Evening star., 1935-11-15
UTILITIES DAzED
ON REGISTRATION
Fear of Losing Constitu'
tional Rights Marks Dif-
ficuIt Situation.
BY DAVID LAWRENCE.

A principle OF broad application
is involved in the hesitancy Of public
utility holding companies to register
under the new Federal law.
It Is q question of what shall be
law he believes to be unconstitutional.
All the legal authorities unite in de-
ciaring an invalid law Is Just the same
rs no law and hence obedience can
not be compelled
But-and here's the rub-oniy q
lower court has said the public
utility act is invalid, and, If the
Supreme Court dees not uphold the
lower court, then anybody who re-
fused to obey the law must risk severe
penalties prescribed In the law itself.
Yet, under our judicial system, no
law can be tested as to its unconsti-
tutionality unless someone takes the
risk and refuses to obey.
On its face, the requirement that
public utility companies should reg
tster Is simple enough The Securities
and Exchange Commission. through
chairman Lands, has pointed out
that it is unsafe for the companies
not to register, that they could stip-
ulate in their registration that they
don't waive constitutional rights and
could carry on a test later just
the same. This explanation has seemed
to satisfy most observers. including
this correspondent, who has believed
the registration ought to be filed and
the law complied with But the law
yers for the utility holding companies
hold otherwise, and their reasons
are, from q legal standpoint, rather
conclusive.
Mechanism Of Control.
Not long ago. for instance. chair
man Lands, In public speech, said,
"Out o. registration springs the mech
anism of CONTROL" and he indicated
that various features of management
would come under Federal control,
Is he interpreted the law. His version
Of the act Is correct. Registration does
mean control. The question then Is
whether a company which files a
registration statement Is voluntary
submitting itself to Federal control
and whether the written concession
by the Securities Commission that
no constitutional rights are waived
really means anything.
The concession is rule Of the COM
mission. and authority for it is not
to be found in the words of the law
itself. The strongest evidence that
anybody submitting voluntarily to the
provisions Of an act may lose his con-
sdttutional rights Is contained in a
brief signed by six eminent lawyers
In the Department Of Justice, includ-
ing James Lawrence Fly, who is now
counsel for the T. v. A, and Harold
NJ Stephens, who recently was ap-
pointed Judge on the Court Of Ap-
peals Of the District of Columbia by
President Roosevelt.
This brief was fled in the famous
Weirton case. which was dropped
when the Schecter case was decided.
so no determination by the Supreme
Court of the United States on the
point now at issue has been made.
Federal Courts Rule.
1T is well settled rule in the Fed
eral courts" says the brief, that one
who has himself voluntarily invoked
a statute or who has received the
benefits flowing from statute is
stopped later to assert its unconsti.
tutionality."
In this instance, the N. r. A. told
code signers that voluntary signing
didn't mean waiver Of constitutional
rights, just as now the S. e. c. Is CIV
ing the same assurance. But the De-
partment Of Justice went ahead and
prosecuted just the same.
There is a much more important
case which has been referred to more
often than any other. It is known as
the Booth Fisheries Co. VS.. Industrial
Commission and it was cited by the
lawyers for the Department of Justice
in the Weirton case because the Su-
preme Court said:
'Tfe employer In this case having
elected to accept the provisions of the
law, and any such benefits and i'm
munities as it gives. may not escape
its burdens by asserting that it is un-
CONSTITUTIONAL. Ihe election Is waiver
and estops such complaint"
Utilities in QuAndary.
Under the circumstances, the utili-
ties are up against it. Their lawyers
advise them not to register. Public
opinion advises them to register and
test the law II they desire and rely on
the assurance of the s. e. C. as being
pledge that will bind the present
administration, including the Depart
ment Of Justice, from raising the same
defense as it did in the weirton case.
Also the Supreme Court of the United
States probably will have passed on
some test case Of the utility law within
the next year or so.
It may be that an understanding
between the utilities and the s. e. c.
on these legal phases win be reached
in time to permit registration by hold
ing companies without fear of loss Of
constitutional rights. But it isn't as
simple q question as 1t appears to be
on the surface.
fronvricbt 1ooEN