Evening star., 1939-12-11

Ban Widened.by
Supreme Court
Broodened to Include
Introstote Service:
Texas Tax Upheld
BY J. A. FOX.

Inc supreme court uOQdy OUT
lawed wire tapping from the COM
munication channels of the Nation.
Following up an earlier decision
which forbade interception of mes
sages that cross State lines, the
court said the prohibition applied
equally to those moving entirely
within a State.
In a second decision bearing on
the same subject today, the court
reversed the conviction of three
men who said they had been found
guilty at their second trial on evil
dence the court had branded as il
legal in reversing their first con-
viction, because the evidence had
been obtained by overlapping.
In another decision today Texas
law which extends the taxing power
of the State beyond its own bound
aries was upheld by the court.
The court refused to review
test case to determine the right of
litigants before the Federal Circuit
Court at New York to a new trial
because of participation by Judge
Martin Manton.
In the litigation involving Manton
it was alleged that he was dis
qualified from participating because
of acceptance of bribes totaling ap-
proximately $4,000 over a period
OF several years.
Since then he has been convicted
on a charge of conspiracy to sell
judicial favors.
Chain Store Tax Review.
The court agreed to review a de-
ciSion holding invalid a section of
the Minnesota chain store tax law
OF 1888 which levies tax measured
by the gross sales of the chain.
The State appealed from the
Minnesota Supreme Court which
ruled in favor of the National lea
Co. and the Allied Stores Corp.
In their suits to recover $ll8.740
and s57,827, respectively. in taxes
paid under the law.
The law imposes levy of IS on
each store in :. chain up to 10 ard
the levy increases, group by group,
up to $155 for each store ia a
chain of SO or more. This section
was held valid but the State cour, S
held unconstitutional t.,e section
which levied tax of one-twentieth
OF one per cent on gross sales up 10
100000 and l Der cent OH sales in
excess of $lo00.00O.
The State contended the law was
enacted for the dual purpose of
raising revenue and restricting ",he
undue expansion of chain stores .
THE gross sales portion of this
tax" said the States petition, ''is
not based on net income, but is
based, exactly as is the specific por-
ton, on the fact that chain sIore
advantages and chain store Capacity
for injuring competitors, increase
with size"
Convicted in Insurance Scheme.
The case in which the court said
the interception of intra- State mes
sages was illegal involved four men
in New York who were convicted
OF using the mails to defraud. They
were said to have fostered a scheme
under which money was collected
from insurance companies through
false claims.
The defendants were DR.. Maxi
milan Goldstein, Joseph j. Weiss
Martin Gross and DR.. George
Krupp
1t was brought out at the trial
that IS intrastate phone messages
were picked up by an insurance de-
tective and postal inspectors by tap
ping phones to the offices of Weiss
and one other man.
They appealed their conviction
which had been upheld by the Sec
ond Circuit Court in New York on
the ground that the wire-tappinp
had violated their rights. The Gov
ernment contended that as only
lntrastate communication was in
volved. the Federal Communications
Act did not apply to e-tapping
in these circumstances.
Roberts Reads Decision.
The decision of the court, read
by Justice Roberts, said, however.
that the broad and inclusive
language" of the Federal Com
munications Act "is not to be limited
by construction so as to exclude
intrastate communications from the
protection against interception and
divulgence.
The second overlapping case de-
(see COURT, Page A-9D