Evening star., 1938-12-09


tional Economic David Lawrence.
Com m t ee.
is listened to with especial interest
these days, declared that he was
opposed to the continued eXpan-
sion of discretionary control over
business" This strikes directly at
one of the main criticisms OF new
legislation in recent years-the tend
ency of Congress to delegate to
commissions and bureaus certain
broad functions, which, as the Wy
oming Senator says, Is inclined 10
mean inevitable use of authority in
accordance with "the ideas, the
comprehension and the predllec-
tions of the men exercising the
power"
Such a definition of the difficult
ties of discretionary control of busi-
ness by governmental bodies meets
responsive note among business
men, yet Mr.. OMahoney was quick
to point out that the alternative is
by no means self f-regulation of busi-
ness without Government inter-
ference" He outlined instead the
necessity for specific rules "by which
the practices which we all know to
be wrongful shall be effectually
banished.'
Rules Better Than Laws.
Many business men have said that
1t was more important to have
specific rules, even though they in
volved extra burdens, than to have
laws which were so broad in char
acter as to keep business constantly
on the anxious seat as to how the
law might be interpreted in the
form of bureau regulations.
To a large extent, this very diff
ferentiation between discretionary
control and specific rules lies at the
heart of the British legislation af-
fecting business and industry. Take,
for instance, the British Industries
Act, which is designed to cover the
same ground as the Securities and
Exchange Law in the United States,
The British act does not make broad
generalizations and leave it to a
out. In the American statute, there
is a prohibition against the omission
in a sales prospectus of any ma
terial fact which may be mislead-
ing" In the British law, the things
which are deemed to be material
or misleading are specifically stated
so that everybody knows what they
are
When it comes to amending the
Sherman antitrust laws, and that,
of course, is what Senator OMa-
honey had in mind in his New York
address, the question is, what ap-
proach shall be used? For long
time, the Senator has been known
to favor bill requiring Federal
licenses or Federal incorporation of
business. The main objection to
such measure has come from those
who have said this would mean an
enlargement of discretionary control
by the Government, because, as a
condition prerequisite to the iSsu-
ance of licenses or the granting of
charters of incorporation, the Gov
ernment might lay down specific
conditions such as in the Walsh
Healey Act In the latter statute
the Government does not permit
contracts to be left to any corpora
tions unless certain labor standards
are complied with.
Reassuring News.
If, therefore, Federal licenses or
charters are granted, the belief has
been expressed that in this way dis
cretionary control over the manage
ment of business would be attempted
To hear from the lips of the man
who, together with Senator Borah of
Idaho, favors law covering Fed
eral licensing of corporations, that
it is not intended to set up new
bureaucracy to WELD the power of
life and death over corporations
is most reassuring piece of news,
and undoubtedly will tend to remove
much Of the opposition to the Borah-
OMahoney licensing bill if it should
emerge as the principal legislative
recommendation growing out of the
hearings of the temporary National
Economic Committee.
1t is significant that the Wyom-
ing Senator quoted approvingly
from the message of President Taft
in 1910 to Congress, in which a law
to provide for Federal incorporation
was espoused. Mr.. Taft, of course,
felt that the Federal incorporation
should be voluntary rather than
compulsory, but some of the argu-
ments he made for his proposal are
being repeated as applicable to pres
ent-day conditions.
The purpose, of course. is to stimu-
fate competition rather than to sup
press it, and the fact that the
OMahoney address was made before
such large group of manufacturers
may be taken to mean that Federal
incorporation will be among the
principal subjects of discussion when
once the hearings of the temporary
National Economic Committee have
been concluded next year.