Evening star., 1935-06-11
GUFFEY MEASURE
IS TERMED INVALID
Use of Taxing Power for
Coercion Consistently
Barred by Court.
BY DAVID LAWRENCE.

A strike in the coal fields of the
Nation threatens-and bill which
violates the Constitution of the
United States has been proposed for
passage by Congress as a means Of
averting the strike.
Such a situation is unprecedented
In American history. But, with the
moral support of President Roosevelt
and his leaders in the Senate and
House, 1t is being assumed here that
the so-called Guffey bill, sponsored by
Senator Guffey of Pennsylvania,
Democrat. will be adopted.
The measure involves a principle
that has been time and again re-
jected by the courts. 1t provides for
the use of the taxing power as a
means Of coercing group of citizens
to accept Federal regulation when
such regulation is, indeed, not sane
toned by the commerce clause of
the Constitution.
Guffey Bill Provision.
The Guffey bill provides:
There is hereby imposed upon the
sale or other disposal of all bitumi-
nous coal produced within the United
States a tax of Is per cent on the
sale price or fair market value of
such coal at the mine, such tax to be
paid the United States by the pro-
dttcers of such coal, and to be payable
AI.Ix
or before the first business day of the
second succeeding month, and under
such regulations, and in such man
ner, as shall be prescribed by the
commissioner of internal revenue, and
Provided, further, that any such
coal producer who has fled with the
National BituminouS Coal Commits
sion his acceptance of the code pro-
vided in section of this act, and who
acts In full compliance with the pro-
visions Of such code, shall be entitled
to a drawback equivalent to SO per
cent of the amount of such tax, to be
allowed and deducted therefrom at
the time of payment in such manner
as shall be prescribed by the commits
sioner of internal revenue.
1Such right or benefit of drawback
stall begin upon the producers filing
with the commission his acceptance
of said code in such form of agree
ment as the commission may pre-
scribe"
Az Code Gives Tax Immunity.
In brief, this merely means that
the coal operators who accept code
which binds them to permit Fed
eral commission to fix maximum prices
and virtually to dictate labor rules
win be immune from a IS per cent
tax, while their competitors who dis
sent will be subject to the tax.
Here is what the Supreme Court of
the. United States said in its ruling
Nkecedent on q similar effort to use
f1s taxing power to prevent the
products Of child labor from moving
into interstate commerce, the tax
being imposed as sort OF penalty:
"Out of a proper respect for the
acts of a coordinate branch Of the
Government, this court has gone far
to sustain taxing acts as such, even
though there has been ground for
kzepecting, from the weight of the
TX, it was intended to destroy its
bhhject. But in the act before ~
tne presumption of validity cannot
prevail because the proof of the con-
trary is found on the very face of its
provisions.
s"Grant the validity Of this law, and
al that Congress would need to do
hereafter, in seeking to take over to
It's control any one of the. great num-
her Of subjects Of public interest,
Jurisdiction of which the States have
never parted with, and which are
reserved to them by the tenth amend
f1ent, would be to enact q detailed
measure OF complete regulation of
the subject and enforce it by So
called tax on departures from 1t. To
give such magic to the word tax
wDuld be to break down all constitu-
tsonal limitation Of the powers of
Congress and completely wipe out the
sovereignty of the States"
Acceptance Held Voluntary.
THE foregoing would seem to apply
exactly to the provisions of the Guffey
bill, though its defenders claim to
have phrased their bill so as to make
1t unobjectionable, because the code
acceptance Is made voluntary. On
the other hand, failure to accept the
code provisions means a compulsory
tax.
If the principle in the Guffey bill
were sanctioned as to coal, then the
recent N. r. A. decision by the Su-
preme Court would be meaningless.
For the Congress could pass a law
putting prohihitive tax on any busi-
ness which did not subscribe to and
obey the provisions of a Federal code.
The N. r. A. would then be revived
overnight.
Just why the Guffey bill has gained
such momentum in the face Of the
fact that 1t Is so plainly uncon-
stitutional is difficult to understand
The coal business is a sick industry.
but the Supreme Court has said that
mining and the production of coal
could not be brought under the COM
n1erce clause of the Constitution, and
now 1t Is apparent that efforts to
bring 1t In under the taxing power will
also fail.