Evening star., 1935-12-01
FRAUD CHARGED
IN PROCESS TAX
HooSac Mills Files Written
Argument in A. A. A.
Test Case.
BACKGROUND


Devised to raise reuenue for pdy-
ing farm benefits, processing tares
brought storm OF criticism from
concerns subject to leDy, became
basis for court attacks upon con-
Stitutiondlity of agricultural dd-
justment act. Although effective
for tUo years. no test case brought
to Supreme Court until this Fall.
HooSdc Mills OF Massachusetts filed
complaint Of unconStitutiondlity,
sought recovery OF $S1,694 tared.
Federal district Judge OF Boston
ruled ldD pdlid, lDds reversed by
Circuit Court OF Appeals on July
13; Supreme Court consented to
reUieW case. Amendment to orig
inal act since fling of suit adds
complications in pending case.
BY the Associated Press.
Receivers for the Hoosac Mills Corp.
of Massachusetts, hurled the charge
of fraud" yesterday against A. A. A.
amendments with which Congress at
tempted to strengthen the constitu-
tionality of processing taxes.
Their written arguments in the test
case, which will be debated orally De-
cember 9 in the Supreme Court, we're
followed quickly, however. by friend
of the court" brief in which the
American Farm Bureau Federation de-
Tended the taxes and held them COM
parable to protective tariffs for indus
try.
Taxation without representation, y
"insidious effort" Congress has abdi-
Gated" and "bureaucrats" were among
the phrases denouncing the A. A. A
in the 116-page document filed with
the nine justices by the milling COM
pany.
Concession Amendment.
Expressing a willingness to have the
court consider both the original A. A
A. act and the later amendments ir
deciding the case. based on taxes i'm.
posed prior to amendment, the COM
pany argued that Congress conceded
the original act was invalid by amend
ing it.
The brief asserted the amendment.
were "a fraud. in essence, upon tht
powers delegated to Congress by tht
people," and constituted rubber
stamp of acts" by the Secretary o.
Agriculture. 1t charged the amended
law was q "bare-faced attempt to col
lect and keep proceeds of these take:
whether they are legal or not"
The Farm Bureaus brief insisted
the A. A. A. developed from con-
gressional study which began in 1924
and argued that the protective tariff
upheld by the court, obtains for in
dustry a higher price for products in
domestic consumption, while process
ing taxes have the same objective with
respect to surplus agricultural COM
modities regarding which the pro-
tective tariff system is wholly ineffec-
tive"
Counsel for the New England mills
had this to say about the action OF
Government attorneys in citing the
general welfare" clause of the Con-
stitution as upholding processing
taxes:
1T is unnecessary to answer be-
cause it is clear to us that it can
not possibly include power to con-
troll through use of the tax money the
conduct and activity of business other
wise beyond congressional control.
"For General Welfare"
Farm Bureau lawyers, however, in
sisted the taxes are intended to pro-
vide for the general welfare, and
asserted that the determination OF
Congress as to what constitutes the
general welfare "is one for which
courts will rarely, if ever, substitute
their own judgment"
To uphold the amended act, con-
(See A. A. A., Page 49,