Evening star., 1935-06-29
A. A. A. TAX FIGHT
BEGUN BY PACKERS
DFLOUR MILLS
Suits to Halt Collection to
Break in Courts Next
Week.
MILLIONS INVOLVED
IN LEGALITY CONTEST
u. S. Claims Law Prevents Effort
to Stop Payments Until Su-
preme Court Test.
BY the Associated Press.

CHICAGO. June 29.-PackerS and
millers joined cotton manufacturers
today in a rebellion against the proc
essing taxes of the administration
agricultural adjustment act.
A survey showed some IS packing
houses had filed petitions for injunc-
tions to restrain collection of the hog
processing tax with the next INSTALL
ment, due on July l.
General Mills Inc, with headquar-
tsrs in Minneapolis, joined the attack
by filing similar suit in Buffalo.
N Y. seeking to restrain collection
of the Federal wheat processing tax.
The packers we're reluctant to dis
cuSs the suits but it was explained
that they are intended to lift the tax
until the Supreme Court rules on the
validity of the A. A. A. Privately, at
torneys for the Chicago packers have
been predicting a defeat for A. A. A.
since the courts N. R. A. ruling.
Hearings Due Monday
Many of the injunction proceedings
ere scheduled for hearing Monday.
and victory for the professors would
tie up taxes totaling hundreds of
thousands of dollars. although the
big Chicago packers. who pay S250,000
q week, do not figure in the fight
Among the bigger packing firms
which have taken the taxes to court
are Kingan g. Co. of indianapolis,
Adolf Gobel, New York; Louisville
Provision Co., Louisville. Ky: Butter
Packing Co., Salina. Kans.; F. G.
Vogt g. Son, Philadelphia and the
Rochester Packing Co., Rochester.
N. Y.
Also asking injunctions to halt col
lection of the processing taxes are
three Iowa firms-the Tobin Packing
Co., Fort Dodge: the KohrS Packing
Co. Davenport. and the Dubuque
Packing Co., Dubuque.
In the ST. Louis area alone, suits on
file would tie up collections of more
than S1,00G000. Firms seeking in
functions include He'll Packing Co.,
Krey Packing Co., Laclede Packing
Co, ]. H. Belz Provision Co. and the
American Packing Co.
Deny Tax Restraint Possible.
The Government has answered the
st. Louis suits with the claim that
Federal statutes prohibit the mainte-
nance in any court of a suit to re-
strain the collection of Federal taxes.
A similar answer has been filed to
suit by the Scala Packing Co.. Utica.
N. Y, over s17,702 in processing taxes.
The Chicago packers generally said
they would pay the July l installment
and await developments in the court
fight.
Cotton processing taxes are under
fire in S2500,000 action filed by the
Amoskeag Manufacturing Co.. seeking
to recover taxes already paid.
The packers suits do not seek re-
covery, it was explained. since to win
would subject the houses to flood of
similar suits for farmers and con-
sumers.
Washington Offices of the A. A. A.,
the Justice Department and the In
ternal Revenue Department said a
complete list of suits filed and money
involved was not available.
=: A. A. A. Wins Round.
The A. A. A. tax program, however.
has already won an initial victory in
the tax fight. This came when Fed
eral Judge Albert L. Reeves of Kansas
City recently dismissed a petition of
the Larabee Flour Mills, protesting the
processing tax and asking an injunc-
ton restraining collection of the wheat
processing tax. At the same time the
court refused to rule on the conStitu-
tiopality of the A. A. A. program.
But another Federal judge, Judge
William H. Atwell at Kansas City. last
Wednesday granted temporary in
junction to the G.. r. Smith Milling
Co. of Sherman, Tex, restraining the
Government from collecting the Fed
eral processing tax on wheat in the
Kansas City district
The milling company attacked the
tax on the grounds it violates the
fifth and tenth amendments tc the
Constitution. The case will be tried
September l9 on It's merits. The COM
pany posted s125,000 bond to guar
antee payment o. the tax If it is
proved to be legal