when they came to make their tax returns, but did not receive all of the benefits which they sought to obtain under congressional legislation.

Mr. WALSH of Montana. Mr. President, I think I can answer the question of the Senator from New Jersey.

Mr. EDGE. I shall be glad to have the point cleared up. Mr. WALSH of Montana. In connection with an act for the reorganization of American corporations in China the Committee on the Judiciary listened to extensive arguments on the matter and a bill was prepared with an exemption in it. I think, however, the unanimous view of the committee was that 'the exemption ought not to be accorded, and the provision was eliminated from the bill.

Mr. EDGE. That was the final action?
Mr. WALSH of Montana. Yes.

Mr. EDGE. I had forgotten as to that.

Mr. KING. I think the Senator from Montana has stated the matter correctly. The general revenue act, as I recall, allowed American citizens who derived any income from foreign investments certain credits or deductions on account of income taxes paid to any foreign country or to any possession of the United States. Accordingly, American citizens who paid in come taxes to the government of the Philippine Islands or to the Government of China or to any other government derived from investments in either of said countries, were entitled when making their returns to the Treasury Department for the purposes of taxation, to claim as a deduction any income tax paid to any foreign government or to any possession of the United States. And domestic corporations were also entitled to be credited with the amount of any income, war profits, and excess-profits taxes, paid to any foreign country or to any possession of the United States. There were, however, some limitations as to the deductions to be allowed which I shall not attempt to state at this time. My recollection is that the law applicable to the years 1918, 1919, and 1920 was quite liberal in the matter of deductions allowed to American citizens on account of income or corporate taxes paid in the Philippine Islands.

Mr. LA FOLLETTE. Mr. President, does the Senator yield?

Mr. KING. Yes.

Mr. LA FOLLETTE. Mr. President, I merely desire to say to the Senator from Utah that I have not had occasion to look

up the recent statutes so far as British nationals doing business abroad are concerned, but in 1921 when an effort was made to provide for an amendment similar to this affecting corporations of this country the argument was made and reiterated over and over again on this floor in justification and in support of the committee's recommendation that the British Government and other foreign governments did exempt their nationals or national corporations doing business abroad, I find, however, upon reviewing the debate that my distinguished predecessor in this body challenged that statement again and again upon the floor, and the proponents of the proposal were never able to produce the statutes to justify the statement which had been made. Subsequently, my predecessor did produce here in the RECORD a statement showing that the British income tax laws did apply to all citizens who received dividends or other profits from their business abroad, if they were resident in their own country, and that is the proposition which is put forward here. Mr. KING. As I recall the discussion to which the Senator refers I think he has accurately stated the position taken by his predecessor, who contended that British subjects engaged in business in China but who claimed their residence in Great Britain paid the same rate of income taxes as British subjects deriving their income from investments in England. There may have been some deductions allowed from gross income as deductions were allowed for municipal taxes and rates levied in England. My recollection is, however, that Britishers living in China and who were associated with Chinese in business enterprises in China, conducting the same through corporations, had applied to them by Great Britain a different rule in the matter of income-tax exactions.

Undoubtedly appeals will be made to Congress and those appeals will grow stronger as American investments in foreign countries are increased, to exempt from all forms of taxation, incomes and profits received by American citizens from foreign investments. The contention will be made that American citizens engaging in business in other countries are required to meet competition and are subject to taxes in the countries in which they are operating, and that to require of them that they shall be subject to the income tax laws of the United States is placing them at a disadvantage with their competitors. Billions of American capital are going abroad and many Americans are engaging in business enterprises in various parts of the world. From these investments and business activities profits are derived. In my opinion, while deductions

should be made from gross income on account of taxes paid abroad the same as deductions are allowed from gross income on account of municipal and State taxes paid in the United States, it would be unwise and unjust to relieve such American citizens from taxes upon incomes derived from enterprises and investments in foreign countries and American possessions.

Mr. COPELAND. I am quite astonished, may I say to the Senator from Wisconsin, although I have no doubt he is right, about the attitude of Great Britain toward its subjects abroad. I have here in my hand what I assume to be a correct transcript of a cable sent by Governor General Wood on the 7th of September, 1923, to the President. I quote from it as follows:

British subjects abroad are never subjected to British taxation on income derived from sources outside of Great Britain, and by the finance act of 1920 England has authorized a refund to overseas British of taxes heretofore levied on incomes derived solely from British

sources.

That seems to contradict the statement made by the Senator from Wisconsin. I know, of course, that the statements can be reconciled, because there may be some mistake, possibly, in the language of the cablegram, although I assume it to be a correct statement of the cablegram sent by General Wood to the President.

Mr. SMOOT. Mr. President, I did not understand the Senator from Wisconsin to say that British corporations were compelled to pay taxes to the British Government. That is true in the case of other countries but under British laws there is an exemption, and I stated the reason why, and so did the Senator from Montana. Did the Senator from Wisconsin state that the British companies abroad were compelled to pay taxes at home? Mr. LA FOLLETTE. I said that the stockholders of British corporations receiving an income from corporations doing busi ness abroad were subject to the income tax of Great Britain. Mr. SMOOT. As to the dividends.

Mr. COPELAND. I assume that is true.
Mr. SMOOT. That is true.

Mr. COPELAND. But the question here as I see it is one of national policy. What are we going to do with the Philippines? It is a matter of no concern to me. I have not a dollar invested in the Philippines, and no personal friend of mine has; but here are these islands, with their vast natural resources. How are we going to treat them? They might better be devel oped by Americans, as I view it, than by nationals of other countries.

I do not regard this as a bonus. I do not look at it in that way at all; but here a tax is levied upon certain corporations doing business in the Philippines, and only nine of them paid any taxes; and I am told that if these particular companies are forced to pay these back taxes, they will go into bankruptcy. They would not have assets enough to pay their taxes.

Mr. EDGE. Mr. President, will the Senator yield right there?

Mr. COPELAND. Yes.

Mr. COPELAND. Yes.

is he

Mr. LA FOLLETTE. Which proposition is the Senator dis cussing now? Is he discussing the proposition to make section 262 retroactive so far as the act of 1918 is concerned, or in favor of the proposition contained in the second amendment? Mr. COPELAND. I was talking about the whole subject of our relation to the Philippines.

Mr. SMOOT. The second amendment has been withdra ◄n. Mr. COPELAND. Yes; the second one has been withdrawn; but may I ask the Senator from Utah about the amendment which he has offered? Why does he limit it to the taxable

sort of a fishing boat that you want to buy. You have to pay so much for the use of it.

Mr. EDGE. I may say that this does not apply alone to large yachts. It applies to all kinds of craft, as explained by the amendment, very small craft; but, not to permit the suggestion of the Senator from Nebraska to go without a word, the wisdom of the House is plainly evidenced. As the bill appears before us protection was necessary, because they raised it, as I recall, five times; and I believe the majority of the Finance Committee felt that that was a just tax or a just tariff.

Mr. NORRIS. I am not finding fault with it.

Mr. EDGE. But apparently there is a treaty condition that, in the opinion of the Department of State, interferes with the tax; and, as I understand the chairman of the committee and this is the reason why I asked the question-it is the hope that the conferees of the two Houses will be able to prepare a section that will be within our treaty rights and still protect | American shipbuilders.

Mr. NORRIS. I will say to the Senator from New Jersey that I listened to the reading of the amendment and to some of the things the Senator from Utah said, and I reached the conclusion that this repealing act referred to our tariff act. I am wrong about that, I am informed.

Mr. FLETCHER. Yes.

Mr. NORRIS. That clears it all up in my mind. I have no objection.

The PRESIDING OFFICER (Mr. VANDENBERG in the chair). The question is on the amendment of the committee. The amendment was agreed to.

Mr. SMOOT. Mr. President, the next amendment is, on page 205, line 7, to strike out "$1 each year" and insert $3 each year."

Mr. COPELAND. Mr. President, of course the Senator does not want that amendment to prevail?

Mr. SMOOT. There are a good many reasons why it should prevail.

Mr. COPELAND. What is the reason why it should prevail? Let the Senate understand what this is.

This is a proposal to tax every doctor in the country $3 instead of $1. Every family doctor, every one of your friends in the medical profession, is aroused over this and feels outraged by it. It is a piece of class legislation, and there is not any reason that I can think of why it should pass. That is the reason why I am asking the Senator from Utah for one reason why it should be made the law.

Mr. GEORGE. May I inquire of the Senator from New York if the physician does not have to register every prescription of drugs that come under the narcotic act?

Mr. McKELLAR. I desire to ask the Senator from Utah a question. How much revenue does this tax of $1 bring in? Mr. SMOOT. I do not know whether it is separated or not. Mr. McKELLAR. Does it cost nearly as much to collect as the tax amounts to?

revenue producer. If we provide $1, and another case goes to the Supreme Court of the United States and it is shown that the $1 does not pay the expenses of collecting it, then more than likely the law would be held unconstitutional.

Mr. MCKELLAR. Under those circumstances, why not strike out the entire tax? If there is doubt as to whether it pays the cost of collection, surely we should not impose the $1. It does seem to me wholly unreasonable that we should impose any tax. Mr. SMOOT. The poor doctor who will charge $10 for a prescription, of course, can not afford to pay $1 a year. Is that the position the Senator takes?

Mr. McKELLAR. No. Doctors do not write that sort of prescriptions in Tennessee.

Mr. COPELAND. Mr. President, I know the question was raised as to whether the narcotic control was a proper thing to include in a revenue act. There is no doctor in the country who would be willing to have that narcotic control wiped out. So I say the doctors are willing to pay the dollar. But they should not pay more than that.

Mr. SMOOT. Suppose the dollar does not pay the expenses? Mr. COPELAND. I am sorry, but I am going to read the appeal of the American Medical Association.

Mr. SIMMONS. Mr. President, I wish the Senator from New York would permit me to interrupt him a moment. Mr. COPELAND. Certainly.

Mr. SIMMONS. I want to ask the Senator from Utah why we imposed the dollar tax on doctors.

Mr. SMOOT. In the beginning?

Mr. SIMMONS. Yes; what was the purpose of it?

Mr. SMOOT. I think it was done because of the fact that there was a desire to find out about how much was sole, and who sold it; and the tax was imposed upon it.

Mr. SIMMONS. It was not imposed for the purpose of raising revenue-nobody thought we would get much revenue out of it but it was in order that the Government might keep track

of physicians who were prescribing these articles that come under the Harrison Narcotic Act.

Mr. SMOOT. Yes.

Mr. SIMMONS. I can tell the Senator how much revenue would be raised.

Mr. SMOOT. It is $200,000, I think.

Mr. SIMMONS. The estimate is that the $3 amendment will produce $290,000, and the $1 will produce $97,000. I insist that the purpose was not to get revenue, but I recognize that the decision of the Supreme Court was that there must be some revenue as a result of the amendment. The question is whether the dollar rate raises more than the amount required to be expended in order to collect it. It raises $97,000, and I can not see how the Government would put out that much money in order to keep track of these things. The $1, therefore, in my judgment, will accomplish the purpose as well as the $3, and there is no reason why it should be multiplied by 3.

Mr. SMOOT. Mr. President, I know the doctors can not very well afford to pay this, and as far as I am concerned I will let the Senate vote upon it, and if it goes out, I shall not care. The PRESIDING OFFICER. The question is on agreeing to

the committee amendment.

Mr. President, there is one other amendment, on page 243, line

22, Bureau of Internal Revenue personnel.

Mr. SMOOT. Yes.

Mr. COPELAND. In that connection, let me say to the Senator that the doctors are not unwilling to have the dollar provision left in.

The PRESIDING OFFICER. The clerk will state the The CHIEF CLERK. On page 243 the committee proposes to strike out lines 22 to 25, both inclusive, and on page strike out down to and including line 10, as follows:

SEC. 707. BUREAU OF INTERNAL REVENUE PERSONNEL.

244 to

(a) The Secretary of the Treasury is authorized to fix the compensa

tion, without regard to the provisions of the classification act

of 1923,

act) in

of the following officers and employees of the Bureau of Internal Rey

enue, appointed (whether before or after the enactment of this accordance with the civil service laws: Twenty-three assistant =

to the

General Counsel at a compensation not in excess of $7,500 a year each;

26 administrative or technical employees at a compensation

ployees at a compensation not in excess of $6,000 a year each.

not in

excess of $7,500 a year each; and 50 administrative or technical em(b) Section 1201 (b) (1) of the revenue act of 1926 is repealed. Mr. McKELLAR. Will not the Senator explain what that

means?

Mr. SMOOT. This was an amendment that was puĹ

in by

and then it was reduced to $1, and the case came up on the $3 proposition, and the question was whether that provision was a

ment, giving them increased salaries notwithstanding the fication act.

classi

Mr. McKELLAR. The action of the committee is to strike that out?

Mr. SMOOT. To strike it out, and let it go to conference. The amendment was agreed to.

Mr. SMOOT. Mr. President, I have been asked that the estate-tax provision go over until to-morrow, as a number of Senators desire to speak upon it.

Mr. BINGHAM. Mr. President, will not the Senator call it up at this time with the understanding that it will not be debated?

Mr. SMOOT. The Senator wants to offer an amendment? Mr. BINGHAM. I would like to offer an amendment, and ask to have sundry documents printed in the RECORD.

Mr. SMOOT. That is all right. Let the amendment be read. The PRESIDING OFFICER. The Senator from Connecticut offers the following amendment, which the clerk will read. The CHIEF CLERK. On page 192, strike out lines 20 to 25, inclusive, and lines 1 to 5, on page 193, and insert:

SEC. 401. TERMINATION OF ESTATE TAXES.

Title III of the revenue act of 1926 shall not apply in the case of the transfer of the net estate of any decedent dying after the enactment of this act.

Mr. BINGHAM. I ask that the documents which I send to the desk be printed in the RECORD.

Is there objection?

The PRESIDING OFFICER. There being no objection, the matter was ordered to be printed in the RECORD, as follows:

Hon. HIRAM BINGHAM,

SOUTH MANCHESTER, CONN., December 13, 1927.

Washington, D. C.

DEAR SENATOR BINGHAM: I am writing to express my hope that you will use your influence in opposition to the continuation of the inheritance tax as now in force. This in part is due to my feeling that it is best for the Federal Government to leave this field of taxation open to the respective States, but that is only secondary. My real objection is to the obnoxious provision whereby the Federal Government bribes or coerces the several States to enact legislation by means of a liberal rebate of the Federal tax to them if they do so. It seems to me that this strikes at the very foundation of our ideals and fundamental principles of government.

If the Federal taxing power is to be exercised by Congress for the obtaining of funds with which to influence State legislation, we may as well give up the idea that this is a federation of sovereign States, each exercising local option in matters of local concern. That means that we have abandoned the ideals of the founders and are repeating the old experiment of governing great countries by a centralized national authority. The principle at stake is out of all proportion to the pettiness of the issue involved. We are selling our birthright for a mess of pottage. We are throwing overboard the most magnificent piece of statescraft which the world has yet produced, and for nothing. Yours very respectfully,

CHARLES CHENEY.

THE FEDERAL ESTATE TAX AS A GOVERNMENT EVIL By William H. Blodgett, tax commissioner State of Connecticut Patrick Henry, in voicing opposition to the adoption of the Federal Constitution in the Virginia Convention, exclaimed:

"Where are the purse and sword of Virginia? They must go to Congress. What has become of your country? The Virginian government is but a name." (Elliott's Debates III, pp. 366-410.)

Fear of excessive power in the proposed new government excited wide-spread opposition to the adoption of the Constitution by the colonists. Justification for such fear was found in the long struggle of the people in the mother country to preserve their rights and liberties. The colonists, with knowledge of the contest between the Parliament and the Stuart kings which lasted nearly all of the seventeenth century, mistrusted usurpation of powers and centralization in government beyond all things else. Their kin across the seas had been participants in this almost interminable struggle. Furthermore, they had just concluded successfully the Revolutionary War, which was brought about by the exercise of centralized powers wielded from a great distance and from beyond the borders of the continent. To them all of the serious experiences of mankind, immediate and centuries old, seemed to justify the extraordinary reluctance with which they yielded to the necessity of forming the more perfect union which was proposed. But the necessity for the establishment of such new union with carefully guarded and more centralized powers than previously were thought necessary was apparent to the ablest and most far-seeing statesmen of those times. The Constitution framers, observing the dangers of excessive centralization of powers on one hand and anarchy arising from excessive localization of powers on the other hand, succeeded in writing into the Constitution that perfect balance of powers on which has rested the security of this governmental structure during the whole period of its existence.

Replying to Patrick Henry and all others who pointed out the dangers of excessive centralization and urging the adoption of the proposed Constitution, Alexander Hamilton said:

"Everything must be left to the prudence and firmness of the people; who, as they will hold the scales in their own hands, it is to be hoped, will always take care to preserve the constitutional equilibrium between the general and the State governments." (17th Federalist.) Whatever may be thought of Hamilton in other respects, it must be noted that his was a most practical outlook. But how has the hope and confidence expressed by Hamilton in the people been justified? What may be said now of the prudence and firmness of the people who hold the scales in their own hands? What care has been exercised in recent years to preserve the equilibrium which all then agreed to be so essential to the perpetuity of the new government?

"The preservation of the States and the maintenance of their governments are as much within the design and care of the Constitution as the preservation of the Union and the maintenance of the National Government. The Constitution and all its provisions looks to an indestructible union composed of indestructible States." (Chief Justice Chase, Texas v. White, 7 Wall, 700.)

The dificulties encountered by the framers of the Constitution in their efforts to establish an enduring federation in terms granting no more than necessary powers to the central government, and at the same time reserving and guaranteeing to the States for the benefit and use of the people all those innumerable powers essential to the existence of freedom of action separately by the State governments, seemed for a considerable period of time, during which the Constitutional Convention was in session, to be insurmountable. With respect to this problem the convention came nearly to disaster. The device to which the Constitution framers agreed, though lending itself to new conditions somewhat imperfectly, remains and must remain always as the most essential abutment of the more perfect structure which it was the design of the founding fathers to establish. The declaration of rights, corresponding in its purpose to the ancient Bill of Rights known to their English forbears, was the means insisted on by Thomas Jeffer son for the protection of the people and of the States against all forms of usurpation by the new government. Mr. Jefferson expressed the hope that 4 of the 13 States would withhold ratification of the Constitution in order to compel the adoption by amendment of the bill of rights. In one of his letters he said:

Tyranny of legislatures is the most formidable dread at present, and will be for many years. That of the executive will come in time, but it will come at a remote period."

A number of the ratifying States did so on condition that the bill of rights would be made part of the Constitution by amendment. Although the four States did not withhold ratification, as Mr. Jefferson suggested, 10 amendments constituting the declaration of rights were proposed and adopted very shortly after the new mechanism of government commenced to function. The provisions of the tenth amendment

are worth observing:

"The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people."

The provisions of the Constitution, considered by some to be adequate protection against centralization, were considered inadequate by Mr. Jefferson and other able thinkers of the time. The declaration of rights was intended to be as adamant against Federal legislative assault upon the rights of citizens and of the States. What has been the result? May we not now with greatest propriety commence to take stock of the situation, and, if found necessary, display some of that prudence .and firmness of the people which was the basis of the hope of Alexander Hamilton? Notwithstanding this effort to protect the States and the people against aggression of the centralized powers, the new governmental machinery had scarcely been set in motion when there arose, to test the wisdom of the statesmen and jurists of the country, questions pertaining to the doctrine of implied powers. Chief Justice John Marshall, America's greatest jurist, by his wise interpretations of the fundamental law gave it life and adaptability. All now generally agree that it was through his foresight that the Constitution, or any constitution of the kind, was saved to bless the future generations of mankind. However, it is quite clear that the Constitution would not have been adopted at all had its proponents admitted that it contained, or would be construed as containing, any implied powers whatever.

Lord Bryce, with whose writings respecting our system of government there is none to compare, visualized our plan of government and tersely described it in the following language:

Under the plan of the Constitution makers an American, through a long life, may never be reminded of the Federal Government, except when he votes at a presidential election, buys a package of tobacco bearing the Federal stamp, lodges a complaint against the post office, and opens his trunk for a customhouse officer on a pier when he comes from a European tour. His direct taxes are paid to officials acting under State laws. The State, or local authority constituted by State statute, registers his birth, appoints his guardian, pays for his schooling, gives him a share in his father's estate, licenses him when he marries or enters a trade, divorces him, enters civil action against him, declares

him a bankrupt, and hangs him for murder. The police that guard his home, the local boards which look after the poor, control the highways, impose water rates, manage schools-all these derive their powers from State laws. In comparison with such a number of functions the Federal Government is but a department of foreign affairs."

In a land of vast areas and great population and of wide diversities of climate and industries and modes of life, different areas being subject to somewhat different economic restraints, it is essential that each section, by separate States thereof, should be free to carry on and develop, each in its own way, so long as none meddles with the freedom of any other State. In this Republic State rule is not granted by the Federal Government. Powers reserved in the States never belonged to the Federal Government at all. The States clearly were the grantors of power and the central Government was the grantee. The value of State governments and the importance of State authority may not be ignored in a country so large as this. Security rests, in a larger measure than we are likely to know, upon the elasticity afforded to the various sections of the country by State units through which the people may exercise direct influence regarding matters of their more immediate concern. In the period of stress and growing storm which immediately preceded the Civil War the party platform on which Lincoln first ran for President contained the following plank:

Those familiar with the history of that period know that Lincoln, standing on the principle stated in this provision of his platform, had other plans for solving the question of slavery than by interfering with the recognized constitutional rights of the several States.

In The Critical Period in American History, written by the historian, John Fiske, may be found this language:

"If the day should ever arrive when the people from the different parts of our country should allow their local affairs to be administered by prefects sent from Washington, and when the self-government of the States shall have been so far lost as that of the departments of France, or even so far as the counties of England, on that day the progressive political career of the American people will have come to an end, and the hopes that may have been built upon it for the future happiness and prosperity of mankind will be wrecked forever."

The proponents of the Constitution took the view that dangers of State encroachments upon Federal powers were greater than the danger of encroachments of the Federal Government upon the powers of the States. Few, if any, tendencies have been witnessed to indicate that there was justification for such fear. History shows that, where the greatest power in government is lodged, greater power is sought, and, except for the prudence and firmness of the people which Hamilton saw was necessary to the maintenance of this Government, ancient rights, however firmly established, will be lost. There is nothing new in this observation. Human nature has not changed perceptibly in this respect. Power in Government affairs begets more power. has been so always. Vigilance is the price of liberty.

It

Encroachments upon powers reserved for States may result from the adoption of constitutional amendments, from Executive action, or from congressional enactments. The National Council of State Legislatures is concerned with enactments of the Congress of the United States which encroach, or which tend to encroach, upon the powers of the several States. Questions concerning such encroachments involve discussions of what is called State rights. Many of the rights claimed as belonging to States in a more strict sense may not be rights at all, unless the court which is vested with authority to pass judgment thereon has so interpreted the Constitution of the United States as to recognize such claimed rights. It appears, therefore, that by use of the words "State rights" is meant such innumerable powers as are not, in terms or by implication, granted to the Federal Government, and which in sound policy may be exercised to better advantage by the States. Recognition of the spirit of the Constitution is the great essential to the maintenance of the equilibrium between State and Federal powers. Generally, through the exercise of State powers, the citizens are affected directly and at home and with respect to their immediate affairs. In such matters the citizen, through his State government, exerts his influence; it is here that he sees the effects of his political activity and interest. In this view State rights may be thought of rather as a matter of sound policy, looking beyond and into the spirit of the Constitution and applying its principles, rather than as positive right reserved in terms by the Constitution and secured to the States by judicial opinion.

By early construction of the Constitution the Supreme Court became the final arbiter of the rights of minorities and of the States. The jurisdiction of this court to pass judgment upon the constitutionality of enactments of the Congress has long since been settled. However, only 39 acts of Congress to this date have been held unconstitutional. The disposition of Congress to usurp power may be most clearly shown by pointing to the plans proposed for breaking down the power and authority of the court in this respect. This purpose

continues and appears periodically in the Congress, notwithstanding the fact that all amendments adopted since 1804, commencing with the thirteenth, have increased the powers of the Congress at the expense of State powers, and, further, that the court has on such rare occasions rendered opinions adverse to the validity of congressional enactments. The prudence and firmness of the people in resistance to this form of aggression may well be called forth to defeat every effort further to weaken this bulwark of national safety.

A vast field of legislation has been occupied in recent years by the Federal Government, either by authority of the general welfare clause of the Constitution or under the doctrine of implied powers. Through the use of the Federal taxing power, the power of the purse in which Patrick Henry saw danger, encroachments upon the powers of the States have increased at an amazing pace during the last half century. Congressional activities in two important directions other than by proposals to amend the Constitution yield abundant evidence of the disposition of Congress progressively with the passing of time excuse to concern Federal authority with the minute details of business which should forever remain under exclusive State control. To carry out such activities the necessity of establishing new Federal bureaus and commissions, with authority to issue regulations having the effect of law, follows in baneful consequence.

to find

Year by year self-government of States is becoming a mockery, the regulation makers being bureau chieftains hidden from view but placed above the law as public masters rather than public servants. The doctrine that this is a government of law and not of men is becoming a byword. The doctrine that there is equality before the law must necessarily vanish with the ever-increasing pretensions of Federal officeholders whose regulations override, or take the place of, Statutes enacted by competent legislative bodies.

to the

It is most likely, however, that the bureau chiefs, commissioners, and other agents all along the line have done as well in the past, and are doing as well now, as similar officials are likely to do in the future with the work assigned to them. The appointees of the Federal Government very generally possess intelligence and efficiency. Undoubtedly, too, the laws enacted are quite as wise as laws in relation same subject matter are likely to be in the years to come. These difficulties are deeply seated. The trouble is primarily with the citi zens themselves, who, instead of resisting tendencies toward centralization, have altogether too freely sought to have the State relieved of responsibility and authority by at least sanctioning congressiona. I activities into fields where Congress should not enter. Responsibility for this business, however, must be assumed by the Congress, it having failed to observe that the maintenance of State governments is within the design and care of the Constitution.

One form of aggression upon reserve powers of States may be found in the so-called dollar-matching or State-aid program of the Federal Government. By this program money received by the exercise of the Federal taxing power is used to subsidize States to engage in activities in which, except for such financial inducements, they would not engage at all. The use of money in the Federal Treasury taken from the people to speed up the use of reserve State powers is a flagrant abuse of the Federal power of the purse. The extension of Federal authority with respect to matters pertaining to maternity and infant hygiene, vocational education, the control of highway construction by States, and many other such activities by the mere mentioning of them is sufficient to show how far afield Congress has already gone beyond the intent and limitations prescribed by the framers of the Constitution. Persistent efforts in recent years to shift responsibility pertaining to public education, divorce, and other lines of activity certainly would be looked on with amazement by the statesmen of the constitutional period, and, indeed, by their successors who

pioneered

on the

the Government through the first hundred years of its existence. Aside from tending to extravagance on the part of the Federal Gov ernment, State-aid practices of the kind induce extravagance part of the States. The citizens, who pay the bills, have little influence with respect to the use of the Federal taxing power, the States the temptation to accept every such grant of money, coming like manna from the skies, is difficult to overcome. The continuance of this program in constantly widening Federal activity can have no other effect than to bring the into an increasing degree of subservience.

while in Federal

fields of States

States, if any there are, which desire Federal control of their affairs through the influence of the power of the Federal purse impliedly admit they are unable to assume their separate responsibilities. Such States assume tion of being liabilities rather than assets upon the Federal Treasury.

the posi

relation that the is the State

A condition of State mendicancy nowhere in fact exists. Of immediate concern to all citizens who feel the original ship between Federal and State authority was wise, who feel principles and spirit of the Constitution should be maintainedentrance by Federal authority in 1924 upon a new plan of control. Reference may be had to section 301, subsection (b) revenue act of that year. This subsection reads as follows: "The tax imposed by this section shall be credited with the of any estate, inheritance, legacy, or succession tax actually any State or Territory or the District of Columbia, in respect

of the

amount paid to

of any