Evening star., 1935-12-10
RULINGS UPHOLD
POWERS OF STATES
H. O. |. C. and Liquor Tax
Decisions Rule Rights
Invaded by U. S.

one act OF congress was uuIlllleu
and another voided in part by the
Supreme Court yesterday in strongly
worded opinions declaring both to be
invasionS of State rights.
Justice Cardozo, classed among the
courts liberals, reported the unanl-
nous belief of the tribunal that
section of the home owners loan act
of 1888 could not be interpreted as
authorizing State building and loan
associations to acquire Federal char
ters against States wishes.
Justice Roberts read a 6-to-3 de-
cision that the Federal Government
could not impose a special tax on
liquor manufacturers and dealers VINO
operated in States which renamed
dry following repeal of prohibition.
The H. o. L. c. case involved an
appeal by three wisconsin assocla-
tions against a State Supreme Court
ruling that failure to obtain State
permission barred them from OBTAIN
ing Federal charters = even though
their stockholders approved the move.
U, S. Aided Associations.
While the Government was not
direct party in the case, H. 0. L. G.
lawyers argued as friend OF the
court" that section of the act au-
thorized such conversion, even over
State objections, in the interest OF
the general welfare"
OF significance to some lawyers,
involving a question as to whether
some members of the court possibly
might feel that conversion, even with
State permission, was questionable,
was this paragraph:
"Confining ourselves now to the
precise and narrow question presented
upon the records here before US we
hold that the conversion Of petit
TONERS from State into Federal asso-
Citations is of no effect when voted
against the protest of Wisconsin. Be
yond that we do not 60
10. L. c. officials. however. took
the view that this was definition OF
the DECISIONS scope, rather than any
indication of possible private discus
sion by the justices of the entire pro-
gram.
lue ACcaIt A~oAAh
Board, in a statement last night, en-
phasized that the courts decision
actually affects only three wisconsin
building and loan associations.
u. S. Encroachment Hit.
These were converted into Federally
chartered institutions against the
States protest, after operating orig
inally under State charters.
In the home loan case Justice Car
dozo asserted there has been an ille-
gitimate encroachment by the Gov
ernment of the Nation upon domain
of activity set apart by the ConStltu-
ton as the province of the States" 3"
The opinion said:
The home owners loan act, to the
extent that it permits the conversion
of State associations into Federal ones
in contravention of the laws of the
place of their creation, is an unconsti-
tutional encroachment upon the re-
served powers of the States
The liquor decision was or appeals
in cases against Gus L. Constantine Of
Birmingham and Bernord Roberts and
Roger Kesterson of Tulsa. The tax of
as much as 81 900 on illicit dealers in
dry States was imposed under 1925
revenue law.
Holding that the purpose of the tax
was to impose penalty as a deter
rent and punishment of unlawful con-
duct" Roberts said it is clear eva
sion of the police power, inherent in
the States, reserved from the grant OF
powers to the Federal Government by
the Constitution.
State Maximum Applies.
We think the suggestion has never
been made-certainly never enter
tained by this court-that the United
States may impose cumulative pen
alties above and beyond those specified
by State law for infractions of the
States criminal code by its own citi-
EenS.
The affirmation of such a PROPOSE
ton would obliterate the distinction
between the delegated powers of the
Federal Government and those re-
served to the States and their citizens.
The implications from a decision sus-
tanning such an imposition would be
startling
The concession of such a power
would open the door to unlimited reg
ulation of matters of State concern
by Federal authority. The regulation
OF the conduct of its own citizens be-
longs to the State-not to the United
States. The right to impose Sant tions
for violations of the States laws in
heres in the body of its citizens,
speaking through their Representa-
tiveS, So far as the reservations of
the tenth amendment preserving spe-
cif1c powers to States were qualified
by the adoption of the eighteenth
amendment, the qualification has been
abolished"
CardOz0 Delivers Dissent.
Speaking also for Justices Brandeis
and Stone, Justice Cardozo delivered
9 dissenting opinion which quoted
from previous decision that "one
branch of the Government cannot en-
croach on the domain of another
without danger" He added:
Il cannot rid myself of the convic-
ton that in the imputation to the
lawmakers Of purpose not professed,
the Salutary rule of caution is now
forgotten or neglected after all the
many protestations of its cogency and |
virtue
Congress may reasonably have be- |
Geved," Cardozo said, that, in view
of the attendant risks, a business
carried on illegally and furtively is
| Oil Croquignole