The Bridgeport times and evening farmer., 1920-07-08
iMERCHANTSMAY
 NOT PROFITEER
 IN NECESSARIES
D. s. Attorney Smith Gives Opinion On Lever Act
 Provision

Hartford, July S-W. F.~Whitmore, Connecticut has obtained an opinion from United States District Attorney Edward l.. Smith as to the scope of the Lever act, the opinion befng asked for by MT. Whittmore be- cause of questions raised by some re- tail merchants. The Lever act con- cerns itself with the supply, distra- button and movement of foods, feeds. wearing apparel, containers designed or intended for containing foods, feeds, fertilizers and fuel. in cluding fuel oil and other things, which in the act are described as necessities. There is another Unit ed States law under which certain articles named in the Lever act are taxed as luxuries. As for instance, women's silk waists, retailing for over $15 are taxed as luxuries at 10 per cent. on the amount over $15. Simil- ar1y, hosiery retailing at over $2 and mems hosiery, retailing at over $2 are cIassed as luxuries and are subject to the luxury tax. Inasmuch as the United States had taxed certain of the articles as 1uxuries, the question was whether merchants were liable for profiteering in these same articles de- scribed as necessaries in the provis- Hons of the Lever act.
 United States Attorney Smith in 1his opinion to Commissioner Whit more holds they are If they charge an excess profit. Judge Smith in answer to the question submitted says under the Lever act, as amended Oe- tober 22, 1919, in Section 1, it is to be carefully noted that the word 'necessaries" therein appearing is not the generic necessaries> Section l concerns itself with the supply, dis trfbution and movement of foods, feeds, wearing apparel, etc, and the act says, hereinafter in this act 'call- ed necessaries." In other words, the opinion says, the word necessaries in the lever act is technical word, meaning under the very provisions of the act, the catalogue of things nam ed in Section l. 4nasmuch as it is contained in that Hist, wearing ap- parel Is a necessary under the Lever act whether or not 1t bears a tax as a luxury, Consequently the mer- chant is liable to prosecution if he proiteers dn the sale of articles named in the Lever act as -neceSsar- les.
 MT, whfttmore also asked the dis
 
 ing the cost of an article to a deal CT, the Invoice price should be con- sidered, disregardfng any reasonable cash discount which may have been allowed and taken for prompt pay ment. He said that many mer- chants consider cash discounts as an offset to the interest cost of borrow ed money which permits them to dis count their bills. On the contrary says the commissioner, the interest paid on borrowed money is usually carried as an item of expense part of the regular overhead cost of doing business and as such is pre- sumably allowed for in the rather large percentages of profits, ordinar- fly considered reasonable for the re- taller to charge.
 Judge Smith in giving an opinion as to this question says he believes 1t Is faar to consider the Invoice as an element in determining cost without regard to any reasonable discount for cash he may actually take in the or derly movement of trade, and the commissioner has ruled that discount up to 8 per cent. may be considered as within the reasonable limit.
 Another question on which Judge Smith ruled was to whether 1t is proper for the retailer of ready to wear clothing, who makes no 1ndivid-