Security Secure

For the last time this session the Supreme Court (which adjourns for the season June 1) this week pronounced the fate of a major New Deal law. Expecting a decision on the Social Security Act, Senators (among them Court Candidate Joseph T. Robinson), members of the Social Security Board and Government attorneys dotted the crowd in the court room. The political consequences of the decision would affect not only the Social Security program but the President's Court program. To many an ardent New Dealer there would have been a very silvery lining in a decision finding this New Deal law unconstitutional. That would have given them fresh proof that more Justices were needed to liberalize the Court.

Such hope died when Justice Benjamin N. Cardozo began to read. As he is an outstanding liberal, his reading meant that the liberals of the Court were in the majority.

The first decision was on an appeal by Charles C. Steward Machine Co. which sued for a refund of $46.16 of unemployment taxes collected by the Government. The company maintained that unemployment payroll' taxes levied by the Federal Government (of which up to 90% is credited to the payer for contributions made to unemployment insurance funds set up by the States) was an unconstitutional means of coercing States into setting up unemployment insurance--for otherwise all the tax money is lost by the State to the Federal Government.

Justice Cardozo retorted:

"During the years 1929 to 1936, when the country was passing through a cyclical depression, the number of the unemployed mounted to unprecedented heights. Often the average was more than ten million; at times a peak was attained of 16 million or more. Disaster to the breadwinner meant disaster to dependents. Accordingly the roll of the unemployed, itself formidable enough, was only a partial roll of the destitute or needy. The fact developed quickly that the States were unable to give the requisite relief. The problem had become national in area and dimensions. ... It is too late today for the argument to be heard with tolerance that in a crisis so extreme the use of the moneys of the nation to relieve the unemployed and their dependents is a use for any purpose narrower than the promotion of the general welfare. . .

"The Statute does not call for a surrender by the States of powers essential to their quasi-sovereign existence. . . . The Social Security Act is an attempt to find a method by which all these [Federal or State] public agencies may work together to a common end."

No 5-4 decision was this but 5-2-1-1. Justice Sutherland read a minority opinion in which he and Justice Van Devanter agreed with what Mr. Cardozo had said except that they held that the law, in requiring the States to deposit their unemployment tax collections in the U. S. Treasury, went too far--invaded States' rights by placing States' money under the Federal thumb. Justice Butler delivered his own dissent declaring:

"The terms of the measure make it clear that the tax and credit device was intended to enable Federal officers virtually to control the exertion of powers of the States in a field in which they alone have jurisdiction and from which the United States is by the Constitution excluded." A third dissent was rendered by Justice McReynolds on the ground that the law, by its tax feature, virtually coerced the States into passing unemployment insurance laws.

Having thus disposed of the unemployment insurance law, Justice Cardozo went on to the old-age annuity section. This was an appeal by the Government from a lower court decision in favor of Stockholder George P. Davis who sued Edison Electric Illuminating Co. of Boston to restrain it from paying old age pension taxes on its payrolls. This time Justice Cardozo carried seven members of the court with him in approving the law, leaving Justices Butler and McReynolds to dissent. Finally Justice Stone read a decision upholding (5 to 4) Alabama's unemployment insurance law passed to conform to the Federal law. The Court having thus made a clean sweep of legal attacks on Social Security, Justice Cardozo went home to celebrate the day, his 67th birthday.

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