Evening star., 1936-04-01
ACTION Of COURT
HELD SIGNIFICANT
New Deal "Victory" Doubt
ed in Bench's Refusal to
Hear BurCo Case.
BY DAVID LAWRENCE.

What the Supreme Court did this
week in refusing to hear the Burco
case involving constitutionality of the
public utility holding company act
carries with 1t considerable significance.
The headlines called it a New Deal
Victory" To the extent that the De-
partment of Justice asked the case be
not heard and the court agreed may
1t be said to be anything of that kind.
Actually, the District Court and the
Circuit Court of Appeals declared the
holding company law was invalid as
applied to this particular litigation,
and since the Department of Justice
did not ask for any reversal Of that
judgement, the decision Of the lower
courts stand.
AS matter of fact, the Department
of Justice was not directly concerned
with the merits of the so-called Burco
case at all, being content to state on
behalf of the Securities and Exchange
Commission that the constitutional
question was not clearly and adequate
~ presented, and that in another case
now in the District Court there would
be better opportunity for a considera-
ton of all the constitutional questions.
Did Not Disclase Reasons.
The Supreme Court did not disclose
its reasons for refusing to go any
further with the Burco case, but it
may be presumed that the court does
~ doNidn tho rJtocfinr1 nf
stitutionality of any law unless the
matter has been adequately argued in
the lower courts and unless the Gov
ernments side has been fully presented.
Certainly it would have created con-
troversy of very unhappy kind if
law as important as the public utility
holding company act were to be de-
clared invalid while the Government
contended it had not had a chance to
argue the case through the lower
courts.
But it is to be noted the Govern
ment could have appeared in the
Burco case and could have argued
the merits Of the constitutional ques-
ton. As a matter of fact, all those
New Deal supporters who have been
saying that Americas constitutional
system is too slow or that advisory
opinions ought to be rendered or that
enormous economic loss is caused by
the slow processes of the judiciary
have now been stripped Of their argu-
nent. For while the Burco case may
not be exactly to the taste of the
s. E. c., it did afford basis for a
quick test if the New Deal really
wanted a test.
The reasons why the New Deal de.
lays test on constitutionality cannot
be determined accurately, of course,
but, judging by talk in New Deal cir
cles, the plain inference is that the
longer the big cases can be delayed
the greater are the chances of Mr..
Roosevelt having a Supreme Court
favorable to his viewpoint, either
through possible vacancies or through
the application of the oft-repeated
but mistaken theory that "the court
follows the election returns"
Still in District Court.
The test case chosen by the New
Deal on the validity of the holding
company law Is still in the District
Court and attempts are being made
to agree on stipulations of fact. The
chances are that the case will not
be argued till late Spring and a de-
cision may not be available until the
Summer. Then the matter will be
taken to the Circuit Court of Appeals
and possibly all of next Autumn and
Winter will be consumed on it, with
the prospect that a year from now the
Supreme Court OF the United States
will be handing down q decision.
Meanwhile. the big utility industry
IS required to wait until its rights are
determined, large refnancing opera
tions are delayed, and construction
activities that would give work to
many unemployed are held back.
/. The layman will wonder why the
New Deal objected to the hearing of
the Burco case in the Supreme Court
at this time or why the Government
refused to defend the act in the lower
courts, though invited to do so. For,
apart from the particular issues raised
in the Burco case by the reorganiza-
ton proceedings of utility holding
company, the supposition naturally is
that any opportunity to go before the
Supreme Court of the United States
to argue the constitutionality of an
important law would have been well
coined, no matter how the case got
into the lower court in the first in
Stapna