Evening star., 1936-04-11
TAX ON BIG GIFTS
OF A.A.A..ST STUDIED
~
unjust Enrichment Phrase
"~ May React Against
Roosevelt.
BY DAVID LAWRENCE.


sponsored by President Roosevelt in
his message to Congress asking 1or
a return of processing taxes-may
prove an embarrassment to the New
Deal because it begins to appear that
"uniust enrichment" might also ap-
ply to those persons and institutions
who received in excess OF $4,000 by
authority of Mr.. Roosevelt himself
through the A.A.A.
It turns out, for instance, that
prominent wheat grower in the West
rented many acres Of land from the
Indians at prices ranging from SO
cents to S1.50 per acre and then re-
ceived upwards of $3.50 per acre from
the New Deal for not raising wheat
on a part of that land.
Payments to the sugar companies
some of which had their stock market
value increased materially as result
of the A.A.A.'s bounties have already
been made and doubtless disbursed,
but the idea of a "windfall" tax to
recover some Of this money that went
for unjust enrichment" of a few
large producers or non-producers is
beginning to be studied.
Tax on Farmers Unlikely.
Politically, nobody here is going to
ask that a tax be imposed on the
farmers, who received money for not
doing things, though to be sure it is
difficult to see how this money can
be lawfully retained by the farmers
any more than the processing tax
money can now be legally taxed since
the whole A.A.A. was declared un-
constitutional and invalid.
Surely If the "windfall" tax is ap-
piled to the professors, who were &C
cused Of unjust enrichment" so can
the principle be applied to any other
company, which benefited by the
whole unjust enrichment" idea. Can
Federal funds be paid out for not
doing things, for failing to perform
a service in which the Government
itself gets value received?" And
since the Supreme Court declared the
A.A.A. invalid, can the funds be re-
garded as anything but a "windfall'
to the farmers? For, strictly speak
ing, the Federal Government, though
entitled to recover money spent. Is
for political reasons not going to seek
to recover the money paid the farmers.
Farmers Got Billion.
The American farmers received
about $1,000, 100000, which was col
lected by the Government in processing
taxes from the American consumers.
The money was disbursed irrespective
of the financial condition Of the re-
cipients. Rich companies got the
benefits along with poor individuals
The whole scheme was theoretically
aimed at control of the price so that
it would go upward. Now nobody
knows how much more the drought
sent the prices up than did the A. A. A
control, and likewise. nobody knows
how much more money there might
have been available had the American
farmer been able to supply the natural
demand by unrestricted production.
But the fact remains that the
American consumer paid the bill oi
00,000.000 in addition to the in.
creased prices that the drought ano
the control program forced upon him
The so-called "windfall' in processing
taxes Is supposed to amount to $780,
100000, but there is no proof that all
the professors got this money because
many Of them were forced by con-
sumers to reduce prices and hence
the processing tax money paid into the
courts was borrowed money which
some of the producers were lucky to
recover in order to prevent bank
1uptcy.
Proposed Law Not Revealed.
The proposed statute, which Is to
recover the processing tax money that
went to unjust enrichment" only has
not been made public. It will be soon.
And it may not meet the test of con-
stitutionality when 1t goes into the
courts. For how can Congress levy a
tax on something which the Supreme
Court said was not a true tax? The
assessment will be levied, however
and the matter taken to the courts
in due time.
Meanwhile, the farmers and the
big producers who received several
thousands Of dollars in A. A. A. bene-
fits will find the Treasury making no
demands on them. For it would be
difficult If not impossible to write a
statute that RECEIVERS money paid to
producers who received. say $4,000
or more from the A. A. A. without es-
tablishing precedent for the re-
covery to all sums paid to farmers.
But under the banner of unjust en-
richment" new legislative standard
may possibly be invented. Unfortu-
nately there is no effective remedy
being suggested either inside or out
side Congress to prevent the unjust
taxation" Of the consumers, so many
Of whom nowadays feel that they are
living in an era Of unjust impoverish-