Ickes v. McCarl

On the desk of Comptroller General John Raymond McCarl, whom President Roosevelt lately made watchdog of all emergency as well as regular Government expenditures, lay last week warrants for $100,000,000 worth of Treasury disbursements to Federal Housing Corp. Comptroller McCarl, without whose signature no Government money may be spent, refused to countersign. To Secretary of the Interior Ickes, FHC president, he explained: FHC, set up under the National Industrial Recovery Act, was to be a permanent organization, whereas its parent agency was an emergency one. That did not look legal.

Secretary Ickes' thick jaw muscles bulged angrily. What with local real estate opposition to slum clearance projects, he had had trouble enough trying to get his housing program started. His ace-in-the-hole was FHC, an investment agency which put the Government squarely into the real estate business. Back to Comptroller McCarl went a tart letter taking exception to Mr. McCarl's legal interpretation.

Now that they were talking about legal interpretations, retorted Mr. McCarl, by what authority would Mr. Ickes pay for FHC's incorporation in Delaware last November?

"The hell with that," stormed the impatient Secretary. "I'll pay for that out of my own pocket."

In a third note, Watchdog McCarl argued that even if FHC was legal, both he and the Attorney General would have to pass on the titles to each and every parcel of land which the Government intended to buy for FHC.

At that Secretary Ickes blew up: "McCarl says the framers of the Constitution never contemplated that a corporation of this sort would be set up, and that therefore it can't be done. . . . The Comptroller General has ruled that he must be advised in advance about every transaction. He wants to know where the properties are, whether the price is a fair one and, in addition, he says each title must be examined by the Attorney General's office. In some tracts there are hundreds of small parcels, and the Attorney General would not have time to do anything else under this ruling!"

Later: "Maybe I ought not to talk this way about another Government official."

That afternoon Secretary Ickes took his troubles to the President, who was also deeply interested in the Comptroller's opinion because it might invalidate potent but as yet little used Federal Surplus Relief Corp., another potentially permanent investment agency under the temporary Recovery Act. When Secretary Ickes left the White House he was in calmer mood. Said he: "We will work the matter out all right." If Watchdog McCarl would not change his mind and sign the FHC warrants. Congress would be asked for fresh law on the subject.

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