Evening star. [volume] (Washington, D.C.) 1854-1972, 1936-02-23
Court Rulings Guide
New Deal Moves
By OtCen L. Scott.

Broad outlines of constitutional power
under which the Federal Government
can build New Deal-if Congress and
the President Wish-are being drawn by
Supreme Court decisions
These decisions disclose that Uncle
Sam is far from being the helpless crea-
ture that some New Dealers picture him
to be. But at the same time they do
more clearly stake out the limits OF
Federal powers as they affect direct
control or domination of private enter
prise, either in industry or agriculture.
The court, in effect, is saying:
Government in Washington, under the
Constitution, can make many of the
rules that govern the economic game. 1t
even can get into the game itself If
carrying out power specifically granted
by the Constitution.
But the Federal Government cannot
step in to control business or agricul-
ture directly or indirectly through CEN
tralization of power in Washington under
the guise of exercising an authority that
the central Government actually does
not possess.
The Supreme Court decided on Feb
ruary II that r. v. A., governmental
agency, can produce and distribute cleo
trio power generated in the exercise OF
Federal authority over navigable streams.
1t had decided on January 6 that the
Federal Government was without au-
thority directly to control agricultural
production just as it had decided last
May q that the Federal Government
lacked authority to control industrial
production. But the justices in the
A. A. A. decision pointed to the broad
national power to spend money and to
make grants of money to States or in
dividuals on condition that they do
something the central Government wants
them to do.
So as New Dealers scan the situation
they are assured that the Government
in washington, if Congress and the
President agree, can, among other things,
do the following:
Tinker with the currency in almost
any manner imagined, from clipping
coins, as in dollar devaluation. to print
ing money. as urged upon Congress.
Control banking. even to the extent
of ownership of the banking system, With
all that would mean in the way OF
Specialization.
Enter the field of competitive bank
ing, as through the r. F. c., the H. O.
L. c.. the F. C. A. and other ventures
into Government financing OF private
enterprise.
Tax corporate and individual incomes
I'D to the point of conflscation, dis
! tributing the money pretty much as the
| Government sees fit.
Tax inheritanceS and estates to the
same extent, thereby ettecting, through
inheritance and income taxation, just
about any degree of wealth and income
| redistribution that people, through their
| national Government, may desire.
Spend money in any amounts and IN
| almost any way so long as the Federal
revenue and the Federal credit hold out
This can include conditional grants OF
money to individuals or States.
| Develop navigable streams OF the Ma
tion-which include just about all
streams down to creeks--and generate
| and distribute electric power that Is
an incident of improvement to navl-
cation.
Control tariffs either to protect Amer
lean business from foreign competition
or to force business to meet foreign
competition.
Make rules for business competition
under trust laws.
4 X y
But, on the other hand. there are
| things that the Federal Government
cannot do. Among them are the fol-
| lowing:
| It cannot use its taxing power as
! x,,;e. - ,e+oh1ich Ec5oral control over
| industry or agriculture.
It cannot, under its power to regulate
| interstate commerce, seek to establish
controls over industrial or agricultural
production. or to control prices or tt
set I'D wage and hour and collective
bargaining standards.
In other words, the central Govern.
ment cannot break down State lines iT
anv attempt to concentrate controls ovel
private industry in Washington. A fiele
of protection is left for laissez faire
economics.
Where would New Deal fit into thai
picture of power and limitation o.
power?
First signs of an answer to that cues
ton now are apparent. They grow from
this past weeks Supreme Court decision
unfolding the Governments right tt
develop and distribute electric power a.
an adjunct to navigation improvement.
Attempts are made to argue that thi!
decision was narrow in scope. The court
presumably, always narrows its decisions
to the specific facts before it. But sen
ator Borah, the Senate's leading constl
tutional lawyer, and the legal lights O.
the New Deal, among Others are con
yinced that the court decision was funda
mental and sweeping on the broad ques'
ton of power development and power
distribution.
T. A. is just one experiment IN ont
river valley. Immediately after the oe
cision upholding the base of that expert
ment. the National Resources Commltte'
released a report recommending a vas
power development along the Coiumpls
River. Senator Norris is sponsoring
plan for a Mississippi Valley Authority
taking in the whole central part OF I'M
country.
The purpose of these proposed ven
lures, and Of T. v. A., is to change tn
face of the countryside by planned de
velopment Of natural resources. PoWe
is to provide the revenue for financing
The Regional Planning Commission
of the Pacific Northwest says concern
ing the plans for the Columbia:
1.-THE power developments under wa.
T. nNf