Evening star., 1936-01-08
Readjustnent.

A moral obligation to pay the Amer
lean farmers who entered into contracts
with the Government for crop curtail-
ment prior to the decision of the Su-
preme Court outlawing the A. A. A. has
been declared by President Roosevelt.
Members of Congress, both Republican
and Democratic, have Endorsed this po-
sition of the Chief Executive. An ap-
preparation for that purpose IS TO pe
asked of Congress. The legal obliga-
ton, however, may not be so clear.
Under this unconstitutional law many
hundreds of millions Of dollars were paid
out by the Government in the past in
checks to the farmers.
Very little has been said so far re-
garding a moral or legal obligation on
the part of the Government to refund
the many hundreds of millions of dollars
collected from the professors to make
these payments to the farmers. How
much consideration has been given this
question at the White House has not
S~N---S
doubt that many of the mill owners and
other professors who have been taxed are
cudgeling their brains over this problem.
For example, the cotton textile mills
of New England have paid in processing
taxes close to $4,000, 900. Up to the end
of June the processing taxes paid by
the whole cotton industry had amounted
to approximately s240,0 900. How much,
if any, of this sum may be recovered from
the Government is a question. Amend
ments to the agricultural adjustment act
enacted by Congress before it adjourned
last Summer specified that suit to re-
cover taxes will be allowed only when
the plaintiff satisfies the commissioner
of internal revenue that he has not (a)
included the tax in the price of the
article, or (b) passed any part of 1t on
to the buyer, or Co included any part
of it in the charge or fee for processing,
or I'D paid reduced price for the article
because of the tax. Provision is made
for court review of the commissioners
determination on the basis of the record
made before him.
Under these provisions it would appear
that payers of the processing taxes, If
they seek to recover, will have difficulty
establishing the fact that they have not
in some way passed along the processing
tax or paid less for the article they proc
essed.
To one measure of relief, however,
the professors may look forward. The
professors of cotton in New England, for
example, have since the Circuit Court Of
Appeals in the Hoosac Mills case held
the tax unconstitutional paid in from
s11 900 900 to $4,000, 900 which has been
held in escrow by the courts pending the
decision of the Supreme Court. The mill
owners now hope to have the injunctions
against the collection Of these amounts
made permanent in view of the decision
of the Supreme Court and to have the
money returned to them. In other parts
of the country where similar mjuctions
have been granted by the courts the mills
are expected to take similar action.
The country generally is wondering
what will be the effect on prices of food
stuffs and of textiles of the decision in
validating the A. A. A. There has been
strong protest among the housewives at
mounting costs of foodstuffs. 1t is too
early to predict the effects of the action
of the Supreme Court or what the read
justment will be- And the effect on the
farmers prices is still in the making.
Undoubtedly the country will have to
undergo readjustments. They may not
be violent. They were not after the Su-
preme Court declared the national re-
covery act unconstitutional.