Evening star., 1937-10-19
The Wire.SeiZures Decision.


Refusal by the Supreme Court to re-
view decision by lower court uphold
ing the right of the Securities Commits
sion to subpoena kilograms of concerns
under investigation, announced yester-
day without an accompanying review
of the case, leaves the matter in some
what unsatisfactory status. The court,
in merely declaring the action taken by
the court below to be in accord with the
law, holds by it's ruling that the COM
mission was within its rights in requir-
ing the production of kilograms sent and
received by persons suspected of obtain
ing money and property by means of
false and fraudulent representations in
connection with the issuance, offer and
sale in interstate commerce of worth
less securities.
This action by the Securities Commits
sion, the Supreme Court now holds, by
its refusal to review, to have been legal
and legitimate procedure, in its pursuit
of fraudulent transactions. 1t would
have been more satisfactory if it had
gone into the merits of the matter in
some detail. AS it stands it must be
assumed that the ruling is based upon
liberal Interpretation of Article of
the so-called Bill of Rights, comprising
the first ten amendments to the Con-
stitution, which were adopted by the
First Congress September 25. 1889, and
were ratified by eleven of the States be-
tween November 20, 1889, and December
Is, 1871.
That article reads: The right of the
people to be secure in their persons,
houses, papers and effects, against un-
reasonable searches and seizures, shall
not be violated, and no warrants shall
issue, but upon probable cause, sup
ported by oath or affirmation, and par
ticularly describing the place to be
searched and the persons or things to
be seized"
When the Bill of Rights was proposed
and ratified and thus became part of
the Constitution, there was no telegraph.
There we're no railroads. There were
of course no telephones. The trainers
of article ten were therefore unaware
of the possibilities of facilities for COM
munication that in later years were to
become a feature of the daily life of the
people.
The single word unreasonable" in
article ten has been held to be negative
warrant for the action of the Securities
Commission in its search for proof of
fraud. It's action was held by the lower
courts to be reasonable, in that it was
in the interest of public honesty and as
a protection of the people against fraud
and spoliation.
Assuredly if there is fraud in the
marketing of securities it should be
punished and its repetition prevented.
That is undoubtedly in the general
public interest. And by the same token
if the sole purpose of the seizure was to
correct that abuse and by the setting of
an example through prosecution and
punishment to end it, the public welfare
was served.
1t was, however, contended by the
interests and concerns affected that the
seizure was in the nature of a fishing
expedition" a wholesale roundup of
materials in the hope. of catching vio-
lators of the law against fraudulent
practices. 1t was that contention which
challenged the reasonableness of the
searches and seizures. Now both the
lower courts and the highest court have
ruled that the searches and seizures
we're not unreasonable, the former
specifically and the latter by plain i'm
plication.
This action by the Supreme Court is
not to be taken as a warrant for whole
sale, dragnet seizures, as justification
of a censorship over the correspondence
of the people, for business or for private
purposes. Were such seizures the sub
ject of the litigation the result of an
appeal to the law would doubtless have
been otherwise. For it is not to be
questioned that the Supreme Court, in
line with previous judgments, would
have read article four of the Bill of
Rights as protection of the citizen