Evening star., 1936-04-23
NEW DEAL SLIGHT
POLICY IS ON TRIAL
P. w. A. Contends 1t Never
Had Intention of ReguIat-
ing Any Rates.
BY DAVID LAWRENCE.

The intellectual honesty of New
Deal policy proclaimed heretofore as
a move to aid the consumer of electric
light Is on trial before the district
court.
For more than a year the New Deal
has been working in concert with
various municipalities. including New
York City, with the object of cutting
down electric light rates. If the local
utility didn't reduce the rates, en-
couragement was given to the munich
pal government in question to bor-
row the money and build competing
project.
1t turns out now that this was all
a mistaken impression. The Public
Works Administration is contending
before the Federal court this week
that it never had any intention Of
regulating rates or influencing the
rates charged. but was merely con-
cerned with the matter as an incident
to furnishing employment on projects.
No Regulation Authority.
The utility companies, of course, are
trying to show that the P. w. A.
money was loaned to do an unconsti-
tutional act, for obviously the Federal
Government has no authority under
the Constitution to regulate electric
light rates within States, or especially
in city areas where there is no con-
nection with other States.
Various decisions Of the Supreme
of tha TTrited Stofos Lauo held
than an unconstitutional object can
not be attained by the use of ordinary
governmental powers. Thus, the Gov
ernment has the right to lend money,
but it could not lend the money for
the purpose of violating the Constitu-
ton. This was confirmed in the A.
A. A. case when the Supreme Court
held that the use of financial payments
to farmers in order to control or reg
ulate agriculture-a State function
vas a violation of the Constitution.
So today the P w. A. Is ignoring all
the early statements and published
reports in the press about negotiations
in various cities about electric light
rates and is insisting that the matter
of rates was incidental to the question
Of making sound loans.
Held Employment Question.
The P. w. A, through its attorneys,
Is contending that it inquired into
rates. Of course. to find out whether a
municipal project would be able to
stand up against private competitor.
If the municipality rates we're too
high, it was assumed the loan would
be unsound If the rates we're under
those of the private company it was
argued by the P w. A. that the loan
would then be good one. But the
P. W. A., the New Dealers say, was
not at all interested in the rate matter
as a public policy and only cared about
how much employment could be given,
The other side Of the story is that,
whenever, in particular city, the
1ocaI company under the whip of P.
w. AS lending power did reduce its
rates, the idea Of a competing project
financed by P W. A. would be dropped.
Also the P. w. A. in a public state
ment openly declared in the latter
part of 1884 that, where private
utility was charging reasonable
rates. there would be no loans made
by P w. A. to compete with that
utility. This has all along been un-
derstood to be the New Deal policy.
It is therefore a matter of much sur
prise in the National Capital now to
find that this was all misconception.
The truth is the New Deal is trying
to narrow the legal issue in the hope
of evading the constitutional argu-
ment.
Seek Letters in Record.
The utility companies are trying
to force into the records an exchange
Of letters between President Roosevelt
and Secretary Ickes, the P. w. A. ad-
nlinistrator. in which the policy of
lending to municipalities was out
lined. 1t is unlikely that the corre-
spondence will be furnished even
though a subpoena has been issued.
The claim is that the letters are priv
ileged." The right Of privacy and
secrecy on matters concerning the
use Of public funds seems to be in
violate when the New Deal itself Is
touched, but the citizen, on the other
hand, can have all his letters and
kilograms seized nowadays If it suits
the New Deals political purposes.
{Copyrfzht 1891