Evening star., 1940-05-02

ClOQ UTdI mas YET DAViu Lawrence
come from the radicals as to the
methods they use in exercising
power under the broad grants of
administrative law given them by
careless minded Congresses of pre-
vious years. The expression in
question was written by Abe Fortas,
who served for a time as one of the
attorneys under the Securities ana
Exchange Commission and later be-
came general counsel of the Bitum-
inous Coal Division of the Depart
ment of Interior. Mr.. Fortas is
being prominently mentioned as the
probable nominee for the S. E. G.
to take the place of George c. Mat
theWs, who resigned.
Written in 1887.
The vacancy is supposed by law
to 20 to a Republican, but since Mr..
Fortas is general counsel for the
Bituminous Coal Division of the
Department of Interior. which is
presided over by Secretary Ickes,
who once upon a time was a
Republican, this presumably makes
Mr.. Fortas Republican, too.
Anyway, the candor which MI.
Fortas revealed when he wrote
an article in April. 1887, for
the Duke University Law Journal
may win him at least recess ap-
pointment when Congress adjourns.
Mr.. Fortas described the inside
workings of the S. E, c. as follows:
"Wise administrators may, by dis
cussion and analysis, use the require
ment of disclosure to educate the
registrant's attorneys Questions and
discussion, directed to the accuracy
of statements, may raise the pos
sibility that the propriety of prac-
tice is subject to challenge. Subtle
appeals to a higher self may cause
slight changes in practices. But the
limitations of such possibilities are
indeed strict. Perhaps the imponder-
able effect of an agency with high
standards may in time permeate the
practices of men: but skepticism
concerning this possibility is in
dicated. Unless the administrator
has effective bargaining power, little
can be expected 1t must have sane
tions or desired favors which it can
trade for changes in practices. Once
In a while. under the Securities Act,
the administrator will have some
thing to trade. It may have a choice
as to whether a particular state
ment will be considered accurate
and complete, or deficient. 1t may
be asked to exercise its discretion,
for example, to accelerate the effec-
tive date of registration. Then, if
the need of the registrant is suf-
ficiently urgent, a trade may be con-
summated. In return for the favor
of the administrator, the registrant
may amend its practices in accord
ance with the administrators con-
ception of equity and justice"
May Surprise Congress-.
The foregoing may come as sur
prise to members of Congress who
have innocently believed that delega-
ton of power to commissions and
bureaus meant an explicit authoriza-
ton and did not involve trading or
bargaining in public rights in &C
cordance as an administrative COM
mission might arbitrarily decide.
But the revelation that bargaining
is a part of the reform process and
that commissions can capriciously
decide what is or is not accurate
or complete" in registration state
ment involving the f1otation of
securities will not come as surprise
to persons who have been up against
Government bureaus in recent years
The theory that the end justifies
the means and that so long as the
objective is a benevolent one, al
most any liberties may be taken
with statutory law represents an
entirely different concept of public
administration than has been con-
sidered morally sound heretofore
The Walter-Logan bill passed the
House by a 3-to-1 vote as protest
against the excesses of administra-
tive commissions, and while it is true
that there are some defects in the
House bill, they can be corrected
without difficulty by those Senators
who really desire to see some meas
ure passed which will really curb
abuses in the exercise of public
power.
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