Evening star., 1935-08-04
CAPITAL LAWYERS
IN BIG TAX CASE
Three Members of Firm
Here Authors of Book
Attacking A. A. A.
BY BLAIR BOLLES.

4HIce WhSullStOu idWycIo Will tdkc
leading parts in the billion dollar
drama entitled Are Processing Taxes
Constitutional" which rrobably will
open before the Supreme Court in
October.
They are Kingman Brewster. James
S. Y. WINS and Percy W. Phillips, who
conducted the appeal in the Hoosac
Mills case which led to the Circuit
Courts granting an Injunction re-
straining collection Of the taxes from
the receivers of the Hoosac Mills.
This case, the fourth processing tax
suit they have conducted, is the ia
vorite for choice as the test of the
A. A. AS validity. The lawyers have
written q book on the subject Of
processing taxes. The 34l-page vol
ume, called Taxation Under the A.
A. A." considers the agricultural ad-
justment act. from the standpoint of
its history, its constitutionality and its
administration. and among other
things concludes that 1T would seem
that II the Agricultural. Adjustment
Administration act can be justified as
a regulation Of interstate commerce,
then there is no limit to the power of
Congress to interfere in purely local
matters.
"If the agricultural adjustment act
can be found to lie on the constitu-
tional side, it Is dif1cult to imagine
any degree of delegation that could
not be vahdly accomplished by the
use of forms and phrases similar TO
those found herein"
Four bases on which unconstitu-
tionality of the processing tax can be
argued are set forth:
/. The taxes, or exactions, are not
for public purposes.
2. The law constitutes regulation
of business not charged with a pub
lie use.
5. 1t represents usurpation Of powers
reserved to the States by the tenth
amendment. which puts under control
Of the States all authority not spe-
cifically granted the national Gov
ernment.
4. It constitutes an improper dele
cation of authority by Congress to
a branch of the Executive.
Challenges of Tax.
These challenges of the processing
tax the three lawyers apply to the
Bankhead cotton control act, the Kerr
tobacco control act and the A. A. A.
flour tax, with other specific objec-
tions for each of these items. For
instance, the conclusion they reach re-
garding the Kerr bill, which imposes
a penalty tax for tobacco srown in
excess of the quota set by the Secre-
tary Of Agriculture. is this:
"The tobacco control taxes will
probably be attacked upon the
grounds that their regulatory purpose
Is beyond the jurisdiction of Con-
gress both because the production of
tobacco Is not charged with a public
use and because. if there be any
power to regulate such production, it
Is reserved to the States or the people
by the tenth amendment"
Sharp criticism of the method used
by Secretary Wallace for setting the
amount Of the cotton processing tax
was made by the three lawyers in
their brief on the Hoosac Mills appeal.
In contending congressional dele
cation Of authority to the Secretary
OF fixing the tax at whatever rate he
thinks best is invalid, the brief COM
ments:
I'm the case of cotton, the rate Is
"a cents a pound, regardless of mar
Eet classif1cations, types or grades
thereof.
THE fact is that there are 481 mar
ket classifications, types or grades of
cotton.
"On April %. 1884, the prices of
these grades of cotton ranged from
S.15 cents per pound to 1916 cents
per pound.
ut is Immediately apparent that
tax rate of a. cents a pound cannot
apply with equal propriety to all
types Of cotton"
Dirt Subject to Tax.
The dirt in a bale of cotton. too,
Is subject to the tax, James WINS, who
wrote the brief, points out, for the
secretary makes no allowance for
the dirt in the boil, although such