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Show LEW FREE PRESS. LEHL UTAH trhunph for the left wing branch of the Braadeis-Frankturte- r SEEN-HEA- RD Deal Using Wrong Tactics around tha National Capital SBSB; New CARTER Wasbiagtoo. No ou knows when tie figare of $340,000,000 first PtbsS-4eu- t' U connection with the tax proposal as the aaosat er-tai- n schedules wonld raise cam from. Bat It is do secret that while no deter rork had been done In figuring the turn, for they were obviously wrong, the figure did mean something. What the figure meant waa the estimate of s certain brain truster, aew very much In the saddle, of what the treasury needed each year In addition to present revenues. The reason the figures were so far wrong, in fixing the amount which those mysterious levies would raise (for bo one has ever admitted parenthood for the figures either) was that the administration, after working out the schedules, did not ask the treasury to put Its experts on them. The reason for this was not sn oversight, but the fact that Treasury Secretary hsd ust expressed himself In each vigorous terms against the tax proposals being made at that time that the brain trusters who hsd won the President's approval hesitated to ask Urn. But let no one be deceived ahnnf ths significance of the figure, despite the discrepancy that the rates mentioned do not produce the $310,000,000. The rates were not imagined by enterprising newspaper reporters. Nor was the $340,000,000. Roth were conceived Inside the administration and formally given out The only advantage sf the denials Is that the administration Is now free to produce an entirely different set of rates, and an entirely different total, and Insist that these new figures represent carefully worked out studies of she problem. While the Republicans tan never prove that the first figsres men-turne- Mor-t-entb- official Want More Taxes AH of which (s only Important soltt-eallActually what Is Important Is Chat certain trusted and at the moment smccesaful advisers to the President 0 Olleve the treasury should have a year more In taxes than are ow coming la Also this opinion was held prior to the avalanche of decisions against AAA processing taxes. If you will examine the highest scale ef taxes on which Morgenthan reported to the house ways and means committee, and then boost the whole level by about onfourth, the taxes would represent the treasury Judgment oa .what Is needed to make up for (1) the present deficiency In revenue as seen by curtain very potent In Influence with the President brain trusters, and (2) the loss of processing tax revenue. This Is not a prediction that any such rates will be enacted. The President has no Idea of going anything like that far. He never did. Bis original Idea was to Increase taxes only on very large Incomes, and Impose levies on very large Inheritances and gifts. Also to boost corporation taxes by the sliding scale aimed at bigness. It is perfectly true that the sliding scale corporation tax Is frankly regarded by Insiders as just an opening wedge. That the ultimate objective b to make the taxes on large corporations so hesvy as to make It advisable (or many of them to dissolve, and for no more mergers to be eon- sfdered. But at the time of his proposal the President had no Idea ef Irritating as many people as would be hit, and hit bard, by any tax program which would raise the amount of money needed. Not this year, er next! $340,-000,00- cer-taln- ly New Day in Politics Maybe Business will come to a realisation that there Is a new day In 'American politics as well as a New Deal In Washington In time to save Itself, but It is about an even bet It appeared tome months back that the public utilities, long politically the most stupid aggregation of successful men In other fields In America, had learned at least the elemental rules ef the new game. But even this demonstration does not seem to have had much effect en other business men. The immediate case In point Is the administration drive against bigness, exemplified in the sliding scale tax on :orporat!on income. If it were Just s .boost In taxes no one except perhaps Jflie immediate taxpayers would be Interested. But its avowed object Is a "better social order." ' Which means that the sliding scale Idea Is Just the opening wedge that the present proposed top rate If the administration has Its way is only the beginning that the eventual object Is to make little ones out of big ones. And "big ones" does not Just mean a few enormous corporations such as United States Steel, General Motors, 'American Telephone, etc. It Includes every corporation big enough to --hare its stock listed on the New iTork Stock exchange list Or on the Curb, for that matter. The highest proposed rate, 1TH per sent, applies on all corporate Income o excess of $20,000,000. But the next lowest rate, IT per cent Includes all 'corporations with Incomes In excess of if 1,000,000. Actually, for an the talk f taxes being reduced on "smalT corporations, only those with incomes bellow $40,000 a year have their taxes reduced. And even Oat reduction Is trifling. In making this sweeping determine tlon of policy President Roosevelt, thongn, this may be denied officially, Ignored the advice of both Treasury Secretary Morgenthan and Brain Truster Moley. It represent s complete Whereupon Business, following the tactics ef long ago, attempts to fight It through the United States Chamber ef Commerce and the Rational Association of Manufactwrs. neither of which can scare a representative from a doubtful district, or worry s Kew Terk senator. Jost why Business in general does nut take a leaf from the amazing success which attended the letter writing campaign of public utility stockholders Is hard to figure. Nut because this letter writing campaign really did the utilities much good. The final bill Is tough enough on the holding companies almost to suit Boosevelt The significant fact is that this letter writing campaign resulted In a 110 majority In the bouse of representatives for precisely what the letter writers demanded. The fact thst the letter writers did not demand enough really to save their bacon is not of consequence in this connection. They got what they asked for from the house. Enough of them, obviously, can get what they want any time if they make it clear enough, and In time. A couple of hundred excited stockholders living Is one congressman's district can scare him te death. But he pays no attention whatever to the national., associations. His only concern is votes In bis district This wss not so Important up to the new day. In the days when bosses controlled states. Big Business oper-ste- d through tbem. Why Ickes Worries "We have only two unemployed persons, and they have been unemployed for 30 years." That crushing answer, made by the. little town of Colebrook, way up In near the northwestern Connecticut Massachusetts line. Is one of the reasons why Harold L. Ickes' gray hair Is getting thinner. Why the public works part of his activities seems to be bogging down. Why some administration officials are wondering if It would not have been better providing, of course, the White House hsd thought of It first to let Carter Glass of Virginia, Alva Adams of Colorado and other senators have their way about substituting two billions of doles for four billions of work relief. But that Is not the only problem which Is worrying Secretary of the Interior Ickes and the White House And which Is Illustrated by Colebrook. When the word first got round that Colebrook could have a big grant of federal money for a fine new road there was much excitement round and about the village. The progressive element was all for It. It would mean the spending of money snd prosperity. But opposition was not slow in showing Its head. The handful of merchants might want more customers, but the summer residents did not want B lot of workmen messing the place op. Again the merchants might like the Idea of a fine new through road, that would canse many auto tourists to stop off, make purchases, at least tray meals. But the folks who have been the mainstay of the community for a generation, living up there on money made elsewhere, did not want the tourists trouplng through, did not want the flavor of the old community "spoiled," in short wanted to keep things Just as they were. But the Progressives did not give a p. They kept on fighting. Then suddenly It was discovered that the money so kindly tendered by Mr. Ickes would involve nslng a new road plan approved by the state highway commission. This would necessitate cutting a corner off the beantlful and historic old church which Is the center of the whole Colebrook legend. Didn't Like It Even the progressive element didn't like that Bnt they did not give up. And they might have won their fight at that tnd Mr. Ickes might have purred over another "soundly placed" publle works project But there was more trouble to come, the sort of trouble that is always magnified In exactly Inverse ratio to the size of a community the agonised yelps of taxpayers afraid of higher assessments! For It was suddenly realized by these gentlemen and ladies, for there are a lot of widows owning property around Colebrook, that Uncle Sara was only giving 43 per cent of the money. Fifty-fiv- e per cent would have to be raised by the local taxpayers. In short that there would have to be a bond Issue, and they would have to pay the Interest and sinking fund for this issue for the next 15 or 20 years. For the 'rest of their lives, as most of them saw It All for what? To have a new road through their township, which would bring in tourists which only the merchants wanted, that would bring a flock of "aliens" In to work on the road, and destroy the simple pastoral tonch of which the community boasts, and finally would chop off a corner of their historic church. And only two unemployed persons In the township, neither of whom, opponents confidently asserted, could be Induced to so much as look t a pick or shovel In connection with the new work. So the town suddenly discovered that Connecticut had a long and pride-fu- l history of Independence, that It waa not becoming for Colebrook, proud of Its own and Nutmeg traditions, t accept charity from the federal government And the proposal was turned down, "Mossbacks," saM the progressives. Patriots," said the summer rest dents, New Deal Laws and the Courts SMMfT: iMlP Golden Phantoms ... FASCI.ATI.G TALES OF LOST MINKS S 17 xi - Y7 f in- twM.v. w xi W; far x . m m i THE struggle to gain the shore of economic security, and has at last run aground on the Constitution of the United States, from which not even the throwing over of billions of dollars in ballast seems likely to be able to lift it. Court decisions have been falling thick and fast, now that New Deal legislation has had a chance to get into application, and claims against it have had a chance to find their ways to the At one time approximatetribunals. ly 400 cases Involving New Deal legislation were pending In the courts. Many of these have already been decided upon, some by the lower courts and a few finally by the Supreme court There are about 17 of them which the concensus of the press has Imbued with more Importance than all of the others. Of these cases 15 have been decided against the present administration and two for it All decisions but one were rendered since the beginning of the year; eight of them were Supreme court decisions, leaving the others to be appealed. Most Important of all such decisions was that which threw out virtually the entire structure of the NRA, knocking the props from under New Deal planning. This left the President with To three courses of action open: build a new and better NRA, to simply suspend action for a while and "let 'em see how they like it," or to campaign for an amendment to the Constitution which would further centralize legislative power to aid the administration In coping with changing social and economic conditions. For a while It looked as if the President's policy was to be a combination of all three, but of late weeks the third has emerged more and more clearly. What has led up to the present state may be followed through a resume of the Important cases which have been decided by Federal District courts and the Supreme court Test New Deal Legislation. The first Judicial straw which indicated the way the storm winds were blowing was the decision of the Supreme court on January 7 of this year, when It declared unconstitutional Sec tion 9c of the National Industrial Recovery act It was the first real test of the legitimacy of New Deal legislation and blasted high hopes held out by administration leaders that it would be upheld. The court ruled that the Executive had been given legislative powers which were uncalled for, that proper rules had not been laid down for his guidance. The section had conferred upon the President the power to proover state hibit the transportation lines of oil which had been produced In excess of state quotas; the power was denied. Hailed as a victory for the New Deal was the decision (5 to 4) of the e Supreme court in upholding the oases, rendered February 18. While the decision upheld New Deal action of denying the gold payment obligation, the opinions of the Justices were In several cases severe rebukes. In this Instance there were three Issues at stake. The first resulted from congressional action in setting aside the obligation In private contracts to pay interest or principal In gold, or other specific coin or currency. The action was sustained by the majority of five, who confirmed decisions of lower courts that "congress had power to adopt the Joint resolution with respect to these obligations of railroad companies and hence that the gold clauses could not be enforced and the bonds were payable In legal tender currency." From the court of claims came the second Issue, which Involved the holder of a federal gold certificate who claimed that he should be paid according to the terms of the gold obligation or Its equivalent In this case the court simply said that the plaintiff had not been able to show any actual damages, so the court of claims had no right to entertain the case In the first place. Much the same was the third Issue, also tip from the court of claims. Involving the holder of a liberty bond who wanted bis payment In gold. And here the court made a peculiar decision. It rather hinted that New Deal legislation was unconstitutional. gold-claus- . CHART OF NEW DEAL'S COURSE IN COURTS (Supreme Court decisions are shown in black type.) For New Deal. Government gold clause cases upheld. TVA declared constitutional, reversing decision of lower court Against New Deal. Sec. 9c of NRA (President's power to prohibit interstate transport of oil in excess of state quotas) declared unconstitutional. Sec. 7a of NRA declared void when applied to companies not engaged in Interstate commerce. Government power to regulate wages in bituminous coal Industry denied. Right of PWA to condemn land for slum clearance in Kentucky denied. Again denied by Cincinnati court NIRA lumber code held Invalid. Right of states to form NRA divisions voided in some states. Steps for stabilizing milk industry declared unconstitutional. Railroad retirement act held invalid. Whole NIRA ruled unconstitutional. Frazier-Lemkfarm moratorium act voided. President stripped of power to remove federal officers. PWA power loans voided. Kerr-Smittobacco act voided. AAA processing tax ruled out. Hog processing tax from packers voided. e h For Composite Score. New Deal: 2. Against: 15. but refused to do anything about it The dlctums of the court said: "We hold that the Joint resolution of June 5, 1933, so far as it attempted to override the obligation of the United States created by the bond In suit, is invalid. It went beyond the constitutional authority of congress. But we hold that the action Is for breach of contract and that the plaintiff has failed to show cause of action for actual damages. Hence the court of claims could not entertain the suit." About the same time a Federal court In Louisville, Ky., denied that the PWA had the right to condemn land A Cincinnati for slum clearance. court did the same. Another court held the lumber codes of the NRA unconstitutional. In some states, state courts threw out state recovery acts which were designed to complement the national one. Labor Relations. Government power to regulate labor relations anywhere in the country, based on the constitutional statement that congress shall have power to "regulate commerce with foreign nations and among the several states and with the Indian tribes," was discarded by Judge John Percy Nields in the Federal District court at Wilmington, Del., In Wierton Steel company case. Another Jolt for NRA. Another blow to NRA labor relations was an Injunction granted by Federal District Judge Charles Irvln Dawson at Louisville to 35 soft coal operators, relieving them from the rigors of NRA minimum wage requirements. Federal District Judge W. I. Grubb In Birmingham took a pot shot at the TVA when he declared that $1,000,000,-00- 0 experiment unconstitutional, claiming that the federal government had no right to compete with private business In any state. This was, of course, directed st the "TVA yardstick." It was a New Deal defeat which was turned Into a victory when Judge Grubb's decision was reversed by the Circuit Court of Appeals In New Orleans. A shadow of the destruction that was to come to the AAA processing tax was cast when the Supreme court on March 4 voided the plans of the New Deal for stabilization of the milk Industry In New York. In May the Supreme court delivered three death blows to the New Deal. One was the - decision which voided the Railroad Retirement act In another case the court put a fur Edltkm L.Wmifm THE STORY OF LAS PLACITAS npnr.Y were sitting on their heels lq the shade of The Supreme Court of the United States. By WILLIAM C. UTLEY New Deal has been tossing in stormy political seas the last few months In its Bw In President Roosevelt's power by denying him the right to remove a federal officer from office. The President had sought to remove William E. Humphrey from the Federal Power commission. And Another Blow. The third blow, the one that left even Franklin D. Roosevelt speechless (for a while) was the decision in the Schechter poultry case. The decision was all the more crushing because it In delivering the was unanimous. court's opinion Chief Justice Hughes declared definitely that all of the provisions were an unconstitutional transfer of legislative powers from congress to the President and others who had no constitutional right to them. About the codes, Chief Justice Hughes said: . . Section 3 (NRA) of the Recovery act Is without precedent. It supplies no standards for any trade, industry or activity. It does not undertake to prescribe rules of conduct to be applied to particular states of fact to be determined by appropriate administrative procedure. Instead of prescribing rules of conduct, It authorizes the making of codes to prescribe ther crimp a corral fence, tiie two southwesterners, one day In the spring of 1S80. It was at a place not iar from Santa Fe, that center of romance and excitement for the whole western country. As they talked about things old and new, never dreaming what madness was In store for them, old Jesse Martin came riding up, ail steamed up over something. "Look at this, boys," he said, falrlv stuttering. "I've got the richest tbln-o- n top of this here earth." "This" was a handful of ore ore so rich that the two friends caught the contagion and grew as excited as Martin. "Where'd you get It, Jess?" they asked, eagerly. to tell you," was the "I ain't answer. "Not now, boys, I ain't I got a parner In Santa Fe, and I'm goln' to tell him first Then when we git everything filed, I'll let yon In on It" All the pleading they could do would not move Martin from this decision. He rode off finally toward Santa Ke with his ore and his news, leaving them to wonder where In the world be bad found such a bonanza. Had he rnn across the Adams diggings, or the Hatchet mine? Pshaw, those places were too far south for Martin to find. This must be something a lot nearer home. Nearer home why, perhaps they could ask some questions of the Mexicans and Indians thereabouts, and find out where old Martin had been. That was the idea! Hastily they caught up their horses, rode forth, and began to take up Martin's trail Oh yes, said someone here and someone else there, the old man had passed this way, or he had ridden yonder. We saw him Just a day or so ago. He was coming So a direction. from the pair rode in that direction. And sure enough, they finally came to a In the claim, all regularly staked. prospect hole was ore ore like that he had showed them very rich ore. The two men were greatly pleased them. with their forethought In tracing " . . We think that the down the location. With business-lik- e authority rims prescribed is an their claims unconstitutional delegation of legisla- promptness, they'staked these new From Martin's. alongside tive power." they gathered a About the power of the federal government to regulate local wages and few samples, and then they raced back to an assayer, wild with curiosity. working hours the chief justice said: How would the ore turn out? in "Without any way disparaging The assayer grew excited with them. (the administration's) motive, It Is enough to say that the recuperative Hastily he prepared for the business efforts of the federal government must of extracting gold, as they watched be made In a manner consistent with the process with eager eyes. At last In the bottom of the crucible lay a the authority granted by the Constitubutton of something. Now for the acid tion. "We are of the opinion that the at- test would It prove to be gold? With tempt through provisions of the code trembling hands the assayer poured In the acid and the button did not cut t to fix the hours and wages of em! ployees of defendants in their Intra- Eureka ! They were worth fortunes state business was not a valid exercise They rushed back to their claims. The news had already spread. In that of federal power." strange manner with which the word Hits Processing Tax. d gold always has spread, On July 16 the Circuit Court of of were coming In to stake men and Appeals at Boston declared that the claims as near to theirs as possible. processing tax of AAA was an unwarThen came a crowd from Santa Fe. ranted use of the taxing power to regIts head were Jesse Martin and At ulate and restrict cotton production; I So that was that it was an unwarranted exercise of Governor Lew Wallace ahead of news ran The the partner federal power to delegate unlimited had assayed them Jesse's samples power to the secretary of agriculture to administer the tax, and that the tax $75 to $100 to the ton. Everyone cheered. violates the requirement that taxes laughed with glee everyone accumuIn three days Las Placitas should be uniform throughout the EvUnited States. In Philadelphia a lower lated a population of 10,000 souls. y the golden was eryone court ruled much the same on the ho led them to fortune and The phantom had processing tax from packers. their wits behind when had left whole agricultural was they program ome they set out to follow her. And yet-S"thrown up for grabs." besouls more sober of the It is now believed that the administration will seek to push as many of gan to quiet down. It was time to these test cases through the Supreme make more assays, to see Just how far court as possible, with the view that the gold spread out to learn just how if they are there held to be unconsti- rich It would run. The assays were made. They showed tutional, constitutional amendment to centralize the legislative power of the no value at all. nation much more than It Is now will The shock was tremendous. Men reform the Important part of the Demofused at first to believe it They cratic platform for 1938. That this Is argued angrily that there was some possible might be indicated by the fact mistake. They knew that they had that 3,500,000 farmers who have so far found gold. The assayer must be a received $900,000,000, are directly af- fool, not to know his business. He fected by the AAA ruling. With their could not find gold when It was right families, they might form a very sub- under his nose. stantial block of votes to change the Then someone thought of looking basic law of the land. for Jesse Martin. He had "the richOne historian, Charles A. Beard, est thing on top of this here earth," points out that three times before has did he? Well, he'd better explain himthe Supreme court "thrown Itself self. , resolutely across currents of powerful But Martin had vanished from sight Interests and ideas." Once was In the and with him disappeared about Dred Scott case, with its aftermath $4,000 In real money money that he of the Civil war, and later the Thir- had obtained from Lew Wallace and teenth, Fourteenth and Fifteenth other prominent men of Santa Fe. He amendments, effecting Important had "lit out" for parts unknown as changes In the federal system. Ansoon as the rush set In. He was too other was the court's attempt during keen an old codger to risk discovery and after the Civil war to restrain the and retribution. . President and congress In several deBut the mine that was still there, cisions; Its result was a curtailment of and the rich ore had most certainly the appellate Jurisdiction of the court come from his. claim I So It had but and an Increase In the number of not originally. Martin had. salted the Justices from seven to nine (the two hole with from' another new ones to be favorable to the remine. versal of a decision which the adminAnd the assay that button of gold istration wanted reversed, and the which the acid would not cutt It was court reversed it). On the third time merely a crystallization, and not gold the court In 1895 declared Invalid the at all Income tax law of 1894. The decision 'fen days later Las Placitas had was reversed by amendment again become a desolate spot In the Of course there Is some question hills. Only thousands of tin cans as to whether a parallel can be drawn sparkled and glittered In the New between these decisions and the recent Mexico aun Just as shining as had ones against the New Deal. If such been the hopes of the ten thousand. a parallel can be drawn: Just' as worthless as the, claims they Will history repeat Itself? staked, WMtera code-maki- thus-and-suc- h code-makin- g new-foun- 1 gold-craz- high-grad- e Newspaper Union. e |