Evening star., 1935-06-04
TRADE PACT RULE
BY j. S. POSSIBLE.
N. R. A. Decision Did Not
Close Door to All Regu-
Iatory Power.
BY DAVID LAWRENCE.


codes into trade associations Of a vol
untary character, which would receive
certain benefits bestowed by the Fed
eral Government in return for the
maintenance of certain standards of
minimum wages or hours, is entirely
within the constitutional rights of the
Federal Government and the trade
organizations.
The impression that the Federal
Government is without power to exer-
else a far-reaching influence on ma
tional commerce or that industries
and businesses which have been aided
by codes are now powerless Is not
borne out by the words Of the Supreme
Court in various decisions under the
very commerce clause which was the
subject of recent Judgment by the
court in the Schechter case
In an opinion, 8 to I, rendered on
March IL, 1898, in the Appalachian
coal case, the Supreme Court went
farther in defining what could be
bilizing market conditions than in any
previous case.
Cooperative Effect Upheld.
In the light of the problem created
by the necessary dissolution of the
old N R. A., the following words Of
the Supreme Court take on new sig
nificance because they seem to apply
to some of the situations now arising:
"A cooperative enterprise, other
wise free from objection, which car
ries with it no monopolistic menace
is not to be condemned as an undue
restraint merely because it may effect
a change in market conditions, where
the change would be in mitigation
Of recognized evils and would not i'm
pair. but rather foster, fair competitive
opportunities.
''Volrntary action to rescue and
preserve these opportunities, and thus
aid IN relieving a depressed industry
and in reviving commerce by placing
competition upon sounder basis, may
be more efficacious than an attempt
TO provide remedies through legal
processes.
THE fact that the correction of
abuses may tend to stabilize q busi-
ness, or to produce fairer price levels,
does not mean that the abuses should
90 uncorrected or that cooperative
endeavor to correct them necessarily
constitutes an unreasonable restraint
Of trade. The intelligent conduct of
commerce through the acquisition of
ft1ll information of all relevant facts
may properly be sought by the CO.
operation Of all those engaged in
trade, although sterilization of trade
and more reasonable prices may be
the result.
Consonant With Interest.
Putting an end to injurious prac-
tces, and the consequent improvement
Of the competitive position of a group
ef producers Is not less worthy aim
and may be entirely consonant with
the public interest, where the group
must still meet effective competition
N fair market and neither seeks
nor Is able to effect domination Of
prices"
What the foregoing probably would
permit, for example, is a concerted
effort by producers to eliminate price
cutting below cost or the use Of the
1oss-leader in retail trade. It could
mean elimination by agreement of
certain things that might be classed,
as the court phrases it, as recognized
evils" And yet not interfere with
competition.
If various trade groups believe that
stabilization Of prices and marketing
conditions is an advantage to them
and deserves immunity from prosecu-
ton under the Sherman law or Clay /
ton act, there Is nothing to prevent
the Federal Government from enter
ing into agreements with such code
groups permitting such sterilization,
but at the same time, requiring GER
tain standards Of a social character
to be maintained.
Right Still Exists.
The administration has had hun
dreds Of plans submitted to 1t and, in
due time, a policy will be evolved, but
It would be unfortunate for any Inn
preston to grow that the Federal Gov
ernment has suddenly lost its power to
regulate commerce among the States
simply because 1t has been deprived Of
the right to do so by coercion or by
the fixing OF penalties or by reaching
into intrastate commerce over which
It has no primary control at all.
Whatever influence the Federal
Government desires to exercise over
national commerce can be very ex-
tensively welded II, first, the new laws
that are to take the place Of the
N. r. A. are careful to set forth stand
ards and rules for the guidance of
executive bureaus and. second. II the
nd fI1A
emergency as period Of expediency
and not means Of introducing per-
manent changes, were to blend togeth-
er all its constitutional functions in
an effort to promote recovery ire
spective Of reform"
The Federal Congress has the right
to approve compacts entered into
among the States, whether the NUM-
ber Of States signing a compact Is 2
or 48. In those compacts may be writ
ten social standards. But here, too,
the Constitution does not permit arbi-
trary or capricious action. 1t is gen.
orally believed, however, that min
imum wage law or law regulating
maximum hours would probably be
upheld.
The field Of experimentation by law
to achieve recovery has by no means
been abolished by the Supreme Courts
decision, even though the precise
formula used by the New Deal has
been found illegal. Voluntary action
by trade groups, interstate compacts
and enlargement Of the authority Of
the Federal Trade Commission are but
q few of the ways out" Of the present
constitutional dilemma.
tcopyrisht 1850