U.S.A. NEW DEAL

Wairarapa Daily Times, 8 January 1936, Page 5

U.S.A. NEW DEAL

SHATTERING BLOW SUPREME COURT DECISION. Press Association Electric Telegraph—Gopyrigh) WASHINGTON, Monday. One of the most momentous decisions ever to effect American economic and political affairs was rendered by the Supremo Court to-day when it was ruled by a six to *threo majority that the entire Agricultural Adjustment Administration programme was unconstitutional.

Mr Justice Roberts read the majority opinion, which declared that this legislation was "an invasion of the States’ rights” and beyond Federal control, oven under the "general -welfare” clause of the Constitution. Justices Stone, Brandeis and Cardoza, so-called “Liberals,” dissented, declaring the Act constitutional.

The majority ruling thus in one stroke completed the destruction of the Now Deal which began with the declaration of the unconstitutionality of the National Recovery Act. All forms of crop control and reduction, processing taxes and the increase of profits to agriculture aro thus swept aside. Tho Government, moreover, faces the loss of £40,000,000 of impounded taxes and the need of finding an additional £120,400,000, which it hoped to get from a processing tax and which it contracted to give to farmers under tho crop control plan. President Roosevelt, acting swiftly after the decision, which swept aside hopes, of carrying out his almost balanced Budget in 1937, immediately called a conference with Messrs Cummings and Wallace. Upon first consideration it seemed that the New Deal could be repaid for the damage to it only by an amendment to the Constitution, but it is yet too early to say whether the President Avill take that direction. Tho stock market in Now York, somehow anticipating the Court’s decision, began early to-day. There was an optimistic reaction. All shares of meat packing and food companies made substantial gains and other stocks went up sympathetically.

MINORITY REPORT. WASHINGTON, Tuesday. Speaking for the so-called Liberal minority, now reduced to three, Mr Justice Stone 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 the government of "insoluble States” cannot much longer survive if the people, through tho National Government, cannot take measures to protect their economic welfare. While President Roosevelt is now faced with the immediate problem of recasting his agricultural policy, observers point out that difficulties are plainly in view, as the Court is likely to reverse the whole series of New Deal legislative action before it. The political reaction of Congress to the Court’s decision, is reserved, although it is generally admitted that tho solution of the farm problem has become the foremost issue for the 1936, campaign. Senator McNary, Republican Leader, announced that he would soon introduce his own Farm Bill, providing export debentures and other devices to subsidise farmers without directly taxing the people. The American Federation of Labour, foreseeing Court reversals of New Deal Labour legislation, indicated that it would make a nation-wide campaign for a Constitutional amendment to extend the economic powers of Congress.