Changing Contours of Gov't and Business
Henderson, Leon
Changing Contours of Gov't and Business By Leon Henderson THE organisation of the srar effort is a fertile field for ease study in the functioning of government. There was no central pattern,...
...I could easily wish for more agreement and less choice...
...The managers in our business system sre aware of the conflicts in policy...
...11/E face, without firm points of reference, new questions of tariffs, world organizations for dealing with finance, air transport, merchant shipping, communications, raw materials, and possibly minimum labor standards...
...The result is a tng-of-war with neither force pulling too far in any recognizable direction...
...Congress will have Its say on each matter I have listed, and Congress not only reflects the lack of agreement among the theoreticians of economic- * principles—it is in one of those recurrent periods of disagreement with the executive breach on division of powers snd responsibilities...
...But s central deficiency, which should concent us, is with its difficulty as an organization, in bringmt to it the advice and counsel of social scientists...
...Against no group of people, at least since the Civil War, have civil liberties been so wantonly and callously violated in this country...
...The military machine may require a two-million-man navy, with attendant drafts on production, snd the possibility of universsl service, with all the structural changes this latter implies...
...Authority for the draft is contained in the Selective Service Act, but the allocation of civilian manpower has not even this much elaboration of the intent of Congress...
...These decisions will tend to determine the future form of political organization and dominant economic policy...
...intervention, the balance of power between the legislative and executive srms, our place in policing the pesce snd in foreign trade, as well as the psttern of industrial and financial organisation...
...He charged that there was a "melancholy resemblance" between the treatment of the Japanese in America and the Jew in Germany...
...erne are drawn on commodity lines, like oil end food...
...In the yesrs to come, government will be relied upon to play an ever-important role la stabilising the economic life of the nstion...
...Large latitude of direction is inevitably left to the administrators who must make choices as to policy from a variety offered by the learned men of your societies...
...There seems, on the surface, to be general agreement on goals and targets, but no agreement as to means of attainment...
...The present stalemate between the executive and legislative branches is the beat argument I know against a fully-planned society...
...I have a strong disposition toward freedom of enterprise, but I an sometimes afraid that the full implications of the tern are not accepted...
...A part of the difficulty in Congress is the well-recog...
...But the Instrumentalities for surmounting these barriers sre not strong enough for the task...
...As s result, decision is stalemated, and so fsr there is no promise thst the elections of 1944 will break the sluggishness...
...The existing fiscal and monetary practices, taken together with administration, are inadequate for handling an unprecedented debt level and the use of the Federal budget and taxation as instruments of policy...
...Chief Justice Stone, speaking for a court in which there were three concurring opinions, ruled that the due process clause of the Fifth Amendment to the Constitution was not violated by discriminatory treatment based on rsce underethe peculiar circumstances existing on the West Coast after Pearl Harbor, since the American citizens affected bore "an ethnic affiliation with the enemy...
...Added to this we have the modern political far tor of antagonism between Congress snd the President...
...nized inadequacy of its mechanism...
...IpHE Korematsu case presents issues far more wide-reaching than those decided previously by the Supreme Court...
...The prologue is being furnished now in the conflict over taxation and renegotiation...
...This leads Congress sometimes to the abuse of its appropriation power and to abuse of a most valuabU instrument—the investigsting power through its committees...
...In many ways, it represents the multi-party French parliament, without party elections...
...Quite properly counsel here has pointed out that evacuation means internment, for in May 1942 no person of Japanese ancestry wss permitted to leave the military zones, but was forced to report to an Assembly Center, whence he wss shipped to a Relocation Center, for what wss euphemistically termed detention...
...These are major barriers to a future happy national life...
...My experience with public administration of economic measures in a changing political economy have impressed me with the importance of the theorist...
...Associate Justice Frank Murphy in a concurring opinion, which for all intents and purposes might well be considered a dissent, disclaimed the reasoning of the main opinion, stating that the Curfew orders went "to the brink of constitutional power...
...The volume of production necessary for an accepted level of employment must be 15 to 50 per cent higher thsn the best pre-wsr year, and it mast / he sttsined quickly...
...Henderson's article is based on remark* made to the joint meeting of the American Economic Association and American Political Science Association last month in W ashing ton The Korematsu Case By Clifford For&ter I AST week counsel for Fred T. Korematsu, aided by a brief as friend of the courts by the American .Civil Liberties Union, filed his petition for review with the United States Supreme Court, in a case involving issues of the utmost importance to all evacusted Japanese-Americans and to other minority groups in general...
...The control of labor has been handled so far with but few new iegislstive standards, mainly those contained in the rather unpotent 8mith-Connally Act and in the Stabilization Act of October, 1942...
...Small wonder that there is no clear policy in the majority or minority political parties...
...I suggest that when "free enterprise" is proposed as a formula it be employed in sll its accepted theoretical stature...
...There is plenty of work ahead...
...Whew WPB moves into the reconversion phase, however, the problem of rriteris will be earnestly presented, since this yea-end-nay power ever silo-eaUea *f material will clash with conflicting ideas an t« the direction the national economy should take...
...Control of prices and rents was authorised after long congressional debate, and the basic act contains more specific standards and expression of congressionsl intent and limitation than arc found in any other delegation of war power...
...This problem is put into perspective here by Leon Henderson, former OPA sdministrstor snd now chairman of the Research Institute of America...
...While it may be too much to hope that the Supreme Court will agree to review the Korematsu case and to decide it favorably, nevertheless it is all to the good that its mettle is being constantly tested, so that the citixen may know with greater surety whet is meant by his...
...Through the magnitude of deficit financing for war purposes, the government has created a volume of savings which will present novel questions of taxation, price levels, choices of permitted production, and credit control...
...Congress todsy is not divided into majority snd minority...
...The degree, extent, and period of price control, beginning shortly with the reconversion period, will present new topics for debate and will be a testing ground for claims of government and of private enterprise...
...Interest is centered in the case because it squarely raised the constitutionality of a military evacuation order directed against American citizens selected solely on the basis of race...
...Many are urging that the central theme of "free enterprise" be applied to major questions which affect future activity...
...The Federal Circuit Court of Appeals affirmed the conviction in Jsnuary 1944, the delay having been caused by certain procedural difficulties necessitating an appeal to the Supreme Court last Spring...
...The government will bulk large as the owner of producing facilities, raw materials, finished inventory, and the potential creator of credit: The place of large-scale enterprise in the totality of production seems likely to be greater, and thus produce new questions of policy, particularly as to goals of opportunity for small enterprisers...
...Its main groupings sre economic in character, and a Insl vote is the result of clustering of special interest blocs...
...Some of the war agencies are functionally designed, as for example those dealing with price, production and labor...
...The high level of war production is its best testimony...
...No provisions had then been made for leaves from the camps, nor was there any opportunity on the part of Japanese-Americans trapped on the West Coast to escape internment It is against this tragic background that the Supreme Court is being asked to review the present case...
...I could urge the same for the term "states' rights...
...Whst-ever may be said for the possibilities of a favorable decision in the Korematsu case, it is generslly conceded thst the Supreme Court will declare this psrt of the evacuation program invalid...
...has "Jest growed...
...The OPA authority for rationing is contained in one line of this delegation...
...THE American governmental machinery, like Tops...
...Current proposals for most of these latter fly directly in the face of our national policy as expressed in the Anti-Trust Law and other statutes...
...The result is s wholly insdeqnste functioning ef government...
...It seems to me that there is a mors precise meaning in economics, and that the economists and political scientist have an obligation to make this clear...
...No congressionsl standards of consequence are written into this Act, and almost the entire operating and policy structure of WPB has been erected by administrators...
...Last year, in a case concerning another American citizen of Japanese descent, the United States Supreme Court dodged this issue when it ruled thst at a matter of military necessity, the Army could impose curfew regulations against American citizens on a racial basis...
...The weakness lies in lack of agreement among theorists in business and in public administration...
...There was no central pattern, mainly J should say because we edged into it, rather than arriving with the aoddenness contemplated by an M Day plan...
...In June 1942, Korematsu, an American citizen of Japanese ancestry, was convicted in the Federal Court in San Francisco for failure to obey an evacuation order issued by General John L. DeWitt, directing sll persons of Japanese ancestry, citizens snd aliens slike, in snd about San Francisco, to report to the Tanforan Assembly Center for removal from the West Coast military area previously established...
...inaliensbl* rio-hi...
...The potential demands for social security may total as much as IB to 20 per cent bf the national income...
...The decisions reached affect not merely the Japanese-Americans but every American citizen...
...The result has been a jerry-built structure wheee shsky foundations are graphically revealed in times of depression, stress, snd war atrain...
...Even so, the administration of the OPA act, like other acts, has reflected some part of the concepts of the then current administrator and hia top staff...
...The basic power for directing resources is the priority power, which wss legislated by Congress in a few lines of the Second War Powers Act...
...Control of food production snd control of transportation derive chiefly from statutes passed before the outbreak of war...
...and some are combinations...
...The necessities are greater because, first, we did not reach agreement on central policies for recovery in the thirties, and second, because the years ahead will present new problems of structure, magnitude, and emphasis, ¦ Let me list some...
...No previous rste of growth in production if repeated under even most fsvorable conditions of competitive enterprise, would sssure the necessary reemployment...
...These esses sre the signposts of the future...
...The potential of foreign trade is greater, but the conditions under which it might be realised are vague...
...Except for the Constitutional Convention of 1787, there haa rarely been any coherent planning or rational adjust-meets of new growths to the existing set-np...
...There is no workable means of discussion with the administrative agencies...
...AH I see it, we sre entering s period of debate *¦ and decision as to the plsre among others of governments...
...It may be well to note that the Circuit Court of Appeals in San Francisco has now before it s esse involving solely the constitutionality of the detention of American citizens in Relocation Centers...
Vol. 27 • March 1944 • No. 10
