JUDICIARY: Dred Scott Cited

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A hypothetical case: a corporation has invested $100,000,000 in cash over 25 years in creating its public service property. Its rates return a profit of $10,000,000 per year or 10% on its actual investment. But the corporation figures that, after allowing for depreciation, its property is now worth $200,000,000—an estimate based on the cost of replacement at higher price levels, the value of franchises, patents, goodwill and other intangibles. On that basis it earns only 5%. It ups its rates to consumers to boost its earnings and its percentage of profit. The State interferes. The corporation appeals to the U. S. Supreme Court which must decide the concern's property value against which income may be figured. The court agrees that the company is worth say $195,000,000, that 5% is not a fair return on that valuation, and therefore voids the State's restraint as a Constitutional violation. The Court then says the corporation may earn 8% on its new and higher value. Rates to consumers are increased to return the corporation a profit to the limit of the Supreme Court's order.

What aroused Senators last week was the recurrent tendency of the Court to favor higher corporate valuations, bigger profits, and increased rates. Speaker after speaker grouped the eight associate justices into Conservatives who supported this tendency—Van Devanter, McReynolds, Sutherland, Butler, Sanford—and Liberals who strongly dissented from it—Holmes, Brandeis, Stone. The Court, it was claimed, was clearly divided between five or "property rights" and three for "human rights." Warning was heard that Chief Justice Hughes would, by virtue of his training, his professional associations, his cast of mind, take his place on the side of "property rights."

Not since Dec. 28, 1835, when President Andrew Jackson nominated Roger Brooke Taney of Maryland as Chief Justice to succeed John Marshall has a nominee for this highest judicial post been more severely flayed in the Senate than Mr. Hughes. Taney was opposed for just the reverse of the reasons advanced against Mr. Hughes. He was a Southern Democrat whom such Whigs as Clay and Webster denounced as "a tool of Jacksonian power"—just as Mr. Hughes was denounced as "a tool of Hooverian power." Progressives charged Mr. Hughes with favoring monopoly; Whigs excoriated Taney for opposing it. Both were conceded to be excellent lawyers. The Senate confirmed Taney as Chief Justice March 15, 1836, by a vote of 29 to 15. He lived to write the famed Dred Scott decision (1857) which voided the Missouri Compromise, denied Congress the right to abolish slavery in the territories and thus helped to advance the Civil War. Senators warned that Chief Justice Hughes might someday write a decision on an economic question as pregnant with awful consequences as was the Dred Scott decision.