Evening star., 1938-05-23
Tax on 3 New York City Port
Employees and on Georgia
Grid Games Valid.
LABOR BOARD ORDERS
CONFIRMED IN 3 CASES
No Ruling on Stockyards Matter
Made-High Bench Limits
Its Taxation Opinion.
BY JOHN H. CLINE.

The right of the Federal Govern
ment under certain circumstances to
tax State instrumentalities was upheld
by the Supreme Court today in two
important decisions, but the justices
indicated that they were not ready to
accept the Presidents contention that
the sixteenth amendment permits un-
restricted mutual taxation by State
and Federal governments.
The opinions are of unusual signifi-
canoe in view Of the Presidents recent
message to Congress asking for legisla-
ton enabling the central government
to levy assessments on tax-exempt
bonds and the salaries of State en-
ployes.
In other important rulings, the court
refused to hear appeals from three
concerns attacking the legality of or
ders promulgated by the National
Labor Relations Board. That action,
in effect. upholds the validity Of the
boards action in cases against Rem
ington Rand, Inc: the Black Diamond
Steamship Co. and the Carlisle Lum-
ber Co.
The Remington Rand and Black
Diamond cases involved orders requir-
ing the reinstatement of strikers,
while the controversy between the
lumber company and the board con-
cerned the definition of "employes." :"
Football Receipts Taxable.
The court recently upheld the
boards power to order the reinstate-
ment of strikers and the legality OF
its proceedings in the Mackey Radio
g. Telegraph case. Presumably. the
justices felt the decision in that case
controlled the three controversies dis
posed of today.
The court did not act on a request
from the Department Of Justice that
it reconsider its ruling in the widely
discussed Kansas City Stockyards case
in which the justices ruled that the
procedure of the Department OF Agrl-
culture in rate-fixing case, prevented
a fair hearing. 1t is expected ruling
on the, departments request will be
announced when the justices convene
for their last session Of this term mex
Tuesday.
The extent Of the Federal taxing
power was brought before the court
in suits by the New York Port Au-
thority and the regents of the Uni
versity System of Georgia.
The court ruled that q Federal
income tax levied on three employees
of the port authority was constitu-
tional and that tax on the proceeds
from football games played by the
University of Georgia and Georgia
Tech also was valid.
Reverses New York Court.
The decision in the New York case
delivered by Justice Stone, reversed
holdings by the Second Circuit Court
and the Board of Tax Appeals that
the salaries of the three men in ques-
ton were immune from Federal taxa
ton because they were engaged in the
performance of sovereign State
function.
Justices Butler and McReynolds dis
sented, while Justice Black wrote a
separate opinion concurring in the re-
suit, but contending that the court
should review and re-examine" an
old decision that the Federal Govern
ment lacked the power to tax the sal
ary of a State judge. From that, il
was believed Justice Black favored
extending the taxing power to enable
the Central Government to levy on
State employees.
Justice Stone, in speaking for the
majority. said it was plain that en-
ployes of the Port Authority are not
employees of the State within the
meaning Of the older decisions.
Expressing no opinion whether q
Federal tax may be imposed upon the
Port Authority itself with respect tc
its receipt of income or other other
activities" Justice Stone declared
I'VE decide only that the present ia,
neither precludes nor threatens un-
reasonably to obstruct any function
essential to the continued existence
of the State government. So much OF
(See COURT. Page A-3.)