Yesterday

Federal Trade Commission; Eastman

In deference to Congressional protest, the President has consented to dilute the autocracy of General Johnson by making his decisions reviewable by the Federal Trade Commission. Of course the leaders of the protest, ranging over so many phases of opinion, were divided in their reaction to the President's compromise. Many are frankly opposed to the intervention of the government in industry, and their dislike of General Johnson does not spring from a dislike of autocracy, but a dislike of the power which his particular autocracy exercises. Another group, the spiritual followers of Lord Hewart, the writers of angry books on "Bureaucracy, Menace to Independence," and "The Tyranny of Administrative Law," hold as their major thesis that whatever the government does should be directly referable to the common courts of the land. But the real supporters of administrative law, and a few of them went on record as opposed to the President's stand, can have done so only on one ground, that the Federal Trade Commission has been so emasculated by the Supreme Court as to endanger the NRA and the future of administrative law alike if General Johnson's decisions are referred to its competence.

The Federal Trade Commission, the Interstate Commerce Commission, and all our other administrative tribunals are not in a position to hold General Johnson's hand with much effectiveness. The Supreme Court, in the Ben Avon case, cut short all the progress which administrative law had made, by ruling flatly that all findings of administrative tribunals, not only of law but also of fact, were ordinarily reviewable by the common courts. Obviously, until this stand is modified by the Court, any transfer of authority from General Johnson to the Federal Trade Commission means, in practise, the supremacy of the common courts, which have nothing but the very limited precedent of the Minnesota mortgage case to support their findings. The sphere of law within which they operate does not now empower them to validate the important legislation of the NRA, and it will not do so until the Supreme Court has built a broad basis for the executive claims. The emergency basis of the Minnesota Mortgage decision is a trifling trump in a game so large, and so far reaching, as that which the President's compromise has set in motion. The alternative is to strike, while the emergency Iron it hot, for a Supreme Court decision that will rehabilitate the bases of administrative jurisdiction, and make the Federal Trade Commission even stronger than it was before Ben Avon's axe fell; despite the optimism of the administration newspapers, there is not much reason to believe that Justice Hughes' conversion renders a reactionary tack either impossible or improbable.

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Mr. Eastman, the railroad coordinator, included in his report the suggestion that government ownership of railroads was in the long run desirable, but that at present, the step might be inadvisable because of personnel problems and the economic condition of the country. No one can deny that it would be dangerous for the government, because it would be dangerous for anyone else, to purchase the railroad plant of America during a depression. Politically, on the other hand, the transfer can be made with less friction when the railroads are losing money than when they are profitable. The crux of this matter must depend upon whether, for the nation, shipper and consumer and manufacturer, our transportation would be improved under government ownership; the arguments on either side are not substantially affected, although they may be brought into sharper relief by the fact of depression.

One of them, the "personnel problem" or the incompetence of government officials, has been widely advanced and apparently much admired. The government, it is said, has shown that its personnel is not competent to undertake the administration of an industry of great complexity and magnitude. With equal justice one might oppose the introduction of footwear into a department store which had no shoe salesmen; the answer is that the new enterprise requires a new personnel, and that every government which has run railroads in the past has realized this, and hired railroad executives to do the work. Much of the actual administration of great industrial mechanisms is in the hands of men indifferent to their employers, and without a stake in the property which they manage. These men, and their successors, can be employed by the government as well as by General Atterbury, and there is reason to believe that General Atterbury himself would apply for a government job, without turning a hair in the process. POLLUX.