Evening star., 1937-03-02
CORPORATED DEVICE
MENACE ASSA|LED
Clifford Tells House 1t Is
Problem for Reorgani-
ZatiOn Committee.
BY WILL p. KENNEDY.

The request of President Roosevelt
in his revised reorganization BILL
which is before the Joint Committee
today, for absolute authority to abolish
or transfer corporations as agencies"
of the Government, so long as they
are Federally owned and controlled.
covers wide field and it is indicated
will be opposed by Congress.
In a speech in the House, Repre-
sentative Charles L. Clifford. Repub-
lican, of Massachusetts,, member Of
the Joint Reorganization Committee,
emphasized what he called the menace
of the corporate device" and declared
that it has been called conspiracy"
He said it is one of the major prob
lens that the Joint Committee on
Reorganization must struggle with.
Representative Clifford quoted from
the report of the Brownlow Commit
tee, advisory to the President on "ad-
ministrative management" which rec
commended continuance of the cor
porate device" This report asserted
the corporate device is used to evade
the laws of Congress. saying Free
dom from the necessity for appropri-
ations carries with it freedom from
various governmental controls and re-
StrictionS, such as budget procedures;
personnel regulations governing ap-
pointments, discharge and compensa.
ton; and various governmental rules
regarding purchase, travel, space and
property. Ordinarily they devise their
own system of accounts and. within
the limits of their enabling statutes.
may incur obligations and settle
claims
Super Holding Company.
Those who are not administrations
bound. and who are scrutinizing close
ly this administration bill. call atten-
ton to the fact that the Federal Gov.
ernment has been turned-largely
through use of the corporate device
since March 4. 1888. in setting up
New Deal agencies-into tremendous
super-holding company with complete
or major control over los business
corporations whose assets exceed $22.-
OO0, 100000 Through these it exer-
cises some financial control over more
than 1000 additional corporate enter
prises.
These governmentally controlled
corporations cover a wide field Of
finance, commerce and industry: Pro-
duction of spruce, sugar and rum;
operation of railroads, ocean steam
ship lines and barges on the Missis.
sippi River; housing. and the manu-.
facture of goods by prison labor.
This corporate device isn't original
with the President or the brain
trust'-it antedates the present Gov
ernment organization-it started in
the first year of the Confederation,
1881, when Congress gave a charter
to the Bank Of North America and
for a time held the majority Of the
stock The Federal Government held
20 per cent of capital stock Of both
the First and Second Banks Of the
United States. Next followed Federal
ownership of the controlling interest
in the Dismal Swamp Co., Virginia
corporation. Then in 1904, under the
other President Roosevelt, the Federal
Government entered upon its present
role as holding company when it
purchased almost all the stock of the
Panama Railroad as a necessary step
in construction of the Panama Canal.
Federal Reserve Set Up.
The Federal Reserve System was
set up by act of December %. 1918.
and brought under the category Of
Government controlled corporations
by the banking act of 1885. In 1916
Congress established the land bank
system controlled through stock own
ership by the United States. During
the World War such corporation agen-
cies were established as the Emer-
gency Fleet Corp, now merged with
the United States Shipping Board;
fha TTnitad States Grain Corn the