More Light on the Recovery Act

By Jack Dionne

With every day that passes more light is being thrown on the proposed workings of the National Industrial Recovery Act, which law is in the forefront of the mind of every business man today, and supersedes in importance all other business subjects.

Many of the queries and questions that have been flying around have been or are being answered. Every industrial group of major character that gathers to discuss the Act is visited by an agent of General Johnson, who addresses them, answers questions, and declares in no uncertain terms that the Act and all of its provisions are going to be enforced. There is no uncertainty about the way the law is explained by these men. There is no difference of opinion. The law, they say, is workable, and is going to be enforced. Yes, indeed, the President has means of enforcing it that will surprise the would-be obstructionist.

The law, of course, refers to "interstate" business; to "transactions in or affecting interstate commerce." It is said that the administration will interpret the "aftecting" clause very liberally. Many of the reports we hear of what can be done in the line of enforcement are unofficial, but impressive. "How," ask many, "can the President handle a firm that joins no association, has no license, and operates under no code, but insists on interfering with industry operating under an accepted code?" "The President can hand that firm a code that will put them up on the shelf until the emergency situation is entirely over," is the reply.

"What assurance has a firm in joining with the Act that they will not be prosecuted for violating the anti-trust laws of the state in which they are located ?" is the usual question. "If Mr. Roosevelt gives you a license to operate under a code and tells you what you must do, no state law can touch you for obeying the Federal Government, and no judge'or jury on earth would ever convict you for answering the call of the Government," is the usual answer.

Dr. Wilson Compton, Manager of the National Lumber Manufacturers Association. and a man who has threshed out this entire problem with General Johnson and his organization and probably knows more about the Act than any other business man, puts it this way: "Any person operating under a Code of Fair Competition approved b-v the President, or an approved agreement under Section 4, is not subject to restraint of the anti-trust laws by reason of any activity pursuant to an approved Code or agreement. The Industrial Recovery Act does NOT repeal any of the anti-trust laws. It merely provides that the antitrust laws may not be invoked against activities under an approved Code of Fair Competition. THIS PROTECTION APPLIES ALIKE TO THF'' FEDERAL AND TO THE STATE ANTI-TRUST LAWS be'cause an approved code has the force and affect of federal law. But these benefits by exemption apply only to industries and persons operating under a Code of Fair Competition under Section 3, or under a voluntary agreement with or approved by the President under Section 4."

I will now quote freely from I)r. Wilson Compton with regard to options, benefits, enforcements, and protection under the Act, these statements of his being particularly pertinent, and coming, we are sure, directly from headquarters:

"The National Industrial Recovery Act has opened to this industry an opportunity for self-regulation, and has imposed a corresponding duty of self-restraint. Some of the sections of the law.are obnoxious, vague and of ominous possibilities. But they represent a deliberate action of the Congress of the United States, and they *re the law. Many of them are frankly experimental, and it should be the purpose of this industry to co-operate in the effort, which I believe will have nation-wide support, to see that these provisions in practice do as little harm and as much good as practicable.

"The Act itself perhaps needs no explanation. Business men throughout the country have read and studied this law with more interest, with more hope, and perhaps with more anxiety than any other law enacted in this generation. For present practical purposes it may be helpful, however, to point out the alternative courses of action available to any industry under the law. We are considering not vague general provisions, which we may at our option accept or reject, but fundamental limitations on freedom of action to which, under the law, each competitor within an industry must conform.

"Four options are open to bny industry:

"First: The industry may submit a code of fair competition under the authority of Section 3.

"Second: The industry may refrain from taking any action whatever, in which event the President, upon his own motion, or if complaint is made that 'abuses inimical to the public interest and contrary to the policy herein declared are prevalent in any trade or industry' may prescribe for such industry a code of fair competition.

"Third: IJnder Section 4, persons engaged in the industry may enter into agreements with the President or among' themselves which, if they 'will aid in effectuating the policy' of the Act, the President may approve. Such agreements are voluntary, are binding only with the President's approval, and are not binding upon non-participating competitors.

"Fourth: The President, after notice and hearings, may by public announcement place any industry under Federal license.

"We should have clearly and accurately in mind also the means of enforcement of industry codes. Approval by the President gives them the force of Federal Iaw. There are six distinguishable means of enforcement. The first three, (Continued on Page 10)