Evening star. [volume] (Washington, D.C.) 1854-1972, 1928-09-16
BY GREGORY RANKIN.
IMITATION of the power Of the
Supreme Court In declaring acts
of Congress unconstitutional has

IL been proposed in several reSolu-
lions introduced in Congress, due
to the increasing number Of such deci'
gions by a five-to-four vote. Some nave
proposed that the court shall not have
power to do so, except by unanimou;
vote, others by vote OF seven or SIX OF
the nine justices.
This question which came into prom
inence in the last number of years cul,
minated as an issue in the presidential
campaign on 1924 The late Senator
La Toilette, maintaining that the Su-
preme Court had usurped the legislative
functions of Congress and had become a
source of danger to the liberties OF tfe
people, favored a constitutional amend
ment whereby Congress could overrloe
q judicial veto by two-thlrds vote,
in much the same way as 1t can over
ride an executive veto. About the same
time, President Coolidge, in an address
before the American Bar Association,
maintained that the safeguards OF the
liberties of the American people lay IN
the power of the Supreme Court to null
lily acts of Congress when these are
opposed to the Constitution.
MANY acts of Congress involving their
constitutionality were before the recent
session Of the Supreme Court.
The Federal gift tax of 1924, was de-
clared unconstitutional in so far as 1t
was imposed on gifts made prior to
June 2. 1924, when the act was passed.
In one case, due to the absence OF JUST
ice Sutherland, the Court was evenly
divided on this question. Chief Justice
Taft and Justice MacReynolds, Butler
and Vandevanter held that in so far
constitutional Justices Holmes, Bran
deis and Stone maintained that the act
should be interpreted as having been in
tended to apply only to gifts made after
the passage of the act, and thus avoid
declaring the law unconstitutional.
Ordinarily, when the Supreme Court
Is evenly divided the decision of the
lower court stands. In this case, how
ever, the question did not come up on
appeal or on petition to review the
decision of lower court The Circuit
Court of Appeals merely asked the
Supreme Court whether the law, II APP
piled retroactively, is constitutional.
Since the Court was evenly divided, that
question could not be answered. But,
since all of the justices concurred in
the result. that the gifts made before
June g. 1924. were not taxable, no prac-
Circuit Court of Appeals
Shortly afterward the same question
came up in two other cases, both on
certiorari to the Circuit Court of APP
peals for the second circuit. In one
Of these, the Supreme Court held, by
q six-to-three decision, that in so far
as the act was retroactive, it was I'M
constitutional Justices Holmes, Bran
deis and Stone dissented. They main
tanned that If the proper interpreta-
ton is that Congress intended to make
the statute retroactive, 1t was within
the power of Congress to do so. In
the other case the decision of the lower
court was reversed without an opinion
IN favor Of the taxpayer.
Insurance Tax Unconstitutional.
The provision in the revenue act of
1921. imposing an income tax on life
insurance companies was held uncon-
stitutional in so far as it affected in
come from taX-exempt securities. This
act imposed tax of 10 per cent on
the gross income of life insurance COM
panies, but allowed a number CO ex-
emptionS, among which were: % The
income from taX-eXempt securities and
90 an amount by which 4 per cent
Of the reserve fund exceeded the income
from taX-exempt securities. A life in
surance company claimed that this pro-
vision put it at a disadvantage because
It had income from tax-exempt securi-
ties, for the reason that, If it had no
tax-exempt securities, 1t would have
been entitled to full exemption of
per cent of its reserve. It maintained,
therefore, that the act imposed bur-
den and amounted to a tax on such
securities. and was therefore uncon-
stitutional.
The court, In a six-to-three decision,
upheld the company's contentious.
Justices Holmes, Brandeis and Stone
dissented on the ground that the act
had provided for a full exemption of
the income from taX-exempt securities;
that the exemption of a portion of the
reserve was in addition to the deduction
already allowed on account of the tax
exempt securities, and that the COM
pany was not in position to question
the validity of such exemption merely
because its finances were such that it
could not avail itself of the full measure
of the benefit given by the statute.
Railroad Law Held Invalid.
The act Of Congress reviving certain
suits against carriers after they had been
barred by the statute of limitations was
declared unconstitutional. Under the
transportation act of 1920 the period of
limitations for bringing suits against
railroads for overcharges was two years.
In 1924 Congress extended the period to
three years and provided that such
actions shall not be deemed to have
been barred if they accrued on or after
March /, 1920, and suit was begun
prior to or within six months after the
passage of the 1924 act. The courts
of Maryland, where the action was
brought, held that in so far as the act
Of 1924 attempted to revive actions
which had already been barred 1t is I'M
constitutional, because the statute of
1920 had barred not only the remedy
of the shipper but also had wiped out
the liability of the carrier. The Gu
preme Court affirmed the decision
without an opinion.
The constitutionality of the flexible
tariff provision in the Fordney -McCum-
Der act of 1922 was upheld by the
Supreme Court. This provision empow-
cred the President to raise or lower
duties on imports, in an amount not
exceeding so per cent of the duties
prescribed, whenever he found there
was difference in production costs at
home and abroad, and the duty pre-
scribed did not equaliZe these costs. It
was maintained that this provision was
an unconstitutional delegation of the
legislative and taxing powers to the
President; that to proclaim new tariff
is legislative act, and that it is also a
taxing function.
The Supreme Court held that under
this provision the President does not
promulgate new tariff, but merely
applies the act of Congress; that the
duties prescribed in tho aot GRO mot
fixed, but are variable and dependent
upon the relative costs of production
at home and abroad, and that the
President is charged with the function
of finding the facts, upon which the
veriable tariff provided in the act be-
comes applicable.