Evening star., 1937-05-24

as he celebrated his 9th birth
| time make available Federal money
sufficiently effective to influence State
policy, standards and details OF ad-
ministration.
The excise laid by 901 Is limited
to specified employers. 1t Is not i'm
posed to raise money to pay unem-
ployment compensation. But 1t is
imposed having regard to that subject
for, upon enactment of State laws for
that purpose in conformity with Fed
eral requirements specified in the act,
each of the employers Aabject to the
Federal tax becomes entitled to credit
for the amount he pays into an un-
employment fund under 4 State law
up to 80 per cent Of the Federal tax.
The amounts yielded by the remain
ing 10 per cent not assigned to any
specific purpose. may be applied to
pay the Federal contributions and ex-
penses in respect OF State unemploy-
ment compensation. It Is not yet
possible to determine more closely
the sums that will be needed for these
purposes.
When the Federal act was passed
Wisconsin was the only State paying
unemployment compensation Though
her plan then in force is by students
Of the subject generally deemed the
best yet devised, she found it neces-
sary to change her law In order to
secure Federal approval In the alb
sence of that, Wisconsin employers
subject to the Federal tax would not
have been allowed any deduction on
account OF their contribution to the
State fund. Any State would be
moved to conform to Federal require
ments, not utterly Objectionable in
order to save its taxpayers from the
Federal tax imposed In addition to
the contributions under State laws.
Peril in Federal Tax.
Federal agencies prepared and took
draft bills to State Legislatures to en-
able and induce them to pass laws
providing for unemployment COM
pensation in accordance with Federal
requirements and thus to obtain relief
for the employers from the impending
Federal exaction. Obviously the act
creates the peril of Federal tax, not
to raise revenue, but to persuade. OF
course, each State was free to reject
| any measure so proposed. But If it
failed to adopt a plan acceptable to
Federal authority. the full burden of
the Federal tax would be exacted.
And as Federal demands similarly
conditioned may be increased from
time to time Is Congress shall deter
mine, possible Federal pressure in that
field is without limit. Already at
least 43 States. yielding to the induce
ment resulting Immediately from the
application Of the Federal tax and
credit device, have provided for un-
employment compensation in form to
merit approval Of the Social Security
Board. Presumably the remaining
States will comply whenever conven-
lent for their Legislatures to pass the
necessary laws.
The terms Of the measure make It
clear that the tax and credit device
was intended to enable Federal officers
virtually to control the exertion Of
powers of the States in 4 field In
which they alone have Jurisdiction
and from which the United States Is
by the Constitution excluded.
Il am of opinion that the Judgment
OF the Circuit Court Of Appeals should
be reversed
Sutherland Opinion.
The minority opinion filed by Jus
tice Sutherland In which Justice Van
Devanter Joined, said:
with most Of what Is said In the
opinion just handed down, concur.
I agree that the pay roll tax levied
Is An excise within the power of Con-
gress; that the devotion of not more
than 80 per cent of it to the credit
Of employees in States which require
the payment Of = similar tax under
so-called unemployment-tax laws a
not an unconstitutional use Of the
proceeds of the Federal tax: that the
provision making the adoption by the
| s~S~s> VI NAA uASAAPAOy AAW Va u
specified character . condition prece-
dent to the credit Of the tax does not
render the law invalid. I agree that
the States are not coerced by the
Federal legislation into adopting un-
employment legislation. The provis-
ions Of the Federal law may operate
to induce the State to pass an employ
ment law If 1t regards such action
to be in its interest. But that is not
coercion. II the act stopped here, ]
should accept the conclusion of the
court that the legislation IS not un-
constitutional
But the question with which ]
have difficulty is whether the admin
istrative provisions Of the act invade
the governmental administrative pow
ers Of the several States reserved by
the tenth amendment. A State may
enter into contracts, but q State car
not by contract or statute surrender
the execution or q share in the execu-
RESORTS
l a <,r~v