‘New Deal’ Goes by the Board

Manawatu Times, Volume 61, Issue 6, 8 January 1936, Page 7

‘New Deal ’ Goes by the Board

Death Blow Dealt By U.S. Supreme Court

LEGISLATION DECLARED UNCONSTITUTIONAL

United Press Association—By Electric Telegraph.—Copyright. Received Tuesday, 7.15 pan. WASHINGTON, Jan. 6.

One of tho most momentous decisions ever to affect Amer'icau. economic and political affairs was rendered by the Supreme Court today, when it ruled, by a sex to three majority, that the entire agricultural adjustment administration programme was unconstitutional.

Judge Roberts read the majority opinion, which declared that this legislation was "an invasion of the State’s rights’’ and beyond Federal control, even under the "general welfare” clause of tho constitution.

Judges Stone, Braudcis and Cardoza, tho so-called "Liberals,” dissented, declaring that tho Act was constitutional.

The majority ruling thus in one stroke completed the destruction of tho "Now Deal” which began with the declaration of uucoiistitutionality of the N.R.A. Ail forms of crop control and reduction of processing taxes auJ increase of profits to agriculture were thus swept aside. The Government, moreover, faces the loss of 200,000,000 dollars in impounded taxes and the need for finding an additional 002,0U0,000 dollars which it was hoped to get from the processing tax and which it contracted to give to tho farmers under the crop control plan. Mr ltooscvcit, acting swiftly after the decision, which swept aside hopea of carrying out his almost-balanced Budget for 1937, also published today, immediately called a conference with Mr Cummings and Mr Wallace. Upon first consideration, it seemed that the "New Deal” could bo repaid for the damage done to it only by an amendment to tho constitution, but it is yet too early to say whether the President will take that decision.

The stock market in ■ New York, somehow anticipating the Court’s decision, began early to-day. There was an optimistic reaction and all shares iu meat-packing and food companies made substantial gains, and other stocks went up sympathetically. Speaking for the so-called “Liberal” minority, now' reduced to three, Judge Stono read a bitter minority report, which roundly condemned the theory that Congress has no power to enact such measures as the agricultural adjustment administration for the benefit of the people, and hinted that tho government of "insoluble States” cannot much longer survive if tho people, through tho national government, cannot take measures to protect their economic welfare. While Mr Roosevelt is now faced with the immediate problem of recasting his agricultural policy, observers point to other difficulties plainly m view, as the Court is likely to reverse the v'holc scries of "New Deal’’ legislative'action now before it.

Political reaction in Congress to the Court’s decision is reserved, although it is generally admitter that a solution of the farm problem has become the foremost issue of the 1930 campaign.

Senator McNary, tho Republican leader, announced taht ho would soon introduce his own Farm Bill, providing export debentures and other devices to subsidise the farmers without directly taxing the people. The American Federation of Labour, foreseeing Court reversals of the “New Deal’’ labour legislation, indicated it would make a nation-wide campaign for a constitutional amendment to extend the economic powers of Congress. Budget to be Balanced MR ROOSEVELT’S PROMISE

WASHINGTON, Jan. 0

In his annual Budget Message, presented to Congress to-day, President Roosevelt promised tho nation a balanced Budget for the fiscal year ending June, 1937, with the important exception that no allowance is being made for unemployment relief funds, the requirements of which, he said, he could not now estimate.

The theme of the entire message is optimistic, the President pointing out that increased revenue and reduced expenditure have lowered the prospective deficit for the fiscal year ending June of this year from the estimate of four and a hal” billion dollars to about tli ree billion two hundred million dollars. "The Government credit is at its highest peak,’’ he said: ‘‘We can look forward to a continued reduction of deficits and increased tax receipts and declining expenditure for tho unemployed. ’ ’ He promised that there would be no new taxes, unless certain eventualities result, such as the Congress voting a cash payment for the veterans’ bonus, tho Supreme Court invalidating the Agricultural Adjustment Administration, or processing taxes, or tho relief requirements exceeding expectations. For tho coming fiscal year President Roosevelt estimated that the expenditure, exclusive of relief, will total 5069 million dollars, and the revenue 5654 million dollars. After SSO million dollars had been deducted for debt retirement, the net excess receipts will total five million dollars.

For the second consecutive year the President put national defence on a billion dollars annual basis. The Navy Estimates total approximately 551 mililon dollars, and the Army Estimates 443 mililon dollars.

The naval appropriation, with the addition of unexpended sums oil hand, will provide for a continued high-speed

bring tho sea-fighting forces up to Treaty strength. Largo sums arc also provided for both military and naval aviation. At least 800 .fighting aeroplanes and m PWjectecl