Curses & Blessing

Last week three U. S. Circuit Courts of Appeal, second highest in the land, passed on the constitutionality of three prime New Deal measures, cleared the path to final judgment by the Supreme Court. Two measures went on their way with court curses, one with a blessing. AAA. Taking its cue from the Supreme Court, the first Federal Circuit Court in Boston found AAA's vital processing taxes as illegal as NRA's codes, and for the same reasons. A U. S. District Court had rejected the suit of receivers for Hoosac Mills Corp, to escape payment of $81,694 in processing and floor taxes levied by AAA. Reversing that decision, the Circuit Court condemned AAA because: 1) Congress, in taxing agricultural and industrial products before they entered interstate commerce, had exceeded its regulatory powers;* 2) having assumed illegal legislative power, Congress had then improperly delegated it to the Secretary of Agriculture. "If Congress," warned the Court, "can take over the control of any intrastate business by a declaration of an economic emergency and a public interest in its regulation, it would be difficult to define the limits of the powers of Congress or to foretell the future limitations of local self-government." Though AAA officials declared the AAAmendments pending in the Senate last week (see p. 12) would create virtually a new AAA requiring a new court test, Attorney General Cummings promised a quick appeal to the Supreme Court, no let-up in the Government's efforts to collect processing taxes. Secretary Wallace, on a visit to his mother in Colorado,/- airily remarked: "The ruling is of no great consequence until it has been passed upon by the Supreme Court." But with processors' suits leaping to a total of 359 three days after the decision, collections of processing taxes were last week down 46% from last year. PWA. "The taking of one citizen's property for the purpose of improving it and selling it or leasing it to another, or for the purpose of reducing unemployment, is not in our opinion within the scope of the powers delegated to the Government." Thus last week the Sixth Federal Circuit Court in Cincinnati condemned PWA's effort to invoke the right of eminent domain to acquire land for its $400,000,000 slum-clearance and low-cost housing program. Upholding a District Court decision which halted a $1,618,000 housing project in Louisville last January, the Court thereby sanctioned the right of any cantankerous or greedy landowner to block a housing project. Owners of 85% of the land desired in Louisville have agreed to sell to the Government. Judge Florence Ellinwood Allen, No. 1 U. S. woman jurist, dissented vigorously from the opinion of her male colleagues, argued the Government's right to use its power of eminent domain for any "projects which benefit the health, the morals, and the general welfare of the people." In Washington, PWAdministrator Ickes was undecided about taking the case to the Supreme Court. But he proposed to push his program as best he could by direct purchase, by getting states & cities to condemn desired land. TVA. Famed has grown Federal District Judge William Irwin Grubb of Alabama for his rulings against the New Deal. Last winter, while expressly avoiding an opinion on TVA's constitutionality, he declared its chief activity of power-selling illegal, forbade 17 Alabama towns to buy its power. Last week in New Orleans the Fifth Federal Circuit Court handed Judge Grubb his first New Deal reversal, went out of its way to declare specifically that TVA was constitutional. The war and commerce clauses of the Constitution empower the Government to build dams for purposes of improving navigation, supplying needs of national defense. Power created by the dams is Government property and may, ruled the Court, be disposed of as freely as any other Government property. In four words the Court disposed of the argument that TVA does not aim at legitimate surplus sales but is primarily engaged in forcing down private rates by "yardstick" competition. The four words: "Its motives are immaterial." Businessmen were scratching their heads last week over this Court puzzler: "Of course, it is true that the U. S. Government cannot engage at will in private business, but it by no means follows that it cannot sell property which it owns, even though in doing so it may enter into competition with other public or private owners of property." Politics? Last week the Press commented widely on the fact that, though the TVA decision represented the unanimous opinion of one Republican and two Democratic judges, in both the AAA and PWA decisions a lone Democrat dissented from two Republican colleagues. Such finger-pointing caused the judicial New York Times to observe: "It would be foolish to contend that no judge is ever swayed in his judicial work by old party affiliations. Yet it is safe to say that very few judges would permit themselves to be moved from what they really believe to be the honest interpretation of the law by any such things." President & Constitution. Smelling a deep plot to change the Constitution, many a Washington observer had by last week convinced himself that to President Roosevelt court curses on the New Deal are really blessings in disguise. Chief clues were the President's outburst after the Supreme Court's NRA decision, his letter three weeks ago urging passage of the Guffey Bill despite "doubt as to [its] constitutionality, however reasonable." From these, political detectives surmised that the President expects the Supreme Court, on the eve of next year's election, to throw out almost his whole program, whereupon he will go to the country declaring in effect:

"I tried to help you, but the Supreme Court wouldn't let me. If you farmers want AAA and you workers want the Wagner Bill and you miners want the Guffey Bill, you must help enact a constitutional amendment putting the Federal Government's powers beyond the reach of the Supreme Court."

*Last week in Sherman, Tex., Federal District Judge Randolph Bryant granted a temporary injunction against collection of cotton taxes levied under AAA's auxiliary Bankhead Cotton Control Act, declared informally: ''I think the law is clearly and plainly unconstitutional." /-Admonished 69-year-old Mrs. Wallace, when photographers approached her son: "Now brush your hair, Sonny, and be a credit to the Government."

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