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Judge Brandeis Says Crisis is Worse Than War

April 7, 1932
See Original Daily Bulletin From This Date

The American people are faced with an emergency more serious than war, Judge Brandeis, member of the Supreme Court, said to-day in the course of a case before the court.

Many Persons believe “unbridled competition” to be one of the chief causes of the economic depression, Judge Brandeis said. Some thoughtful men believe that plans for proration and stabilisation will be futile unless, in some way, a certificate of public convenience and necessity is made a prerequisite to the investment of new capital in an industry where capacity already exceeds the production schedules.

The case was one which concerned the action of Ernest A. Liebman, in Oklahama City. Under the Oklahama’ laws the New State Ice Company of Oklahama City had obtained a certificate of public convenience and necessity from the State Corporation Commission, had invested 500,000 dollars in a plant and had been making ice for some years. Liebman, without obtaining or applying for a licence, bought a piece of land and started to build a plant of his own. The ice company thereupon brought an action against him.

Liebman contended that ice manufacture is not a public but a private business, that he had a constitutional right to engage in a common calling, and that to make that right dependent upon a finding of public necessity deprived him of his constitutional prerogatives.

The Western Oklahama District Court and the Tenth Circuit Court of Appeals sustained Liebman’s plea, and the ice company appealed to the Supreme Court.

The Supreme Court, too, has decided in Liebman’s favour, but Justice Brandeis uttered a dissenting opinion and Justice Stone concurred.

Delivering his opinion, Judge Brandeis spoke with deep feeling and from time to time emphasised his words with vigorous gestures.

The people of the United States are now confronted with an emergency more serious than war, Justice Brandeis said. Misery is widespread in a time not of scarcity but of overabundance. The long-continued depression has brought unprecedented unemployment, a catastrophic fall in commodity prices and a volume of economic losses which threatens our financial institutions. Some people believe that the existing conditions threaten even the stability of the capitalistic system.

Economists are searching for the causes of this disorder and are re-examining the bases of our industrial structure. Business men are seeking possible remedies. Most of them realise that failure to distribute widely the profits of industry has been a prime cause of our present plight. But rightly or wrongly, many persons think that one of the major contributing causes has been unbridled competition.

Increasingly doubt is expressed whether it is economically wise, or morally right, that men should be permitted to add to the producing facilities of an industry which is already suffering from overcapacity.

Justice Sutherland, delivering the majority opinion, declared that “it is not necessary to challenge the authority of the State to indulge in experimental legislation, but it would be a strange and unwarranted doctrine to transcend the limitations imposed upon them by the Federal Constitution”.

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