Evening star., 1935-03-08
CODE. COMPULS|ON
BY LAW HELD DEAD
Voluntary Cooperation Of
Business Units Seen Very
Much Alive.
BY DAVID LAWRENCE.

BY DAVID LAWRENCE.
Codes by compulsion Of law are
dead whether applied to businesses or
industries engaged in interstate or
intrastate commerce.
Codes by voluntary cooperation OF
various units of business are very
much alive and represent the sole
way out of the mess IN which the
N. R. A. finds itself today.
Court decisions by the highest
tribunals in different States, as we'll
as by the Supreme Court, have
sounded the death knell Of codes by
compulsion.
Conceded by Richberg.
Donald Richberg, spokesman for the
President, conceded as much when
he asked Congress this week to limit
the codes to those businesses engaged
in interstate commerce.
But this would mean inequality.
Two businesses alongside one another
in the same city, paying different
rates Of wages and using different
working hour schedules for virtually
the same kind of labor, would mean
handicap to those actually shipping
goods from State to State which the
other units would not be obliged to
bear.
There is another reason. however,
why the whole N. r. A. structure IS
collapsing. The Wisconsin Supreme
Court and the Appellate Court of
New York State have both handed
down decisions declaring that State
Legislatures cannot abdicate their
functions and delegate their power
over code making to administrative
agencies. In each instance, the deci-
sion cited in its support the opinion
of the Supreme Court OF the United
States in the recent "hot oil" cases.
In other words, even as to business
operating with a State, the legisla-
lures cannot simply copy the Federal
law and make N. r. A. codes the law
Of their respective States. This Is a
delegation of power to an outside
agency. Indeed, in this example it is
a delegation to the Federal Govern
ment of a power that ought to be ex-
erciSed by the State Legislature. Wis
consin and New York courts have both
said so.
Refuse Responsibility.
Neither the State Legislatures nor
Congress will ever write specific codes.
The legislators usually refuse to take
the responsibility. And the Supreme
Court says the laws must be specific.
This means that detailed instructions
as to the operation of businesses
would have to be undertaken by
either State or National legislators
and the danger of this is a reaction
at the polls similar to that which has
attended the drive Of the N. R. A.
1rritations and grievances have multi
piled under the N. r. A., especially in
small businesses.
There was much merit in Gen
Johnson's original concept Of volun-
tary codes, but much harm in the
Blue Eagle boycott as a penalty fol
those who did not obeby. But the
basic idea of volition plus public opin-
ion was step in the right direction.
The way out is to preserve the code
idea and let Government officials sit
in on code meetings as conciliators
and mediators, in the hope of bring
ing about in each industry the maxi
mum of agreement in what constitutes
q fair trade practice and leaving II
to the present Federal Trade Com
mission procedure in the courts to
determine what is unfair competition
in q given case The Federal Gov
ernment's right to suspend the anti
trust laws is a weapon which would
be helpful in the event that the Gov
ernment representatives saw merit in
the operation of code developed by
the agreement Of majority.
The formula for preserving the good
In the code system is rapidly coming
to the surface. It lies in an abandon
ment Of compulsion and greater re-
lance on voluntary cooperation. The
emphasis is shifting in that direc-
tion partly because there is no other
way to produce cohesion in industrial
groups and partly because the Federal
and State courts have by their recent
decisions revealed the impracticability
Of q Government dictatorship over
economic policy.
Another phase Of Government con-
troll which will have to be clarified
soon Is the attempt by the Federal
Government to introduce the licensing
system with respect to products of
agriculture. Certainly Government
power over the marketing Of products
In interstate commerce has been seri-
ously interfered with in the cases
wherein the Federal Government has
been enjoined by the courts from pre-
venting milk sales inside State.
Tariff Barrier Seen.
Likewise the State power to re-
strain sales Of milk that come In from
another State has been knocked down
by the Supreme Court Of the United
States as being kind of tariff barrier
forbidden by the Federal Constitution
as between the States of the Union.
All in all, the power to obstruct
interstate commerce by laws intended
to build up a new economy have
fallen down, and the sooner the
Roosevelt administration adjusts It
self to the new situations the quicker
will recovery come.
It is sad commentary on the quail
ity Of legislative intelligence that laws
plainly in conflict with the Federal
and State constitutions are passed. but
much Of this must be attributed to the
hysteria growing out Of the economic
emergency.
The day of reckoning has come in
the courts and this is one of the prin-
cipal reasons why legislation is all
piled up here in Congress and why the
administration silently looks on in q
sort Of bewilderment, wondering in
what direction to &C next.
Meanwhile, busiress and industry
are clamoring for recognition by the
administration Of the fact that recov-
cry will come when the raid on busi-
ness is superseded by constructive
program which really aims at re-
employment of the idle millions.
(Copyright. 1850