The Waterbury Democrat., 1937-05-25
SECURITY TEST
 HOLDS IMPORT
 FOR 2s MILLION
supreme Court Decision
 Affects Workers and | Also Employers
By JOHN A. RIECHNANN |,

TN NQW1gCO GIGS3 6t8H NOGGCSpOuuCbbI
 Washington, May 2S-(UP)-The Sipreme courts decision on validity
 of old age pensions, major provi- 3ion of President Roosevelt's So- Eial security act affects more than B6, 100000 workers and 2,700,000 Employers.
 The law itself is more wide- Epread in the scope of those 1t di- Rectly affects than any other New Deal measure passed on by the high 4tribunal.
 The workers under the law have sbeen paying. since January l, one
 per cent of their weekly wages into
 h federal fund designed to provide
 Tor their voluntary retirement at
 the age of 65. Employers likewise
 have been paying a payroll tax of
 the same amount for the same fund.
 The tax, starting at 1 per cent Ion employe and per cent on em- nployer, rises gradually to maxi -mum of per cent on each in 1948. ~s Aids Pension Laws
 The act also provides for old age
 benefit payments to states having .old age pension laws of their own, [ the Federal government contribut-
 ing half of any monthly payment n.up to $50 a month made under a s..state plan approved by the Social s.Security Board.
 = The old age pension provisions '. together with the unemployment ssirlSurance provisions of the law attacked in other suits before the .court-makes up the most important phases of the Social Security pro-
 gram.
 Other phases of the act such as assistance to the blind, grants for ! maternal and child health services {, and for public health work, are not 2 involved in the decision.
 Z. Because of the far-reaching ex- ! tent of the old age law, adminiStra- { tion leaders urged the Supreme 2 Court to grant early consideration ( of the present case when the First { Circuit Court of Appeals in Boston {. held the law unconstitutional. :, The appeals court, the same court !, which voided AAA in the case which l" furnished a Supreme Court test of the farm program, made its decision [ by a two to one vote in test E. brought by George P. Davis, ! stockholder in the Edison 1llumin- z ating Company of Boston. ! Sued For Injunction :. Davis sued in the Federal District
 cougt for an injunction to restrain
 the officers and directors of the
 company from paying the tax im- ]. posed on its payrolls for old age pen- !. siors. He asserted that the tax was : linconstitutional. He contended that !. to pay the tax would deprive him, , as . stockholder, of property since , the tax money, if unpaid, presumab-
 ly would be used to provide div : idendS. He sought to prevent the company from withholding from the pay envelopes of its employees the l 7 per cent tax imposed by the law.
 The District court saw no merit to Davis contentious and his law yers appealed to the Circuit court. The utility company did not in- .. terpose any defense to Davis action However Guy T. Hedvering, and William M. Welch, local collector of
 internal revenue, intervened in the
 suit.
 While the government might
 have challenged Davis right to sue and to obtain an injunction against tax collections it did not do so. In : arguing the case in the Supreme court, the government declared that
 the necessity of determining the laws status made it desirable to
 obtain an immediate ruling in spite of technical grounds.
 The government noted that there were almost 29,000,000 tax accounts
 with the Federal government invol- we'd in the proceedings and that the task of making refunds, should the law be declared invalid, would prove an almost superhuman task. Immediate Ruling Sought s- It thus sought to obtain an im- mediate ruling.
 The old age pension plan had long been under consideration by various legislators before finally en- acted into law during the depression
 under the direction of President Roosevelt. It was supported on the theory that it would remove from
 the government a large part of the burden of relief in future periods of economic stress.
 As social argument in favor of the law, it was contended that the proportion of persons over 65 was growing in relation to the rest Of the population and probably would reach a peak of IA per cent of the total population in 1880. A large part of this group. it was urged, are either confined to institutions or de- pendent on relatives for support.
 Under the law 42 states and ter ritories have enacted old age benefit laws which have recieved the ap- proval of the Social Security board.
 Benefits payable under the pro- visions of the act establishing monthly old age benefits to be paid workers under Title II of the act range to maximum of $85 month after the age of 65, on the basis of a maximum salary of 5000 year.