The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1934-01-17
STANDARD OIL
MOVE RECALLS
COURT VERDICT
Tribunal Found Legislature
Justified in Levying Chain
Store Tax.
BY DANIEL VI. KIDNEY
Iimes star Mrltrr


Announcement of the Standard
Oh Company plan TO close approx
mately 300 filling stations in In
diana Feb l. directed attention to-
day to the text of the recent su-
preme court decision holding the
chain store tax law constitutional.
The oil company manager. z. P.
Galbreath, Indianapolis, blamed the
wholesale closing on the amended
law which raised the fee for all
stores IN chains exceeding twenty
to $50.
II was SIS when the law was up
held by the United States supreme
court, but was boosted TO $3.50 by
the 1888 legislature This action was
upheld BY the state supreme court
In what lawyers, who have studied
the case. are terming the most
revolutionary decision in the history
Of Indiana Jurisprudence.
Courts Opinions Compared
Where the United States supreme
court decision set out that grada-
tons Of taxation are possible. pro-
viding they are not too discrimina-
tory, the state high bench ruled
that 1t is within the police powers
to favor one type of business deveI-
opment as opposed 10 another.
The opinion sets out that it is
not the business of the court. but
that of the legislature. to determine
whether or not chain stores are in
imical. To legislate accordingly is
not unconstitutional, it holds.
1ndiana's first chain store tax law
was upheld az Washington where
appeal was taken by the grocery
chain in the name of Jackson VS..
the State.
The amended law was upheld in
the state high court in a case deal
ing especially with filling stations.
called the AIidweste-n Petroleum
Corporation VS.. the State of In
diana.
General Welfare Considered
Oil dealers had contended that
filling stations we're not stores. but
this point was overruled in the APP
peal.
Then the high court opinion goes
into the matter of chain merchan-
dising and cites reasons why the
legislature may have considered it
TO the general welfare to impose
heavier taxes upon chain stores.
The operation of a chain of
stores certainly tends toward mo-
nopolizing merchandising" it sets
out. The legislature may have be-
lieved that the rapid growth and
efficient methods of chain operation
presages the gradual elimination of
the independent merchant and that
each line of mercantile business will
ultimately be controlled by a few
. condition generally recognized as
inimical to the public welfare.
III the state were TO stand by
and permit the elimination of the
independent merchant and the ac-
romplishment of practical mo-
nopcly, 1t might be confronted with
great difficulty in finding 9 rem
edy."
Cheapness Not Chief Factcr
Admitting the possibility that
chain stores may sell cheaper, the
opinion continues:
"Conceding this to be true, the
question of whether the benefit
outweighed the dangers of mo-
nopoly and possibly higher ultimate
prices, is for the determination of
the legislature and not for us"
The more independent status of
the merchant owner as compared
with the chain store employee is
then pointed out.
1t is cited that the court has held
against the peddler and itinerant
merchant TO protect the indie
pendent store owner as taxpayer
bnd citizen and that the same can
he done when his existence is
threatened by chain store COMPETE
ton.
1T may be inevitable that the
chain store will drive the small
local merchant out of business" the
opinion concludes. The legislature
may have believed that his going
win affect the welfare of the state,
Or its people, or its communities,
and that il is desirable and i'm
portant TO the public welfare to
N,rofpct him and with that DlJrD0Se