1237. We hold, therefore, that the § 1848 "substantial evidence" requirement applicable to our review here demands a quantum of factual support no different from that demanded by the substantial evidence provision of the APA, which is in turn no different from that demanded by the arbitrary or capricious standard.30
This appeal requires us, then, to decide whether the Board of Governors acted arbitrarily or capriciously — either because no substantial evidence existed to support its factual premises, or in any other respect — when it concluded, based on the record of the proceedings before it, that the new activities Citicorp proposed were closely related to banking. The test which the Board applied was that developed by this court in National Courier, supra, 516 F.2d at 1237:32
As to what kinds of connections may qualify [as closely related to banking], at least the following seem to us within the statutory intent:
1. Banks generally have in fact provided the proposed services.
2. Banks generally provide services that are operationally or functionally so similar to the proposed services as to equip them particularly well to provide the proposed service.
3. Banks generally provide services that are so integrally related to the proposed services as to require their provision in a specialized form.
See, e.g., Citicorp Order, 68 Fed.Res.Bull. at 506 n. 3; Regulation Y Order, 47 Fed. Reg. 37,368 n. 1. These criteria are disjunctive rather than cumulative, see National Courier, supra, 516 F.2d at 1237-38, and not exclusive, see 49 Fed.Reg. 806 (1984); SIA, supra, 104 S.Ct. at 3006 n. 5.34
Petitioners do not contend that the National Courier criteria are in themselves erroneous (they have subsequently been approved by the Supreme Court, see SIA, supra, 104 S.Ct. at 3006 n. 5), but they do contend, preliminarily, that the Board erroneously applied them to the kinds of data involved in the proposed services, rather than to the services themselves.36
The depth of confusion that surrounds this argument is suggested by the fact that the Board's brief denies that a data test was applied, Respondent's Brief at 27-33, while the briefs of intervenors supporting the Board acknowledge that, at least as to the Regulation Y order, it was applied but assert that its application was lawful, Citicorp Brief at 27-32; CBCHA Brief at 27-32. We must address the Board's contention first.37
The Board is quite correct that the Citicorp order specifically examined each of the eight categories of data processing the applicant proposed to provide. But some of those categories were only described with reference to (1) the data processing technology employed and (2) the nature of the data to be provided or processed, and the Board clearly held that the former "is not determinative of whether [the] activity is permissible," Citicorp Order, 68 Fed.Res. Bull. at 507. The conclusion is therefore inescapable that, even in the Citicorp order, a data test was employed. With regard to timesharing services, for example, the applicant proposed to provide "data processing and transmission services for financial and non-financial institutions wherein the data being processed and transmitted are financial, banking or economic related." J.A. C-54. The Board approved this, with the one change (which will be discussed further in another portion of this opinion) that "economic related" was altered to "economic." Citicorp Order, 68 Fed.Res.Bull. at 507 n. 8. It is true that the application further provided some examples of the specific data processing uses to which the requested authority would be put:38
Such packaged financial systems permit customers at various locations to obtain the benefit of Citicorp's financial information systems and financial analysis expertise with respect to such applications associated with banking as financial modeling, loan analysis, accounting and book-keeping, budget and profitability analysis, portfolio record-keeping and analysis, foreign exchange exposure, general ledger, bond analysis, international trade settlement, and economic forecasting.
J.A. C-54 to C-55. The Board's opinion discussed several of these examples, concluding that they in fact represented services provided by banks or were so similar to such services that banking organizations are particularly well equipped to provide them. But that can only be understood as an attempted demonstration that its data test is as successful in concrete application as it is in theory.40
It is even clearer that the Regulation Y order employs a data test. No more is needed to establish this than the text of the new regulation which the order adopted. Permissible activities of bank holding companies now include:41
Providing to others data processing and data transmission services, facilities (including data processing and data transmission hardware, software, documentation or operating personnel), data bases, or access to such services, facilities, or data bases by any technological means, if:
(i) The data to be processed or furnished are financial, banking, or economic, and the services are provided pursuant to a written agreement so describing and limiting the services;
(ii) The facilities are designed, marketed, and operated for the processing and  transmission of financial, banking, or economic data; and
(iii) The hardware provided in connection therewith is offered only in conjunction with software designed and marketed for the processing and transmission of financial, banking, or economic data, and where the general purpose hardware does not constitute more than 30 percent of the cost of any packaged offering.
12 C.F.R. § 225.25(b)(7). The Regulation Y order states that the amendment it adopts "will make it permissible for bank holding companies to engage in the data processing and transmission services the Board has approved by order in the [Citicorp] case." Regulation Y Order, 47 Fed.Reg. 37,369. But as the footnote accompanying that statement shows, this is a reference to the eight broad technological categories of service (e.g., timesharing) rather than to the particular uses within those categories (e.g., budgeting, bookkeeping, accounting) which petitioners complain a data test avoids. And when the Regulation Y order incorporates by reference "[t]he Board's findings on the permissibility of the services involved ... set forth in detail in the Board's [Citicorp] order," id., that incorporation, like the original findings themselves, must be for the purpose of exemplifying that in concrete application the data test will produce services closely related to banking.43
As the insignificant nature of the textual changes in the portion of Regulation Y dealing with the current issue indicates, the present amendment does not fundamentally alter the approach of that regulation to data processing services. With regard to the data test point it is significant, we think, that the Board's staff recommendation proposing what in substance became the 1971 Regulation Y described its approach as follows:44
In our view, the real issue is what kind of data should banking organizations be permitted to process. The technology employed is not the subject of the Act.
. . . .
Accordingly, we recommend that the Board shift the emphasis of its proposal from the method of processing data to the kind of data being processed. Under this recommendation, bank holding companies would be permitted to process banking, financial, or other economic data, regardless of the tool used in the processing.
Legal Division Memo to Board of Governors (June 7, 1971), Applicant's Exhibit M-2 at 6. While this is the staff's description rather than the Board's we think it an accurate representation of what the Board did in 1971 and perpetuated in the present orders.46
The Board's brief suggests that the exclusiveness and allegedly impermissible generality of the data test are avoided by the fact that47
[b]efore any holding company may engage in data processing services, it must file an application with the Board and receive a Board order determining that the `public benefits' test of section 4(c)(8) [of the Act] has been satisfied. 12 C.F.R. § 225.4(a), (b). Since data processing activities for a particular company are subject to Board approval upon specific application, the Board will have the opportunity to ensure that no bank holding company's activities exceed the statutory standard.
Respondent's Brief at 32. It is indeed true, as noted in the Regulation Y Order, 47 Fed.Reg. 37,371, that the Board makes the separate "public benefits" determination required under the Act by examining individual applications rather than by regulation. But it would be unlawful, in the  course of that case-by-case examination for that separate purpose, to deny an applicant the "closely related" qualification which the regulation generally confers. Such action would require amendment of the regulation — so that the limitation upon the data test which the Board's brief puts forward amounts to no more than the possibility that the rule can be amended to forbid what it now impermissibly (according to petitioners) permits. Reliance upon such a possibility would validate every invalid rule.49
We must confront, therefore, the stark question whether the data test, as the determinant of whether data processing services are closely related to banking, is arbitrary or capricious. We think not. It would of course be preferable, from the point of view of accuracy alone, to make every "closely related" determination on a more narrow, specific, case-by-case basis — to ask, as petitioners would have the Board do, whether data processing for budget analysis, for bookkeeping, and for accounting each separately qualifies for the exemption. Indeed, it would be even more accurate to get even more specific, and to ask whether budget analysis for manufacturing entities, budget analysis for retail sales entities, and budget analysis for personal service entities each separately qualifies. But the whole point of rulemaking as opposed to adjudication (or of statutory law as opposed to case-by-case common law development) is to incur a small possibility of inaccuracy in exchange for a large increase in efficiency and predictability. What the present controversy comes down to is simply whether there is reasonable assurance that the activities embraced within the data test — not all of which have been individually examined or even yet foreseen — will be closely related to banking under one or more of the broad National Courier tests. We think that there is.50
As a theoretical matter, to begin with, the test is appealing. The record of this proceeding amply demonstrates, if any demonstration is needed, that banks regularly develop and process for their customers large amounts of banking, financial and economic data, and that they do so (and will presumably continue to do so) through the most advanced technological means. Once that is acknowledged, it is difficult to envision how any provision of data processing services dealing with data of that particular type would not meet at least the second of the National Courier tests:51
Banks generally provide services that are operationally or functionally so similar to the proposed services as to equip them particularly well to provide the proposed service.
National Courier, supra, 516 F.2d at 1237. Perhaps it may not be in the public interest for them to provide one or another of such services, for anticompetitive or other reasons. But that relates to the "public benefits" determination, which is made case-by-case rather than in the amended Regulation Y, and whose resolution in the Citicorp order is not under challenge on this appeal.53
In addition to its theoretical reasonableness, there is the fact that the Board, in the course of this proceeding, considered specific applications of the principle to various specific data processing uses proposed by Citicorp — finding all of them to be within one of the National Courier criteria, and many to be within the most rudimentary criterion that "[b]anks generally have in fact provided the proposed services," id. We find adequate support in the record for those conclusions.54
 It is significant that petitioners have not proposed any alternative to the data test, evidently demanding instead that each new data processing technology, and even each new use of data processing (such as budgeting, financial modeling, accounting) be separately examined and approved for its "closely relatedness." In a field such as data processing, this will not do; the predictability of a rulemaking approach to the issue is vital. As the ALJ in the present proceeding found:55
In view of rapid technological evolution, it is virtually impossible for any firm to predict the data processing services which will be available or offered in the coming years.
Recommended Decision at 10, J.A. B-81. And as the Comptroller of the Currency noted in a rulemaking proceeding dealing with the data processing activities of national banks:57
In addition to being difficult to draft, acceptable specific lists or examples of permissible activities would be very difficult to keep current. This difficulty is due to the rapidly changing nature of the data processing field. The current rate of change virtually ensures that any acceptable list would quickly be rendered obsolete. Thus, any acceptable list or set of examples would require repeated updating. Perhaps more significantly, such a list may discourage the development by national banks of new data processing services which, although part of the business of banking, are not on a list of permitted activities or similar in nature to those in a set of examples of permitted activities.
Data Processing by National Banks, 47 Fed.Reg. 46,526, 46,529 (1982). We think these considerations amply justify the approach the Board has taken, an approach to which the petitioners have suggested no feasible alternative.59
We turn next to an objection of petitioners that relates not to the data test as such, but to the types of data which the data test embraces.61
The previous version of Regulation Y permitted bank holding companies to engage in "storing and processing other banking, financial, or related economic data, such as performing payroll, accounts receivable or payable or billing services." 12 C.F.R. § 225.4(a)(8)(ii) (1972) (emphasis added). In the combined adjudication-rulemaking here at issue, the ALJ's Recommended Decision accepted Citicorp's proposal that this be expanded to include the processing and transmission of "banking, financial and economic related data." Recommended Decision at 49, J.A. B-120 (emphasis added). The Board rejected that  recommendation, agreeing with petitioners here that "economic related data" was "too broad a category and includes data that are not closely related to banking." Regulation Y Order, 47 Fed.Reg. 37,369; Citicorp Order, 68 Fed.Res.Bull. at 507 n. 8. It adopted, however, an expansion of the previous language to "banking, financial and economic [as opposed to economic-related] data," and permitted Citicorp to engage in such activities. Id. This expansion of prior authority was based upon its conclusion that "the record in this proceeding supports a finding that banks process economic data." Regulation Y Order, 47 Fed.Reg. 37,369. See also Citicorp Order, 68 Fed.Res.Bull. at 507 n. 8 ("[t]he record supports a finding that banks engage in the processing and transmission of economic data").62
We agree. The testimony amply establishes the proposition that banks have long served their customers by developing and making available information regarding the national and international economy, including economic projections useful for investment decisions. The existing Regulation Y itself permitted the provision of "general economic information and advice, general economic statistical forecasting services and industry studies." 12 C.F.R. § 225.4(a)(5)(iv) (1982). The current amendment of Regulation Y, which merely enables banks to make such information available in a new and more useful fashion, thus clearly meets the second of the National Courier criteria, and perhaps the first as well. Petitioners complain that "[n]owhere in the record has there been any demonstration that banks have historically provided economic services even approaching the sophistication, scale and business mode approved by the Board in its Orders." Petitioners' Brief at 42. Perhaps so, but that is progress. It is not the purpose of the Bank Holding Company Act restrictions to confine banks to the same level, or crudeness, or technological simplicity of services previously provided — but merely to services of a closely related nature.63
We also reject petitioners' complaint that the Board has not defined "economic data." Petitioners' Brief at 35-36. In the context of these orders the meaning of the term is clear enough. It includes, as petitioners fear, "agricultural matters, retail sales matters, housing matters, corporate profit matters and anything `of value in banking and financial decisions.'" Id. at 36 (quoting Citicorp Reply Brief before the Board at 13 & n. 17).64
Until the 1970s, data processing was performed in the "batch" mode, that is, the application of a computer program was applied to data recorded (keypunched) on small cards, which were physically delivered to the computer. Batch processing requires expensive data pick-up and delivery, often involves lengthy overall turnaround time, and permits only one job to be performed at a time. Technological advances now enable data to be transmitted electronically, typically over a telephone line, to and from the central processing unit and the user's terminal. That capability plus other technological advances permit "timesharing" — the simultaneous use of a computer by many users, each of whom can interact with the computer, i.e., ask yes-no questions and receive immediate responses. The ALJ found timesharing particularly well suited to economic, financial, and banking operations. Recommended Decision at 9, J.A. B-80.66
Timesharing was approved in both the Citicorp and the Regulation Y Orders, 68 Fed.Res.Bull. at 507; 47 Fed.Reg. 37,369. Of course one of petitioners' objections to this action is that the approval of this new service on the basis of the data test was impermissible; we have addressed that in a more general context above. Petitioners also claim, however, that timesharing, particularly when combined with customer use (which the orders permit) of applications software for such functions as modeling, forecasting and statistical analysis residing on holding company computers (as opposed to requiring customer creation and use of  their own applications software) enables customers to use bank computer systems for "open-ended and general, non-financial services," Petitioners' Brief at 28, such as "race track handicapping or employee evaluation," id. at 27.67
This objection is unfounded. To begin with, the Act places a limitation upon the services that bank holding companies can offer, not upon the uses to which others choose to put them. If the services proposed here were so well adapted to such uses unrelated to banking as employee evaluation that it could reasonably be thought that the services were offered for that purpose it would be one thing; but these services are no more invalidated by the mere possibility of such use, "unknown even to the holding company itself," Petitioners' Brief at 29, than was the service which we approved in National Courier invalidated by the obvious possibility that a customer might include some nonfinancial material in the courier packages. And such a possibility (at most) is all that petitioners established. They brought forward not a single instance of actual use of such services for such purposes. Even their theoretical horrible was refuted by testimony asserting that it would be prohibitively expensive to use financial programs for such nonfinancial purposes. Nov. 17, 1981 Tr. at 1178-79, 1214-15.68
Moreover, as undocumented and as unrealistic as the petitioners' fears on this score appear to be, the Board nonetheless included provisions in its orders to calm this concern. In the Citicorp order the Board required that "all proposed data processing services provided by Citicorp to others outside the holding company for banking, financial and economic data must be provided pursuant to a written agreement so describing and limiting the services." Citicorp Order, 68 Fed.Res.Bull. at 507. The approval conferred by the amended Regulation Y applies only when "the data to be processed or furnished are financial, banking, or economic, and the services are provided pursuant to a written agreement so describing and limiting the services." 12 C.F.R. § 225.25(b)(7)(i). These agreements will be subject to scrutiny in connection with the Board's case-by-case "public benefits" determination. In addition, the amended Regulation Y specifically requires that the offered facilities (by which the Board means "data processing and transmission hardware, systems software, documentation and operating personnel," Citicorp Order, 68 Fed.Res.Bull. at 507 n. 12) be "designed, marketed, and operated for the processing and transmission of financial, banking, or economic data," 12 C.F.R. § 225.25(b)(7)(ii), and the Citicorp order makes it clear that this imposes the obligation to "take the technical steps necessary to ensure" this result. 68 Fed.Res.Bull. at 508. It is unthinkable that any more should be required.69
In both the Citicorp order and the Regulation Y order, the Board approved bank holding company provision of data processing hardware to their customers. Hardware is the equipment used in data processing systems, such as the mainframe computer, terminals, printers, memory devices, and the like. Software is the coded instructions which control the way data is processed, for example, individual programs. See Recommended Decision at 6-7, J.A. B-77 to B-78. For present purposes, data processing hardware provided by bank holding companies can be divided into two types, which were approved subject to different conditions and must be discussed separately.71
Specialized hardware is specifically designed "to provide a permissible data processing or transmission service, and is not likely to be used, to any significant extent, for nonfinancial purposes." Citicorp Order, 68 Fed.Res.Bull. at 508 n. 14. The prime example is the automated teller machine (ATM), which is designed to execute banking transactions and has special security features appropriate to that purpose. The Board found that such hardware, when "offered only in conjunction with software designed and marketed for  the processing and transmission of financial, banking, or economic data," 12 C.F.R. § 225.25(b)(7)(iii), meets the third National Courier test. Citicorp Order, 68 Fed.Res. Bull. at 508 & n. 14, 509; Regulation Y Order, 47 Fed.Reg. 37,370. As noted earlier, that test reads as follows:72
Banks generally provide services that are so integrally related to the proposed services as to require their provision in a specialized form.
516 F.2d at 1237. Petitioners make several attacks upon this finding, none of which seems to us well taken.74
First, they assert that the third National Courier test could not conceivably apply because by its terms it pertains to "services," which the provision of computer hardware is not. Petitioners' Brief at 54. But surely National Courier is not to be interpreted in that fashion. Since the case dealt with services (courier services) it framed all its tests in those terms. But the object of the tests was to determine what are, within the words of the Act, "activities ... closely related to banking," 12 U.S.C. § 1843(c)(8) (emphasis added), and they are obviously meant to apply, mutatis mutandis, to all activities, including not just services but also sale of material and equipment. It cannot seriously be thought that a bank holding company's sale of checkbooks stands in a less favored position, under National Courier than its provision of courier services.75
Next, petitioners argue that the third National Courier test is not met because it requires that the new services (or, as we have said, other activities) be integrally related to "traditional bank services" such as "check collection, credit extension and deposit gathering." Petitioners' Brief at 53. As far as we can determine, this limitation has been created out of whole cloth. It does not appear in National Courier, which only requires that the integrally related services be services that "banks generally provide." If one were to hang upon this phraseology, the issue would presumably come down to whether the relevant integrally related services are data processing services in general (which banks now do generally provide) or the new types of data processing services authorized by these orders (at least the most futuristic of which banks now do not generally provide). Or it might be argued, as intervenor Citicorp does, Citicorp Brief at 61, that "services which banks generally provide" really means, as shown by language elsewhere in the National Courier opinion, "services which banks are authorized to provide."76
But at this point it begins to become foolish to devote one's analytic energy to a parsing of the National Courier tests as though they were the statute itself, instead of referring to the underlying intent of the "closely related" requirement of which National Courier is, and only purports to be, a partial elaboration. That is to say, surely one of the most significant elements of the National Courier criterion is its prologue. After noting that the 1970 amendments to the Bank Holding Company Act (which slightly altered the text of the "closely related" provision and added the "public benefits" requirement) mean that the "closely related" test "no longer bears the full load, and may now be thought of as setting off as forbidden to banks those activities which are so clearly of a purely commercial nature that the predominantly adverse effects of a bank's engaging in them may be presumed," 516 F.2d at 1237, we continued:77
Against this background, and reminding ourselves that the matter is one expressly committed by the statute to the Board, we think we owe considerable deference to the Board's judgment that a particular activity is "closely related to banking." Rather than define that term with any precision, therefore, we simply require that the Board go about making its "closely related" decision in a reasoned  fashion consistent with the legislative intent.
The Board must, we think, articulate the ways in which banking activities and the proposed activities are assertedly connected, and must determine, not arbitrarily or capriciously, that the connections are close. As to what kinds of connections may qualify, at least the following seem to us within the statutory intent....
Id. (emphasis added).79
Whether or not the provision of specialized computer hardware comes within the third National Courier test, we think the Board came to its decision in a reasoned fashion consistent with the legislative intent, and that that decision is not arbitrary or capricious. The Board noted, with adequate record support, that customers do not buy software and hardware but data processing. Citicorp Order, 68 Fed. Res.Bull. at 508-09; Regulation Y Order, 47 Fed.Reg. 37,370. Moreover, the Recommended Decision which the Board adopted discussed the impact of large scale integrated (LSI) circuits upon data processing technology, which now permit simple software functions, and in the future will permit more complex software functions, to be built into the hardware; and enable some of the computing function to be removed from the central computer and located in a customized "micro-processor" or "minicomputer" located at the point of use. Recommended Decision at 7-8, J.A. B-78 to B-79. This is the way some data processing is conducted now, and much more will be conducted in the future. Finally, the Recommended Decision also noted, with adequate record support, that a software producer marketing a "package" of software plus hardware is able to get a manufacturer's discount on the hardware, and is thus able to provide the full service to the purchaser at a more competitive price. Recommended Decision at 8, J.A. B-79. On the basis of these factors the Board concluded that "the activity of providing software without the corresponding authority to provide related hardware is of questionable economic feasibility." Citicorp Order, 68 Fed.Res.Bull. at 508 (footnote omitted). It is not the economic infeasibility in itself that impresses us, but the underlying cause of that infeasibility, recognized by the Board — that in both market contemplation and technological reality the service in question is a unitary one. The issue boils down, as Citicorp suggests, Citicorp Brief at 58, to almost "a tautology." In effect, to authorize the provision of banking, financial and economic data processing is to authorize the provision of banking, financial and economic hardware and software. Whether it be considered "integrally related" to the authorized service or, perhaps more realistically, simply part of it, the provision of specialized hardware is reasonably included.80
General purpose hardware is, as the name would suggest, hardware that is designed to perform data processing functions in addition to banking, financial and economic. The Board approved bank holding company provision of this hardware, subject to the same condition that it be offered only in conjunction with banking, financial or economic data software, and subject to the additional condition that it "not constitute more than 30 percent of the cost of any packaged offering." 12 C.F.R. § 225.25(b)(7)(iii). The Board acknowledged that the sale of general purpose hardware "is not itself an activity that is closely related to banking," but found that with the limitations the Board imposed it would be permissible as "incidental" to the provision of permissible data processing services, Citicorp Order, 68 Fed.Res.Bull.  at 508; see also Regulation Y Order, 47 Fed.Reg. 37,370.81
The notion of permissibility of "any incidental activities that are necessary to carry on" activities closely related to banking has been embodied in Regulation Y since 1971. 12 C.F.R. § 225.21(a)(2). We approved it in National Courier, noting that "[i]n enumerating the activities that could be carried on, [Congress] certainly could not have meant to forbid engagement in such other `incidental' activities as were reasonably necessary to carrying out those that were enumerated." 516 F.2d at 1240. We disapproved its application to bank courier handling of nonfinancial materials for the following reason:82
The justification for the `incidental' courier services ... is not, as far as we can tell, that the carriage of non-financially related material is in any way necessary to the successful operation of the courier service affiliates. Rather, it is that the provision of such service would serve `the convenience of the public.'
Id. (footnote omitted). Here, by contrast, the Board's justification was precisely that the provision of banking, financial and economic data processing services could not be successful unless they were offered in conjunction with the necessary hardware. Even where the hardware itself was not required to be specialized or to contain any software — so that the hardware could not be regarded as in itself the provision of banking, financial or economic data processing — the nature of the data processing market was such, the Board found, that hardware and software were a single package. The provision of data processing software in isolation, even where no specialized or software-inclusive hardware was required, was "of questionable economic feasibility." Citicorp Order, 68 Fed.Res.Bull. at 508, referred to in Regulation Y Order, 47 Fed.Reg. 37,370. There was record evidence to support this conclusion, and, as the excerpt from National Courier above suggests, the conclusion is sufficient to support the Board's action. Indeed, the Fifth Circuit Court of Appeals has permitted an even lesser connection to sustain bank holding company provision of liability insurance as "incidental" to the closely-related-to-banking activity of providing property damage insurance for the collateral in bank loans. Alabama Association of Insurance Agents, supra. While that court found evidence to sustain the proposition that, "from the consumer's point of view, packaged property damage and liability policies are more desirable than the same policies separately sold," 533 F.2d at 245, it did not make the further finding that the sale of the one had been shown to be "of questionable economic feasibility" without the sale of the other. In that respect, Alabama Association goes further than we were prepared to go in National Courier, though there was, it must be acknowledged, the added factor that liability insurance in itself to some degree increased the security of the banks' loans. In any case, we think that the reasoning of both National Courier and Alabama Association supports the proposition that the economic necessity of offering a service that is not closely related to banking in order to sell another service that is, justifies the provision of the one as "incidental" to the other.84
There is an obvious limitation upon this principle: At some point the tail begins to wag the dog. If it should be found, for example, that data processing services cannot be sold in an economically feasible manner without manufacturing data processing hardware; and if the banks' profits from the latter should exceed their profits from the former; surely the provision of data processing services would be incidental to hardware manufacture rather than vice-versa. But the Board has adequately taken that limitation into account, by specifying, as described above, that the cost of the hardware (including both specialized and general purpose hardware) cannot exceed 30 percent of the cost of the package. The Board derived this figure by noting from the record that hardware costs for the data processing industry as a whole represent about 25 percent of total costs, Citicorp Order, 68 Fed.Res.Bull. at 509, — so that a "package" in which hardware accounted  for about that percentage of the cost could reasonably be considered primarily a sale of data processing rather than a sale of processing hardware. We think that a reasonable way to proceed, and we cannot say that an element of a permissible service which constitutes less than one-third the cost of that service is not "incidental."85
Petitioners raise a procedural objection to the Citicorp order. They claim that the Board approved Citicorp's request without stating its holding or reasoning regarding four components of that request, in violation of the APA's requirement that agency orders in formal proceedings address "all the material issues of fact, law, or discretion presented on the record." 5 U.S.C. § 557(c). They complain that the Board did not address the sale of applications software products, the provision of facilities management services, the sale of turnkey systems products, and the provision of software-related services.87
We do not agree. What is a "material issue" that must be separately addressed obviously depends upon one's view of the logical or operational differences between various aspects of the problem in question. If an appellant before this court chooses to analyze a freedom-of-speech issue by discussing verbs, nouns, adjectives and pronouns separately, our decision will not necessarily disregard a "material issue" if it ignores this distinction. So also here, petitioners cannot insist upon imposing their structure of analysis upon the Board. The characteristic feature of petitioners' approach throughout this proceeding has been the insistence that each separate element of the provision of data processing services be analyzed separately; this is simply contrary to the Board's view, which we have found reasonable, that "the particular technology by which a data processing activity is provided is not determinative" and the "permissible data processing activities may be provided by any technologically feasible method." Regulation Y Order, 47 Fed.Reg. 37,369. The Board's decision in the Citicorp order clearly disposed of the various elements petitioners complain of here, whether or not it addressed each of them separately; and the reasons for its dispositions are fully set forth. That is all that reason or even the APA requires.88
Applications software, which petitioners define as software that provides instructions for the performance of specific tasks, is part of the software included in on-site data processing, electronic funds transfer, and authentication programs, all of which were approved and fully discussed. Facilities management by employees of the bank holding company and "turnkey" systems (that is, systems including both hardware and software in which control is turned over to the purchaser) were described by the ALJ as the two modes of providing on-site data processing, Recommended Decision at 7-8, 12-13, J.A. B-78 to B-79, B-83 to B-84; that activity, in all of its modes, was approved and fully discussed. Citicorp Order, 68 Fed.Res.Bull. at 508-09. Finally, as to software related services, such as consulting and systems analysis: Citicorp's application did not include these services as a separate activity, and neither we nor, judging by its brief, the Board, see Board's Brief at 63, regards the operation of a consulting service to give advice regarding data processing to be the same thing as data processing, which is all that the orders approve. Of course some consultation and advice will be necessary as an incident to the sale of data processing, but authorization for that was neither separately sought nor is separately required, since it is obviously included within Regulation Y's existing authorization for "incidental activities," discussed above. We therefore reject the procedural objection to the Board's action.89
* * * * * *90
The challenge which the Board faced in the current proceeding was the perennial regulator's problem of adjusting the outlines of regulation to accommodate technological change. Virtually unprecedented difficulties of adjustment are presented by  the torrent of recent scientific innovation in the fields of electronics and telecommunications, which possess a peculiar capability to destroy the categories of enterprise upon which regulation is based. Communications merges into data processing and data processing into banking. Intervenor California Bankers Clearing House Association perceptively observes, CBCHA Brief at 29 n. 20, that this proceeding parallels the Federal Communications Commission's Second Computer Inquiry, the order resulting from which we upheld in Computer and Communications Industry Association v. FCC, 693 F.2d 198 (D.C.Cir.1982).91
The record of the present proceeding displays a careful and conscientious effort by the Board to cope with these difficulties. We are not inclined to complicate its task further by attempting to exercise close and necessarily inexpert supervision of its judgments. That would be particularly inappropriate under a governing statute such as this one, which commits it to the Board to apply a standard of such inherent imprecision ("closely related to banking") that a discretion of almost legislative scope was necessarily contemplated. If there is a problem in such broad delegation, it would assuredly not be solved by effectively taking the delegation from the Board and placing it in our own hands. Having assured ourselves that the Board has acted reasonably, consistently and with procedural regularity in giving content to the statutory standard, our task is at an end.92
In addition to the major points discussed above, we have considered the other objections urged by petitioners and find them insubstantial. For these reasons, the petitions are93
 Sitting by designation pursuant to 28 U.S.C. § 294(d) (1982).95
 12 C.F.R. § 225.25(b)(7) (1984) is the slightly revised successor to 12 C.F.R. § 225.4(a)(8) (1983). Since the revisions are minor and do not affect this opinion, all references are to the 1984 Code.96
 In SIA, the Court noted that the Board's "factual findings ... are substantially supported by the record," 104 S.Ct. at 3009, but as will appear below that may be a description of the requirements of the arbitrary or capricious standard.97
 12 U.S.C. § 1848 reads as follows:98
Any party aggrieved by an order of the Board under this chapter may obtain a review of such order in the United States Court of Appeals within any circuit wherein such party has its principal place of business or in the Court of Appeals in the District of Columbia, by filing in the court, within thirty days after the entry of the Board's order, a petition praying that the order of the Board be set aside. A copy of such petition shall be forthwith transmitted to the Board by the clerk of the court, and thereupon the Board shall file in the court the record made before the Board, as provided in section 2112 of title 28. Upon the filing of such petition the court shall have the jurisdiction to affirm, set aside, or modify the order of the Board and to require the Board to take such action with regard to the matter under review as the court deems proper. The findings of the Board as to the facts, if supported by substantial evidence, shall be conclusive.
 National Courier's failure even to refer to § 1848 was noted in a later decision of this court which applied the "substantial evidence" provision of another statute to informal (as opposed to formal) adjudication. Aircraft Owners and Pilots Association v. FAA, 600 F.2d 965, 971 n. 26 (D.C.Cir.1979). Our decision today explains why National Courier, in ignoring the provision, and Aircraft Owners, in applying it, were not reaching different results. Aircraft Owners acknowledged this possibility in a footnote, 600 F.2d at 971 n. 28.100
 Subsection 706(2) reads as follows:101
[The reviewing court shall —]
(2) hold unlawful and set aside agency action, findings, and conclusions found to be —
(A) arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law;
(B) contrary to constitutional right, power, privilege, or immunity;
(C) in excess of statutory jurisdiction, authority, or limitations, or short of statutory right;
(D) without observance of procedure required by law;
(E) unsupported by substantial evidence in a case subject to sections 556 and 557 of this title or otherwise reviewed on the record of an agency hearing provided by the statute; or
(F) unwarranted by the facts to the extent that the facts are subject to trial de novo by the reviewing court.
 See, e.g., the quotation from K. DAVIS, supra, page 684. The reason for this reputation, one may surmise, is that under the APA the substantial evidence test applies almost exclusively to formal adjudication (formal rulemaking is rare), which is, by contrast to rulemaking, characteristically long on facts and short on policy — so that the inadequacy of factual support is typically the central issue in the judicial appeal and is the most common reason for reversal.103
 There is no doubt that the Board understood them to be, as they were phrased, merely examples of the data processing uses that would be made available. Where its opinion meant to limit the applicant to the specific uses that were recited as currently contemplated, it said so. See the portion of the Citicorp order dealing with home banking services, 68 Fed.Res.Bull. at 509-10, the conclusion of which is reflected in the Regulation Y Order, 47 Fed.Reg. 37,370.104
 Although the language of the statute is subject to the interpretation that the "public benefits" finding is merely part of the finding that the activity is "so closely related to banking ... as to be a proper incident thereto," 12 U.S.C. § 1843(c)(8), it is now well established that they are "two separate determinations," SIA, supra, 104 S.Ct. at 3006.105
 This is required by the Board's regulations, 12 C.F.R. § 225.21(a)(2). The Supreme Court has intimated that it is also required by law, saying that the Board "must [make the determination] on a case-by-case basis," and citing for that proposition a portion of the legislative history, H.R.Conf.Rep. No. 1747, 91st Cong., 2d Sess. 16-18, reprinted in 1970 U.S.CODE CONG. & AD. NEWS 5561, 5567-69. SIA, supra, 104 S.Ct. at 3006.106
 The petitioners' challenge to the evidentiary support for the Board's approval of budget and accounting services, which they present as a separate challenge to the orders, Petitioners' Brief at 46-47, is in reality merely a challenge to this pragmatic validation of the data test. We digress briefly to address that challenge. The Board concluded that "[t]he record of this proceeding demonstrates that banks in fact provide data processing services that assist banks in performing their own credit functions and that perform financial bookkeeping and accounting operations for other businesses." Citicorp Order, 68 Fed.Res.Bull. at 507. While this specific finding was made only in the Citicorp order, the Regulation Y order incorporated it by reference when it noted that "[t]he Board's findings on the permissibility of the services involved are set forth in detail in the Board's Citishare order." Regulation Y Order, 47 Fed.Reg. 37,369.107
Neither the Board nor the intervenors cited us any portion of the record that supports this finding. The reason, apparently, is that with the exception of the provision of economic data (discussed later in this opinion) the evidence in the present proceeding focused upon the technological means of delivering data processing services, rather than upon the subjects those services covered. The latter had been extensively considered in the 1971 rulemaking that produced the prior version of Regulation Y — in which proceeding, we may note, ADAPSO participated. Thus, for evidence to support the Board's statement on this score its brief refers to an American Bankers Association survey introduced in the 1971 proceeding. Respondent's Brief at 43 n. 46, 48 (citing Supplemental Statement of American Bankers Association, Apr. 30, 1971, Appendix I at 4). We have been unable to find the survey in the record. We think it unnecessary to examine or rely upon the survey itself, however, since the Applicant's Exhibits include a June 7, 1971 Memorandum to the Board from its Legal Division which provides information based upon the survey. See page 686, supra. It shows that since the 1950s banks have performed such functions as payroll service, account reconciliation, sales analysis and inventory analysis, which seem to us unquestionably bookkeeping and accounting functions. While that information is not extensive (as the full survey itself presumably is) we think it adequate, in the absence of any contradiction regarding such functions from petitioners, to provide the necessary record support.108
 There is no question that courier service for data processing material has been found "closely related to banking" not because of its connection to banking per se but because of its relation to financial data processing, an activity banks are permitted to engage in.109
516 F.2d at 1239.110
 This means cost to the bank holding company. See Regulation Y Order, 47 Fed.Reg. 37,370. The Citicorp order, and the text of the Regulation Y order (as opposed to the language of the amended regulation) say "approximately 30 per cent." Citicorp Order, 68 Fed.Res.Bull. at 509; Regulation Y Order, 47 Fed.Reg. 37,370 (emphasis added). The Citicorp order also concedes that "in individual cases, the cost of hardware may exceed the percentage limitation," so long as hardware sales do not "consistently exceed" it. Citicorp Order, 68 Fed.Res.Bull. at 509.
400 F.3d 530 (2005)2
United States Court of Appeals, Seventh Circuit.
Argued January 26, 2005.
Decided March 9, 2005.
 Scott E. Bratton (argued), Wong & Associates, Cleveland, OH, for Petitioner.5
Karen Lundgren, Dept. of Homeland Security Office of the District Counsel, Chicago, IL, Anthony W. Norwood (argued), Terri J. Scadron, Dept. of Justice Civil Division, Immigration Litigation, Washington, DC, for Respondent.6
Before POSNER, MANION, and WOOD, Circuit Judges.7
An immigration judge ordered the petitioner, a citizen of China seeking asylum in the United States, to be removed (deported) from the United States, and the Board of Immigration Appeals affirmed without opinion. The basis of the immigration judge's ruling was that the petitioner is not entitled to asylum because she lacks a well-founded fear of being persecuted by the Chinese government should she return to China.9
A woman in her early 20s, Li arrived in the United States in 2000. At the removal hearing she testified through an interpreter that she had begun to practice Falun Gong in China and — the Chinese government having outlawed Falun Gong in 1999 — that police and village officials had learned of her activity (probably through her employer) and decided to investigate. Village officials made repeated visits to the house in which she lived with her parents to tell her to abandon Falun Gong, but she eluded them by residing mainly in her aunt's house. Police visited the parents' home and delivered a summons commanding Li to come to the police station for an interview. She did not comply with the summons. They kept coming back to the home, looking for her, and she fled the country.10
Since arriving in the United States, Li has, again according to her testimony, practiced Falun Gong in Chicago (where she lives) and has also participated in street demonstrations against the Chinese government's persecution of the movement. When she arrived in this country she knew the name of the founder of Falun Gong (Li Hongzhi, now in exile in the United States) and had done the physical exercises that are the primary manifestation of adherence to Falun Gong, but she was vague about its doctrines and unfamiliar with its symbol. She has since become more familiar with the movement's doctrines and symbol. At the hearing before the immigration judge she presented letters from her mother in China, and the Chinese man who had introduced her to Falun Gong there, corroborating her testimony.11
Falun Gong is an international movement, though primarily Chinese, that is often referred to as a "religion" (or, by its critics, as a "cult"), though it is not a religion in the Western sense. Like other Asian "religions," such as Buddhism and Confucianism — on both of which Falun Gong draws — there is no deity. The emphasis is on spiritual self-perfection through prescribed physical exercises; in  this respect the movement has affinities with traditional Chinese medicine.12
The government acknowledges that China persecutes adherents to Falun Gong and that an applicant for asylum need not have experienced persecution (Li has not) in order to have a well-founded fear of future persecution, Diallo v. Ashcroft, 381 F.3d 687, 699 (7th Cir.2004); Sivaainkaran v. INS, 972 F.2d 161, 165 n. 2 (7th Cir.1992); Knezevic v. Ashcroft, 367 F.3d 1206, 1212 (9th Cir.2004), which suffices for a claim of asylum. Capric v. Ashcroft, 355 F.3d 1075, 1084-85 (7th Cir.2004); Yadegar-Sargis v. INS, 297 F.3d 596, 601-02 (7th Cir.2002); Krastev v. INS, 292 F.3d 1268, 1270 (10th Cir.2002). As Falun Gong is neither theistic nor, so far as appears, political, the ferocious antipathy to it by the Chinese government — that government's determination to eradicate it root and branch — is mysterious, but undeniable. See, e.g., Zhang v. Ashcroft, 388 F.3d 713, 716, 719 (9th Cir.2004) (per curiam). If Li practiced Falun Gong in China, as she testified she did, or if she attempted to practice it upon returning to China, she would face a substantial likelihood of persecution. She might be able to conceal her adherence to Falun Gong from the authorities, but the fact that a person might avoid persecution through concealment of the activity that places her at risk of being persecuted is in no wise inconsistent with her having a well-founded fear of persecution. Id. at 719 ("to require Zhang to practice his beliefs in secret is contrary to our basic principles of religious freedom and the protection of religious refugees"); Muhur v. Ashcroft, 355 F.3d 958, 960-61 (7th Cir.2004). On the contrary, it is the existence of such a fear that motivates the concealment.13
The immigration judge gave five reasons for nevertheless denying Li's application for asylum. The first is that she was not persecuted in China. But she does not claim to have been; it is a nonissue. The fifth reason is that her brother, who lives in the United States, is a follower of Falun Gong yet failed to submit an affidavit attesting that his sister is too. The judge misread the record; the brother is not a follower of Falun Gong.14
Reasons 2 through 4 overlap. Reason 2 is that Li failed to present persuasive evidence that she is a follower of the movement, because in her testimony she was "quite vague concerning her beliefs." For example, she didn't know that Falun Gong has a symbol (the "Falun Wheel" composed of reverse swastikas, a Buddhist symbol). But the heart of Falun Gong observance is the exercises, which she testified without contradiction that she does.15
Reason 3 was that there were inconsistencies in her testimony about the visits of the police to her home. This was not, as the immigration judge thought, an independent reason for denying the application for asylum; rather, it was a reason not to credit her testimony about being a member of Falun Gong. The inconsistencies were trivial, however, and may well have been due to the fact that Li was testifying through an interpreter who appears not to have had a good command of English. When Li testified about the delivery of the summons to her home by the police, the immigration judge asked her whether she had had any prior "confrontations" with the government and she said no, but later explained that although the police didn't start coming to her home until they served the summons, village officials had visited earlier. Were these "confrontations"? She was never at home when they visited. And goodness knows how the interpreter translated "confrontations" into Chinese.16
Reason 4 was that when interviewed by an asylum officer at the time she first applied for asylum, Li testified that after  the village officials got wind of her involvement with Falun Gong she "went into hiding at different locations and never went back home." The immigration judge said that she "did not specifically testify in this manner (e.g. that she went into hiding) nor does the rest of the record support this statement." That is not correct. Although Li (more precisely, the interpreter) did not use the word "hiding," she said she wasn't at home when the police visited and that sometimes she was "at my aunt that I mentioned at her house." Apparently the village officials and police visited her home repeatedly, and since she was never there when they showed up it is a logical inference, supported also by her mother's letter, that she was indeed trying to evade the authorities.17
The immigration judge's opinion cannot be regarded as reasoned; and there was no opinion by the Board of Immigration Appeals. So we have to vacate the decision and send the matter back to the immigration service. We do not decide that Li is entitled to asylum; that is a decision for the immigration authorities to make. But she is entitled to a rational analysis of the evidence by them.18
The number of followers of Falun Gong in China is estimated to be in the tens of millions, all of them subject to persecution. And among the other billion Chinese there are doubtless many who would prefer to live in the United States than in China. Falun Gong, unlike, say, Judaism or Roman Catholicism or Jehovah's Witnesses, does not appear to have any formal requirements for membership; indeed, it has no membership. Anyone, we suppose, can get hold of a book of Li Hongzhi's teachings, start doing the exercises, and truthfully declare himself or herself a bona fide adherent to Falun Gong. The implications for potential Chinese immigration to the United States may be significant, though in this circuit there have been only two litigated applications for asylum based on fear of persecution for being an adherent (or for being believed by the Chinese authorities to be an adherent) of Falun Gong, Liu v. Ashcroft, 380 F.3d 307 (7th Cir.2004); Yu v. Ashcroft, No. 03-3965, 2004 WL 3103070 (7th Cir. Dec.28, 2004) (unpublished order), and in the federal courts as a whole there have been only a couple of dozen such cases since 2003. The United States has every right to control immigration. But Congress has not authorized the immigration service to do so by denying asylum applications in unreasoned decisions.19
We close by noting six disturbing features of the handling of this case that bulk large in the immigration cases that we are seeing:20
1. A lack of familiarity with relevant foreign cultures. Yi-Tu Lian v. Ashcroft, 379 F.3d 457, 459 (7th Cir.2004); Joanna Ruppel, "The Need for a Benefit of the Doubt Standard in Credibility Evaluation of Asylum Applicants," 23 Colum. Human Rts. L.Rev. 1, 14-15 (1992). The immigration judge offered no justification for regarding a person's lack of knowledge of Falun Gong doctrines as evidence of a false profession of faith. Different religions attach different weights to different aspects of the faith. Falun Gong, remember, is not theistic; nor is it hierarchical. So far as appears, what is central is neither doctrine nor symbol, but the exercises. Benoit Vermander, "Looking at China Through the Mirror of Falun Gong," 35 China Perspectives 4 (May-June 2001), http://www.cefc.com.hk/uk/pc/articles/ art_ligne.php?num_art_ ligne=3501 ("the absence of any formal rituals and organisation would make it impossible to consider Falun Gong precisely as a religion. Where rituals are concerned, however, it seems to us that one must consider the  communal practice of exercises, alternated with peaceful protests, as the movement's own ritual arsenal"); Anne S. Y. Cheung, "In Search of a Theory of Cult and Freedom of Religion in China: The Case of Falun Gong," 13 Pac. Rim L. & Policy J. 1, 28 (2004) ("those who believe in Falun Gong dedicate themselves to the exclusive practice of this exercise as a means to achieve enlightenment. In this sense, manifestation and belief are united").21
2. An exaggerated notion of how much religious people know about their religion. Muhur v. Ashcroft, supra, 355 F.3d at 959-60. Of course a purported Christian who didn't know who Jesus Christ was, or a purported Jew who had never heard of Moses, would be instantly suspect; but many deeply religious people know very little about the origins, doctrines, or even observances of their faith.22
3. An exaggerated notion of the availability, especially in poor nations, of documentary evidence of religious membership. Id.; Qiu v. Ashcroft, 329 F.3d 140, 154 (2d Cir.2003). An acephalous, illegal religious movement is particularly unlikely to issue membership cards. The immigration judge's zeal for documentation reached almost comical proportions when after Li had testified at length and in considerable detail about locations, including the street in front of the Chinese consulate in Chicago, in which she had participated in demonstrations against the persecution of Falun Gong, he upbraided her for having "failed to submit to the Court any letters or photographs or any other evidence whatsoever to corroborate these claims." Since the demonstrators are mainly Chinese who might one day want or be forced to return to China, they are hardly likely to be taking photos of each other demonstrating, or to be creating other documentary proof of participating in demonstrations of which the Chinese government deeply disapproves.23
4. Insensitivity to the possibility of misunderstandings caused by the use of translators of difficult languages such as Chinese, and relatedly, insensitivity to the difficulty of basing a determination of credibility on the demeanor of a person from a culture remote from the American, such as the Chinese. E.g., Lin v. Ashcroft, 385 F.3d 748, 756 n. 1 (7th Cir.2004); Ememe v. Ashcroft, 358 F.3d 446, 451-53 (7th Cir.2004); Mendoza Manimbao v. Ashcroft, 329 F.3d 655, 662 (9th Cir.2003); He v. Ashcroft, 328 F.3d 593, 598 (9th Cir.2003); Deborah E. Anker, "Determining Asylum Claims in the United States: A Case Study on the Implementation of Legal Norms in an Unstructured Adjudicatory Environment," 19 N.Y.U. Rev. L. & Social Change 433, 505-27 (1992); Neal P. Pfeiffer, "Credibility Findings in INS Asylum Adjudications: A Realistic Assessment," 23 Tex. Int'l L.J. 139 (1988). Behaviors that in our culture are considered evidence of unreliability, such as refusing to look a person in the eyes when he is talking to you, are in Asian cultures a sign of respect.24
5. Reluctance to make clean determinations of credibility. Gontcharova v. Ashcroft, 384 F.3d 873, 877 (7th Cir.2004); Diallo v. Ashcroft, supra, 381 F.3d at 698-700; Mendoza Manimbao v. Ashcroft, supra, 329 F.3d at 660-61; Diallo v. INS, 232 F.3d 279, 287 (2d Cir.2000). When an immigration judge says not that he believes the asylum seeker or he disbelieves her but instead that she hasn't carried her burden of proof, the reviewing court is left in the dark as to whether the judge thinks the asylum seeker failed to carry her burden of proof because her testimony was not credible, or for some other reason.25
6. Affirmances by the Board of Immigration Appeals either with no opinion or  with a very short, unhelpful, boilerplate opinion, even when, as in this case, the immigration judge's opinion contains manifest errors of fact and logic.26
We do not offer these points in a spirit of criticism. The cases that we see are not a random sample of all asylum cases, and the problems that the cases raise may not be representative. Even if they are representative, given caseload pressures and, what is the other side of that coin, resource constraints, it is possible that nothing better can realistically be expected than what we are seeing in this and like cases. But we are not authorized to affirm unreasoned decisions even when we understand why they are unreasoned.27
The petition for review is granted and the matter returned to the immigration service for further proceedings consistent with this opinion.28
 This is the name that appears in the final order of the Board of Immigration Appeals and in the docket and briefs in this court. But the record reveals that the petitioner's name is actually Xiuzhen Li, and that is the name we'll use in the opinion.