Courts v. Recovery

Sooner or later President Roosevelt's recovery program will have to have its Dred Scott case. For months & months a gigantic tortoise race of litigations has crept up through the nation's lower courts, slugged its way toward the inevitable goal of the U. S. Supreme Court, where three test cases are already on the docket. Last week four late entries appeared. Three were negligible, one looked like a champion. And the recovery program lost three out of four of the first sprints.

Emergency v. Emergency. At Welch, W. Va., a sawmill operator named Killem worked his employes more than 40 hr. a week, paid some of 'them less than the 28.5-c- minimum hourly wage required by the Lumber & Timber Products Code. The McDowell County prosecutor went to Circuit Judge Beno F. Howard, asked for an injunction against Miller Killem under the State NRA enforcement law. Judge Howard must have remembered the motto of West Virginia, Montani Semper Liberi (Mountaineers Always Freemen), when he handed down his decision. Maintaining that it was "not the purpose of this decision to interfere with'' NRA's collective bargaining provisions, he nevertheless denied the prosecutor's petition. Grounds: "It amounts to the deprivation of the fundamental right which one has to conduct his own affairs honestly and along customary lines."

Homework. The idea behind prohibiting homework in formulating the embroidery code was to prevent manufacturers from sweating wretched women for such appalling wages as 5-c- an hour. Nevertheless, in Manhattan Mrs. Nenette Sabatini and Mrs. Rose Perricone had young children to support, so they applied to the State Industrial Commissioner for permits to work at home. They were denied, and the case came to court. Mrs. Sabatini said she made as much as $15 a week crocheting, Mrs. Perricone said she made $22. Domestic duties prevented them from working in a factory. The judge found that the code prohibition "appears to be directed at the manufacturer," is "not an injunction against the individual worker." He ruled that the women should have their permits.

Coal & Coke, Next day another New York State Supreme Court Justice, also in Manhattan, saved NRA from a whitewash score for the week by forbidding a coal company to sell fuel below the price set by code authorities.

Price-fixing, an NRA provision which liberal and conservative enemies of the organization have united in damning, was the issue in the week's big case.

In Washington, suave Donald Richberg stroked a soothing hand over the troubled brow of Business when he told the National Press Club that NRA was planning a return to the principle of "good old competition" in certain industries. From Boise, Idaho one of NRA's severest critics grumbled approval. "I assume when Richberg says price-fixing should end." said Senator Borah, "that he means it shall end. If so. the importance of his statement cannot well be overestimated. When you put an end to price-fixing, you have cut the jugular vein of monopoly."

Meantime in Memphis, Tenn., Federal Judge Harry Bennett Anderson had smitten the Lumber Code's price-fixing provision a stunning blow between the eyes. Judge Anderson, onetime member of the Tennessee Republican State Committee, knows all about the lumber business. His interest in it involved him in a peek of trouble four years ago. Congressman Fiorello Henry LaGuardia and four colleagues went South to investigate impeachment charges against Judge Anderson, one of which was that he had used his official prestige to coerce a potential purchaser of some shares in his family's Anderson-Tully Lumber Co. The charges against him were subsequently dropped.

Into Judge Anderson's court came attorneys for 600 hardwood lumbermen praying for an injunction against the U. S. District Attorney who was trying to prosecute 62 manufacturers for selling 30,000,000 to 50,000,000 ft. of lumber to Fisher Body Corp. at sub-code prices (TIME, Sept. 17). Judge Anderson's reasoning in deciding the case seemed crystal clear. If it is upheld by higher courts, to which it will be at once appealed, it will take the stuffing out of every minimum price clause in every NRA code, immensely please Senator Borah and bring back Mr. Richberg's "good old competition" not to some industries, but all.

Ruled he: "There is no mention in the [National Recovery] Act itself of price-fixing or price protection. The Act itself authorizes the various industries to compile codes of 'fair competition'. . . . The words 'fair competition' by a long series of judicial decisions have been fully defined. . . . Price regulation is the antithesis of competition, fair or otherwise. ... To hold that Congress in the National Recovery Act has fixed a minimum price by implication is to carry judicial construction too far. ... It is an intolerable situation for citizens to hold salable property which they dare not fix a price on for sale purposes." The lumbermen's injunction was granted.

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