Evening star., 1935-07-31
FARM AIDS AMPLE
WITHIN BASIC LAW
A. A. A. and Process Taxes
Hit as Regulation With
Revenue Secondary.
BY DAVID LAWRENCE.

Wh1le opinion is 0lV1oed as 10 the
economic wisdom Of the agricultural
adjustment act and the processing
taxes, there can be no doubt that
the sponsors Of 1t could have secured
their objectives-a better price situa-
tion for the farmers OF America
within the Constitution.
Attempts are being made to per-
suade the farmers that because the
courts are nowadays holding the
processing taxes unconstitutional. no
other way exists to get better returns
or higher farm income except by
that method.
Naturally the New Dealers will
make such q claim because they are
on the defensive and they must blame
the courts for interfering with their
plans. But the farmers will In due
time learn that the amendments to
ths agricultural adjustment act are
plain confession that the first
statute-being held unconstitutional
by various courts-was poorly drawn
and is the result of mixture of
socialistic philosophy and misuse Of
Federal power.
There is, for instance, an example
of this Misrepresentation of the facts
in the case when We read published
reports that farm organization in
Texas wants to test the constitution
ality of tariff powers and wants its
members not to pay the tariff on
goods consumed by the farmer.
Tariff Idea Being Sold.
The misunderstanding arises out OF
the frequent effort of the New Deal
to make the public believe that .
processing tax is nothing more than
a tariff and that the Federal Govern
ment has the right to give protection
to farmers Just as it gives protection
by tariffs to the manufacturer.
The tariff-making power Is vested
In Congress by the Constitution, be-
cause Congress has the absolute power
to regulate commerce with foreign ma
tions. AS recently as March 20, 1888,
Chief Justice Hughes in deciding q
tariff case expressed the opinion OF
O unanimous Supreme Court when
he said:
1.-THE words Of the Constitution
comprehend every species of CON-
mercial intercourse between the
United States apd foreign nations
No sort of trade can be carried on
between this country and any other
to witch this power does not ex-
tend Gibbons VS.. OGDEN. 1t is ar
essential attribute Of the power that
it is exclusive and plenary.
THE principle of duality in oul
system of government does not touch
the authority of Congress in the reg
ulation of foreign commerce.
1T is true that the taxing power
Is distinct power; that it is dis
tinct from the power to regulate com.
rnerce. 1t Is also true that the tax
ing power embraces the power to lay
duties. But because the taxing power
Is distinct power and embraces the
power to lay duties, it does not fol-
low that duties may not be imposed
in the exercise of the power to regu-
late commerce. The contrary is well
established. d"
THE Congress may, and undoubt-
edly does, in its tariff legislation, con-
sider the conditions of foreign trade
In all its aspects and effects"
Distribution of Duties Denied.
The court went on to say that 1t
was not permissible to separate or
distribute the duties by allocatins
some of them ito the exercise of the
admitted power to regulate commerce
and others to an Independent exercise
of the taxing power" because the pur-
pose to regulate foreign commerce
'permeates the entire congressional
plan" and the revenue resulting from
such duties "is an incident to such an
exercise Of power-it flows from but
does not create the power"
Now the importance and signifi-
canoe of the foregoing is that Con-
gress cannot impose a processing tax
unless it has originally the power to
regulate commerce In the article being
taxed. In the case Of agricultural
products, the processing tax Is i'm
posed on the production, which is not
a regulation Of interstate commerce
at all.
So when the courts hold that the
A. A. A. has not power to regulate
business or farmers not engaged in
interstate commerce, the question then
turns on the Federal Governments
right to use the taxing power. But
the taxing authority must be applied
uniformly and revenues must be for
the purpose of supporting the Fed
eral Government and not be ear
marked for q particular group Of citi-
Eens.
That's why the processing tax cases
under the original agricultural ADJUST
ment act are running afoul the courts.
But in the amendments, which have
just been passed, the New Deal law
yers have admittedly corrected the
defect in so far as 1t relates to the tax
ing power. They have provided that
the processing taxes shall be levied
and collected and 60 into the general
Treasury and then the Federal Gov
eminent, as separate transactions
pays out Of general receipts certain
sums to farmers for the rental" of
their farms-namely, when they with
hold certain acreage from production.
Delegation Of Powers.
Also the New Dealers have cor
rected another flaw-the unconstitu-
tional delegation Of power. In the
original act. the Secretary of Agricul-
ture could flx the taxes. Such power
cannot be delegated by Congress unless
limits are fixed within certain points,
as in the flexible tariff law provisions,
which. of course, have been sustained
by the Supreme Court. The new A. A.
A. amendments provide for such limits.
Now the point is still doubtful as to
where the Federal Government gets
any authority TO levy o processing tax
or any other kind Of tax on production
within a State except for general rev.
enue purposes. and it will be obvious