Evening star., 1934-10-25
RAIL ACT FACING
HIGH COURT TEST
Appeal From InvaIidity Rm-
ing Here Is Certain for
Pension Law.
BY the Associated Press.

ny Lnc ASSOCldbeO EIeSSs
An eventual test In the United
States Supreme Court Of the New
Deal pension system for railroad en-
ployes was regarded as certain today
As q result of the action Of the Dis
trict Supreme Court yesterday declsr-
ing the legislation unconstitutional.
Although an appeal by the Gov
ernment is regarded as a certainty,
the decision of the District court
served to stimulate sluggish stock
market, rail shares leading q brisk
advance yesterday with jump from
81 to SIS.
1.-The act is unconstitutional be-
cause it extends its provisions to per-
sons not engaged in interstate COM
merce," declared Justice Alfred A.
Wheat in his opinion.
Fifth Amendment Held Violated.
The American Railway Association
in its attack upon the law asserted
it affected many employees who were
engaged only in intrastate commerce
and that it violated the fifth amend
ment by taking property without due
process Of law.
Passed in the closing days Of Con-
gresS. the pension bill had much the
same legislative history as the Frazier
Lemke farm moratorium measure Ad-
ministration leaders had neither bill
upon their program, but a coalition,
which included Senator Long. Demo-
crat, Of Louisiana and Senator Dill,
Democrat, of Washington, put both
measures through.
The FraZier-Lemke bill since has
been held unconstitutional by a Fed
eral court in Maryland.
Held Loosely Worded.
President Roosevelt in signing the
measure said it was loosely worded'
and would require amendment next
session. Justice Wheat referred TO it
by quoting Mr. Roosevelt.
The natural reluctance which a
judge feels when compelled to hold
an act of Congress unconstitutional"
he said is in this case somewhat
tempered by the fact that the act
seems not to be satisfactory even to
some who favor it in principle and
purpose"
The pension act which bore the
name of Representative CroSser, DEM
ocrat, of Ohio, provided for retire.
ment with pay of railway employees
who had reached the age Of SIS or who
had served for 80 years. Both en-
ployes and employers we're required to
contribute to fund for the pensions.
but the carriers assessment was about
two-thirds of the sum.
$50 Roads Enter Battle.
More than $50 railroads were rep
resented in the legal assault upon the
act. In addition to the challenge on
constitutional grounds. they claimed
the financial burden on the carriers
would be 100000, 900 the first year Of
the laws operation. and the railroads
we're in no condition to stand added
levies
Justice Wheat also said the pension
act provided for unemployment by
the carriers Of men previously in rail-
road service, and that this prior ser
vice was to be counted as part Of the
time which entitled them to pensions.
The evidence, he said, showed more
than l.000, 900 former employees might
be affected.
To require the plaintiffs TO con-
tribute huge sums of money TO be
devoted to the payment of pensions
based upon service long since COM
pleted and fully paid for" Justice
Wheat said. seems to me 10 take their
property without due process Of law.
I am constrained. therefore. to hold
that the act is unconstitutional"
The law was to have been admin
istered by Railroad Retirement
Board Of three persons, headed by
Murray Latimer of New York. the
Governments representative. The ef-
feet of the decision was to restrain
the board from proceeding toward set
ting up the pension fund pending a
final test of the legislation.