Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-06-03

While the United States Supreme
Court has upheld legislation In In
diana establishing graduated taxation
affecting chain stores and classifi-
cation Of mercantile establishments.
thus settling the legalistic aspects OF
the question, the country sees the even
tual outcome Of the controversy as q
matter to be settled by economics and
public policy. The DECISIONS effect on
pending chain store legislation in other
States is discussed, with the question
of whether State revenues or business
rivalry are the chief considerations.
Some see in it authority for laws TO
euualize the struggle between the chains
and the independents, while others view
it as authority for laws which, with
the possibility of higher levies than
those imposed by Indiana, will tax the
chains out of existence.
the Indianapolis Star states: THE law
provides that each mercantile establish
ment must pay an annual license Zee
of So when operated as a single unit.
Owners operating from two to flve
stores pay $40 on each additional unit.
The fee Is SIS on each unit in excess OF
five and not more than ten. From ten
to twenty units the fee is $40 each. The
fee is $25 on each unit in excess OF
twenty. The act became effective on
July /, 1929. A suit was brought IN
April, 1929. to test the constitutionalityy
of the act. The attorney general
defended the law and on February
/, 1880, q three Judge decision was
handed down in the Federal District
Court declaring the law to be un-
constitutional. District Judges Baltzell
and Slick and Circuit Judge Sparks
were Of the opinion that the law sets
UP an arbitrary classification that vio-
lates the constitutional rights Of the
owners Of more than one mercantile
unit Attorney General Ogden appealed
to the Supreme Court OF the United
States and that tribunal sustains the
classification. Justice Roberts finds that
the constitution does not compel the
adoption of an iron rule Of equal taxa
ton, nor prevent variety or differences
in taxation, or discretion in the selec-
ton of subjects, or the classification for
taxation of properties, businesses.
trades, callings or occupations The
court holds that it Is in duty bound to
sustain the classification adopted by
the Legislature If there are substantial
differences between the occupations
separately classified, and that such diff
ferences need not be great"
1.-THE Supreme Court is careful to
make 1t clear" says the Omaha World
Herald, that in this, as in many other
contentious, its decision Is purely legal
istic. It NAV uphold or deny the con-
stitutional right of q State to enact
law in dispute. The decision as to its
wisdom is left to the legislative power.
Strictly speaking, that is none Of the
Supreme Courts business" The Lowell
Evening Leader points out that 1.-The
principle Of the graduated tax Is the
same as that upon which our income tax
shedules are based; in view OF modern
merchandising trends the decision is Of
far more than ordinary Importance.
1.-THE decision will increase rather
than quiet the controversy raging over
the status of the chain stores In mod
ern retail distribution" according to the
Newark Evening News, which attests
that growth Of the chain stores has
been enormous" and that 'it appears
to be q natural economic growth which
State legislation seeks to thwart In the
interest of the individual retailer"
The Roanoke World-News comments:
Although the Legislatures Of three
fourths of the States have been in ses-
sion this Winter, there has been little
renewal Of the agitation for chain store
taxation, partly awaiting the Supreme
OOuIb O6ClSlDIlS III Tic 4nuAhLlh duO
North Carolina cases, and partly, 1t Is
believed, because independent store own
ers have been advised that such laws
against chain stores would give an i'm
petus to the movement In some States
for q general sales tax"
Such legislation, In the opinion Of the
Springfield (MaSs) Union, appears to
be due to two causes, of which the de-
sire on the part of Legislatures to find
some new source of revenue to meet the
increasing costs of government probably
is by no means the lesser. The
other principal reason, perhaps, may be
traced to the agitation which the indie
pendent stores and some of the labor
organizations have been carrying on
against them In the last few years"
That paper concludes: Their rapid
growth, the tremendous volume Of busi-
ness they handle, the telling effect of
their competition on the local inde-
pendent stores and other phases Of the
chain store development present study
and q problem which are engaging at