Evening star., 1936-07-04

"when we make our business plans
what unforeseen and extraordinary
events may increase our expenses or
reduce our revenues. The manufac-
turer whose plant is situated in flood
area may have his calculations upset
by disastrous flood. His income may
he reduced. His expenditures may be
increased"
But. the government of the United
States, and particularly the Treasury,
Is to be compared more accurately
with bank than with a manufacture
ing plant. AS financial institution,
the Treasury is obliged to estimate its
probable income and outgo from the
viewpoint of what is sure and what
Is doubtful account.
Reckoned Without Court.
The New Deal has been more than
$500, GOO 900 off on its calculation of
expected receipts because it did not
figure out that the Supreme Court
might possibly hold the agricultural
adjustment act to be invalid. If the
Treasury were run like bank or if
the Treasury had to submit to some
of the rigid inspection which its own
bank examiners require of banks. there
would have been set up in the Treasury
a special reserve account for possible
loss on the A. A. A.
The Treasury knew almost from the
instant the law was passed that the
law was of doubtful constitutionality
because the A. A. A. promptly was
challenged in the lower courts In
deed, by January, 1886, the Circuit
Court of Appeals in Boston had re-
versed lower court and had held the
A. A. A. unconstitutional in the Hoosac
Mills case, and the question had been
fully argued in the later part of 1885
before the Supreme Court in ample
time for the Treasury to take cogni-
rance of the possible loss in revenue.
But up to the very day the Supreme
Court handed down its famous opin-
ion in the Hoosac Mills case declaring
the A. A. A. invalid, the New Deal
acted as If there never had been the
slightest doubt in the world that the
law would be upheld. The 6-to-3 de-
division, but anybody with an objective
mind in the Government, reading pre-
Vious decisions of the present Supreme
Court, would have come to the con-
clus.on that the A. A. A. was at least
of doubtful constitutionality and would
have so advised the Treasury Depart
ment.
Bonus Assured in 1885.
Likewise there was every certainty
that the bonus would go through in the
1895 session Of Congress. This eventu-
elity was foreSeen in the congressional
session which adjourned in the Sum-
mer of 1885. Indeed, it is being re-
ported on Capitol Hill that Postmaster
General Farley reflected the Presi-
dents point of view to various Sena-
tors, namely that he would not be
disturbed if they failed to sustain his
veto.
Under the circumstances, the def
rits for the 1886 fiscal year could have
been foreseen and the country notified
81 that pressure to reduce unnecessary
expenses would have been put on by
VIC ouHIIlLSti dtioIl ItScll. ouI WltIl
an approaching election this was not
deemed politically expedient. Hence,
the proper explanation to have been
made over the radio might we'll have
been: In government we never know
what political exigency will arise to
make it necessary for our figures to
be altered to give better impression
at the moment. even though later on
we find it necessary to blame some
other institution, notably the Supreme
Court, for our own lack of foresight
or indifference to constitutional prece-
dent"
tCopyright. 1850