The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1936-01-13
Administration Is Handed
100000, 900 Setback in
Professors Suit.
DISMISS TEXANS PLEA
High Tribunal Fails to Hand
Down Its Verdict
on IVA.
By United Press

. |
WASHINGTON, Jan. 49,
A ten-minute session of the
Supreme Court today cost the
New Deal S200,000,000 in
processing taxes, left status of
81, 000,0O0,0OO in other proc
essing levies in doubt and
avoided ruling directly on
constitutionality of the Bank
head Cotton Act.
This resulted from two decisions:
First, the court held that protest.
ed processing taxes. actually paid
into eScrow-a sum amounting to
about $500 ,000, 000-must be re-
turned to the professors. BY failing
to decide upon validity CT an AAA
amendment, however, the court left
in doubt the chances of any re-
covery of the 81 ,000,000,000 in levies
already paid to the government by
professors who failed to obtain anti
tax injunctions.
Second, the court threw out an
attempted test of the Bankhead Act
on technical grounds. Thus. it
postponed until sometime after Jan.
20 final ruling on the acts valid
ity. The question will be raised at
that time in suit brought by Gov.
Eugene Talmadge of Georgia, New
Deal foe
Silent on iva
The court concluded reading opin-
ions without ruling on constitution
ally of IVA
The only question the court I'M
dertook to decide today with respecs
to the Bankhead Act was whether
a Federal District Court has the
right to grant or withhold an in
junction against the act. The court
decided that it was within the dis
erection of the lower court to adopt
either procedure and that there was
no cause for it to intervene in this
specific case on that specific ques-
ton.
Lee Moor, Texas cotton planter,
brought the action in Federal Dis
trict Court seeking to enjoin the
government from assessing the pro-
hibitive Bankhead tax against cot
ton which was outside any Bank
head act quota. The district court
refused to grant the injunction and
Moor sought it higher up.
The court assembled promptly at
noon to the crier's call of God
save the United States and this hon.
orable court
Justice owen j. Roberts. who de-
ilvered the opinion last week con-
demning AAA, began reading the
processing tax case opinion.
1000 Suits Involved
A sigh of alarm escaped Admin
istration officials about the council
table. Briefly, in an unanimous
opinion, Justice Roberts ruled that
money impounded in the lower Fed
eral courts in suits challenging
processing taxes must go back to
the professors.
There are more than 1000 of these
suits. They involve 5000, 1000 900 of
taxes which became due after
amendment of the AAA last Au-
gust. Justice Roberts held that the
AAA already had been declared in
valid and that, since the taxes had
not been paid into the Treasury.
they must go back to those who
paid them.
The decision somewhat ieopar-
died but did not directly bear upon
the status of s1,000,O0O,000 of other
processing taxes paid into the
Treasury under AAA. Proceeds Of
that tax have been paid out to
farmers in AAA benefit checks.
Long and complicated legal pro-
ceedings may be necessary before
the fate of the processing taxes al
ready paid in has been decided.
New Suits Necessary
Professors must launch new law
suits seeking recovery of the mon
eys and challenging directly the
clause in the AAA amendments re-
curing proof that the tax has not
been passed on.
Should the court hold the process
sors entitled to recovery. a severe
drain on the Treasury would be in
evitable.
The government has already in
Dictated that it regards payments
contracted with farmers under the
invalidated AAA as a moral ceot.
1t was estimated by the AAA that
cost of this might reach $500 900 900.
Forced refund of processing taxes
would put on the Treasury the bur-
den of finding another 81 900 ,000, 900.
New Deal Victory Empty"
The Bankhead Act ruling was an
empty victory for the New Deal.
The Administration asked that
the case be thrown out because
there had been no full trial Of the
issues involved in the lower court
proceeding. 1t was while arguing
this point, and under cryptic ques-
tioning by conservative jurists, that
Solicitor General Stanley Reed coli
! lapsed.
Since then, however. the court ap-
parently invalidated the Bankhead
act. to all practical purposes. when
it ruled against validity of AAA.
At the same time, the decision to-
day placed on the New Deal the task
of defending the contested law in
the suit brought by Gov. Talmadge.
Turn In Pare Three1