The Waterbury Democrat., 1937-02-03

eral courts. Other suits are pend ing in state courts.
 The Alabama law was declared unconstitutional by federal cour' and was upheld by a state circuit court.
 Most sweeping of these decisions was the one handed down here by the Federal court for the Northern Alabama district. Tn that ruling Judge David J. Davis upheld tht law in its broadest sense.
 Davis Succeeded Grubb 1 Davis succeeded the late William I. Grubb Judge Grubb made sev- eral decisions invalidating New Dea legislation. The Tennessee Valley Authority Act, the Agriculture Ad- justment Administration Act anC the Federal excise tax on alcoholic beverage dealers in dry states were held unconstitutional in his court Judge Davis decision on the SO cjal security law was in the case o the Beeland Wholesale Co. and thu Alpha Portland Cement Go. which sought to enjoin collection of tho unemployment insurance tax.
 His ruling waa contained in z lengthy, informal brief that denied the petition for an injunction. He discussed broad aspects of the case
 The social security, tax, Judge Davis said, is q weapon against fut- ure Impressions. He described the suffering during the depression al length and ruled that Congress having spent billions to end it--was empowered to tax the privilege oi employing to prevent recurrence of such "calamities."
 4. Plaintiffs Cite Injunction
 The complainants had asked the suit be thrown out because they had obtained an injunction from q three- judge federal court in Mont gomery preventing collection of taxes levied by the state law. Under the federal act If they had paid state taxes 90 per cent could have been given to the state, and their obliga- ton to the federal government would have amounted to only 10 per cent
 The judge informed them that they had erred in obtaining. a ruling of unconstitutianality ruling Ol unconstitutionality from a fedora court. If they had attacked the statt was constitutional or unconstitution. al they would have been liable only for 1 per cent of the pay roll valut the amount required by federai law. But since they had obtained ar injunction against the state law ir a federal court, they had no re- course and the money already paid to the state would be lost.
 Judge Davis construed the social security tax a properly levied ono and refused the injunction, although complainants argued this would pre- vent them from further pursuing the question of the constitutionality of the state law.
 Unless they want to lose the money already paid to the state, the plaintiffs must prove the federal law invalid. Meanwhile they plan to appeal Davis' ruling.
 Mellon Case Precedent
 They also attacked the tax on the grounds it was move by Congress to force states to enact unemploy- ment compensation laws. Davis cited the case of Mellon versus Florida in which 1t was ruled Congress had the power to enact an inheritance tax. Florida had attempted to prove coercion by Congress to compel it to enact state inheritance tax.
 The present social security act is for the general welfare" of the people, and Judge Davis said if it could not bc upheld under the general welfare" clause, of the constitution, the clause was useless
 The federal court ruling against the state law was made in a suit brought in Montgomery by the same cOmplainants. The court there threw it out on the grounds that 1t Violat- cd the state and federal constitu- tions in that it applied to compan- les with "eight or more" employees.
 That distinction and classification was unreasonable and amounted to taking property for the general vel fare without due process of law, the court said. It granted a permanent injunction to prevent collection of state taxes from the plaintiffs.
 U. $. Court Refuses Injunction
 A three-j judge federal court in New Orleans refused an injunction three cotton mills had asked to pre- vent Mississippi from collecting un- employment compensation taxes The court did not rule directly on the validity of the state act. The same argument that was upheld in the Montgomery decisions was pre- scnted to the court.
 The Circuit Court at Gadsden Ala, presided over by Judge J. II Disquc, q state juriGt, held the Ala bama law constitutional. This suit differed from others that employca of two nrm8--thc Gulf States Steel Corp. and the Dwight Manufactur- ing Co.--brought suit against their employers to retrieve the taxes de- ductcd from their wages.
 Alabama was made party to the giIit and entered f. to argue the laws constitutionaIity. which was upheld.
 The 5th District Circuit Court of appeals at New Orleans upheld an- other decision Of Judge Davis which had been favorable to the New Deal Judge DaViG had ruled against two Alabama cotton mills, seeking to ob- tain rebates of si 100000 in taxef paid under the inyalidated AAA, z ------------a-----s---,,--.--.---
 Hints Offered on Worrying