Show New NewYork York Whirligig T The h News New's B Behind h i n d f the h N News 8 W S POLITICS POLITICS- FINANCE By JAMES JAMES JAMES' McMULLIN NEW Its NE YORK Its It's an i open se secret secret se- se cret in hl New York l legal gal circles that administration lawyers have no great relish for the task of ot defending the constitutionality of ot Title TiLI I of ot the utility act the ho part port that deals with holding companies com corn panle On some sections they privately concede defeat in advance Th Their J strategy will wUl be bo to tOI try to save as much as as' as they can by focusing on the more lnore defensible parts parta of the law Instead of handling the whole of ot Title I as ai a swim or prop prop- I They realize that will this weaken weak weak- en their 1 presentation but resent but on but they feel they have no choice Tho The supreme court wasn't j at all an hospitable hos hos- inthe In in the A to A A case case to to the theory that a a laws law constitution on aUt can be decided piecemeal One of at the main reasons S the administration s is s out on a legal limb aS lImb as insiders is is be because be be- cause the brain br ln tr who dr drafted ted Title Iwer I were ao so sharp they c cut t themselves Said brain included Felix Frankfurter Frankfurt t ter r i of ot the Harvard law school and his disciples Ben Cohen Tom Torn Corcoran Jim and M. M W W. Splawn Their guiding philosophy philosophy I phy was to make little ones out ut of ot big ones Their first miscalculation lay in the holding companies corn com m- m panics would howl their h heads a s oft off but register nevertheless They I pr practically practically promised the president nt I a as as' much This assurance w was bu based d on their experience experience- with the securities exchange act ct Exchanges Exchanges Ex Ex- changes and member firms meekly meeky meek meek- ly jy y accepted S. S C Jurisdiction tinder un under tin tin- n der that law Jaw for all aU their preliminary nary and protests and this was taken 1 en as asa a sure-fire sure precedent for utility behavior P Power leaders themselves concede concede con con- cede that it it might have worked out that way If Jt the securities exchange commission had had the patience nce to togo go through gh fl- fl nite period of ot tactful persuasion n. n But it its over overconfidence Cid nce that the Ui would knuckle under in ina a pinch led to a second mistake mistake- the Ie setting of ot December 1 as a registration deadline That forced a showdown t too o soon loon and most of at the big holding companies balked baked ked The he important point is that the acts act's authors expecting authors expecting no contest on the law as a whole Inserted provisions ns they themselves themselves them them- selves rated of ot doubtful They thought some lome of these thue might be challenged successfully sue suc in the courts courts but but they never never- dreamed of a mass mus attack ck ckon on their entire handiwork That Th t. t oversight is ii costing Robert tobert Jack Jack- Jackson son who son who Is running the S SEC E q suit Buit against Electric Bond and Share Share and and the d department of jus justice jus tice tics plenty ot of headaches The grief involved n the in-the n. n the test teat of ot Title I 1 of ot the utility act is in striking contrast to the complacency complacency com com- corn com of the federal power commission about the legal status of ot Title H. H This section tacked tacked onto the act almost as an afterthought after ater thought thought greatly greatly extends the power power pow pow- er commissions commission's jurisdiction over operating companies Yet Yeti despite It Its alarming implications from th the viewpoint of ot those who fear fed federal er eral l Incursions on private enterprise enter enter- prise nobody is challenging Title II LI In court H How w come corne Because Chairman irman Frank and his his' associates an are using their new powers powers' with the utmost discretion About all aU they have done so far tar is to send out a couple of questionnaires I Suspicious Suspicious' utilities imm immediately Consulted their law lawyers rs as s to whet whether er they hadn't better refuse refus to reply In each case th the lawyers law Jaw yer advised compliance on the th basis bails thc that that the commission probably proba proba- bly already had authority to ask k such auth questions question Under r the e federal waterpower act Nor will viII there then be any Battle o soon n about directors D bf mo more e than one oni operating company corn com p pany ny who have decU declined ed to apply for permission to continue their multiple directorships and are supposed to resign from all but butone butone butone one by February 25 The power commission will wm simply extend the date dato and thus thu's postpone hostilities until it feels it is on a a secure legal footing looting An informed New Yorker re remarks remarks remarks re- re marks that the power commission is just M N along But It U. is m making king In lishing jurisdiction which it is more more than the securities ex exchange bang I commission can cari say lay about Jt iti h share re of ot the l law v. Inter Interested sted observers ob observers oh ob- servers servers' call this lt situation a on a new new of ot the hare hah an and l the tortoise o Financial insiders Insider privately concede concede concede con con- cede that it isn't Mr Roosevelt's Roosevelt fault none if none of ot the members of ot the new federal reserve board are men of ot outstanding reputation Uon as a. bankers banker Several leading commercial bankers were asked to to serve serve serve- and arid declined with thanks In part their their refusals were were d due e to un will will- to tobe be associated cl ted with the new flew deal But in part also alo they trace to the failure of ot congress to provide pensions pensions' for board mem mem- b hers bers A A. job on ori tl the supreme court of ot finance doesn't look so 10 attra attractive Uve to bankers banker pf pt t established established established ability 1 The remuneration Is comparatively small smaIL and arid at the th end you are are aia simply limply dumped out outon outon on your own with no recompense cco for or faithful public service None of ot the new bo board rd members mem meni- hers bers has any of ot federal reserve traditions and practices i. i But E. E A A. director of the research and statistics its sta J division division can can ari b be called upon to supply any background und that may be needed Maurice P. P Davidson Davidon recently resigned as 83 Mayor LaGuardia's commissioner of water supply gas la and andel el electricity ctrl in order to rebuild the city f fusion lon p party rt for lor orthe t the t. t 1937 municipal election Keen observers say aay he might as u weIl well plan plan plana a rocket trip to Mars Mar insistence tence on divorcing divorcing ing politics from the business of ot running New York City has ha helped administrative efficiency but u w wrecked r the fusion political setup beyond all repair All AJI signs indicate that Tammany will float back to power with the greatest c of t e ease ue i New v Yorkers are chuckling at atthe atthe atthe the story of ot an informal interchange Interchange inter Inter- change between President Roosevelt Roosevelt Roose Roost velt and a member of ot the opposIng opposing ing branch of the family at the dedication of the local loul Theodore Ro Roosevelt evelt memorial The story atory runs that F. F D. D R. R twitted his his' distant kinsman who kinsman who is engaged in finance finance finance-by by remarkIng remarkIng remark- remark Ing Jag You You know when I I. talk about the forces of ot entrenched greed I mean fellows wa li like e you To this thi the other Roosevelt is II reported to have replied Mr President I wont won't arrue argue with you about the greed but I r respectfully respectfully respect respect- t fully take exception to your your description de- de of it as as entre entrenched ched Copyright McClure Newspaper Sy Syndicate |