The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1923-01-21
liocent Frear Rider Designed
to Curb interference of SUI.
preme Court in Legislation
: aORED BY PRoGRESslvES
ganize for Fight in Next
Congress to Pass Levy on
stock Dividends; Precedent
..Rx WINnERl R.HARRIS.


in a legislative battle that,
be fought to a finish when
Sixty-eighth Congress comes
; being.
fiery few of the statesmen at
, Capitol heard the shot.
by of them are certain to
Ter from shell-shock when its
I4lutionary significance be-
Hes generally recognized. 1t
kks new turn in the. spread
attack on the power of the
= hreme Court to nullify laws by
{ Ilaring them unconstitutional.
BONUS BILL.
kirecting the fire in this phase
1.-The offensive is Representative
hes A, Frear, Progressive Re-
klican, of wisconsin Way down
IL the end of his new soldier Eo-
bill he stuck in this provision:
NO part Of this act shall be rem
I'd invalid by the decision of
n court if more tham one Justice
kents from such decision, and
,lhoIding OF. any part of this act
tAlid shall affect the remainder
The act
representative Frear very frankly
Ted when the innocentlsounding
highly important little para
$ph was discovered that 1t was
ktten into the bill to protect
m Supreme Court notification
Il tax the measure proposes to
y en- undistributed profits OF cor
Ations.
1PEs TO STOP INTERFER.
9NCE.
TT is said" he declares, the
spora1ioRs affected viii iInlnedi-
agy flee to the Supreme Court for
sir haven, based on the stock
vdend decision, il this retroactive
81 on nndistributed profits for the
rs 1917 to 1922 is pressed for
Usage.
1.-THE Constitution provides. Ar
lie III, The Supreme Court shall
We appellate Jurisdiction, both as
kaaw and fact, with such excep-
ms and under such regulations
! the Congress shall make In
sew of some appointments and
me recent pr0ffered appointments
II the highest judicial position in
le country, Congress, representing
le people, has a right, and possi.s
MA duty, to protect their viii,
trticularly as expressed in the
5feenth amendment or even
q bugh the act of Congress under
s. unconstitutional. power"
Under the proposed provision in
u newly offered bonus measure,
6slat <@f
bid prevent an act of Congress or
State statute being invalidated
Y IA decision of the court 1t has
En- almost the rule rather than
u exception In the past that in
rs where laws were nullified two
{ more of the Justices dissented.
Q FOLLOW@EXAMPLE.
Ind unusual foresight is not nee
Ary to see that once this safe
uMgd against judicial interference
els into an act of Congress, it will
e, but a short time before it be-
ohhes as much stereotyped part
Ikvery bin of consequence as the
rfFent section providing that de-
SON holding any one part of a
ehtainder of the legislation.
Thus, 8 to and 4 to 8 decisions
the Supreme Court knocking out
cts of Congress would become a
ring OF the past and notification
any law a rarity. Investigation
as shown that approximately 400
ederal and State laws have been
vErturned by the courts and sew
ri score of these have gone down
Wis to and to 3 decisions-a
are majority of one.
Probably the most notable Fed
raj act nullified in recent years by
a to 4 decision was the original
lepme tax act. Congress theRn sub
lqted to the States an amendment
} ithe Constitution permitting the
nBctment of laws taxing income
nd il was ratified. This was fol-
'wed by re-enactment of an income
AZ law. BY another to 4 decision
1lS was emasculated in the famous
tSfk dividend case.
The full effect of the courts ruI-
N that stock dividends were not
lIioject to tax was not felt until
mis- winter when nearly two thou.
aid million dollars I'm stock divi-
eAds were issued-for the pur-
dSe, in large number of cases.
has been charged on the floor
n congress, to evade surfaces. In
ne instance n stock dividend OF
1hfe than 10000 per cent was is
uied and in another 10000 Rer
eiIt.
Would Catch Stock Dividends.
hFhe provision in' the Frear bonus
'ill taxing undivided profits or
lhplus. he says, would catch all
hAse stock dividends and all other
net income of cor
,ofations back to the beginning of
ST., to which date il is retroactive.
Moreover, while designed to raise
'eTenue to meet the cost of the
,dnus, It is noticeable that this
epy actually is separate and dis
met from the bonus features OF
he legislation and is not limited
81 the life of the bonus. After
solving its purpose in connection
With the soldiers adjusted compen
sation it would go on raising reve
nae for general Treasury needs.
The provision rstipulates that the
proposed graduated tax of s TO 2(
per cent shall be collected for tho
Years 1917 TO 1922 and leach yeaI
etc. Similarly the ex
cess profits tax, which the bill
seeks to restore, would be per
m4nent.
After introducing the bonus bill
with this safeguarding provision
Congressman Frear discovered thai
there is a precedent for the limi
Lation on court qualification in The
Constitution Of the State of Ohio