AAAbolition

When New Year's came to the U. S. Supreme Court, a new desk and a group of filing cases appeared in the larger of the two rooms used by newshawks in the basement of the new Court building across the plaza from the Capitol. With the furniture, in moved a Court Clerk named Nelson A. Potter. Promptly the ungrateful Press announced even the Supreme Court now had a press agent. Actually Clerk Potter had been appointed to put an end to old complaints of the Press that it was unduly difficult to see or obtain copies of official Court documents. His job, to make available briefs, decisions and opinions, specifically excluded the issuance of hand-outs and press releases.

Whether Clerk Potter's new job was but a sign of the times or whether the nine Justices realized that with the New Year there would be a real need for Mr. Potter's services, was not revealed. But the day when the Court met for the first time in 1936 was a busy one for Mr. Potter and the press room. That afternoon in the courtroom upstairs after Mr. Justice Cardozo had read a minor decision, Mr.

Justice Owen J. Roberts spoke up briskly: "I have been directed to read the Court's decision in the case of the United States v. Butler et al., Receivers of Hoosac Mills Corp."

A soft Chunk, chunk sounded from the press benches as pneumatic tubes carried down to the press room below the news that the Supreme Court was about to pass on the AAAct in a test case brought by the Government against a New England textile mill regarding the cotton processing tax (TIME, Dec. 23 et ante). In slow precise tones, seldom consulting the written opinion that lay before him, Mr. Justice Roberts proceeded to outline the law and the nature of the case. For some minutes none of the hearers in the crowded courtroom knew which way the decision would go. Gradually the general tenor of the argument became adverse. Then came the words: "The tax, the appropriation of the funds raised, the direction for their disbursement are but part of the plan. They are but means to an unconstitutional end."

Chunk . . . chunk . . . chunk, chunk. The pneumatic tubes shot the news to a waiting world. AAA was dead as NRA. Once again the Supreme Court had knocked a prime prop from under the New Deal.

Only one more big piece of news did the Press still wait for, the vote. It came at the end: Not unanimous like the invalidation of NRA, not 5-to-4 like the validation of the gold clause resolution, but 6-to-3. The two "variables," Chief Justice Hughes and Justice Roberts had joined the conservative wing of the Court to vote against the liberal wing.

For many a day will legalites ponder the chief points in Mr. Justice Roberts' opinion, for on them depends the constitutionality of many another New Deal law:

Taxes and Taxes. "A tax, in the general understanding of the term, and as used in the Constitution, signifies an exaction for the support of the Government. The word has never been thought to connote the expropriation of money from one group for the benefit of another. We may concede that the latter sort of imposition is constitutional when imposed to effectuate regulation of a matter in which both groups are interested and in respect of which there is a power of legislative regulation. But manifestly no justification for it can be found unless as an integral part of such regulation. The action cannot be wrested out of its setting, denominated an excise for raising revenue and legalized by ignoring its purpose as a mere instrumentality for bringing about a desired end." In short, there are bona fide taxes and pseudo taxes. Bona fide taxes, imposed to raise money, are constitutional under Congress' power to raise revenue. Pseudo taxes, imposed for purposes of regulation rather than for the purpose of raising money, are constitutional or unconstitutional depending on whether Congress, through its other powers, is entitled to undertake such particular regulation. By inference the penalty taxes of the Bankhead Cotton Control Act, Kerr-Smith Tobacco Act, the Guffey Coal Act, cannot be upheld as constitutional taxes, can only be upheld if the aims of those acts are within the proper powers of Congress.

Taxes for Agriculture. "The Agricultural Adjustment Act ... is a statutory plan to regulate and control agricultural production. . . . From the accepted doctrine that the United States is a Government of delegated powers, it follows that those not expressly granted, or reasonably to be implied from such as are conferred, are reserved to the States or to the people. To forestall any suggestion to the contrary, the 10th Amendment was adopted. The same proposition, otherwise stated, is that powers not granted are prohibited. None to regulate agricultural production is given, and therefore legislation by Congress for that purpose is forbidden. "It is an established principle that the attainment of a prohibited end may not be accomplished under the pretext of the exertion of powers which are granted. . . . Resort to the taxing power to effectuate an end which is not legitimate, not within the scope of the Constitution, is obviously inadmissible." The Bankhead Cotton Act's taxes are also imposed for the regulation of agriculture; the Guffey Coal Act taxes are imposed for the regulation of coal production. Neither form of regulation is to be found among Congress' enumerated powers. Therefore, without mentioning them, Mr. Justice Roberts practically rendered in advance the Supreme Court's verdict on those laws as well.

Force on Farmers. "If the taxing power may not be used as the instrument to enforce a regulation of matters of state concern with respect to which the Congress has no authority to interfere, may it, as in the present case, be employed to raise the money necessary to purchase a compliance which the Congress is powerless to command? The Government asserts that whatever might be said against the validity of the plan, if compulsory, it is constitutionally sound because the end is accomplished by voluntary cooperation. . . . "The coercive purpose and intent of the statute is not obscured by the fact that it has not been perfectly successful. It is pointed out that, because there still remained a minority whom the rental and benefit payments were insufficient to induce to surrender their independence of action, the Congress has gone further and, in the Bankhead Cotton Act, used the taxing power in a more directly minatory fashion to compel submission. This progression only serves more fully to expose the coercive purposes of the so-called tax imposed by the present Act. It is clear that the Department of Agriculture has properly described the plan as one to keep a noncooperating minority in line. This is coercion by economic pressure. The asserted power of choice is illusory." Thus, any comprehensive system of crop contracts and benefit payments, which in fact puts non-cooperators under economic compulsion, is as illegal as taxation if used for unpermitted purposes. Let Congress use income taxes or any other legal form of taxes to raise revenue in order to continue AAA and it will make no difference; AAA's system of crop contracts is still unconstitutional because the system is, in effect, the use of force on farmers.

Bought Obedience. "If the plan were one for purely voluntary cooperation it would stand no better so far as Federal power is concerned. At best it is a scheme for purchasing with Federal funds submission to Federal regulation of a subject reserved to the states. "It is said that Congress has the undoubted right to appropriate money to executive officers for expenditure under contracts between the Government and individuals; that much of the total expenditures is so made. But appropriations and expenditures under contracts for proper Governmental purposes cannot justify contracts which are not within Federal power. And contracts for the reduction of acreage and the control of production are outside the range of that power. An appropriation to be expended by the United States under contracts calling for violation of a state law clearly would offend the Constitution. Is a statute less objection able which authorizes expenditure of Fed eral moneys to induce action in a field in which the United States has no power to intermeddle? The Congress cannot invade state jurisdiction to compel individual action; no more can it purchase such action. . . . "A possible result of sustaining the claimed Federal power would be that every business group which thought itself under privileged might demand that a tax be laid on its venders or vendees, the proceeds to be appropriated to the redress of its deficiency of income. "These illustrations are given, not to suggest that any of the purposes men tioned are unworthy, but ... to point out that, by the exercise of the asserted power, Congress would, in effect, under the pretext of exercising the taxing power, in reality accomplish prohibited ends. It cannot be said that they envisage improbable legislation. The supposed cases are no more improbable than would the pres ent Act have been deemed a few years ago. Until recently no suggestion of the existence of any such power in the Federal Government has been advanced." In short, AAA was found illegal because processing taxes are a misuse of the taxing power. Eliminate processing taxes and AAA is still illegal because its system of crop contracts is use of illegal economic coercion. Eliminate the element of compulsion from the system of crop contracts and AAA is still illegal because benefit payments become bribes offered by the Federal Government to gain illegal power. Eliminate benefit payments and AAA is legal, but extinct.

Powers of the Court. Well did every one of the nine Justices know that their AAA decision would provoke a world of criticism of the powers of the Court. Before even the debate got to the public the Justices took it up between themselves. Said Mr. Justice Stone in a minority decision, highly critical of his colleagues' majority opinion: "The power of courts to declare a statute unconstitutional is subject to two guiding principles of decision which ought never to be absent from judicial consciousness. One is that courts are concerned only with the power to enact statutes, not with their wisdom. The other is that while unconstitutional exercise of power by the executive and legislative branches of the Government is subject to judicial restraint, the only check upon our own exercise of power is our own sense of self-restraint. For the removal of unwise laws from the statute books appeal lies not to the courts but to the ballot and to the processes of democratic government." Said Mr. Justice Roberts for the majority: "It is sometimes said that the Court assumes a power to overrule or control the action of the people's representatives. This is a misconception. The Constitution is the supreme law of the land, ordained and established by the people. All legislation must conform to the principles it lays down. When an Act of Congress is appropriately challenged in the courts as not conforming to the constitutional mandate the judicial branch of the Government has only one duty--to lay the article of the Constitution which is invoked beside the statute which is challenged and to decide whether the latter squares with the former. . . . Every presumption is to be indulged in favor of faithful compliance by Congress with the mandates of the fundamental law. Courts are reluctant to adjudge any statute in contravention of them. But, under our frame of Government, no other place is provided where the citizen may be heard to urge that the law fails to conform to the limits set upon the use of a granted power."

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