Indianapolis Times, Indianapolis, Marion County, 16 May 1938 — Page 1

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The Indianapolis Times

FORECAST: Fair tonight followed by increasing cloudiness with showers probably tomorrow; slightly warmer tonight.

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FINAL

VOLUME 50—-NUMBER 56

MONDAY, MAY 16, 1938

Entered as Second-Class Matt n

at Postoffice, Indianapolis,

TREES

er d

PRICE THREE CENTS

Rain Softens Soil to Allow

DEATH TOLL I HOTEL FIRE AT ATLANTA IS 25

| TEMPERATURES Ca m....51 10a m.... 083 Ta M....5M liam . 64 hi 8a m.... 5 12 (Noon).. 66 14 Critically Burned and, go pm i606 1pm . 6

Fatalities May Reach | 35, Is Fear.

ready bave counted their oats crop a loss because of an arid April, to- " a [day were in their fields preparing ATLANTA, Ga, May 16 (¥ P).— and made pliable for corn planting B : At least 25 persons died today in an | by week-end rains. tell ; : ) Pet i turfy n fire that destroveq! Four-tenths of an inch fell Sa Sally Jnoning 8 ‘i C77 day and vesterday, and Horace Abthe old Terminal Hotel in Atlanta's bott, County Agricultural Agent, downtown railroad district. | said that would sufficiently soften Fifteen of the 25 bodies recovered | the clods so that they could be

by 1:30 p. m. (Indianapolis Time) | broken, were el fe E More showers were predicted as TS | Tits > Fourteen were critically injured? Dossibiity ox gion 4 eighth and fear was expressed that prob- | owever, By WAS M 8 ably a score more bodies might be | consecutive day of Subnor mal temon tn : 3 wheat still w t buried in the basement under wreck- peratures and wheat still was at a

' standstill. The rains helped pasage of upper floors which broke |, \ loose from the brick walls and a helped the wheat some, crashed. r. Abbott said because of the

Cause of the blaze was unknown | tack of rainfall in April and the It started in the basement . and | git part of May, there probably soared upward, the elevator shaft |;ll he more soybeans planted than serving as a chimney. normal. He predicted that the corn Floors of the five-story structure | acreage would be nearly normal. fell, leaving the walls intact. Debris

was piled deep in the basement and ‘Strawberry Crop in

smoldered for hours. Fin cut moldere I how iremen ¢ Floyd County Damaged

through it and recovered three bodies from the charred and tangled NEW ALBANY, May 16 (U. P.).— wreckage. | Due to recent freezing temperatures Some Leap to Death and lack of rain, the Floyd County Five died strawberry crop, usually valued at 4 5 2 $100,000, is reported to be about oneHospital and the other bodies were third normal size. recovered from of the Numerous fruit trees suffered from ruins or from adjacent streets where | the high winds and freezing . A , | weather, they jumped In an effort to avoid athe the flames. A few managed to climb down the searing iron fire escapes and others leaped into safety nets spread below by firemen. So great was the confusion

from burns at Grady

the edges

JAPS SURROUND

occupants of the hotel

Corn Planting

Marion Cecunty farmers, who al- |

Yaa thal

of the fire Fue

be: who escaped. He expressed a fear that the death toll might exceed 35.

The fire started at 3:15 a. m.

still in bed tense. control

Firemen in an

brought, it

hour, but the hea

Chief O. J Parker refused to estimate the num-

(Indianapolis Time), while guests were It was sudden and inunder

from the blackened walls and glow-

ing embers prevented search of the building

From 60 to 75 persons were believed to have been registered at the

hotel last night but due to loss o registry records it determine the exact number.

was impossible to

It was believed all the dead were

white guests, most of them Identification of impossible because their features had been burned or mangled bevond recognition. Nearly all were clad in nightclothing. Other belongings were destroyed.

men.

Housed Railroad Men

The hotel, located across from the terminal station, was frequented by railroad men. It was of brick construction with the floors supported by wooden sills. Ten of those identified were: Miss Esther Thomas. 31. Tremont

Hotel, Atlanta, identified by drive er's license and leiter from “Frances.” Macon, Ga. A Mrs. Bacon, mother of Mrs Overstreet, address unknown, and three Overstreet children; Jaqueline, 11; Jimmy and Jean, 9-year-oid twins. James Carroll Bond, Knoxville, Tenn. William Howard Snyder, 33, High Point. N. C. D. D. Wilson, Muscodine, Ala.

Dr. Gordon Johnson, Lecomptee, La. Carl E. Roberts, Birmingham, Ala. Pulls Fire Alarm T. W. Williams, way worker, said that the flames he ran and pulled a fire “As I ran across the street I saw a man jump from the top story in his flaming pajamas,” Mr, Williams said. “He bounced like a and landed clea from where he had first Some survivors came down the fire escape Others jumped to safety in fire nets. The survivors were so hysterical it was impossible to determine how many escaped.

Southern Railwhen he saw from cafe alarm.

the

rubber ball the street hit.”

ACI'o0ss

One man who jumped down the |

elevator shaft fiom an upper story, struck a rafter in the basement. Firemen cut his body away. Chief Parker said he would investigate possibility that the fire started from an explosion in the basement near the kitchen.

Redecorating was in progress and |

there were a number of cans of varnish and shellac stacked in the basement, he said.

200 CHICKENS KILLED IN BROODER BLAZE

Fire caused by an stove early today chickens in the brooder Morgan, at 2900 E. 56th St. The one-story frame building housing the chickens was destroyed, before the township pumper arrived. Damage to the building was estimated at $175.

overheated

of Orville

LEVINE SUSPECT FREED ROCKAWAY, N. J, May 16 P.).—John Skone, 352-vear-old

(U.

some victims was

immediate

{north of the railroad and 40 miles northeast of Suchow.

destroyed 200 |

| offered their blood today in event a | transfusion is necessary to have the

{| Republican mayoralty nominee,

rag |

picker, was at liberty in his River- | side shack today following a week- | end of questioning by Federal and |

local officers in search of clues to

the kidnaping of Peter Levine, miss- |

ing 12-vear-old school boy of New Rochelle, N. Y.

6 MISSING IN BOAT FIGHT LONDON, May 16 (U.P).-

“The |

steamer City of Norfolk arrived to- |

day from Baltimore and reported

six members of the crew were miss- |

ing as a result of & fight aboard. One of the crew, after stabbing another, jumped overboard. A boat which was lowered to his assistance capsized and five men were lost.

RAIL JUNCTIO

THE FOREIGN SITUATION

SHANGHAI—Japanese Suchow as line.

surround Chinese abandon

je Paul Cathedral. i

TWO CITY MEN

City's Toll for 1938 Now 28, County's 46; 4 Others Killed in State.

{ Six Hoosiers were dead today | including two Indianapolis men, as {18 persons were injured, eight of them seriously, in week-end traffic

accidents. Death of Paul Huffman, Rural Route 9, in an automobile-train collision here brought the City's death toll for the year to 28, as against 41 a year ago. The 1938 traffic toll for Marion County rose to 46. Fifty-seven drivers were arrested over the week-end. John J. Quinn, of 2340 N. Pennsylvania St., son of Thomas Quinn, Democratic nominee for trustee of Center Township, was injured fatally early yesterday in an accident on Highway 37 near Waverly. He was 27. Others killed in traffic were Alice F. Nolan, 74, near Clinton; Charles Byers, 25, at Bedford; Lee Sewell, 53, at Goshen, and Miss Janet Jones, 29, near Goshen. Mr. Quinn, returning to Indian-

| apolis from a dance with two | friends, R. Conditt Fields, 25, and | Robert Kennedy, 23, both of

| Mooresville, both of whom were in- | jured seriously, was found in the | wreckage of his overturned car two | miles north of Waverly. Mr. Huffman was killed instantly | when his machine was struck by | a westbound passenger train at the | Pennsylvania Railroad crossing at | Emerson Ave. yesterday. He was 35. | Quinn Funeral Wednesday | Mr. Quinn, a graduate of Catheds {ral High School, died four hours after he was brought to City Hospital. Funeral services will be held at 8:30 a. m., Wednesday, in the [home and at 9 a. m. in SS. Peter Burial will be in Holy Cross Cemetery, He is survived by his parents; a

MEXICO CITY—Cardenas pre- |brother, Thomas Qunn Jr.; two sis-

pares to suppress any rebellion, WASHINGTON ~- Foreign intervention in Mexico feared.

RIO DE JANEIRO-—Newspaper reports Italy backed revoit. LONDON=Air Minister resigns in | Cabinet shakeup.

PRAHA —Czech Premier may confer with Sudeten leader.

VATICAN CITY-—Pope recognizes Franco Government in Spain.

HENDAYE--Spanish Rebels ree port capturing 93,000 prisoners. BUCHAREST—Iron Guards’ leader indicted for treason.

SHANGHAI, May 16 (U. P). — Chinese forces abandoned their “Hindenberg Line” in Central China today as six Japanese columns drove around the city of Suchow, important railroad junction, the fall of which will enable Japan to consolidate all coastal provinces in Northern China.

Hand-to-hand fighting was re- | ported in the streets of Siaohsien, ! just west of Suchow. Japanese in- | fantry fought their way across the | moat at the southern corner of the | city despite withering Chinese ma-chine-gun fire and hand grenades. Japanese artillery battered down | the walls of the ancient city, paving | the way for an infantry attack. It | was indicated that both forces were | firing on the city in an effort to| burn out the enemy. } The main Japanese force was fighting along the YungchengSuchow Highway. Piogress was | swift but difficult because of Chi- | nese rear guard action, including | the dynamiting of bridges and high- | WayVs. | Neutral military observers predicted Suchow would fall shortly, | permitting the consolidation of the Japanese regimes at Peiping and | Nanking and giving the Japanese | control over ali Chinese coastal! provinces north of Hangchow Bay. | They said, however, that the vic-

tory probably would be shallow since the Japanese had failed in their aim to trap and annihilate |

400,000 troops of Gen. Li Sung-jun. | Gen. Li's forces were reported to | have withdrawn to the west. | The Japanese columns advanced | north and south on the east-to-west Lunghai Railroad and today | effected contact. | The columns met each other on the railroad near Tangshan, west of the Hsuchow sector, the dispatches said. Other Japanese forces, it was asserted, oocupied Pihsien, 10 miles

All news from the front told of Japanese advances in their most determined offensive of the entire war. Japanese storm troops occupied (Turn to Page Three)

CITIZENS OFFER BLOOD

WARSAW, May 16 (U. P.).—More than a score of Warsaw citizens

life of John G. Hansman, Warsaw

Cardenas Gives His Views on U.S.

In an exclusive interPresident Lazaro Cardenas of Mexico has answered searching questions about his attitude toward the United States, his oil expropriation policies and his plans for the | future of America's nearest "Good Neighbor." See Page Nine.

view,

| ters, Miss Clare Quinn and Mrs. J. | Barton Griffin, all of Indianapolis.

The injured men were taken to

Methodist Hospital, where Mr. |

| Fields was reported to have suf- | | fered a fractured right shoulder and

possible internal injuries, and Mr. | Kennedy, a broken left ankle and | body bruises, Both men were | hurled from the car when it over | turned. A man arrested by State Police in Bloomington suspected of being in- | volved in the wreck was released when it was learned his machine had been damaged in another collision. State Trooper Ralph Metcalfe now believes the car went out of control when Mr. Fields, who was driving, tried to negotiate a curve. The car left the road on a sharp | curve, struck the ditch, bounded to | the other side of the highway and | turned end over end for 300 feet, | Officer Metcalfe believed. Mr. Huffman, employed at the Real Silk Hosiery Mills, had waited at the railroad crossing for an eastbound passenger train to pass, witnesses told police.

Doesn't See Second Train

Apparently believing the track was clear, Mr. Huffman started to drive south across the tracks, unaware of the other train approaching from the opposite direction. The wreckage of his machine was carried more than 200 feet down the | tracks, police said. Funeral services will be held from his home at 11 a. m. Wednesday. | Burial will be at Milford. Mr. Huff- | man is survived by his wife, Mrs. Fern Huffman; stepdaughter, Miss Martha Wolfard; his parents, Mr. and Mrs. Thomas Huffman of Emi- | son, three brothers and three sisters. William Henegen, 17, of 1168 Udell | St., received a possible skull fracture when he fell from his bicyele | in attempting to avoid striking the door of a machine at 18th and N. Meridian Sts. | John McClain, 29, of 1812 N. Me- | (Turn to Page Three)

DIE IN TRAFFIC; 18 HURT HERE

DR. WICKS TO TOUR EUROPE . . . . .

Acquirement

Of East St. Land Pushed by City

About 75 per cent of owners of property needed in the widening of S. East St. have signed agreements, and owners of property appraised at about $75,000 have refused to sign, the Works Board was told today. The Board failed to act upon an approach street for the new Itvington High School. It rescinded proposals to pave parts of Oxford and Randolph Sts. when property owners objected. Robert P. Moorman,

acting as

signed East St. agreements to be checked by City Engineer Henry RB Steeg. Those who have sigend, Mr. Moorman said, agreed to sell the needed property to the City for $174,443.25. He estimated that the City will have to pay about $250,000 for all property necessary. Largest owners of property who have not signed the agreement, he said, are the Sinclair Oil Co., Father Sullivan and Frank Venetia. In, some cases the agreements signed fixed the prices at slightly above the appraised value. The Board probably will adopt a preliminary damage roll at its Friday meeting after Mr. Steeg has checked the agreements signed. The affected property owners then will be notified of the damages they have been awarded.

FARLEY BACKING KENNEDY, EARLE

Divides Support Between Warring Factions in Pennsylvania Race.

Postmaster General James A. Farley, | | who also is chairman of the Dem- | | ocratic National Committee, inter|vened today in the Pennsylvania primary contest to put new impetus | | behind the campaign of Thomas | Kennedy, a member of John L.| | Lewis’ C. I. O. brain trust, for the | | Democratic Gubernatorial nomina- | tion, { Mr. Farley, in New York indorsed Mr. Kennedy for Governor and Governor Earle for nomination to | the U. S. Senate. | He thus picked representatives | from each of the warring Demo- | cratic State factions. Mr. Kennedy, secretary-treasurer | of the United Mine Workers of America and supported by C. I. o.| forces here, also is backed by Sen- | ator Guffey (D. Pa.). His running mate on the ticket sponsored by Mr. Lewis and Senator Guffey is Mayor S. Davis Wilson of hee

|delphia, candidate for Senatorial |NOmination as a “a fine victory for

nomination. Governor Earle is supported by | the State Democratic organizaiton | and is running with Charles Alvin | Jones, Pittsburgh lawver, who is a | candidate for the gubernatorial!

| nomination.

Mr. Farley's announcement cli- | maxed a primary campaign notable | for its destructive impact on the Pennsylvania Democratic organiza-

[tion which rose to power in 1934

with the New Deal tide. The unexpected move by the na-

tional Democratic chairman re-| called reports that Mr. Lewis. who | has significant political power in

several states, was in a position to | damage the New Deal cause in| Kentucky, Ohio and elsewhere. | Mr. Farley's indorsement of Mr. |

| Kennedy appeared likely to assure

Mr. Lewis’ support in Kentucky primaries for Senator Alben W.| Barkley, New Deal leader, who is! opposed for renomination by Gov- | ernor Chandler. Pennsylvania Republicans have | hoped that the dissension among

| the Democrats will enable the G. O. |

P. to recapture the state in Novem- | ber. nor are G. Mason Owlett and Judge | Arthur H. James, respectively. They are opposed by Senator Davis

Works Board agent, presented the |

A greyhound track is being com- | pleted on Road 67 near McCordsville

Plantation raid.

WAR ON GAMING SHAPING UP AS ISSUE ATPOLLS

Ministers Stand by Charges Of Lax Enforcement by State Officials.

By TOM OCHILTREE

Agitation begun by Indianapolis | ministers for strict enforcement of gambling laws continued unabated today and threatened to develop into a possible election issue. While no heavily publicized drive has been launched, records show that Indianapolis police are continuing to conduct raids. Seven men arrested here early yesterday were scheduled to appear in Municipal Court today to answer gambling charges.

For the past several weeks, ministers have stood by their charge that little effort is being made by State officials to clean up gambling in Marion County. In answer, Governor Townsend explained he was willing to send State Police into any district to aid in vice and gambling drives if requests for aid were received from | local law enforcement authorities. | Hancock County's gambling problem, solved for a time when the Plantation, a casino on Road 67, was raided by State Police last fall, also has been revived.

New Test of TVA to Be Argued During Fall Term.

WASHINGTON, May 16 (U, P.) — The National Labor Relations Board today won Supreme Court victories in two issues of far-reaching significance in its administration of the Wagner Labor Relations Act. The Supreme Court decisions were presented in a test challenge of Labor Board powers filed by the Mackay Radio & Telegraph Co., and in an unusual mandamus action brought by the Board in connection with its casé against the Republic Steel Corp. In the Republic action Chief Justice Hughes announced that the Third Circuit Court of Appeals is directed to “show cause” by next Monday why an injunction prohibiting further Board action in the Republic case should not be vacated. The Board seeks to withdraw its Republic case from the courts for the purpose of taking additional procedural steps.

TVA Case Accepted In another important action, the

by the Indiana Kennel and Auction Supreme Court accepted a new test

{ Club. This project was started last (fali, but discontinued after the

Legion Rejects Sponsorship After the Hancock American |

| of constitutionality of the Tennessee | Valley Authority, filed by 18 private utilities operating in the TVA area.

Argument and decision of this test

{can not be held before next fall.

The Mackay decision, in which

Legion Post voted to reject spon-|the Supreme Court upheld a Board

PHILADELPHIA, May 16 (U. P.).— | Sorship of this track, Frank F. Far- |order compelling reinstatement of

ney, promoter, said the track would | union leaders after a strike, turned not open until pari-mutuel betting | also OR the vital procedural issue, is legalized in Indiana by statute.| The question of whether the He said he expected such a law to | Board's procedure complies with the be passed by the 1639 Legislature, [requirements of the Supreme Court According to a national editorial | arose after the court three weeks survey, the gambling problem here | ago vacated rate orders established is similar to that faced by cities of | for Kansas City stockyards commisdifferent sizes located in various | Sion men by the Agriculture Departsections of the countrv. ment. The orders were vacated on Indications that the gambling is- [grounds Agriculture department sue is not confined to central Indi- | Procedure was faulty because it did ana were seen in the primary elsg- | NOt include an intermediate report tion results in Clark County. The |t0 Which exceptions might be filed Jeffersonville dog track failed to |before issuance of a final order. open two weeks ago when the Ken- Fearing similar attacks might be tucky Derby was attracting “chance [made on its procedure in the Reminded” people to Louisville and vi- (public and other prominent cases, cinity. the NLRB has sought to withdraw When James L. Bottorf secured [them from the courts to take | the Democratic nomination for Cir- | further procedural steps. cuit Court judge in the primary, It was for this reason that Labor the Rev. R. C. Dillman, Jefferson- | Board attorneys regarded the Suville Ministerial Association presi- |preme Court's “show cause” order | dent, characterized Mr. Bottorf’s|to the Third Circuit Court a major | step in their fight to correct the | doubtful procedure in that case. | Had the order not been granted, it | was noted, the Board would have | had no recourse but to fight the Republic case through the courts without possibility of an opportunity

the people who desire a ‘clean up’ in Clark County.” In his report on the arrest of the seven men here, Sergt. Carl Ashley, vice squad head, declared a card game was in progress when his men

SHAKEUP BILL

NATIONAL AFFAIRS SUPREME COURT backs NLRB in two important cases. ICKES called to testify in spending bill hearings. PROPAGANDA RADIO hearings start in House.

NEUTRALITY POLICY labor groups.

splits

Prospects for Wage-Hour Bill Held Promising

Congress enact a Government reor ganization bill at this session o

Congress but has not placed measure on his “must” list,

today after a White House confer ence, Rep. Rayburn made his statemen

morning conference with leaders o

lative program.

Deficiency Subcommitiee of

Senate Appropriations lief-recovery bill.

Senate this week. Shakeup Discussed

the House William Bankhead Sensate Majority Leader Barkley (D. Ky.). Rep. Rayburn did not

| views on reorganization.

a stiff battle. At his press conference, however, Speaker Bankhead said he knew of no plan to revive the reorganization bill at this session. Senator Barkley said he had heard only reports that some new developments might come on the measure—chiefly to the effect that some representatives

who voted to kill the measure have

shifted their position. Barkley added, however, that there has been no

REVIVAL GOAL OF ROOSEVELT

WASHINGTON, May 16 (U, P.) .— President Roosevelt would like to see

the House Majority Leader Sam Rayburn said

after the President's weekly Monday

the House and Senate on the legis-

The conference was held as the | out-of-state the Committee went to work on the President's reLeaders hope that the measure can be passed by the

Rep. Rayburn said the reorganization situation was discussed generally at the conference attended by Vice President Garner, Speaker of and

isters’

(R.|is an electian year,” the association

raided 701 Bates St. Police con- | fiscated a quantity of dominoes, he said.

The following were Mathew Rara, 29, of 713 Greer St. and Harry Martinelli, 34, of 816 Elm St, both charged with keeping a | gaming house; Othie Franklin, 38, of R. R. 1, Box 105; Sam Grinnor, 50, of 3235‘ N. Adams St..; Ray Franklin, 35, of 834 Lexington Ave.; Eugene Rosse, 54, of 706 Lord St, | and Frank Sgeo, 46, of 811 Lexing- | ton Ave, all charged with visiting a gaming house. The Indianapolis Methodist MinAssociation, Indianapolis | Ministerial Association and the | Marion County Women's Christian | Temperance Union have waged the! most active campaign Marion County gambling.

arrested: |

against |

Hint at Reprisal The Methodist Ministers’ Associa- |

The conservative Republican | tion hinted at reprisal at the polls | te candidates for Senator and Gover-|in a letter sent to Governor Townsend shortly before the primary.

{call order. The Mackay decision was reached {by a 7-to-0 decision of the Court, Justices Cardozo and Reed not participating. In another Court decision today, | executors of the estates of the late W. and R. Bruce Mellon lost their legal fight to recover approximately $400,000 of alleged over- | payments in income taxes. The Cqurt also rejected an atmpt of Robert A. Taft, Cincinnati, the former | Chief Justice, to deduct more than | Subcommittee planned to devote the “We are perfectly aware that this | two million dollars from the estate of his aunt on the grounds that she

with

Andrew

|son of

to correct its procedure. Supreme Court attaches declared | {that the Supreme Court's order to | the lower court was virtually with- | jout precedent so far as could be! learned.

Mellon Heirs Overruled Associate Justice Roberts, writing | gets to the Senate I don't know

| the Mackay directly on the Board's procedure and declared that lack of an intermediate report in this case did not the Board's

for

decision,

reversal

President

commented | what tactics will

and |

Pa.), seeking renomination, and for- | wrote. “We are so much aware of | had pledged it to various charitable

mer Governor Gifford Pinchot, Governor.

Dr. Frank S. C. Wicks sketches the itinerary of his projected European tour to his successor, the Rev. E. Burdette Backus, to become new pastor of All Souls’ Church. Dr. Wicks said today he plans to study “the possibility of the next world war at its source in Europe, (Story

for | the fact

(Turn to Page Three)

that we are carefully ob- and educational institutions before ‘her death.

. INSPECTING DENTAL AWARD .

| effort by Administration leaders to | go into the situation.

Wage Bill Prospects Good

Turning to prospects for wagehour legislation, Rep. Bankhead predicted the bill would pass the House in some form. “When it

be taken. I've | heard some talk about a filibuster, | but that seems to be speculation [even with the Senators.” Senator Barkley declared the con- | gressional program from now until {adjournment is on a day-to-day | basis. Rep. Rayburn said that he {saw no reason why Congress could (not complete its work and adjourn about June 4, Political Washington has taken a {new view of the | bill's chances since Senator Pep- [ per’s renomination in Florida on a | New Deal platform.

Bond Plan to Be Issue

In studying the recovery bill, ihe

| entire day to questioning Secretary { Ickes. Several members were anxious to learn what action the PWA con- | templated under a section authoriz{ing it to enter lease purchase agree- | ments with debt-exhausted states and municipalities which otherwise would be barred from obtaining Federal Public Works loans. Subcommittee Chairman Adams (D. Colo.) said that he was “very dubious” about the provision. In the House, Rep. William B. Umstead (D. N. C.) failed by four votes to have it struck on the ground that it amounted to an invitation on states and cities to violate their own laws.

Morgenthau Says U. S. Credit Remains Good

(Copyright. 1838, by United Press) WASHINGTON, May 16 (U. P..

‘| —Secret testimony disclosed today | that Secretary of Treasury Morgen- |

thau, discussing future Federal financing, told the Senate Finance Committee that the credit of the Government is “as high or higher than it ever has been.” Senator Morgenthau discussed (Turn to Page Three)

TIMES FEATURES ON INSIDE PAGES

sociation here today. The assistants are meeting in conjunction with the Indiana State Dental Association. (Story, Rake Two.)

\ |

hoe

Johnson .,....10 | State Deaths. .11 Movies +.seq 11 Wigsam suse dl

reorganization |

COURT BANS GROSS TAX ON INTERSTATE SALES, SUPPORTS NLRB ACTIONS

@®

Supreme Tribunal Allows Indiana to Tax Exempt Bonds.

WASHINGTON, May 16 (U, P.) .~ The Supreme Court today barred application of Indiana's gross ine come tax law to income derived from interstate commerce, but ape proved its application to interest on tax-exempt state and municipal ob ligations. The High Court partially reversed an Indiana Supreme Court decision approving validity of both disputed applications of the tax which was challenged in a test case brought by the J. D. Adams Manufacturing Co., Indianapolis. Justice Hugo L. Black issued ane other vigorous dissent to the views of his majority Supreme Court cole leagues—this time charging that the Supreme Court had invaded the prerogatives of Congress. He challeneged the Court's invali« = | dation of application of the tax to f | interstate commerce receipts. Justice James C, McReynolds dis«~ sented to the portion of the decision upholding taxation of tax-exempt - | bonds.

Hits ‘Double Taxation’

Justice Owen J. Roberts, writing the majority decision, held that ime position of the tax to receipts {from might lead to and therefore is | illegal. The Court pointed out | that other states might impose similar levies on the same transace tions. However, Justice Black said that under the Constitution the power to regulate interstate commerce lies with Congress. “Taxation” and “regulation” are not the same, he said, and in the Indiana case the tax merely provided that interstate corporations share equally with ine trastate companies the burden of Government. A tax on interstate sales, he ade mitted, might become too burdensome on interstate commerce, but if so Congress could enact legisla« tion prohibiting those taxes, he said, “Since the present litigation has developed that no such unfair bure dens have been imposed upon appellant’s interstate business, appele lant can only be exempted from payment of this tax by application of a regulatory rule or law which

sales

| double taxation

condemns all such state taxes— whether fair or unfair,” Justice Black said.

“If such a general rule or law is to be promulgated, it would seem that under our constitutional divie sion of governmental powers such a regulatory policy should be cone sdered and determined by Congress under its exclusive grant.”

State Denies Claims

The Adams Co. claimed that it did not dispute the state's right to levy taxes on net income or on property within the state as a fran chise to perform business in the state. However, it charged a gross ine come tax, a taxable base for which would include receipts from sales in other states, constituted a direct

burden on interstate commerce. The company contended applica= [tion of the tax to income from ine terest on tax exempt securities was a violation of the sanctity of cone tracts clause of the Federal Consti« tution because the tax impaired tha conitract contained in the bonds specifying freedom from taxation, The State denied both assertions, contending that the impositions neither placed a direct burden on interstate commerce nor violated lany contractual obligation or right, With reference to commerce, the State based validity of the levy on grounds it could levy any reasonable tax it chose in return for granting to the company the prie ilege of doing business in the State. On the second application, the company asserted that the tax exe emption clause applied only to taxes in force at the time the bonds were issued, such as property taxes. The State argued it did not relinquish its right to levy possible new taxes, {such as income taxes, against ine [come derived from interest on the | bonds.

| ‘Far-Reaching’ Decision, ‘Says Attorney Matson

Frederick E. Matson of the law firm of Matson, Ross, McCord & Clifford, who argued the Adams interstate commerce tax case before the Supreme Court, said today that he was ‘very happy” to learn of the Court's decision. “It is one of the most far-reach-ing decision,” he said, “relating to the power of the states to levy a tax that affects interstate commerce that the Court has ever handed down.” The original complaint filed by the Adams company asked a declaratory judgment as to what portion of gross receipts were properly taxable. The Indiana Supreme Court ruling was appealed to the United States Supreme Court, At the start of the argument, Associate Justice Harlan O. Stone raised the point that since the State had not yet collected or even attempted to collect the portion of the tax objected to, that possibly there was not sufficient actual cone

(Turn to Page Three) ¥

and 3

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