Evening star., 1938-11-23

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49,. 10y David Lawrence.
scare into American business, which
he himself insists is unjustif1ed, but
there's no denying he has gotten
hold of a phase of governmental
power which can affect American
business stability very profoundly.
In some respects the old N. R. A.
was much better. Under its proce-
dure businessmen met with the ad-
ministrator and discussed and agreed
on a code. All interested parties
participated in the hearings, there
was no discrimination as against
competitors, and the codes at least
had the virtue of being arrived at
without any form of duress, actual
or implied.
Indictment Starts Process.
Now under the scheme devised by
Mr.. Arnold-and he is conscientious
and sincere in his belief he has de-
veloped something constructive-the
Department of Justice files criminal
indictments and then waits for the
defendants to come hat in hand, to
the department begging for mercy.
AS a matter of fact the Assistant
Attorney General says quite naively
that he cannot tell them what to do,
and that he isn't insisting that they
do anything, but when they do come
to his department they are given
mimeographed copies of all previous
press releases and departmental pol
icies and they can, if they like, for
mulate proposal putting an end to
the practices complained of and
also suggesting other self-restraints
which will be in the public interest.
Mr.. Arnold declares that the
presence of the criminal indictments
has nothing to do with the nego-
tiations for a consent decree, that
he isn't agreeing in advance to for
give past offenses, but that if
good code is worked out, he will ask
the court to let the defendants off
and will tell the court that the rea-
son he is doing this is because an
agreement has been reached to re-
frain from doing other things not
covered by the indictments or the
law itself.
Now it is a fact that the defend
ants know that Mr.. Arnold can ac-
cept or reject their proposals as be-
ing adequate or inadequate, so that
the claim that the Department of
Justice isn't passing on the merits
of the proposals is just one of these
little practical jokes of which some
of the New Dealers are so fond.
Johnson's Power Pales.
But here is power exercised by
one man which is greater than the
power which Gen. Hugh johnson
ever exercised. Businessmen may
have found fault with the generals
cracking down" and yet as between
that and the Arnold method, they
would thousand times rather have
the NJ r. A.
For one thing, the Assistant At
torney General Is law unto him.
self He decides what is good or bad
marketing practice because he ap-
proves or rejects proposals for con-
sent DEGREES. He alone decides that
mere argument to stop doing some
thing complained of isn't enough
but that as a penalty something ad-
ditional must be agreed to which,
admittedly, the Sherman antitrust
laws do not cover.
Everybody will concede that GRIM
inal as we'll as civil penalties should
be imposed on lawbreakers in the
field of monopoly, but it also will be
noted that the filing of criminal in
dictments on technicality for a
complicated question of economics
Is an abuse of governmental power.
Mr.. Arnold uses as his favorite anal
ogy that when nice folks are arrest
ed for breaking the traffic laws, So
ciety insists on their punishment
nowadays, and that criminal prose-
cutions for violation of the business
traffic laws are the same thing.
What Mr.. Arnold forgets is that
reckless driving is easily determin-
able. Speedometers have been in
vented to limit the number of
miles per hour one can travel and
also a host of specific regulations
tell the citizen how fast, for in
stance, he can go on intersections
and when he can pass another car
No Economic Speedometer.
AS Tor economic questions there
are no speedometers which tell
when competition becomes unlaW-
full. The Supreme Court establish
ed at one time rule of reason" as
between good and bad trusts and in
later years the courts have applied
the antitrust laws to specific COM
plants which must be adjudicated
on their merits and which consti-
tute a body Of precedents for the
guidance of other courts and other
businessmen.
The unsatisfactory situation
created by the lack of specific rules
has been so widely recognized that
the President asked Congress to ap-
point a committee to study the mat
ter. The so-called Anti-Monopoly
Committee has arranged to survey
the whole subject, but meanwhile
Mr.. Arnold has "scooped" the COM
mittee, the Congress and the Presi-
dent. He has put into effect all by
himself a new scheme to handle
the problem of competition and
when Congress gets back here in
January it will find that no legisla-
ton at all is needed-the Arnold
plan is so simple. All that is re-
quired is for the Department of JUS
tice to find a technicality of some
kind on which to file criminal in
dictment-and Mr.. Arnold will do
the rest hu the SOcalled consent de.