THE PRESIDENCY: Old Horses & New

President Hoover last week accepted one great national issue and helped build up another. He accepted the Insurgents' challenge on the Power issue by vetoing the Muscle Shoals Bill. His pocket veto of the Wagner Bill to reform the Federal employment service loomed like a big square target for Democrats to shoot at.

The Wagner Bill would have scrapped the present Department of Labor employment agency (now placing 1,300,000 workers per year) and set up new and larger machinery for co-ordinate job-finding between the Federal and state governments. President Hoover's major reaction to the bill was, he said, a fear that it would create a hiatus between the old and new systems which would hurt, not help, joblessness. Fortified with arguments from his Attorney General and his Secretary of Labor, the President said:

"If I would prevent a serious blow to labor during this crisis, I should not approve the bill. . . . It cannot be made effective for many months or even years. It is not only changing horses while crossing a stream but the other horse would not arrive for many months. . . ."

New York's Democratic Senator Robert Wagner, author of the dead bill, retorted: "The President has failed every man out pounding the pavement in search of work. . . . Before we ever got into water, the Administration was offered a sound horse with which to ride through the storm. It refused it. It insisted on riding the decrepit and balky creature which is the existing Federal employment service."

On Muscle Shoals the President reiterated his belief in controlling the "Power Trust" by regulation rather than by direct public competition. His veto message, to which he brought his full professional prestige as an engineer, made these objections to the bill: 1) Government operation of the plant would produce a loss of $2,000,000 per year; 2) Muscle Shoals is no longer needed for national defense because private companies now make ample synthetic nitrogen; 3) no private company would take a restricted lease on the nitrate plant; 4) unknown millions would be required to modernize the "more or less obsolete" nitrate plant; 5) a capable board of managers believing in government operation could not be found; 6) the Government would be competing with its citizens. To take the sting out of his veto President Hoover suggested that Alabama and Tennessee as the two states primarily concerned name a joint commission with "full authority to lease the plants at Muscle Shoals in the interest of the local community and agriculture generally." The Senate sustained (34-to-49) the veto after the President had been roundly abused on the ground that he made Muscle Shoals into a "gold brick" and then tried to pass it off on the states.