The Waterbury Democrat., 1935-07-17
BY LYLE G. WILSON


9L xAE We WAASON tat
(United Press Staff Correspondent
washington, July II - tUP) -
Federal circuit court judgment
holding agricultural adjustment
administration processing taxes
unconstitutional will wrek New
Deal farm aid plans beyond legis-
lative- repair. experts said today.
unless the supreme court reverses
the lower tribunal.
Under the jeopardi8ed AAA pro-
gram the government has collected
$9O3,648,4SS from professors Of
various basic commodities. Under
existing benefit payment agree
ments the government IL commits
ted to pay farmers $1.5ss.s63,s21.
Dig Into Treasury
If the AAA taxes followed NRA
into the judicial discard, the gov
eminent would have to dig into the
treasury for, at least the difference
between collections and existing
commitments. The direct charge
on the treasury would be increased
IL professors were able to obtain
refunds of taxes already paid. It
would be possible to pay refunds
or benefits out of the $4,000,000,.
900 work-relief fund.
The number of injunctions and
other suits against AAA is creep
ing toward 200 in justice depart
ment files. They come from prac.
tically every state-filed by meat
packers, flour mills, sausage man.
o. rr,An r,fv ~
mills, cotton gins and manufac-
turers of speciality foods.
These suits attack processing
taxes from all angles. Most OF
them seek injunctions against fur
ther tax collection on the grounds
the processing payments are doing
irreparable injury to the professors.
other suits seek refunds of taxes
paid. A few, including the Hoosac
case which went against the New
Deal yesterday, directly challenge
onstitutionality Of the NRA's
agricultural twin.
Supreme Court VIII Decide
Frank J. Wideman. assistant to
the attorney general, commands the
AAA legal army. He believes the
Hoosac case and the Continental
Mill suit, which seeks tax refund,
win settle the AAA controversy
this autumn by decision from the
supreme court.
Only about 100000 Of pro-
cessing tax funds actually are tied
UP now. The money Is In escrow.
eFderal judges in few cases have
directed suing professors to pay
tax money to the court which will
hold It until constitutionality of
AAA finally Is decided. II the gov
eminent wins, the money will go
Immediately to the treasury. II
the government loses In the SUI
preme court, 1t would revert to the
professor who, by this process.
avoids the long delay inevitable in
recovering money from the gov
eminent through the court of
claims. Wideman said the govern
ment would ask the court in all
CAGES to collect the money and
hofd It when temporary injunctioas
are issued against the processing
levies.
Secretary Of Agriculture Henry
A, Wallace contends that shrewd
businessmen rather than avowed
AAA opponents are behind most
OF the injunction suits.
Cannot Refund Taxes
Taxes paid now cannot be re.
funded later merely because the
supreme court rules against AAA.
Professors hive everything to gain
and nothing but lawyers fees to
lose by seeking injunctions.
Congress is engaged now on
AAA amendments designed:
ITO make certain that the pro.
gram will be carried out within
the limits of the regulatory power
given congress under the consti.
tuition"
These new and cautious changes
in the AAA act might meet one OBJ
lection raised by the Hoosac decis-
ion - the one relating to- congress
failure to define standards to guide
the secretary of agriculture in fix
ing processing taxes.
: Debate ON Amendments
Majority Leader Joseph Robin
son said he would seek limitation
of debate on the AAA amendments
today to 80 minutes on the bill and
Is minutes on any amendment,
The first section to be considered
would fix a tax on barley Of rs
cents a bushel and 35 cents q
bushel of flaxseed. Another would
fix a processing tax on materials
for rayon or synthetic yarn at 12b
per cent Of the cotton tax.
Senator M. NJ. Nicely, democrat,
West Virginia, said he would pro-
pose putting potatoes under the
AAA. En-. James Pope, democrat,
Idaho, said he would speak In favor
OF the amendment.
BY q vote of 40 to 3S late yes
terday the senate voted to permit
the secretary of agriculture to fix
prices charged by producers OF
foodstuffs. 1t provided that price.
fixing would apply only when the
sales were made by producers, as
sociations Of producers, or on ac-
count OF producers.
Senator's Interested
Senators expressed interest In
the Hoosac decision. The court
objected, first, that congress inn
properly delegated to the secre-
tary power to establish processing
) taxes - the proceeds Of which are
distributed to farmers to compen-
safe. them for crop control. acre.
age-restriction cooperation with
New Deal plans.
Some constitutional authorities,
believe that fault can be remedied
and that the amendments pending
now in the senate would make the
AAA proof against such attack.
But the courts second objection
carried the constitutional argu-
ment further. 1t held that con.