As THIS is written word has just 

 come from Washington that the 

 United States Senate voted 3 to 1 

 to strike out that provision in the AAA 

 amendments barring suits for the recov- 

 ery of processing taxes heretofore paid 

 by processors. By what line of reason- 

 ing the senators by their action appar- 

 ently justify the recovery of processing 

 trxes by these corporations is not clear. 

 For they must know, as every informed 

 person knows, that the processors have 

 not been paying these taxes out of their 

 profits. The taxes have been passed on 

 to the producers, the consumers, or both. 

 They amount to far more, at least in the 

 case of meat packers, than their net 

 earnings. And to pave the way for a 

 few middlemen to recover enormous 

 sums of money which do not rightfully 

 belong to them, doesn't appear to be 

 good sense. 



***** 



But whatever the future actions or 

 decisions of the congress and the courts 

 regarding processing taxes, the federal 

 government is under contract with co- 

 operators in production adjustment pro- 

 grams to make specified adjustment pay- 

 ments. This money is payable out of 

 the United States Treasury. Payment 

 is not dependent upon the collection of 

 processing taxes although obviously if 



the taxes are finally declared unconstitu- 

 tional by the Supreme Court, and if the 

 courts should order that sums paid by 

 processors be returned to them, which 

 seems improbable, the federal budget 

 will be further out of balance and the 

 national debt increased by another bil- 

 lion dollars or so. 



THE chief interest of farmers in the 

 AAA and the right of government 

 to assist producers in the control 

 of the farm surpluses now centers in the 

 coming Suprems Court decision in the 

 suit brought by the Hoosac Mills Corpo- 

 ration of Massachusetts. While we have 

 not been able to get a copy of the de- 

 cision of the federal circuit court of ap- 

 peals at Boston declaring the cotton 

 processing tax unconstitutional, news- 

 paper reports state that two of the 

 three federal judges held that: (1) the 

 Congress had no authority to regulate 

 the production of cotton; (2) the law 

 (AAA) itself is an improper delegation 

 of authority to the Secretary of Agri- 

 culture. . , 



• * »■•■»•-«■■-■ 



If the Supreme Court takes such a 

 position — and we doubt that it will — all 

 that organized farmers have fought for 

 over a period of nearly 15 years is lost. 

 The only hope left, then, will be for 

 farmers to organize just as thoroughly 

 as has been done under the crop control 

 programs in adjusting their production 

 and regulating their marketing. With 

 approximately 6,000,000 producers in 

 America widely scattered over the 48 



states, the difficulty, if not impossibility, 

 of such organization is readily seen. 



It seems inconceivable that the courts 

 would hold on the one hand that it is 

 within the constitution to tax the people 

 through the tariff for the protection of 

 textile mills and other relatively non- 

 essential manufacturing interests, but 

 would deny that same protection to the 

 basic and essential industry of agricul- 

 ture. For if any problem is impossible 

 of solution by the states, it is the prob- 

 lem of saving agriculture from ruinous 

 prices. ; • • . . ■ • ■: 



IN VIEW of the Boston decision and 

 others which preceded it, it appears 

 that part of the New Deal legisla- 

 tion, at least, was not properly drawn. 

 If'this proves to be the seat of the diffi- 

 culty it is not serious. Legislation to 

 overcome technical objections can be 

 readily drawn. 



* ♦ • » » 



But it is a serious thing if the S :- 

 preme Court holds in the coming AAA 

 case that the federal government lacks 

 the power under the constitution to han- 

 dle a national economic problem. In that 

 case we personally believe that the peo- 

 ple of this nation will support a move 

 to amend the constitution. 



Out of the welter of economic non- 

 sense and politically-inspired criticism 

 of AAA appearing in the daily press the 

 comments of Walter Lippman, foremost 

 (Continued on page 24) 



AUGUST, 1935 



