The Waterbury Democrat., 1935-12-10

| TWO or three judges composing InaC court made the decision and forced the government to take the appeal to the Supreme Court.
 Following argument of the AAA case, the court will hear an attack on the validity of the Bankhead | cotton control act, formulated in Congress and accepted reluctantly by the Administration to give ad- ditional force to the cotton crop re- duction program.
 On the Bankhead case decision will hinge the fate of the Kerr tobacco controHact, and the dis puted potato control act.
 A week hence the court is again scheduled to go into a major New Deal issue when the Alabama Power Company case, involving the validity of the Tennessee Valley Authority and the administration s power program is to be argued.
 Decision to Affect Many Suits
 After the IVA case the court will consider the right of processing tax payers to bring injunction suits against collection of the tax. If the court upholdS the AAA in its en- tirety there will be no necessity of it's deciding the injunction suit case which indirectly involves more than 1000 suits pending in lower federal courts.
 It is on the AAA case, however, | that the Administration has con- centrated its attention. Of it's nu- merous activities its farm program has best withstood the attacks of its critics. Its effectiveness is regard ed by the New Deal as probably the brightest spot in its program of accomplishments.
 The court before which it comes has not thoroughly committed it. self on basic questions of Consti- tutional interpretation involved in the New Deal other than gener- ouSly to condemn delegation of power in the MIRA law and to ap- prove by a five to four vote, de- valuation of the dollar and out laying the gold clause in bond ts- sues and other evidences of debt. In its defense of the farm pro- gram the government is relying chiefly on the public welfare clause of the constitution. This clause permits Congress to impose taxes and excises and to spend the proceeds "for the gen. eral welfare" of the nation. | R1lvzA Da
 Constitutional authorities con- tend that this power has never been questioned in the history of the country and that the court has never given an interpretation on it. The New Deal contends there is no limitation on this taxing and spending power so long as the tax itself is for the purpose of raising money.
 Those opposing the farm pro- gram condemn the AAA on the grounds that the act as originally passed delegated unauthorized Congressional power to the Secre- tary of Agriculture when it estab- lished stadnards and permitted hin to fix the amount of tax on eact processed product.
 They also condemn the basic theory of the AAA on the ground. that it is an attempt to eontro production of agricultural product. within state lines and thereby ha! become an invasion of states rights.
 In answer to the latter conten. tion the Administration calls at- tention to the fact that it compel. no farmer to reduce production bT only makes 1t profitable for hin to cooperate voluntarily.
 The AAA was one of the frs major pieces of legislation to bt sent to the special session of Con. gress called the day after President Roosevelt moved into the Whit House.
 Farmers Sign Contracts
 Briefly, the act provided that tn, Secretary of Agriculture might en. ter into contracts with farmers b, which they would reduce the aver. age amount of acreage they hat soWn over a given period of years Tn return they were to be paid bounty for the observance of thu contract.
 The law gave the secretary au' thority to fix 8 tax on the process ing of each particular product fol which a program had been estab lished. The amount of the tax wa; limited to be not more than thu difference between the marke value of the farm commodity ant the average price of the goods thu farmer was compelled to buy.
 On cotton the tax was fixed a approximately four cents pound when it became effective in August 1883, floor stock tax also was i'm posed on all stocks of goods con taining or composed of cotton il order to make the tax application equal.
 An immediate flow of taxes wa set up which was carried in 8 sepa rate fund of the treasury to be dis bursed only for the farm program It has passed the $l,000, 900, ,00 mark.
 Company in Receivership
 The Hoosac Mills Company in volved in the case now before tn court was placed in receivership il October, 1883. William M. Butle and James A. McDonough were ap pointed receivers.
 In February Joseph P. Marney Massachusetts collector of Interna Revenue, filed Q claim with the re ceivers for the payment of process ing and floor stocks taxes due iron the mill. They totalled &00,S78 in cluding penalties. The receiver appealed to the district court il Massachusetts for instructions.
 In their plea the receiver charged that the tax was uncon |1 stitutional but the district cour held against them. The Circui Court reversed the district court.