Indianapolis Times, Indianapolis, Marion County, 14 May 1937 — Page 17

'* Y¥RIDAY, MAY 14, 1937

~Adverse Security Rule

May Result

“Fight on Court Reform

: ‘Suits Pending in High Tribunal Attack Old Age Pension and Jobless Insurance Programs; Roberts Is Termed Enigma in Case.

Tinies Special

WASHINGTON, May 14.—The New Deal's most far-reaching reform is pending before the Supreme Court, with a decision expected before the Court adjourns for the summer early in June. This is the Social Security Act of 1935. involve both the old age tax and annuity program, covering 25,000,00 wage-earners, and the state-Federal unemployment insurance system, These are the major features of the Administration’s biggest effort to “redistribute income.” The decisions may bring to a crisis the President's campaign to modernize the Supreme Court by * :

covering nearly 20,000,000.

adding new and younger justices to replace or assist those past 70. A decision sweepingly adverse to ‘* both'programs, many believe, would lead ‘to quick passage of the President's’ plan by Congress, and possibly: also to a constitutional amendment specifically authorizing legislation of this sort.

Attack Tax Validity The suits directly attack the va-

lidity of the taxes imposed to finance |

the two programs. But indirectly they attack the whole scheme of payments to aged and jobless—taking a cue from Justice Roberts’ AAA opinion, which held the processing taxes invalid because they were. to be used in an allegedly coercive scheme of regulating local affairs.

The Government argued that the

Social Security taxes were entirely separate from the benefit features. If the Court should knock out the tax clauses without ruling on the benefits, the Government could set up anew tax scheme to finance the payments. Government attorneys asserted in the recent arguments before the Court that the old-age benefits could just as well be financed, if Congress ‘desired, by a _ sales tax, an income tax, or inflation. of the currency. The main question in the adverse guessing is how Justice Roberts will vote. It is generally believed that the four conservatives, Van Devanter, McReynolds, Sutherland and Butler, will vote against both programs. It is generally assumed that Chief Justice Hughes, who is strong for humanitarian legislation, and the three liberals, Brandeis, Stone and Cardozo, will vote for most if not all of the program.

Roberts Is Enigma

Roberts as usual is an enigma. He wrote the five-justice opinion which knocked out the Railroad Retirement Act, similar in some respects to the old-age pension scheme now at issue. He wrote the six-justice AAA- decision barring the Federal Government from handling affairs that are historically “local.” The question now is, say the New Dealers, whether he thinks the poorhouses are as “local” as farming. But Roberts also wrote the Nebbia

in Crisis in

The cases before the cout

ing an advanced idea of state regulatory powers. And the unemployment insurance scheme is based largely upon state laws.

One of the curious elements is

that the Court, following two terms

of repeated anti-New Deal broadsides, has not nullified a single federal enactment since this term started in October. Another is the recent unanimous ruling upholding the National Firearms Act—which like the AAA and Guffey Acts amounts to a regulation based upon the taxing power. A further hopeful factor, to the New Deal, is the fact that the recent Wagner Act decisions—especially Justice :Roberts’ vote upholding the federal law's coverage of manufacturing industry —fooled nearly every lawyer In Washington. The fact that four cases involving three different complicated legal questions are before the Court leads many to expect a whole series of split decisions upholding part and invalidating part of the program.

Attack Alabama Law

Two of the pending cases involve only an attack upon Alabama’s unemployment insurance act. In another case involving the similar New York law, the Court with Justice Stone absent divided 4-4 last fall, and a petition for rehearing before the full Court is still pend-

ing. Nearly everyone expects these '

laws to be upheld 5-4. (Forty-two states now have such statutes.) Yet these laws were passed, hecause of the federal law imposing

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a payroll tax on employers and remitting most of the money to the

‘state if it enacts a suitable unem-

ployment insurance law. The federal tax is under attack in another case from Alabama. If the federal tax goes down and the state laws are upheld, how long will the state laws remain in effect? The last case, argued just a few days ago, is an attack on the oldage pension tax, a wholly federal setup, brought by a Boston stockholder in an effort to prevent his company from paying the levy. The legal points involved are not so complicated as they sound in lawyer’s language. ‘Basically, these are the questions at issue: : Are the taxes actually levied for the “general welfare”? Has Congress power to set up na-

tional systems of unemployment in-<

surance and old-age pensions, even

THE INDIANAPOLIS

IMES

CRUSADE OUTLINED ON CHECK CHARGES

Credit Men Fight Discount From Face Value.

By VINCENT LYONS Times Special Writer NEW YORK, May 14.—American business, made militant by the grownig tendency on the part of certain banks to lop off a part of the face

with state co-operation as in the case of unemployment insurance? Do the taxes take anyone’s property without “due process of law’? If one part of either scheme is invalid, does the whole scheme thereby crash?

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amount of checks as a service charge when cashing them, shortly will undertake an intensive campaign to combat these activities, it was learned today.

The fight is to be made under the leadership of the National Association of Credit Men, which seeks to establish “par” clearance of checks on a national scale. Federal Re-

for the cashing of checks; but many banks outside are discounting checks on other banks:

Henry H. Heimann, association

| executive manager, today outlined

the program which is to be launched. Business men are opposed to the discounting of checks, he said, because, in effect, it creates two kinds of money, one fully ac-

serve Board regulations prohibit members from making any charge

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— PACE $231 BONUS SATSFIES INDIANA SHOE BUYER

By United Press ANGOLA, May 14. — During a Saturday rush, the manager of a local shoe store put away $231 in a pair of four-buckle arctics. An -extra clerk sold them. The customer is satisfied, but has not returned.

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