SHATTERING BLOW FOR NEW DEAL

Timaru Herald, Volume CXL, Issue 20261, 9 November 1935, Page 17

SHATTERING BLOW FOR NEW DEAL

UTILITIES BILL INVALID AMERICAN COURT JUDGMENT APPEAL TO HIGHER COURT PROPOSED United Press Association—By Electrlo Telegraph—Copyright (Received November 8, 5.5 pun.) BALTIMORE, November 7 The 1935 Holding Company Act, designed to give the Government power for a sweeping reorganisation of the utility industry was held invalid in its entirety by the Federal District Judge William Coleman, in instructing the trustees of the American States Public Service Company, to treat the Act as invalid and of no effect. Judge Coleman said that Congress had flagrantly exceeded its lawful power in enacting a measure by which the elimination of most of the holding companies in the country’s vast utilities network would be sought. The matter will probably go to the Supreme Court of the United States. EFFECT OF JUDGMENT DEMORALISING DEFEAT OF KEY MEASURE United Press Association—By Electric Telegraph—Copyright (Received November 8, 8.15 p.m.) BALTIMORE, November 8 President Roosevelt’s New Deal received another rude shock with the declaration to-day by a judge of the Lower Federal Court, that the public utility measure passed by Congress last session, after so much travail, so many investigatons, and so much relentless pressure by the President upon legislators, was unconstitutional since “Congress by its enactment has flagrantly exceeded its lawful power under the commerce clause of the Constitution.” The measure is considered one of the keystones of President Roosevelt’s programme of basic reform in contradistinction to recovery. It will still have to undergo the Supreme Court test, but the effect of the Lower Court’s decision is unmistakeable, since once again it has thrown the pall of constitutionality upon the Rooseveltian machinery for righting America’s economic evils. Utility Stocks Soar The prices of utility stocks soared ppon the exchanges with the announcement of the good news and the Administration suffered another defeat which even if only temporary is too reminiscent of the N.R.A. disaster to be anything but demoralising.