Security Challenged

In their cavernous new marble chamber, against their rich red velvet backdrop, the nine U. S. Supreme Court Justices looked magnificent but could hear little. To improve acoustics, more red velvet curtains were draped at either end of the bench. Result was to cast the justices into shadowy gloom. Last week the red curtains, side and rear, were swathed in white, and only in the front half of the chamber were inverted ceiling lights switched on. Thus the audience was thrown into shadow, the black-robed old actors into brilliant relief.

Onto that mighty stage last week marched Lawyer Frederick H. Wood of Manhattan, victor over NRA and the Guffey Coal Act in the Schechter and Carter cases, "to challenge the constitutionality of New York State's unemployment insurance law. Since last January the law has exacted a 1% payroll tax (which will increase to 2% in 1937, 3% in 1938) from all employers of four or more persons. From the fund thus created, workers who lose their jobs after next year will, following a three-week wait, get $5 to $15 per week for not more than 16 weeks.

Appearing as associate counsel for two of the three appellants--W. H. H. Chamberlin, Inc., E. C. Stearns & Co. and Associated Industries of New York State, Inc.--Lawyer Henry S. Fraser of Syracuse decried the law's justice in giving benefits to workers regardless of need or merit, implied that New York children would soon be chanting as did German children when social insurance was adopted:

One, two, three, four, Only fools work any more!

Restraining his argument as he has restrained his resounding voice ever since Chief Justice Hughes asked him to quiet down during the Carter case. Chief Counsel Wood attacked the law strictly on constitutional grounds. His thesis was that, since the burden was laid solely on employers and on them equally regardless of unemployment conditions in their particular plants or industries, it violated both the due-process and equal-protection clauses of the 14th Amendment.

Why, asked social-minded Mr. Justice Brandeis, was it any more unjust than to make every taxpayer help support public schools, whether or not he had children attending them?

"The schools," returned Lawyer Wood, "are supported out of public moneys raised through general taxation. . . . The fund here is not raised by general taxation."

What, asked the 80-year-old Justice, about the responsibility of automobile manufacturers who attracted thousands of workers to Detroit, then turned them out to become burdens on the State?

"I should say," replied the distinguished attorney, "that the manufacturers were the immediate instruments through which they became unemployed, but that the basic cause . . was due to the fact that--I know no better way to say it--we live in an ever changing world."

New York's Solicitor General Henry Epstein replied for the State with a spirited plea for social justice. Hotly he cited the case of Bethlehem Steel Co., which, he charged, brought 7,500 workers to Lackawanna, N. Y., discharged 6,000 of them during Depression, even tried to evict them from company houses so that it could tear down the worthless buildings and thus lower its tax bill.

"The science of medicine,'' cried he, "has definitely supplied the world with cures and with preventives and with palliatives for the ills of the body. The science of government is to the ills of society what the science of medicine is to the ills of the body."

Under the unemployment insurance provisions of the Federal Social Security Act, a payroll tax has been in force since Jan. 1 on all U. S. employers. First collection will be next Jan. 31. This tax, designed to shape and stimulate State action, will then be pocketed by the Government if the taxpayers' State has not yet set up an unemployment insurance system. In the 14 States which have created satisfactory insurance systems,* employers will contribute to a State fund, get a credit up to 90% of their Federal tax. From the balance which the Government collects, funds will be returned to the State for administering their systems. Though complying with it in this fashion, New York's legislators carefully made their law independent of the Federal Act, which was not, therefore, at issue in the Supreme Court last week. But since principles were virtually the same, most observers believed that a Supreme Court decision against the New York law would foreshadow the doom of the Federal measure's unemployment provisions.

*Alabama, California, Idaho, Indiana, Massachusetts Mississippi, New Hampshire, New York Oregon, Rhode Island, South Carolina, Texas, Utah, Wisconsin. Also the District of Columbia.

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