Jurisdictional Statement — McCoy v. Hunter

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| Statement as to jurisdiction......................4.

Statutory provision sustaining jurisdiction........

State statute the validity of which is involved... .

Date of the judgment and application for appeal. .

The nature of the case and the rulings of the Court

which bring the case within the jurisdictional

provision relied upon....................005.

Specification of the stages in the proceedings at

which and the manner in which the federal ques-

tions sought to be reviewed were raised........

Statement of grounds upon which it is contended

that the questions involved are substantial... . .

The order from which the appeal is prayed does not

rest on an independent state ground...........

Cases believed to sustain jurisdiction............

ST rc 1.02 G ane GCE idweeee vis <<) oops

Appendix “‘A’’—Statutes involved...................

Appendix ‘“‘B’”—Opinion of the Supreme Court of Illi-

TABLE oF Cases CITED

A. & S. F. R. R. Co. v. Vosburg, 238 U. 8. 56........

Carmichael v. Southern Coal & Coke Co., 301 U.S. 495. 12, 14,18

City of Chicago v. Ames, 365 Ill. 529.................

Depariment of Finance v. Gold, 369 Ill. 427...........

Hartford Steam Boiler Inspection and Ins. Co. v. Harri-

RL Va od Cats waldion ss 0e8 454 pees 9

Herb v. Pitcairn, 89 L. Ed. 481 (No. 24, October Term,

1944, decided February 5, 1945 and April 23, 1945)..

Hill v. Texas, 316 U. S. 400 Rial a oe oe Saar

We MO MD A, Wy OR ewes ccc yeceurceverses

Market Street Ry. Co. v. Railroad Commission, (Nos.

510 and 511, October Term, 1944, decided March 25,

ii INDEX

Nashville C. & St. L. R. R. Co., v. Walters, 294 U.S. 405.

Owens Illinois Glass Co. v. McKibbin, 385 Ill. 245

Skinner v. Oklahoma, 316 U. 8S. 535

Southern Ry. Co. v. Va., 290 U. S. 190

Stewart Drygoods Co. v. Lewis, 294 U. 8. 550

Topliss & Harding, Inc. v. Murphy, 384 Ill. 463

Wichita R. R. & Light Co. v. Public Utilities Comm.,

Sratutes CITED

Constitution of the United States, 14th Amendment...

Illinois Unemployment Compensation Act, Section

18(c) (5) (B), approved June 30, effective July 1, 1943

(Senate Bill 398 found in Laws of Illinois, 1943 (63rd

Generaly Assembly) Vol. 1, pp. 666-678) (Illinois

Revised Statutes (1943) (State Bar Association Edi-

tion) Chap. 48, Sec. 234(c) (5) (B) pars. 3 and 4, p.

1641, Col. 2)

Section 18(c) (7) (C)

Section 25(a) (2)

Iowa Code 1939, Ch. 77.2 (Section 1551.13(c))........

Judicial Code, Section 237(a) as amended by the Act of

February 13, 1925 (28 U. 8. C. 344a)

Oklahoma Statutes 1941, Title 40, Ch. 6, Sections

217(c), as amended by H. B. 205, Laws 1943, ap-

proved and effective March 26, 1943 and by H. B.

323, Laws 1943, approved and effective April 12,

SER oBNESNE

IN THE

SUPREME COURT OF THE UNITED STATES

OCTOBER TERM, 1944

No. 1219

S. BUCHSBAUM & CO., 4 Corporation; ASKANIA REG-

ULATOR CO., a Corporation; DIAMOND BRAIDING

MILLS, INC., a Corporation; DIAMOND WIRE &

CABLE CO., a Corporation; JAMES G. HEGGIE MFG.

CO., a Corporation; HOLLUP CORPORATION, a Cor-

poration; INDEPENDENT PNEUMATIC TOOL CO.,

a Corporation ; J. P, SEEBURG CORP., a Corporation;

WESTERN FELT WORKS, «a Corpcration; E. M.

WEYMER CO., a Corporation; A. M. STEELHAM-

MER, LILLIAN C. STEELHAMMER, ADAM GAB-

RIEL anp ANNA F. GABRIEL, Copartyers Dorne Bust-

ness aS Aome InpustriaL Co.; AGAR PACKING & PRO-

VISION CORP., «a Corporation anp THE VICTOR

MANUFACTURING AND GASKET COMPANY, a

CorPoRATION,

Appellants,

vs. “seis ;

ROBERT L. GORDON, Director or Lasor or THE State

oF ILLINoIs, Appellee

APPEAL FROM SUPREME COURT OF ILLINOIS, ITs NO. 28416

JURISDICTIONAL STATEMENT

The basis upon which it is contended that the Supreme

Court of the United States has jurisdiction upon appeal to

review the order of affirmance in the above entitled cause,

entered by the Supreme Court of Illinois on January 17,

1945 (which became final on March 20, 1945, on the entry

of an order by that Court denying the petition for rehearing

and modifying the opinion theretofore filed in certain re-

spects) is that such decision was rendered by the highest

court of the State of Illinois in which a decision in the suit

could be had and there was drawn in question the validity

of a statute of the State of Illinois on the ground of its

being repugnant to Section 1 of the 14th Amendment to the

Constitution of the United States and the decision was in

favor of its validity.

(a) The statutory provision believed to sustain the juris-

diction of the Supreme Court of the United States is Sec-

tion 237(a) of the Judicial Code, as amended. (U.S.C. A.

Title 28, Sec. 344(a).)

(b) The statute of Illinois, the validity of which is in-

volved, consists of the third and fourth paragraphs of Sec-

tion 18{c)(5)(B) of the Illinois Unemployment Compensa-

tion Act, which were incorporated into that Act by amend-

ment approved June 30, effective July 1, 1943. Said

amendatory act is identified as Senate. Bill 398 found in

Laws of Illinois, 1943 (63rd General Assembly) Vol. 1, pp.

666-676, the specific paragraphs of Section 18(c)(5)(B) in-

volved being found at pp. 671-672. The statutory provi-

sions in question also appear in Illinois Revised Statutes

(1943) (State Bar Association Edition) Chap. 48, Sec.

234(c)(5)(B) pars. 3 and 4, p. 1641, col. 2). The entire

Section 18 as amended by the law identified as Senate Bill

398 appears at pp. 23-37, Section 18(c)(5)(B) at pp. 29-31,

and the third and fourth paragraphs thereof appear at p. 30

of the Appendix hereto. For convenience throughout these

proceedings and herein said Section 18(c)(5)(B) has been

referred to as the ‘‘war risk amendments.’’

was rendered January 17, 1945, petition for rehearing de-

nied and opinion modified March 20, 1945. This applica-

tion for appeal is being presented on April 9, 1945. That

is in ample time. Market St. Ry. Co. v. R. R. Comm. (No.

510 & 511, this Term), 13 L. W. 4272 (decision March 26,

1945), Sec. 8(a) Act of Feb. 13, 1925 (U. 8. C. A. Title 28,

Sec. 350(a)). The opinion rendered January 17, 1945 ap-

pears at pp. 39-58, and the modifications made in the opin-

ion upon denial of the rehearing appear at pp. 58-60 of the

Appendix hereto.

The Nature of the Case and the Rulings of the Court Which

Bring the Case Within the Jurisdictional Provision

Relied Upon.

This is a consolidated cause in which were consolidated

14 cases in the Circuit Court of Cook County, Illinois. One

is a proceeding filed in that court by way of writ of cer-

tiorari pursuant to Section 25(a)(2) of the Illinois Unem-

ployment Compensation Act, seeking review of the action

of the Director of Labor, appellee herein, in denying a claim

filed under Section 25(d) of said Act for credit or refund

of the payment of its contribution for the first quarter of

1944 by appellant, S. Buchsbaum & Company and praying

the allowance of such claim. The other cases are 13 manda-

mus proceedings filed in said Court by all appellants, in-

cluding 8. Buchsbaum & Company, praying the issuance

of a writ of mandamus to the Director of Labor, appellee,

requiring him to expunge from his records, kept pursuant

to said Act, relative to the relator in each suit, his pur-

ported contribution rate determination for the calendar

year 1944 applicable to said relator. All such proceedings

raise identical substantive issues regarding the power and

jurisdiction of the Director of Labor under said Act and

the constitutional validity of the aforesaid statutory pro-

visions.

In the proceedings under review appellants based their

rights upon the invalidity of the contribution rate deter-

minations made with respect to them for the calendar year

1944 by the Director of Labor by applying to them the

‘‘war risk amendments.’’ They asserted that the ‘‘war

risk amendments’’ were void and no part of the law of IIli-

nois, (1) because denying them equal protection of the laws

in violation of Section 1 of the 14th Amendment to the Fed-

eral Constitution, (2) because violative of various pro-

visions of the Illinois Constitution and (3) because they

had been repealed. Appellants contended that, the rate

determinations having been made by the Director pursuant

to the dictate of these void statutory provisions, they oper-

ated to deprive appellants of their property without due

process of law in violation of Section 1 of the 14th Amend-

ment to the Federal Constitution and a similar Illinois con-

stitutional provision and amounted to wholly arbitrary

action by the Director in excess of his jurisdiction and

powers under the Act. Both the Circuit Court of Cook

County, Illinois and the Illinois Supreme Court overruled

all of appellants’ contentions in this regard, holding the

‘*war risk amendments”’ constitutional under both the Fed-

eral and Illinois Constitutions and a valid unrepeuled por-

tion of Section 18 of the Act.

Specifications of the Stages in the Proceedings at Which

and the Manner in Which the Federal Questions Sought

to Be Reviewed Were Raised.

The proceedings reviewed in the certiorari case were be-

gun by the filing of a claim for credit or refund with the

Director of Labor, appellee. The claim itself asserted that

the apniication of the ‘‘war risk amendments’ to claimant

in determining its contribution rate for the calendar year

1944 and the contribution rates so determined were uncon-

stitutional and void because denying to claimant due process

SE ARR neRataeaemmnesurscm

of law and equal protection of the laws in violation of the

14th Amendment. (Abst. 66, 68.) After an ex parte denial

of the claim (Abst. 69), claimant filed its Protest and Peti-

tion for Hearing (Abst. 54), in which it asserted the in-

validity of the ‘‘war risk amendments’’ because denying to

claimant the equal protection of the laws in violation

of the 14th Amendment (Par. XII; Abst. 62) and that

the action of the Director in purporting to determine

claimant’s contribution rate for 1944 pursuant to the

‘‘war risk amendments’’ and the rates so determined de-

prived claimant of its property without due process of law

in violation of Section 1 of the 14th Amendment. (Abst.

55.) Because without judicial power (Topliss € Harding,

Inc. v. Murphy, 384 Ill. 463 at 467-468 (1943)) the Director

did not pass on this issue (Abst. 69. 81-82).

In the trial court the issues in the certiorari proceeding

were raised, in accordance with Illinois practice (Topliss

é Harding, Inc. v. Murphy, 384 Ill. 463, at 467-468 (1943) )

by the filing by claimant of a motion to quash the record

of the Director and for allowance of its claim (Abst. 84).

Ground 2 of the motion expressly set forth the contention

that the ‘‘war risk amendments”’ denied claimant equal pro-

tection of the laws, and ground 7 the contention that the

action of the Director in determining claimant’s contribu-

tion rate for 1944 pursuant to the ‘‘war risk amendments”’

and the rate determination so made deprived claimant of

its property without due process of law, all in violation

of Section 1 of the 14th Amendment (Abst. 85, 86). The

final order of the Circuit Court in the certiorari proceed-

ing denied said motion and expressly overruled said grounds

2 and 7 thereof (Abst. 151).

In the mandamus cases the issues were raised in the trial

court by motions of appellee to strike the petitions and

dismiss the suits (Abst. 106-108). The mandamus petitions

of 9 appellants, for all of whom the Director purported to

determine the war risk rate of 2.7% under the third para-

graph of Section 18(c)(5)(B) are substantially identical

and abstracted only once (Abst. 87-106). Similarly, the

mandamus petitions of four appellants, for all of whom the

Director purported to determine a 2% war risk rate, are

substantially identical and abstracted only once (Abst. 110-

130). In both groups of petitions the first cause of action

dealt with the contention of repeal, and the second cause

of action with the contention of the unconstitutionality of

the ‘‘war risk amendments’’, the second cause of action

adopting by reference various paragraphs of the first cause

of action (Abst. 98, 121).

Paragraph II of the second cause of action alleged the

repugnancy to the 14th Amendment of the ‘‘ war risk amend-

ments’’ in denying to relators equal protection of the laws,

(Abst. 99, 121) and paragraph X. of the first cause of

action, adopted by reference into the second cause of action,

alleged that the action of the Director in purporting to

determine the contribution rates of relators pursuant to

the ‘‘war risk amendments’’ and the contribution rates so

determined deprived relators of their property without

due process of law in violation of the 14th Amendment

(Abst. 95, 118). The final order of the trial court sustained

appellee’s motion to strike the mandamus petitions and

dismiss the mandamus proceedings (Abst. 154), the Court

expressly finding that the ‘‘war risk amendments’ did not

deny to relators equal protection of the laws and that the

action of the Director in determining the contribution rates

of relators pursuant to the ‘‘war risk amendments’’ and

the rates so determined did not deprive relators o1 their

property without due process of law, in violation of the 14th

Amendment (Abst. 152-154).

Under Illinois practice assignments of error are abolished

and in lieu thereof appellants are required to set forth in

their opening briefs the errors relied upon. In their open-

ing brief in the Supreme Court of Illinois appellants as-

serted that, both in the certiorari proceeding and in the

mandamus proceedings, the Circuit Court erred in failing

and refusing to hold ‘‘(2)’’ that the ‘‘war risk amend-

ments’’ denied appellants equal protection of the laws in

violation of Section 1 of the 14th Amendment and ‘‘(5)”’

that the action of the Director in purporting to apply the

‘‘war risk amendments’’ in determining the contribution

rates for the calendar year 1944 of appellants, and the

purported contribution rate determinations so made, oper-

ated to deprive appellants of their property without due

process of law in violation of Section 1 of the 14th Amend-

ment. (Brief and Argument for Appellants, pp. 28, 29.)

These alleged errors were fully argued in appellants’

briefs. (Brief and Argument for Appellants, pp. 33-34,

35-36, 82-115, 115-122. Reply Brief and Argument for Ap-

pellants, pp. 51-69, 71.)

In its opinion the Supreme Court of Illinois expressly

overruled the contention of appellants that the ‘‘war risk

amendments’’ denied to them the equal protection of the

laws. (Appendix hereto, p. 53.) It did not reach the issue

of ‘‘due process of law’’, since the contention of lack of due

process in making the rate determinations pursuant to the

‘‘war risk amendments’’ is based upon the assumption that

the ‘‘war risk amendments’’ are invalid and the Supreme

Court of Illinois upheld their validity against all grounds

of attack.

The issue of unconstitutionality under the 14th Amend-

ment of the ‘‘war risk amendments’’ was also raised in

appellants’ petition for rehearing (pp. 9-12).

Statement of Grounds Upon Which It Is Contended That

the Questions Involved Are Substantial

Illinois enacted its Unemployment Compensation Act in

1937. It adopted the pooled-fund plan whereby all contribu-

tions from all employers are pooled in a single, undivided

fund from which benefits are paid to eligible employees,

without regard to the identity of their former employers.

To accomplish its purpose a fund is created to be held by

the State Treasurer as custodian and to be administered

by the Director of Labor. The primary source of the fund

are annual contributions paid by employers subject to the

Act.

The times of payment and rates of contribution by em-

ployers are provided for in Section 18 of the Act. They

accrue annually and are payable quarterly. The rate is a

percentage of the wages payable by each employer with

respect to employment during the year in question. Origi-

nally and through the calendar year 1942 there was an arbi-

trary statutory rate of 2.7% applicable to all employers

subject to the Act.

Section 18 was amended in 1941 to provide, beginning

with the calendar year 1943, for variable rates based upon

the benefit experience of individual employers as compared

to the benefit experience of all employers subject to the

Act. This change recognized the importance to the ac-

complishment of the purposes and objectives of the Act

of rewarding in this manner employers who achieve in their

own businesses the desired stabilization of employment. It

provided an incentive to that end.

The variable rates range between 0.5% and 3.6%. Each

year the Director is required to determine each employer’s

rate pursuant to Section 18 and to notify him of it. To

qualify for a variable rate an employer must have incurred

liability for the payment of contributions within each of the

five calendar years immediately preceding the year for

which the rate was being determined. It is undisputed that

all of the appellants qualified for variable rates for the cal-

endar year 1944, ranging between 0.5% and 1.5%.

Payrolls in Illinois expanded very substantially as a re-

sult of the war, creating the possibility that the demands

upon the fund for the payment of benefits due to sudden and

greatly increased unemployment at the war’s end would

render the fund insolvent. To protect against this eventual-

ity the General Assembly enacted during June, 1943, the law

known as Senate Bill 398. It dealt with this problem by add-

ing to Section 18 the paragraphs appearing under Section

18(c)(5)(B). They provide war risk rates of 2% and 2.7%.

They are applicable to the two and one-half year period

from July 1, 1943 through December 31, 1945. Only the

third and fourth paragraphs relate to the calendar year

1944. Consequently they are the only paragraphs, the

validity of which is involved herein.

The ‘‘war risk amendments’’ apply solely to employers,

who are not only subject to the Act, but who also are en-

titled under Section 18 (exclusive of the ‘‘war risk amend-

ments’’) to variable rates of contribution applicable to

their entire payrolls for the calendar year in question and

which are lower than the war risk rates.

The applicability of the war risk rates to any employer

is determined by comparing his payroll for the preceding

calendar year with his 1940 payroll and by comparing his

variable rate for the year for which his contribution rate is

being determined to the applicable war risk rate.

If his 1943 payroll showed an increase of 150% or more

as compared with his 1940 payroll and his variable rate

for 1944 was less than 2.7%, his variable rate was applied to

the first $100,000 of his 1944 payroll, but he was required to

pay contribution on his entire 1944 payroll in excess of

$100,000 at the arbitrary war risk rate of 2.7%. This is

provided in the third paragraph of Section 18(c)(5)(B).

If his 1943 wages showed an increase of more than 100%

but less than 150% as compared with his 1940 wages and

his variable rate for 1944 was less than 2%, his variable

rate was applied to the first $100,000 of his 1944 payroll,

but he was required to pay contribution on his entire 1944

payroll in excess of $100,000 at the arbitrary war risk rate

of 2%. This is provided in the fourth paragraph of Sec-

tion 18(c) (5) (B).

If his 1943 payroll showed an increase of less than 100%

over his 1940 payroll, the war risk rates do not apply to his

1944 payroll, without regard to its size either absolutely or

relatively to his 1940 payroll. This is the result of these

two paragraphs.

All appellants except Diamond Braiding Mills, Inc., James

G. Heggie Mfg. Co., Independent Pneumatic Tool Co., and

The Victor Manufacturing and Gasket Company, came

within the third paragraph of the ‘‘war risk amendments.’’

Applying it to them the Director of Labor in each instance

determined a variable rate ranging between 0.5% and 1.5%,

applicable to the first $100,000 of payroll for 1944 and a

2.7% war risk rate applicable to the entire balance of their

1944 payrolls. The four above named appellants came

within the purview of the fourth paragraph. The Director

of Labor determined for each of them pursuant thereto a

variable rate of 0.5% applicable to the first $100,000 of their

1944 payrolls and the 2% war risk rate applicable to the

entire excess of their 1944 payrolls over $100,000.

The 1944 payrolls of all appellants substantially exceeded

$100,000, ranging between $200,000 and $5,000,000. Appel-

lants contended below and now contend that the ‘‘ war risk

amendments’’ deny them equal protection of the laws in vio-

lation of Section 1 of the 14th Amendment in the following

ways:

1. As between employers given war risk rates and all

of whose 1944 payrolls exceed $100,000, by burdening them

with war risk rates with respect to their 1944 payrolls with-

out regard to the relationship of the sum of $100,000 to their

payrolls either for 1940, 1943 or 1944. For example, Em-

ployer A with a 1940 payroll of $50,000 has a 1943 and 1944

payroll of $500,000 while Employer B with a 1940 payroll

of $500,000 has a 1943 and 1944 payroll of $1,500,000. The

payroll expansion of Employer A as compared to 1940 is

10 to 1 both for 1943 and 1944, while the payroll expansion

of Employer B for both years is only 3 to 1. Both are

given the 2.7% war risk rate. Nevertheless, because the

first $100,000 of the 1944 payroll is exempt from the war

risk rate, employer A pays no contribution at a war risk

rate on that portion of his 1944 payroll which is double

his 1940 payroll, while Employer B pays contribution at

his war risk rate on 80% ($400,000) of that portion of his

1944 payroll which is no greater than his 1940 payroll

($500,000). Also, by reason of such arbitrary exemption,

Employer A pays contributions at the war risk rate on

only 80% ($400,000) of his 1944 payroll ($500,000), even

though it is 10 times his 1940 payroll ($50,000), while Em-

ployer B pays contributions at the war risk rate on 93%

($1,400,000) of his 1944 payroll ($1,500,000), although it

is only 3 times as large as his 1940 payroll ($500,000).

These discriminations result entirely from the arbitrary

statutory exemption of the first $100,000 of the 1944 payrolls

of employers given war risk rates from their burden. They

are typical instances of the unequal application of these

statutory provisions as between employers subject thereto.

Such inequalities are not only without logical relationship

to the objects and purposes of the war risk amendments, but

in fact directly contrary thereto. Employers with the

greater payroll expansion over 1940 are treated more favor-

ably than other employers having smaller expansion over

1940.

2. The arbitrary exemption from the burden of the war

risk rates of the first $100,000 of 1944 payroll of employers,

all of whom were given war risk rates because of the extent

of their payroll expansions between 1940 and 1943 has cre-

ated arbitrary and unconstitutional inequalities and dis-

criminations in favor of those employers whose 1944 pay-

rolls do not exceed $100,000 and against those employers

whose 1944 payrolls exceed $100,000, including appellants.

3. The failure to graduate the burden of the war risk

rates with respect to the 1944 payrolls of employers sub-

ject thereto by (a) exempting from the application of any

war risk rate that portion of the 1944 payroll of all em-

ployers subject thereto which does not exceed its 1940 pay-

roll by 100% or more, (b) subjecting only to a 2% war risk

rate that portion of the 1944 payrolls of employers given a

2.7% war risk rate which exceeds their 1940 payrolls by

100% but less than 150%, and (c) subjecting to the 2.7%

war risk rate only those portions of the 1944 payrolls of

employers given such rate which exceed their 1940 pay-

rolls by 150% or more.

According to the opinion of the Illinois Supreme Court

(Appendix, p. 53), these contentions of denial of equal pro-

tection of the laws are ‘‘completely answered’’ by a state-

ment in the opinion of the Supreme Court of the United

States in Carmichael v. Southern Coal & Coke Co., 301 U.S.

495, which sustained the Unemployment Compensation Act

of the State of Alabama as follows (pp. 510-511) :

‘*Distinctions in degree, stated in terms of differences

in number, have often been the target of attack, see

Booth v. Indiana, 237 U. 8. 391, 397. It is argued here,

and it was ruled by the court below, that there can be

no reason for a distinction for purposes of taxation,

between those who have only seven employees and

those who have eight. Yet, this is the type of distinc-

tion which the law is often called upon to make. It is

only a difference in numbers which marks the moment

when day ends and night begins, when the disabilities

of infancy terminate and the status of legal competency

is assumed. It separates large incomes which are

taxed from the smaller ones which are exempt, as it

marks here the difference between the proprietors of

larger businesses who are taxed and the proprietors

of smaller businesses who are not.’’

This statement in the opinion of the United States Su-

preme Court was made in answer to the contention that the

Alabama law was unconstitutional in denying equal pro-

tection of the laws because it applied only to employers

of at least eight employees. In the very next paragraph

of its opinion (301 U. S. at p. 511) that Court pointed out

that administrative convenience and expense in the collec-

tion of the tax are ‘‘alone’”’ a ‘‘sufficient’’ justification for

the difference between the treatment of small taxpayers

and that meted out to others, adding:

‘‘We cannot say that the expense and inconvenience

of collecting the tax from small employers would not

be disproportionate to the revenue obtained.”’

The contentions herein may not be answered in any such

manner. There can be no problem of determining whether

the expense and inconvenience of collection would be dis-

proportionate to the revenue obtained. All the employers

whose exemption from the burden of the war risk rates

(given them because of their payroll expansion) furnishes

the basis for the attack herein were, nevertheless, subject

to the Act and required to pay contributions at lower vari-

able rates on their entire 1944 payrolls even though not

burdened with the war risk rates. In reality, if they had

to contribute at their war risk rates, more revenue at the

same cost of collection would necessarily be received from

them. They would pay contributions on the same payrolls

at substantially higher rates.

Equal protection of the laws is a standard, as distin-

guished from a rule of law. It must be applied to an infinite

variety of facts and circumstances. The Illinois Supreme

Court pointed out in City of Chicago v. Ames, 365 Ill. 529

(1937) that for this reason precedents are of limited value.

The question is always the reasonableness of the classifica-

tions attacked in the particular case. It said (p. 535):

‘‘Numerous cases have been cited by the appellants

where the classification has been sustained as based

on a reasonable difference between the things differ-

ently classified. The decisions of the courts sustaining

or rejecting such classifications are, however, of little

assistance unless they be analogous on the facts. The

principle involved in all the cases is uniformly an-

nounced as the constitutional requirement of reason-

ableness of the classification.’’

We submit that there is no substantial similarity between

the question of equal protection of the laws raised herein

and the question raised in Carmichael v. Southern Coal &

Coke Co., 301 U. 8. 495, by the provision excluding from the

application of the Alabama law employers of fewer than

eight employees or any other provision of that law.

That case may also be distinguished upon the further

ground that the Alabama law is a revenue measure, the

validity of which was to be determined in the light of ‘‘con-

stitutional principles applicable to State taxation’’ (301

U. S. at p. 509), while the Illinois Supreme Court holds

that the Illinois law is an exercise of the police power.

Zehender & Foster, Inc. v. Murphy, 386 Ill. 358 at 362

(1944). Zelney v. Murphy, 387 Ill. 492 at 496-497, 499

(1944).

We recognize that equal protection of the laws is a con-

cept of somewhat vague meaning; that it does not require

that laws be either mathematically accurate, scientifically

correct or entirely logical; and that the power of State

Legislatures to classify the subjects of legislation is very

broad and entitled to a large presumption of the existence

of facts and circumstances sufficient to justify the dis-

criminations and inequalities created.

Nevertheless, there is a limit to legislative power. The

duty to preserve that limit is imposed by the equal protec-

tion clause of the 14th Amendment upon the courts. In Hill

vy. Texas, 316 U. S. 400 (1942) Chief Justice Stone said

(p. 406) :

‘*Equal protection of the laws is something more than

an abstract right. It is a command which the State

must respect, the benefits of which every person may

demand.’’

In Skinner v. Oklahoma, 316 U. 8. 535 (1942) Mr. Justice

Douglas said (p. 541):

“The guaranty of ‘equal protection of the laws is a

pledge of the protection of equal laws.’ * * *

542) The equal protection clause would indeed be a

formula of empty words if such conspicuously artificial

lines (as the legislature drew in that case) could be

drawn.’’

In order to meet the requirements of this constitutional

provision the classifications, inequalities and discrimina-

tions created by legislation must bear some recognizable,

reasonable and logical relationship to the objects and pur-

poses of the law.

The purposes of the Illinois Unemployment Compensa-

tion Law are clearly expressed in the ‘‘declaration of

policy’’ set forth in Section 1 as a guide to its interpreta-

tion and application (Appendix p. 38). They are to lessen

the serious menace to the welfare of our people from eco-

nomic insecurity due to involuntary unemployment and to

encourage stabilization of employment. The purpose of the

‘‘war risk amendments”’ and the evils sought to be remedied

thereby are stated in the Illinois Supreme Court opinion

herein as follows (Appendix pp. 41-42) :

‘‘These war expanded employers under the experience

rating plan are being assigned reduced rates of contri-

butions which reduced rates of contribution were

earned on the basis of the three prior years of experi-

ence which included both non-war and war production

and represented much smaller pay rolls. The result

is that these war expanded employers during this

period would pay contributions at these reduced rates

on increased pay rolls and would thus not bear a fai? .

share of the potential past-war burden, Clearly, when

these employers contribute at reduced rates they

cannot contribute an amount sufficient to take care of

the potential liability created by their workers em

ployed in these war expanded industries, who are ac-

quiring benefit rights which are many times greater

than the contributions which are being or will be paid

on their wages. Moreover, even if these employers

are assigned higher rates under the experience rating

plan in the post-war period, such higher rates on re-

duced pay rolls will not result in a sufficient yield of

contributions to meet the benefits paid to the workers

laid off by these employers.’’ (Emphasis ours.)

The opinion further elucidates the legislative intent in

enacting ‘‘war risk amendments’”’ in the following (Appen-

dix, p. 54):

‘*‘Under the amendments, the determining factor as

to whether an employer shall pay his experience vari-

able rate on his entire pay roll or whether that rate

shall be applied only to the wages paid which are not

in excess over $100,000, and a higher rate on the excess

over $100,000, is based upon a comparison of the wages

paid during the next preceding calendar year with the

wages paid during the calendar year 1940. It is obvi-

ous that the calendar year 1940 was selected as the basic

year for comparison with the wages paid im future

years because it was asswmed that the calendar year

1940 was a normal year, uninfluenced by wartime con-

ditions.’’ (Emphasis ours.)

(Appendix, p. 57):

‘*Obviously, the greater the wartime expansion of the

pay rolls, the greater the potential liability for the

payment of unemployment compensation during the

post-war period when there will be the greatest drain

on the unemployment compensation fund. There is,

therefore, a direct relation between war-expanded pay

rolls and the potential liability which will be meurred

as a result of war-time increase in employment.’’ (Em-

phasis ours.)

This analysis of the law and its purposes by the Illinois

Supreme Court makes it apparent that the arbitrary exemp-

tion of the first $100,000 of the 1944 payrolls of employers

given war risk rates, because of the disproportionately

large expansion of their payrolls between 1940 and 1943,

renders unconstitutional these statutory provisions. The

record is not only entirely barren of any support for an

inference that this arbitrary limitation of $100,000 has any

reasonable or logical relationship whatever to the purposes

either of the original Act or of the ‘‘ war risk amendments,”’

but actually supports the contrary inference.

The example at pp. 10-11, supra, of the wholly arbitrary

discriminatory treatment of hypothetical Employer A and

hypothetical Employer B, whereby Employer A with a

payroll expansion of 10 to 1 enjoys more favorable treat-

ment than Employer B with a payroll expansion of only

3 to 1 (such inequalities being the inevitable result of the

$100,000 provision) demonstrates that the law operates

exactly contrary to its purposes and objectives. According

to the Illinois Supreme Court, the greater the wartime

expansion of payrolls the greater the potential liability

for the payment of unemployment compensation during the

post-war period and there is a direct relation between war

expanded payrolls and the potential liability which will be

incurred as a result of wartime increase in employment.

Consequently, an employer with a payroll expansion of

1000% would suffer severer (not more favorable) treatment

than an employer with a payroll expansion of only 150%,

if the classifications created by the law bore any logical

relationship to its objects and purposes.

A multiplication of examples should not be necessary to

demonstrate the wholly arbitrary character of the $100,000

yardstick and the unconstitutional inequalities and discrim-

inations resulting from its operations. According to the

Supreme Court, 1940 was selected as the year for compari-

son upon the assumption that that was a normal year un-

influenced by wartime conditions. The Commissioner of

Placement and Unemployment Compensation of the Illinois

Department of Labor presented to the Illinois Senate Com-

mittee on Industrial Affairs, to which the bill embodying

the ‘‘war risk amendments’’ had been referred, a ‘‘compar-

ative payroll analysis of selected expanded employers.”’

It makes crystal clear the absence of any relationship be-

tween $100,000 and 1940 payrolls of Illinois employers

(Add. Abst., p. 19). That analysis, containing 1940 and

1942 payrolls of 32 Illinois employers, shows payrolls ex-

panding from $109.00 in 1940 to in excess of $391,000 in 1942

and from in excess of $390,000 in 1940 to in excess of

$17,000,000 in 1942, with many variations in between. All

demonstrate the absence of any relationship whatever be-

tween $100,000 and either 1940 payrolls or the expansion

thereof in subsequent years.

No inequality or discrimination dealt with by the United

States Supreme Court in Carmichael v. Southern Coal &

Coke Co., 301 U. 8. 495 bears even a remote analogy to the

unconstitutional discriminations and inequalities produced

by this provision of the ‘‘war risk amendments.’’

We regard it significant that both Oklahoma and Iowa

gave full recognition to the principle for which we contend

at this point in enacting their ‘‘war risk amendments.’’

They took no arbitrary dollar figure (such as $100,000) as

the dividing line in the current year’s payroll between the

portion to which the employer’s variable rate based on bene-

fit experience was applicable and the portion to which his

war risk rate was to be applied. They used the ‘‘normal

year’s”’ payroll for this purpose and thereby avoided the

denial of equal protection of the laws which renders the

Illinois ‘‘war risk amendments’’ unconstitutional.

The Iowa law subjects to the war risk rate only ‘‘the

excess of payroll of the employer over his payroll for 1940’’

and gives him the benefit of his variable rate based upon

benefit experience with respect to that portion of his pay-

roll ‘‘equal to his payroll for 1940.’ (Section 1551.13(c),

Ch. 77.2 of Iowa Code of 1939, as amended.)

The Oklahoma law imposes a war risk rate of 2.7% ‘‘for

any portion of his annual taxable payroll in excess of 300%

of whichever is the lesser of his actual taxable payrolls for

the three calendar years immediately preceding the current

year’’ and gives the employer subject to this war risk rate

the benefit of his variable rate on that portion of his payroll

for the current year below such amount. (Title 40, Ch. 6,

Sections 217(c), Okla. Statutes 1941, as amended by H. B.

205, Laws 1943 approved and effective March 26, 1943 and

by H. B. 323, Laws 1943, approved and effective April 12,

1943.)

The Order from Which the Appeal Is Prayed Does Not Rest

on an Independent State Ground

Section 18(c)(7)(C) (Appendix, p. 35) provides:

‘The Director shall promptly notify each employer of

his rate of contributions for each calendar year as

determined pursuant to this Section, by mailing notice

thereof to his last known address. Such rate determi-

nation shall be final and conclusive upon the employer

for all purposes and in all proceedings whatsoever, un-

less within 15 days after mailing of notice thereof, the

employer files with the Director an application for

review of such rate determination, setting forth his

reasons in support thereof.’’ (Emphasis ours.)

None of the appellants filed applications for review with

the Director of Labor under said statutory provision. The

rate determinations complained of by appellants were made

pursuant to the ‘‘war risk amendments.’’ Appellants have

always contended that the ‘‘war risk amendments’’ were

no part of the Act or Section 18 thereof, because of their

repeal and unconstitutionality and, therefore, that rate

determinations made pursuant to them were void. They

relied upon the decisions of the Illinois Supreme Court in

Department of Finance v. Gold, 369 Til. 427, and the line

of cases of which a recent one is Owens Illinois Glass Co.

v. McKibben, 385 Ill. 245 (1944), in support of the well

established principle of Illinois law that a person attacking

administrative action as void is not required to exhaust ad-

ministrative remedies as a condition precedent to judicial

relief. They also pointed out that the statutory provision

itself made ‘‘ final and cenclusive’’ only rate determinations

made ‘‘pursuant’’ to Section 18 and that, if the ‘‘war risk

amendments”’ were invalid either because repealed or un-

constitutional, rate determinations pursuant to them were

obviously not pursuant to that section; and, consequently,

they did not come within the scope of its language making

‘‘such’’ rate determinations ‘‘final and conclusive upon the

employer.’’

In the concluding paragraphs of its opinion rendered

January 17, 1945, beginning with the fifth paragraph from

the end of the opinion (Appendix, pp. 57-58), the Illinois Su-

preme Court appeared to hold, in spite of the fact that it

had decided the issues of repeal and unconstitutionality on

the merits, that the failure of appellants to pursue the ad-

ministrative remedy deprived them of the right to question

in these proceedings the validity of the rate determinations

upon the ground of the invalidity of the ‘‘war risk amend-

ments’’ pursuant to which they were admittedly made.

In their petition for rehearing appellants pointed out the

ambiguity created by the opinion in this respect and the

possible handicap to appellants in seeking review in the

United States Supreme Court which might result there-

from. Appellants requested that, even though a rehearing

were denied, this portion of the opinion be modified by add-

ing clarifying language to show that the decision of the

Federal question was necessary to the decision rendered.

Appellants set forth in their petition for rehearing at p. 8

the verbatim modification which they desired made in the

opinion theretofore rendered to clarify this holding. The

modification which the Supreme Court of Illinois made in

its opinion at the same time that it denied the petition

for rehearing was by adopting verbatim the additions to

the sixth and third paragraphs from the end of the opinion

requested by appellants to accomplish this clarification.

Appendix (pp. 58-60) contains these paragraphs at the end

of the opinion, showing in italics the additions, which were

the only modifications made. They will be found upon

comparison to be identical with those requested at p. 8 of

the petition for rehearing.

By such clarification the Supreme Court of Illinois made

manifest its intention to rest its order of affirmance upon a

holding, of which its decision that the ‘‘war risk amend-

ments’’ are not repugnant to the ‘‘equal protection clause’’

of the 14th Amendment is an integral and necessary basis.

In Herb v. Pitcairn, 89 L. Ed. (Adv. Ops.) 481, decided

February 5, 1945 (Case No. 24 at the 1944 Term), the Unitea

States Supreme Court sent back to the Supreme Court of

the State of Illinois the proceeding there involved, in order

to have the Illinois Supreme Court clarify its opinion in

order to show ‘‘ whether it has intended to rest the judgment

herein on an adequate and independent State ground or

whether decision of the Federal question was necessary to

the judgment rendered.’’ By its action in modifying its

opinion in compliance with the request of appellants in

their petition for rehearing, the Illinois Supreme Court in

this case has already demonstrated its intention to make

decision of the Federal question necessary to the judgment

rendered.

Cases Believed to Sustain Jurisdiction

Liggett Co. v. Lee, 288 U. 8. 517 (1933) ;

Stewart Drygoods Co. v. Lewis, 294 U. 8. 550 (1935) ;

A. €8.F.R. R. Co. v. Vosburg, 238 U. 8. 56 (1915) ;

Southern Ry. Co. v. Va., 290 U. S. 190 (1933) ;

Nashville, C. & St. L. R. R. Co. v. Walters, 294 U. S.

405 (1935) ;

Hartford Steam Boiler Inspection & Ins. Co. v. Harri-

son, 301 U. 8. 459 (1937) ;

Wichita R. R. & Light Co. v. Public Utilities Comm.,

260 U. 8. 48 (1922);

Herb v. Pitcairn, 89 L. Ed. (Adv. Ops.) 481 (1945).

Conclusion

We respectfully submit that the United States Supreme

Court has jurisdiction of this appeal and that substantial

Federal questions are presented.

Respectfully submitted,

Water H. Moszs,

Watter Bacuraca,

Attorneys for Appellants,

231 South LaSalle Street,

Chicago 4, Illinois,

APPENDIX “A”

Section 18. Payment of Contributions.) (a) (1) On and

after July 1, 1937, contributions shall accrue and become

yable by each employer for each calendar year in which he

is subject to this Act, with respect to wages payable for

employment occurring during the six months’ period be-

ginning July 1, 1937, and the calendar years 1938, 1939 and

1940. For the year 1941 and for each calendar year there-

after, contributions shall accrue and become payable by

each employer, at the rate hereinafter prescribed, upon the

wages paid with respect to employment after December 31,

1940. Such contributions shall become due and shall be paid

quarterly on or before the last day of the month next fol-

lowing the calendar quarter for which such contributions

have accrued; except that any employer who is delinquent

in filing a contribution report or in paying his contributions

for any calendar quarter may, at the discretion of the Di-

rector, be required to report and to pay contributions on a

calendar month basis. Such contributions shall not be de-

ducted in whole or in part, from the wages of individuals in

such employers’ employ. If the Director shall find that the

collection of any contributions will be jeopardized by delay

he may declare the same to be immediately due and payable.

(2) In the payment of any contributions, interest or

penalties, a fractional part of a cent shall be disregarded

unless it amounts to one-half cent or more, in which case it

shall be increased to one cent.

(3) Interest. Any employer who shall fail to pay any con-

tributions when required of him by the provisions of this

Act and the Rules and Regulations of the Director, whether

or not the amount thereof has been determined and assessed

by the Director, shall pay to the Director, in addition to

such contribution, interest thereon at the rate of one per

cent (1%) per month and one-thirtieth (1/30) of one per

cent (1%) for each day or fraction thereof computed from

the day upon which said contribution became due.

(4) Penalties. Any employer who shall fail to file a re-

port of wages paid to each of his workers for any period in

the manner and within the time required by the provisions

of this Act and the Rules and Regulations of the Director,

or if the Director shall pursuant to such regulations extend

the time for filing such report shall fail to file such report

within such extended time, shall, in addition to any sum

otherwise payable by him under the provisions of this Act,

pay to the Director as a penalty a sum equal to 2 per cent

of the contributions payable by such employer for such

period, for each month or part thereof of such failure to file

such report, provided that such penalties shall not exceed 10

per cent of the amount of such contributions.

If the Director shall deem any report of wages paid to

each of the workers of any employer insufficient, he shall

notify such employer to file a sufficient report. If such

employer shall fail to file such sufficient report within 30

days after the mailing of such notice to him, he shall, in ad-

dition to any sum otherwise payable by him under the pro-

visions of this Act, pay to the Director as a penalty a sum

equal to 2 per cent of the contributions for such period,

unpaid by him at the time of the mailing of such notice, for

each month or part thereof of such failure to file such suffi-

cient report, provided that such penalties shall not exceed

10 per cent of the amount of such contribution.

If any employer shall willfully fail to pay any contribu-

tion or part thereof when required by the provisions of this

Act and the Rules and Regulations of the Director, with

intent to defraud the Director, then such employer shall in

addition to such contribution or part thereof pay to the

Director a penalty equal to 50 per cent of the amount of such

contribution or part thereof, as the case may be.

(b) Rate of Contribution. Each employer shall pay con-

tributions equal to the following percentages of wages paid

or payable (as hereinafter set forth) with respect to

employment :

(1) Three and six-tenths per centum with respect to

wages payable for employment for the six months’ period

beginning July 1, 1937: Provided, that if the total of such

contributions at such three and six-tenths per centum rate

equals less than one and eight-tenths per centum of the

total wages payable by any employer with respect to em-

ployment during the calendar year 1937, such employers

shall pay, not later than January 31, 1938, an additional

lump sum contribution with respect to employment for

such six months’ period beginning July 1, 1937, equal to

the difference between one and eight-tenths per centum

of such total wages for the calendar year 1937 and the

total of his contributions at such three and six-tenths per

centum rate for such six months’ period beginning July 1,

1937, and provided further that in no event shall the con-

tribution required from any employer with respect to em-

ployment during the six months’ period beginning July 1,

1937, exceed one and eight-tenths per centum of the wages

payable by him with respect to employment during the

calendar year 1937.

(2) Two and seven-tenths per centum with respect to

wages payable for employment during the calendar years

1938, 1939, and 1940.

(3) Two and seven-tenths per centum with respect to

wages paid during the calendar year 1941 and each

calendar year thereafter, with respect to employment after

December 31, 1940, except as may be otherwise provided in

subsection (c) of this Section.

in this Act shall be construed to grant any employer or

individuals in his service prior claims or rights to the

amounts paid by him either on his own behalf or on behalf

of such individuals.

For the calendar year 1943 the contribution rate of each

employer who has incurred liability for the payment of

contributions under this Act within each of the calendar

years 1938, 1939, 1940 and 1941; and for the calendar year

1944 and each calendar year thereafter, the contribution

rate of each employer who has incurred liability for the

payment of contributions under this Act within each of the

five calendar years immediately preceding the calendar

year for which a rate is being determined, shall be deter-

mined as hereinafter provided. The contribution rate of

all other employers shall be 2.7%.

(1) (A) Prior to July 1, 1941, when a worker is paid

benefits for the second compensable week of unemployment,

with respect to any benefit year his wages during his base

period shall immediately become benefit wages.

(B) On and after July 1, 1941 (and except as is otherwize

provided in this section), when a worker is paid benefits

which, when added to benefits previously paid for the same

benefit year, equal or exceed three times his weekly bene-

fit amount for that benefit year, his wages during his base

period shall immediately become benefit wages.

reconsideration by a deputy of his finding, the amount of

such increase shall be treated as if it became benefit wages

on the day on which such deputy made such reconsidered

finding.

(2) An employer’s benefit wages shall be the wages

earned from or paid by him, as the case may be, which

became benefit wages. For purposes of this subsection an

employer’s benefit wages with respect to any one worker

shall include only the first $1,024 of wages in any base

period prior to the base period 1941; and with respect to

the base period 1941 and each base period thereafter, an

employer’s benefit wages with respect to any one worker

shall include only the first $1,375 of wages in such base

period.

(3) (A) In the determination of contributicn rates for

the calendar year 1943, the benefit wage ratio of each em-

ployer shall be a percentage equal to the total of his bene-

fit wages for the three most recently completed calendar

years, divided by his total wages for insured work for the

same three years on which contributions were paid to the

Director on or before January 31, 1943.

(B) In the determination of contribution rates for the

calendar year 1944 and for each calendar year thereafter

the benefit wage ratio of each employer shall be a percent-

age equal to the total of his benefit wages for the 36 con-

secutive calendar month period ending June 30 of the cal-

endar year immediately preceding the calendar year for

which a rate is being determined divided by his total wages

for insured work for the same period on which contribu-

tions were paid to the Director on or before July 31 imme-

diately following such June 30.

(4) (A) In the determination of contribution rates for the

calendar year 1943 the total benefits paid from this State’s

account in the unemployment trust fund during the three

most recently completed calendar years shall be termed

the loss experience. The loss experience less all repay-

ments to this State’s account in the unemployment trust

fund during the three most recently completed calendar

years divided by the total benefit wages of all employers

for the same three completed calendar years, after adjust-

ment of any fraction to the next higher multiple of one per

cent, shall be termed the state experience factor.

(B) In the determination of contribution rates for the

calendar year 1944 and for each calendar year thereafter

the total benefits paid from this State’s account in the un-

employment trust fund during the 36 consecutive calendar

month period ending June 30 of the calendar year imme-

diately preceding the calendar year for which a rate is

being determined shall be termed the loss experience. The

loss experience less all repayments to this State’s account

in the unemployment trust fund during the same 36 consecu-

tive calendar month period divided by the total benefit

wages of all employers for the same period, after adjust-

ment of any fraction to the next higher multiple of one per

cent, shall be termed the state experience factor.

each calendar year by the Director. In the determination

of the state experience factor for the calendar year 1943 any

change in the benefit wages of any employer after December

31, 1942, shall not affect the state experience factor as de-

termined by the Director. In the determination of the state

experience factor for the calendar year 1944 and for each

calendar year thereafter any change in the benefit wages

of any employer after June 30 of the calendar year im-

mediately preceding the calendar year for which the state

experience factor is being determined shall not affect the

state experience factor as determined by the Director.

(5) (A) The contribution rate for each employer shall

be the percentage at the head of the lowest numbered column

in the following table, in which on the same line as the

current state experience factor, there appears a percentage

equal to or in excess of such employer’s benefit wage ratio.

If no percentage equal to or in excess of such employer’s

benefit wage ratio appears on said line, then such employ-

er’s contribution rate shall be three and six-tenths (3.6)

per centum.

TABLE

’ ; ’ 6

5% 1.0% 1.5% 2.0% 2.5% 3.0%

1% 50% 100% 150% 200% 250% 300%

2 25 50 75 100 1 150

3 17 33 50 66 83 100

4 13 25 38 50 63 75

5 10 20 30 40 50 60

6 8 17 25 34 42 50

7 7 14 21 29 36 43

8 6 13 19 25 31 38

9 6 11 16 22 28 33

10 5 10 15 20 25 30

11 5 9 14 18 23 27

12 4 8 13 17 21 25

13 4 8 12 15 19 23

14 4 7 11 14 18 21

15 3 7 10 13 17 20

16 3 6 9 12 16 19

17 3 6 9 12 15 18

18 3 6 8 11 14 17

19 3 5 8 11 13 16

20 3 5 8 10 13 15

21 2 5 7 10 12 14

22 2 5 7 9 1l 14

23 2 4 7 9 1l 13

24 2 4 6 8 10 12

25 2 4 6 8 10 12

26 2 4 6 8 10 12

27 2 7 6 7 9 11

28 2 4 5 7 9 11

29 2 3 5 7 9 10

30 2 3 5 7 8 10

31 2 3 5 6 8 10

32 2 3 5 6 8 9

33 2 3 5° 6 8 9

34 1 3 4 6 7 9

35 1 3 4 6 7 9

The contribution rate of each employer for whom no

wages became benefit wages during the period under con-

sideration and who paid no contributions upon wages for

insured work during such period prior to the date specified

in Section 18 (c) (3) shall be 2.7%. The contribution rate

of each employer for whom wages became benefit wages

during the period under consideration but who paid no con-

tributions on wages for insured work during such period

prior to the dates specified in Section 18 (c) (3) shall be

3.6%.

(B) Any provision of this section to the contrary not-

withstanding :

Each employer who has paid wages for insured work in

the calendar year 1942 which exceeded by 150 per cent or

more the wages for insured work payable by such employer

in the calendar year 1940, shall pay contributions on wages

paid for insured work in the last six months of the calendar

year 1943 at the rate determined by the Director pursuant

to the other provisions of this section for the calendar

year 1943 if such rate is 2.7 per cent or more; if such rate is

less than 2.7 per cent, then such employer shall pay con-

tributions on wages paid by him for insured work in the

last six months of the calendar year 1943 up to and including

$50,000 at the rate determined by the Director for the cal-

endar year 1943 pursuant to the other provisions of this

section and at the rate of 2.7 per cent on all wages for in-

sured work in excess of $50,000 paid in such period.

Each employer who has paid wages for insured work in

the calendar year 1942 which exceeded by more than 100

per cent, but less than 150 per cent, the wages for insured

work payable by such employer for the calendar year 1940

shall pay contributions on wages paid for insured work in

the last six months of the calendar year 1943 at the rate

determined by the Director pursuant to the other provisions

of this section for the calendar year 1943 if such rate is

2 per cent or more; if such rate is less than 2 per cent, then

such employer shall pay contributions on wages paid by him

for insured work in the last six months of the calendar year

1943 up to and including $50,000 at the rate determined by

the Director for the calendar year 1943 pursuant to the other

provisions of this section and at the rate of 2 per cent on

all wages for insured work, in excess of $50,000 paid in such

period.

Each employer who has paid wages for insured work in

the calendar year 1943 which exceeded by 150 per cent or

more the wages for insured work payable by such em-

ployer in the calendar year 1940 shall pay contributions on

wages paid for insured work in the calendar year 1944 at

the rate determined by the Director pursuant to the other

provisions of this section for the calendar year 1944 if

such rate is 2.7 per cent or more; if such rate is less than

2.7 per cent, then such employer shall pay contributions

on wages paid by him for insured work in the calendar

year 1944 up to and including $100,000 at the rate deter-

mined by the Director for the calendar year 1944 pursuant

to the other provisions of this section and at the rate of 2.7

per cent on all wages for insured work in excess of $100,000

paid in such calendar year.

Each employer who has paid wages for insured work in

the calendar year 1943 which exceeded by more than 100 per

cent, but less than 150 per cent, the wages for insured work

payable by such employer in the calendar year 1940, shall

pay contributions on wages paid for insured work in the

calendar year 1944 at the rate determined by the Director

pursuant to the other provisions of this section for the

calendar year 1944 if such rate is 2 per cent or more; if

such rate is less than 2 per cent, then such employer shall

pay contributions on wages paid by him for insured work

in the calendar year 1944 up to and including $100,000 at

the rate determined by the Director for the calendar year

1944 pursuant to the other provisions of this section and

at the rate of 2 per cent on all wages for insured work in

excess of $100,000 paid in such calendar year.

Each employer who has paid wages for insured work in

the calendar year 1944 which exceeded by 150 per cent or

more the wages for insured work payable by such employer

in the calendar year 1940 shall pay contributions on wages

paid for insured work in the calendar year 1945 at the rate

determined by the Director pursuant to the other provisions

of this section for the calendar year 1945 if such rate is 2.7

per cent or more; if such rate is less than 2.7 per cent, then

such employer shall pay contributions on wages paid by

him for insured work in the calendar year 1945 up to and

including $100,000 at the rate determined by the Director

for the calendar year 1945 pursuant to the other provisions

of this section and at the rate of 2.7 per cent on all wages

for insured work in excess of $100,000 paid in such calendar

year.

Each employer who has paid wages for insured work in

the calendar year 1944 which exceeded by more than 100

per cent, but less than 150 per cent, the wages for insured

work payable by such employer in the calendar year 1940,

shall pay contributions on wages paid for insured work in

the calendar year 1945 at the rate determined by the

Director pursuant to the other provisions of this section

for the calendar year 1945 ° if such rate is 2 per cent or

more; if such rate is less than 2 per cent, then such employer

shall pay contributions on wages paid by him for insured

work in the calendar year 1945 up to and including $100,000

at the rate determined by the Director for the calendar year

1945 pursuant to the other provisions of this section and

at the rate of 2 per cent on all wages for insured work in

excess of $100,000 paid in such calendar year.

be deemed to have been paid when requisition has been made

therefor by the Director upon the State Treasurer.

The term ‘‘basic amount’’ means the amount standing to

the credit of this State’s account in the unemployment trust

fund as of the close of the calendar year 1942.

The term ‘‘minimum normal amount’’ means 60% of the

basic amount.

The term ‘‘maximum normal amount’’ means 140% of

the basic amount.

The term ‘‘current amount”’ shall be the amount standing

to the credit of this State’s account in the unemployment

trust fund as of June 30, 1943 and as of June 30 of each

succeeding calendar year thereafter.

For every 4% (or fraction thereof) of the basic amount

by which the current amount falls below the minimum

normal amount, the calculated state experience factor for

the succeeding calendar year shall be increased 1% absolute.

For every 4% (or fraction thereof) of the basic amount

by which the current amount exceeds the maximum normal

amount, the calculated state experience factor for the suc-

ceeding year shall be reduced 1% absolute.

(6) (A) In the determination of contribution rates for

the calendar year 1943 and for each calendar year there-

after, two or more employing units which are parties to or

the subject of a merger, consolidation, or other form of re-

organization effecting a change in legal identity or form

shall be considered and treated as a single employing unit

if the Director finds that (a) immediately after such change

the employing enterprises of the predecessor employing

unit or units are continued solely through a single employ-

ing unit as successor thereto, and (b) immediately after

such change such successor is owned or controlled, directly

or indirectly, by legally enforceable means or otherwise, by

the same interests as the predecessor employing unit or

units itamediately preceding the date of reorganization.

Whenever two or more such reorganizations occur in

succession, all the employing units which are parties to or

the subject of the last reorganization, if any, which took

place prior to January 1, 1943, and all the employing units

which are parties to or the subject of any such successive

reorganization which occurred on or after January 1, 1943,

shall be considered and treated as a single employing unit

for the purposes of determining contribution rates, if the

Director finds that both conditions (a) and (b) above exist

with respect to each reorganization in the series of succes-

sive reorganizations.

(B) For the calendar year in which a reorganization pro-

vided for in the preceding paragraph occurs, the contribu-

tion rate of any such successor employing unit for whom a

rate of contribution has previously been determined for

that calendar year shall continue to be that employer’s con-

tribution rate. The rate of any such successor employing

unit for whom a rate of contribution has not previously

been determined for that calendar year shall be determined

in the following manner:

(i) If there is only one predecessor employer involved

in such reorganization, that predecessor employer’s rate of

contribution for the year in which such reorganization

occurs shall be the rate of the successor employing unit for

the calendar year in which such reorganization occurred ;

(ii) If there are two or more predecessor employing units

involved in such reorganization and all the predecessor em-

ployers have the same contribution rate for the year in

which such reorganization occurs, that contribution rate

shall be the rate of the successor employing unit for the cal-

endar year in which such reorganization occurred ;

(iii) If there are two or more predecessor employing

units inyolved in such reorganization having different con-

tribution rates for the year in which such reorganization oc-

curs, a rate of contribution for the successor employing

unit for the calendar year in which such reorganization oc-

curred, shall be determined as follows: If such reorganiza-

tion occurred prior to January 1, 1944, then for the purpose

of determining such rate for the calendar year 1943 the

benefit wage ratio of the successor employer shall be a per-

centage equal to the total of the benefit wages of all the par-

ties to the reorganization for the three immediately pre-

ceding calendar years divided by the total wages for in-

sured work for the same period of all the employing units

which were parties to the reorganization on which contribu-

tions were paid to the Director on or before January 31, 1943.

If such reorganization occurred on or after January 1, 1944,

then for the purpose of determining such rate for the calen-

dar year in which such reorganization occurred, the benefit

wage ratio of the successor employer shall be a percentage

equal to the total of the benefit wages of all parties to such

reorganization for the 36 consecutive calendar month period

ending June 30 of the calendar year immediately preceding

the date of such reorganization, divided by the total wages

for insured work for the same period, on which contribu-

tions were paid by all the employing units which were par-

ties to such reorganization to the Director on or before

July 31 immediately following the end of such period. In

computing a rate for an employer under the provisions of

this paragraph the State Experience Factor shall be the

one applicable in the determination of contribution rates

for the year in which such reorganization occurred.

(7) (A) The Director shall periodically furnish each em-

ployer with a statement of the wages of his workers or

former workers which became his benefit wages together

with the names of such workers or former workers, and any

such statement in absence of an application for revision

thereof within 30 days from the date of mailing of such

statement to his last known address shall be conclusive and

final upon the employer for all purposes and in all pro-

ceedings whatsoever. Such application for revision shall

be in the form and manner prescribed by regulation of the

Director. If the Director shall deem any application for

revision insufficient, he shall rule such insufficient applica-

tion stricken and shall serve notice of such ruling and the

basis therefor upon the employer. Such ruling shall be final

and conclusive upon the employer unless he shall file a suffi-

cient application for revision within ten days from the date

of service of notice of such ruling. Upon receipt of a suffi-

cient application for revision of such statement within the

time allowed, the Director shall order such application al-

lowed in whole or in part, or shall order that such applica-

tion for revision be denied and shall serve notice upon the

employer of such order. Such order of the Director shall

be final and conclusive at the expiration of ten days from

the date of service of such notice unless the employer shall

have filed with the Director a written protest and a petition

for hearing, specifying his objections thereto. Upon re-

ceipt of such petition within the ten days allowed, the Di-

rector shall fix the time and place for a hearing and shall

notify the employer thereof. At any hearing held as herein

provided, the order of the Director shall be prima facie cor-

rect and the burden shall be upon the protesting employer

to prove that it is incorrect. All of the provisions of See-

tion 25 of this Act applicable to hearings conducted pur-

suant to such section and not inconsistent with the pro-

visions of this subsection shall be applicable to hearings con-

ducted pursuant to this subsection. No employer shall have

the right to object to the benefit wages with respect to any

worker as shown on such statement unless he shall first

show that such benefit wages arose as a result of benefits

paid to such worker in accordance with a finding, recon-

sidered finding, determination or reconsidered determina-

tion pursuant to Section 9 of this Act to which such em-

ployer was a party entitled to notice thereof as provided by

Section 9 of this Act, and shall further show that he was not

notified of such finding, reconsidered finding, determination

or reconsidered determination in accordance with the re-

quirements of Section 9 of this Act. Provided that nothing

herein contained shall abridge the right of any employer at

such hearing to object to such statement of benefit wages

on the ground that it is incorrect by reason of a clerical er-

ror made by the Director or any of his employees. The

employer shall be promptly notified, by mail, of the Di-

rector’s decision. Such decision shall be final and con-

elusive unless review is had within the time and in the man-

ner provided by Section 25 (a) (2) of this Act.

(B) Each rate determination for the calendar year 1943

made as in this Section provided shall be based upon the

benefit wages of each employer for the three preceding cal-

endar years as they appeared upon the records of the Di-

rector on February 25, 1943.

his rate of contributions for each calendar year as deter-

mined pursuant to this Section, by mailing notice thereof to

his last known address. Such rate determination shall be

final and conclusive upon the employer for all purposes and

in all proceedings whatsoever, unless within 15 days after

mailing of notice thereof, the employer files with the Di-

rector an application for review of such rate determina-

tion, setting forth his reasons in support thereof. Such

application for review shall be in the form and manner pre-

scribed by regulation of the Director. If the Director shall

deem any application for review insufficient, he shall rule

such insufficient application stricken and shall serve notice

of such ruling and the basis therefor upon the employer.

Such ruling shall be final and conclusive upon the employer

unless he shall file a sufficient application for review within

ten days from the date of service of notice of such ruling.

Upon receipt of a sufficient application for review within the

time allowed, the Director shall order such application for

review allowed in whole or in part, or shall order that such

application for review be denied, and shall serve notice upon

the employer of such order. Such order of the Director

shall be final and conclusive at the expiration of ten days

from the date of service of such notice unless the employer

shall have filed with the Director a written protest and a

petition for hearing, specifying his objections thereto.

Upon receipt of such petition within the ten days allowed,

the Director shall fix the time and place for a hearing and

shall notify the employer thereof. At any hearing held as

herein provided, the order of the Director shall be prima

facie correct and the burden shall be upon the protesting

employer to prove that it is incorrect. All of the pro-

visions of Section 25 of this Act applicable to hearings con-

ducted pursuant to such Section ‘and not inconsistent with

the provisions of this subsection shall be applicable to hear-

ings conducted pursuant to this subsection. In any such

proceeding the employer shall be barred from questioning

the amount of the benefit wages as shown on any statement

of benefit wages which forms the basis for the computa-

tion of such rate, unless such employer shall prove that he

was not, as heretofore provided, furnished with the state-

ment of benefit wages containing the benefit wages which he

maintains are erroneous. In such event, the employer shall

have the same rights to revision of such statement of benefit

wages in such proceedings as provided in this Section with

reference to revision of statements of benefit wages. Upon

the completion of such hearing the employer shall be

promptly notified by the Director by mail of his decision and

such decision shall be final and conclusive for all purposes

and in all proceedings whatsoever unless review is had

within the time and in the manner provided by Section 25

(a) (2) of this Act.

(D) Whenever service of notice is required by this sub-

section such notice may be given and be complete by de-

positing the same with the United States Mail addressed

to the employer concerned at®his last known address. If

represented by counsel in the proceedings before the Di-

rector then service of notice may be made upon such em-

ployer by mailing same to such counsel.

(d) Study of Experience Rating. The Board of Unem-

ployment Compensation and Free Employment Office Ad-

visors created by Section 6 of ‘‘The Civil Administrative

Code of Illinois,’’ approved March 7, 1917, as amended, is

hereby authorized and directed to study and examine the

present provisions of this Act providing for experience

rating, in order to determine whether the rates of contribu-

tions for the calendar years 1943 and thereafter will oper-

ate to replenish the amount of benefits paid and to determine

the effect of experience rating upon labor and industry in

this State.

The Board shall submit its findings and recommendations

based thereon to the sixty-third General Assembly, includ-

ing, if it is found that the rates for 1943 and thereafter will

not provide for replenishment of benefits paid out, a recom-

mendation of such adjustment of rates as will accomplish

this purpose. The Board may employ such experts and as-

sistants as may be necessary to carry out the provisions of

this subsection. All expenses incurred in the making of this

study, including the preparation and submission of its find-

ings and recommendations, shall be paid in the same man-

ner as is provided for the payment of costs of administra-

tion of this Act.

THE UNEMPLOYMENT COMPENSATION ACT

. Declaration of Public Policy.

. Definitions.

. Election and Termination of Coverage.

. Payment of Benefits.

. Part Time Workers.

. Eligibility for Benefits.

. Ineligibility for Benefits.

. Repealed.

. Filing Claim for Benefits.

10. Powers of Director or Board of Review.

§ 11. Testimony—Immunity.

§ 12. Attendance of Witnesses—Production of Papers—

Depositions.

§ 13. Copies of Proceedings.

aQanNanfr © doe

Je)

§ 14. Review by the Courts.

§ 15. Wages and Compensation of Attorneys.

§ 16. Waiver Agreement Void.

§ 17. Assignment of Benefits—Exemption.

§ 18. Payment of Contributions.

§ 18a. Repealed.

. Agreement to Contributions by Employees Void.

. Duties and Powers of the Director.

. Cooperation with Social Security Board.

. Records and Reports—-Disclosure of Information.

. Handling of Funds—Bond—Accounts.

. Unemployment Com pensation Administration

Costs.

Determination and Assessment of Contributions by

the Director—and Collection Thereof—Refunds.

4. Evidence and Procedure.

Lien Upon Assets of Employer.

%. Liability for Payment of Employer’s Delinquent

Contributions by Others.

State-Federal Cooperation.

Reciprocal Benefit Arrangements.

. Violations and Penalties.

. Moneys and Increments to be Sole Source of Bene-

fits Under Act—Non Liability of State.

. Separability of Provisions.

. Saving Clause.

. Title of Act.

SSS SB8R8N SSR & SSRESS:

An Act in relation to a system of unemployment compen-

sation.

Be it enacted by the People of the State of Illinois, rep-

resented in the General Assembly:

Section 1. Declaration of Public Policy.) As a guide to

the interpretation and application of this Act the public

policy of the State is declared as follows: Economic inse-

curity due to involuntary unemployment has become a seri-

ous menace to the health, safety, morals and welfare of

the people of the State of Illinois. In voluntary unemploy-

ment is, therefore, a subject of general interest and concern

which requires appropriate action by the legislature to pre-

vent its spread and to lighten its burden which now so often

falls with crushing force upon the unemployed worker

and his family. Poverty, distress and suffering have pre-

vailed throughout the State because funds have not been

accumulated in times of plentiful opportunities for em-

ployment for the support of unemployed workers and their

families during periods of unemployment, and the tax-

payers have been unfairly burdened with the cost of sup-

porting able-bodied workers who are unable to secure em-

ployment. Farmers and rural communities particularly

are unjustly burdened with increased taxation for the sup-

port of industrial workers at the very time when agricul-

tural incomes are reduced by lack of purchasing power in the

urban markets. It is the considered judgment of the Gen-

eral Assembly that in order to lessen the menace to the

health, safety and morals of the people of Illinois, and to

encourage stabilization of employment, compulsory unem-

ployment compensation upon a statewide scale providing

for the setting aside of reserves during periods of employ-

ment to be used to pay benefits during periods of unemploy-

ment, is necessary.

APPENDIX ‘‘B’’

S. Buchsbaum & Co.

Opinion Rendered January 17, 1945

Docket No. 28416—Agenda 60—November, 1944

S. Bucuspaum & Co., et aL., Appellants,

Roserr L. Gorvon, Director of Labor, Appellee

Mr. Justice Smith delivered the opinion of the Court:

This cause originated in a claim for refund or credit, filed

with the Director of the Department of Labor, under sec-

tion 25(d) of the Unemployment Compensation Act. The

claim was filed by S. Buchsbaum & Co. The Director de-

nied a refund and dismissed the claim. The claimant re-

moved the cause to the circuit court of Cook county by

certiorari. In the circuit court, thirteen mandamus suits,

brought by various employers against the Director, were

consolidated with the certiorari case. The petitions for

mandamus in each prayed for a writ ordering the Director

of Labor to expunge from his records, kept pursuant to

the Unemployment Compensation Act, the entry fixing the

contribution rate determined for each petitioner for the

calendar year 1944. The circuit court, upon a hearing, con-

firmed the action of the Director disallowing the claim for

credit or refund, and quashed the writ of certiorari. In the

mandamus cases, the motions of the Director to strike were

sustained, and the petitions were dismissed. This appeal

seeks a review of all of those orders.

In all of the cases, the issue was raised as to whether sec-

tion 18(c)(5)(B) of the Unemployment Compensation Act,

as amended in 1943, constitutes any part of the law of Illi-

nois. It is contended that said section of the Unemploy-

ment compensation Act, as amended in 1943, was re-

pealed by the subsequent passage of another amendment

to the same section, at the same session. It is also con-

tended that said section violates various provisions of the

constitution of the State and of the United States. In this

opinion, S. Buchsbaum & Co. and the thirteen petitioners

in the mandamus cases will be referred to, collectively, as

appellants.

The Unemployment Compensation Act, originally enacted

in 1937, creates a fund administered by the Director of

Labor, available for the payment of unemployment com-

pensation. This fund is maintained by the payment of con-

tributions by employers subject to the act. The portion of

the act dealing with the rates and payment of contributions

by employers is section 18. Originally, section 18 im-

posed an arbitrary statutory rate of 2.7 per cent on the

wages paid by each employer subject to the act. There-

after, section 18 was amended so as to provide that the

Director should determine the rate of contributions for all

employers, based upon their employment experience and

upon the employment experience in the State at large. The

formula for computing and fixing the variable experience

rates of contribution of employers for each year was set

out in section 18(c).

In 1941, the legislature, obviously recognizing the need

of a study of the provisions of the act relative to experience

rating, enacted section 18(d) of the Unemployment Com-

pensation Act. (Ill. Rev. Stat. 1941, chap. 48, par 234.) By

this act, the Board of Unemployment Compensation and the

Free Employment Office Advisors, created by section 6 of

the Civil Administrative Code, were authorized and di-

rected to study and examine the provisions of the Unem-

ployment Compensation Act providing for experience

rating, in order to determine whether the rates of contribu-

tions for the calendar year 1943, and each year thereafter,

would be sufficient to replenish the amount of benefits paid

out, and to determine the effect of experience rating upon

labor and industry. They were directed to submit their find-

ings and recommendations, based on such findings, to the

sixty-third General Assembly. Such investigation was con-

ducted and findings made. A report was transmitted to the

Governor and to both Houses of the General Asembly on

April 27, 1943. As a basis for determining the purpose of

the amendments hereinafter considered, and the evils sought

to be remedied, a quotation from that report is pertinent :

“These war expanded employers under the experience

rating plan are being assigned reduced-rates of contributions

which reduced rates of contribution were earned on the

basis of the three prior years of experience which included

both non-war and war production and represented much

smaller pay rolls. The result is that these war expanded

employers during this period would pay contributions at

these reduced rates on increased pay rolls and would thus

not bear a fair share of the potential post-war burden.

Clearly, when these employers contribute at reduced rates

they cannot contribute an amount sufficient to take care of

the potential liability created by their workers em-

ployed in these war-expanded industries, who are acquir-

ing benefit rights which are many times greater than the

contributions which are being or will be paid on their wages.

Moreover, even if these employers are assigned higher

rates under the experience rating plan in the post-war

period, such higher rates on reduced pay rolls will not

result in a sufficient yield of contributions to meet the bene-

fits paid to the workers laid off by these employers.”’

On May 6, 1943, two bills were introduced in the Senate.

These bills were numbered 398 and 399. Senate Bill No.

398 amended section 18, only, of the Unemployment

Compensation Act. Senate Bill No. 399 amended vari-

ous sections of said act, including section 18. The

amendment of section 18, as set out in Senate Bill No.

398, was substantially identical with the amendment of

section 18 made by Senate Bill No. 399, except that section

18, as amended by Senate Bill No. 398 contained what is

referred to in the record and in the briefs as the ‘‘ War Risk

Amendments.’’ Said amendments will be hereinafter so

designated and referred to in this opinion. By these

amendments, it was provided that ‘‘(B) Any provisions

of this section to the contrary notwithstanding,’’ certain

war risk rates were to be paid for the last six months of the

calendar year 1943, applicable to wages paid in excess of

$50,000, and for the calendar years 1944 and 1945, appli-

cable to wages paid in excess of $100,000 by certain em-

ployers subject to the act.

Treating the War Risk Amendments as a part of section

18, the Director made contribution rate determinations for

appellants for the year 1944, in accordance with those

amendments. With respect to S. Buchsbaum & Co., and all

of the petitioners in the mandamus suits, except four, he

determined in each case a rate based upon benefit experience

ranging between .5 per cent and 1.5 per cent, applicable to

wages paid during 1944, not in excess of $100,000, and an

additional rate of 2.7 per cent applicable to wages paid

during the year 1944, in excess of $100,000. The record

shows that the pay roll of each had increased, in the calen-

dar year 1943, more than 150 per cent over their respective

pay rolls for the calendar year 1940. As to the petitioners

in the mandamus suits, not included in the above computa-

tion, the Director fixed their rates at .5 per cent applicable

to the first $100,000 of wages paid during the year 1944,

and an additional rate of 2 per cent, applicable to wages

paid in excess of $100,000. The record shows that the pay

roll of each of these petitioners increased in the calendar

year 1943, more than 100 per cent but less than 150 per cent

over their respective pay rolls for the calendar year 1940.

The computations made by the Director are not questioned

as to their mathematical accuracy. Nor is there any ques-

tion raised that such computations were made in accordance

with the War Risk Amendments of section 18 of the Unem-

ployment Compensation Act, as amended by Senate Bill No.

398, The sole question presented on this branch of the

case is whether section 18, as amended by Senate Bill No.

398, was repealed by the passage of Senate Bill No. 399

later on the same day. The legislative history of Senate

Bills Nos. 398 and 399 is as follows:

As already observed, the two bills were introduced on

the same day. Senate Bill No. 398 was passed by the Sen-

ate without amendment, on June 16, 1943. It was passed

by the House without amendment, during the morning ses-

sion of June 24, 1943. Senate Bill No. 399 was passed by

the Senate on June 9, 1943. It was amended in the House,

and as amended, passed by the House during the morning

of June 24, 1943, immediately preceding the passage of

Senate Bill No. 398. It was then returned to the Senate

for concurrence in the House amendment. The House

amendment to Senate Bill No. 399 was concurred in by the

Senate on the evening of June 24, 1948. Both bills were

approved by the Governor on June 30, 1943.

It is the contention of appellants that the effect of the

concurrence by the Senate, in the House amendment to

Senate Bill No. 399, being later in point of time, repealed

section 18, as amended by Senate Bill No. 398, which was

finally passed by the House earlier on the same day.

The rule as to the effect of the passage of different amend-

ments to the same statute at the same session of the legis-

lature is well defined. The rule is that if the two amend-

ments are so inconsistent that both cannot operate and be

given effect, the later amendment in point of time controls.

In the case of People ex rel. Heaton v. Illinois Central

Railroad Co., 295 Til. 408, this Court considered two amend-

ments to section 112 of the Roads and Bridges Act, relat-

ing to the rate at which taxes could be levied. The section

was twice amended at the same session of the General As-

sembly. Each amendment provided a different rate. It

was held that the two acts, being inconsistent, could not both

operate or be given effect, and the amendment passed later,

in point of time, repealed by implication the amendment

passed earlier in point of time. It was there said: ‘‘Two

acts that are passed at the same session of the legislature

are not to be construed as inconsistent if it is possible to

construe them otherwise, but where it is impossible to give

effect to both acts the latest in point of time will prevail.’’

The same question was presented in People ex rel. Hines

v. Baltimore and Ohio Southwestern Railroad Co., 366 Ill.

318. In that case, section 25 of the Counties Act, fixing the

rate at which taxes could be levied, was amended three times

during the same session of the General Assembly. Each

amendment fixed a different rate. It was held that the last

act passed, being the latest expression of the legislature,

was the one which must be given effect, and that the two

earlier amendments were repealed by implication. It was

there said ; ‘‘It is a general rule that where an act, or section

of an act, is amended so as to read as it is repeated in the

amendatory act, all such portions of the old act or section

as are not repeated in the new act are repealed without any

express words for that purpose, but all such portions of the

old law as are retained, either literally or substantially, are

regarded as a continuation of the old law and not as a new

enactment.’’

It is equally well settled that amendments are to be con-

strued together and with the original act to which they

relate as constituting one law and as a part of a coherent

system of legislation. (City of Altamont v. Baltimore and

Ohio Railroad Co., 348 Ill. 339; People ex rel. Adams v.

New York, Chicago and St. Louis Railroad Co., 316 Ill. 452;

Spiehs v. Insull, 278 Til. 184.) The statement in Klemme v.

Drainage Dist. No. 5, 380 Ill. 221, that a later law which is

merely a re-enactment of a former law does not repeal an

intermediate act which has qualified or limited the first one

but the intermediate act will be deemed to remain in force

and to qualify or modify the new act in the same manner

as it did the first, (on the authority of 25 R. C. L. p. 937,

par. 187,) is subject to the modification that the two acts

are not so inconsistent that both cannot stand and be given

effect. 50 Am. Juris. p. 558, see. 553.

Where acts are passed at the same session, containing

conflicting provisions, the whole record of the legislation

will be examined in order to ascertain the legislative intent

which, if ascertained, must be given effect, regardless of

priority of enactment. (Mette v. Feltgen, 148 Ill. 357.) The

provisions of any statute, so far as they are the same as

those of any prior statute, must be construed as a continu-

ation of such prior provisions and not as a new enactment.

(Ill. Rev. Stat. 1943, chap. 131, par. 2.) It is also the rule

that when the legislature enacts an amendatory statute

providing that a certain act shall be amended so as to read

as repeated in the amendatory act, such portions of the old

law as are repeated in the new act, either literally or sub-

stantially, are to be regarded as a continuation of the old

law and not the enactment of a new law on that subject.

(People v. Lloyd, 304 Ill. 23; Svenson v. Hanson, 289 Ill.

242.) In all cases the primary question is the intention of

the legislature, rather than the technical priority of the

passage of the acts.

The record shows that the War Risk Amendments were

recommended and strongly urged by the Board of Unem-

ployment Compensation and Free Employment Office

Advisors, in their report made to the Governor and to

both Houses of the General Assembiy. In this report,

the amendments were said to be absolutely necessary

to protect the solvency of the unemployment compen-

sation fund during the post-war period of decreasing pay

rolls and increasing claims for compensation payments.

The same facts were forcibly stressed in a statement made

on the hearing on Senate Bill No. 398, before the Senate

Committee on Industrial Affairs, by the Commissioner of

Placement and Unemployment Compensation of the De-

partment of Labor. The report of the Board of Unemploy-

ment Compensation and-Free Employment Office Advisors,

made to the Governor and the General Assembly, after

reviewing the history of the Unemployment Compensation

Act, and the prior amendments thereto, made separate

recommendations as to the War Risk Amendments to sec-

tion 18, and as to certain administrative amendments of

minor importance, contained in Senate Bill No. 399. The

record also shows that certain representatives of the Fed-

eral government were opposing the War Risk Amendments.

Their objection was obviously made because many war

expanded employers were operating under government

contracts on a ‘‘cost plus’’ basis, and any increase in con-

tributions would increase the cost to be ultimately paid by

the Federal government.

The record justifies the conclusion that the reason the

two acts, the one including the War Risk Amendments to

section 18, and the other omitting those amendments, were

introduced at the same time was the fear that the bill con-

taining the War Risk Amendments might be defeated.

Obviously, the purpose ia introducing the two separate bills

was to insure the passage of the administrative amend-

ments to section 18, made by Senate Bill No. 399, regardless

of the result of the final vote on Senate Bill No. 398. In

other words, it was intended to separate the War Risk

Amendments entirely from the noncontroversial adminis-

trative amendments contained in Senate Bill No. 399.

The legislative history shows that the two acts were

treated as companion measures in both Houses of the Gen-

eral Assembly. They were introduced by the same member.

When the bills were introduced in the Senate simultaneously

both were referred to the Committee on Industrial Affairs.

The two bills were reported back by the committee with the

recommendation that both be passed, and they were ordered

to a first reading. On June 3, 1943, on motion, the two bills

were taken up, one immediately after the other, read at

large the first time, and ordered to a second reading. On

June 8, 1943, Senate Bill No. 398 was taken up and read at

large the second time and ordered transcribed and typed for

third reading. Immediately thereafter, Senate Bill No. 399

was taken up and read at large the second time. On second

reading, a slight amendment was made to Senate Bill No.

399, which is wholly unimportant here. It was then ordered

that Senate Bill No. 399 be transcribed and typed for a third

reading. On June 9, 1943, Senate Bill No. 398 was read a

third time and, on motion, its consideration was postponed.

Immediately thereafter, Senate Bill No. 399 was taken up

and read a third time and passed. On June 16, 1943, Senate

Bill No. 398 was passed.

The House Journal shows that on June 15, 1943, Senate

Bill No. 2399 was taken up and ordered to a first reading.

On June 16, the bill was read at large the first time and

ordered to second reading without reference. Shortly

thereafter, and on the same day, Senate Bill No. 398 was

taken up and ordered to a first reading. On June 17, 1943,

Senate Bill No. 399 was read a second time and after an

amendment to section 4 was adopted, increasing the amount

of weekly benefits to workers eligible for compensation,

was ordered to a third reading. Shortly thereafter, on

the same day, Senate Bill No. 398 was taken up and read

for the first time and ordered to a second reading without

reference. On June 22, 1943, Senate Bill No. 399 was placed

on third reading. On the same day, Senate Bill No. 398 was

read the second time and ordered to third reading. On

June 24, 1943, Senate Bill No. 399 was read the third time

and passed. The clerk was ordered to inform the Senate

and ask its concurrence in the House amendment to said

bill. Immediately thereafter, on the same day, Senate Bill

No. 398 was read a third time and passed.

The Journal of the Senate shows that on June 24, 1943,

the Senate concurred in the House amendment to Senate

Bill No. 399. Both bills were thereafter signed by the

speaker of the House and the President of the Senate.

It thus appears that Senate Bill No. 399 was finally

passed by the House on June 24, 1943, immediately preced-

ing the final passage by the House of Senate Bill No. 398.

However, inasmuch as there had been an amendment in the

House to Senate Bill No. 399, it was necessary that that bill

be sent back to the Senate for its concurrence in the House

amendment. This concurrence was given on the same day,

and only a few hours after the passage of Senate Bill No.

398, in the House. The result was that the final action of

the Senate on Senate Bill No. 399, was later in point of time

than the final action of both Houses on Senate Bill No. 398.

The rule that where two conflicting enactments are passed

at the same session, the latest enactment in point of time

will prevail, as well as all other rules of construction deal-

ing with repeals by implication, are mere canons of con-

struction. Such canons are only aids to the ascertainment

of the legislative intent and must yield to such intent if

the same be otherwise. They should never be followed to

the extent of defeating or overriding the definite intent of

the legislature. IJllinois’ Central Railroad Co. v. Franklin

County, 387 Ill. 301.

In view of the legislative history of the two enactments

appearing in the record, the intention to repeal the War

Risk Amendments contained in section 18, as amended by

Senate Bill No. 398, by the final action of the Senate in

concurring in the House amendment to Senate Bill No. 399,

cannot be assumed. The contention that the legislature

intended that the later enactment in point of time should

repeal Senate Bill No. 398, which was finally passed only

a few hours earlier on the same day, cannot be sustained.

The Journals of the two Houses show that the two acts

were considered together. After mature consideration they

were both passed. To assume that it was the intention of

the legislature to repeal Senate Bill No. 398, by the final

action taken in the Senate concurring in the House amend-

ment to Senate Bill No. 399, is to impute to the legislature

an absurdity which is not justified by the record. (Ketcham

v. Board of Education, 324 Ill. 314; People v. Day, 321 Tl.

552; Village of Glencoe v. Hurford, 317 Ill. 203.) That it

was not the intent of the legislature to repeal Senate Bill

No. 398, by the later action of the Senate in concurring in

the House amendment to Senate Bill No. 399, is further

demonstrated by the fact that in both Houses, Senate Bill

No. 398 was passed after the passage of Senate Bill No. 399.

It must, therefore, be assumed that it was the intention of

the legislature that both enactments should be operative

and given effect.

This brings us to the question of whether the two enact-

ments are so inconsistent and irreconcilable that both can

not stand and be given effect. The rule is that when two

statutes pertaining to the same subject matter are passed

at the same session of the legislature, they will both be up-

held unless they are so antagonistic that both cannot oper-

ate. People ex rel. Gill v. Devine Realty Trust, 366 Ill. 418;

People ex rel Reynolds v. Chicago, Burlington and Quincy

Railroad Co. 295 Ill. 191; Hoyne v. Danisch, 264 Ill. 467.

The provisions of section 18 of the Unemployment Com-

pensation Act relative to the variable rates of contributions

to be made by employers, as that act existed prior to any

of the amendments of 1943, provided that for each calendar

year, commencing after December 31, 1942, such contribu-

tion rates should be determined by the Director in accord-

ance with the formula set out in said section 18. The

variable rates provisions of the act first became effective

on January 1, 1943. Section 18, relating to the rates of

contributions by employers, provided that for each calendar

year, commencing after December 31, 1942, the contribution

rate for each employer should be computed in accordance

with the formula set out in that section. The correspond-

ing provisions in section 18, as amended by Senate Bill No.

399, provided the same method and set out the same formula

for fixing the rates for the calendar year 1944 and subse-

quent years. It is, therefore, apparent that it was not the

purpose of Senate Bill No. 399 to make any amendments to

the existing provisions relating to the rates of contribution

as contained in said section prior to any of the 1943 amend-

ments. While it is true that section 18 was set out at length

in the amendment contained in Senate Bill No. 399, this was

necessary in order to comply with the requirements of sec-

tion 13 of article IV of the constitution that the amended

section be inserted at length in the new act. All of the pro-

visions relating to the rates of contribution to be paid, and

the method of ascertaining those rates contained in the act

as it existed prior to the 1943 amendments were substan-

tially repeated in the amendment to section 18 in Senate

Bill No. 399. Those provisions of the existing act which

were repeated, or substantially repeated, in the amend-

ment of section 18 contained in Senate Bill No. 399, must

be regarded as a continuation of such prior provisions and

not as a new enactment. III. Rev. Stat. 1943, chap. 131, par.

eres v. Lloyd, 304 Ill. 223; Svenson v. Hanson, 289 Ill.

Turning to Senate Bill No. 398, which was an amendment

of section 18 only, we find that all of the provisions of sec-

tion 18, as it existed prior to any of the 1943 amendments,

and all of the provisions of the amendment of said section

contained in Senate Bill No. 399, were substantially re-

peated in Senate Bill No. 398. But, there was also in-

serted in Senate Bill No. 398, the War Risk Amendments.

In Senate Bill No. 398, after setting out in substantially

the same language all of the provisions contained in the

existing act relative to the fixing of rates of contribution and

the formula therefor, the War Risk Amendments were in-

serted. Under those amendments it was provided that the

variable rates of contribution, as ascertained according to

the formula set out in that section of the act, should be ap-

plicable to the last six months of 1943, and to the years 1944

and 1945. This, however, was followed by the provision

that ‘‘Any provisions of this section to the contrary not-

withstanding’’ each employer, who has paid wages in the

calendar year 1942 which exceeded by 150 per cent the wages

paid in the calendar year 1940, shall pay contributions on

the wages paid in the last six months of the calendar year

1943 at the variable rate on the first $40,000 and 2.7 per cent

on the excess over $50,000. Those whose payment of wages

in the calendar year 1942 exceeded by more than 100 per

cent but less than 150 per cent the wages paid in the calen-

dar year 1940 were required to pay, for the last six months

of the calendar year 1943, the variable rate fixed by the Di-

rector on the first $50,000 of wages paid, and 2 per cent

on the excess. It is further provided that employers who

paid wages in the calendar year 1943, which exceeded by 150

per cent or more the wages paid for the calendar year 1940,

shall pay contributions on wages paid in the calendar year

1944 at the variable rate determined by the Director under

the formula set forth in the act on the first $100,000 of

wages paid, and 2.7 per cent on wages paid in excess of

$100,000. And, further, that for the calendar year 1944,

where the employer had paid wages in the year 1943 exceed-

ing by more than 100 per cent but less than 150 per cent of

the wages paid in 1940, the rate of contribution should be

the rate determined by the Director in accordance with the

provisions of the formula on the first $100,000 of the pay

roll, and 2 per cent on the excess over $100,000. A like pro-

yision was made with reference to the rates to be paid in

1945, based upon a comparison of the wages paid in 1944 -

with the wages paid in 1940. These are the so-called War

Risk Amendments.

It will thus be seen that section 18, as amended by both

Senate Bill No. 398 and Senate Bill No. 399, provided for

the determination of the variable rate by the Director for

each employer by the same formula and method. This rate

is to be based upon the experience of each employer and

upon the experience in the State at large. The same

formula was set out in the existing act, in Senate Bill No.

398, and in Senate Bill No. 399, for the determination of

such variable rates by the Director. The only difference is

that by the War Risk Amendments contained in Senate Bill

No. 398, the last six months of the year 1943 and the years

1944 and 1945 were excepted from the general provisions

of the act, as to the rate of contributions to be paid by those

employers whose pay rolls had increased in the years 1942,

1943 and 1944, more than 100 per cent over the year 1940.

In other words, those employers whose pay rolls for the

year 1943 had exceeded their pay rolls for the year 1940 by

100 per cent, and not more than 150 per cent, were required

to pay, for the year 1944, the variable rate fixed by the Di-

rector on the first $100,000 of the pay roll, and 2 per cent on

the excess. Those employers whose pay rolls in 1943 ex-

ceeded by 150 per cent or more the wages paid in 1940 were

required to pay the variable rate determined by the Di-

rector on the first $100,000 of the wages paid in the year

1944, and 2.7 per cent on the excess.

For the year 1945, those employers who had paid wages

in the year 1944 in excess of 100 per cent but less than 150

per cent more than the wages paid in 1940 were required

to pay at the variable rate fixed on the first $100,000 of

wages paid in 1945, and 2 per cent on the excess. Those em-

ployers whose pay rolls in 1944 exceeded by 150 per cent or

more the wages paid in 1940 were required to pay, in the

year 1945, the variable rate fixed on the first $100,000 of the

pay roll, and 2.7 per cent on the excess.

The purpose of the War Risk Amendments and the inten-

tion in passing the same, as appears from the record, was to

avoid insolvency of the unemployment compensation fund

‘during the post-war period when pay rolls will normally de-

crease and claims for unemployment compensation increase.

The additional rates were to be imposed upon employers

whose pay rolls had expanded more than 100 per cent due

to war conditions.

It is our conclusion that the two amendments are not so

contradictory or inconsistent that both cannot be given ef-

fect. As already observed, the purpose of Senate Bill No.

399 was to make certain minor amendments and changes in

section 18, which in nowise related to, or disturbed or

changed the provisions contained in the existing act with

reference to the rates of contributions of employers to the

unemployment compensation fund. In compliance with the

constitution, the section amended was set out at length in the

new enactment. Senate Bill No. 398 made the same amend-

ments, but, in addition thereto, also contained the War Risk

Amendments. Under these amendments the rates of con-

tribution fixed under section 18, as it existed prior to the

1943 amendments, and as re-enacted in Senate Bill No. 399,

were continued. But, employers who paid out wages, in

the years 1942, 1943 and 1944, 100 per cent or more in ex-

cess of the wages paid by them in the year 1940 were given

the benefit of the variable rates fixed by the Director, for

the last six months of the year 1943, only on the first $50,000

of wages paid. On the excess over $50,000, they were re-

quired to pay a higher rate. For the years 1944 and 1945,

they were given the benefit of the variable rates only on the

first $100,000 of the pay roll. On the excess over $100,000,

they were required to pay a higher rate. In other words,

such employers were temporarily lifted out of the general

provisions of section 18 with reference to the contribution

rates for those years, and were required to pay a higher rate

on the wages paid in excess of $50,000 in the last six months

of 1943, and on the excess over $100,000 in the years 1944

and 1945.

The amendment of section 18, made by Senate Bill No.

399, was but a continuation of the existing provisions of that

section. The War Risk Amendments in Senate Bill No. 398

constituted amendments to section 18 as it existed before the

passage of Senate Bill No. 399, and as repeated in that

amendment in compliance with the constitutional mandate

that the amended section be set out at length in the new act.

Section 18, as amended by Senate Bill No. 398, is not so in-

consistent with that section as amended by Senate Bill No.

399 that both cannot stand and be given effect. The effect

of the War Risk Amendments in Senate Bill No. 398 was to

modify section 18 as it originally existed and as re-enacted

by Senate Bill No. 399 as a continuance of the same section

of the existing act. The War Risk Amendments contained

in section 18, as amended by Senate Bill No. 398, are ef-

fective to modify and qualify the provisions of the original

act relative to the rates of contribution, and those pro-

yisions as re-enacted and set out at length in section 18, as

amended by Senate Bill No. 399. Under this construction,

both amendments can stand and be given effect.

This brings us to the contention of appellants that the

War Risk Amendments denied to them the equal protection

of the law, in violation of section 1 of the fourteenth amend-

ment to the constitution of the United States; that said

amendments constitute special legislation, in violation of

section 22 of article 4 of the constitution of Illinois, and im-

pose a burden upon employers who contribute to the un-

employment compensation fund which is not uniform as

to the class upon which it operates, in violation of section

1 of article IX of said State constitution.

We think the contention that the amendments constitute

a denial of the equal protection of the law, in violation of

the fourteenth amendment, is completely answered by what

is said in the opinion of the Supreme Court of the United

States in Carmichael v. Southern Coal and Coke Co. 301

U. 8. 495, 57 L. ed. 868, in sustaining the Unemployment

Compensation Act of the State of Alabama. With refer-

ence to an attack upon a classification of employers, it was

there said: ‘‘Distinctions in degree, stated in terms of

differences in number, have often been the target of at-

tack, see Booth v. Indiana, 237 U. S. 391, 397, 35 S. Ct. 617,

59 L. ed. 1011. It is argued here, and it wax ruled by the

court below, that there can be no reason for a distinction,

for purposes of taxation, between those who have only

seven employees and those who have eight. Yet, this is the

type of distinction which the law is often called upon to

make. It is only a difference in numbers which marks the

moment when day ends and night begins, when the disabili-

ties of infancy terminate and the status of legal competency

is assumed. It separates large incomes which are taxed from

the smaller ones which are exempt, as if marks here the

difference between the proprietors of larger businesses who

are taxed and the proprietors of smaller businesses who are

not.’’

The contention that the War Risk Amendments are special

legislation and impose upon the employers who are required

to contribute to the unemployment compensation fund a

burden which is not uniform as to the class upon which it

operates, is based upon the classification of employers con-

tained in the amendments. Under the amendments, the

determining factor as to whether an employer shall pay

his experience variable rate on his entire pay roll or whether

that rate shall be applied only to the wages paid which are

not in excess over $100,000, and a higher rate on the excess

over $100,000, is based upon a comparison of the wages paid

during the next preceding calendar year with the wages

paid during the calendar year 1940. It is obvious that the

calendar year 1940 was selected as the basic year for com-

parison with the wages paid in future years because it was

assumed that the calendar year 1940 was a normal year,

uninfluenced by wartime conditions.

In the determination of the questions raised by this ob-

jection, the legislative history and background of the amend-

ments, as well as the potential evils sought to be obviated,

already referred to, must be kept in mind. The effect of

the amendments is to classify employers into three classes.

(1) Those employers who did not pay out as much as

$100,000 in wages during the calendar year for which

the rate is to be determined. Such employers pay ac-

cording to their variable experience rate, determined by

the Director, on their entire pay roll. (2) Those employ-

ers who paid wages during the next preceding calendar

year which exceeded by more than 100 per cent but less

than 150 per cent the wages paid for the calendar year

1940. Employers within this class pay their experience

variable rate fixed by the Director on the first $100,000 of

wages paid during the current calendar year. On the excess

over $100,000, they pay at a war risk rate of 2 per cent.

(3) Employers who paid wages during the next preceding

calendar year which exceeded by 150 per cent or more the

wages paid in the calendar year 1940. Such employers pay

the variable experience rate fixed by the Director on the

first $100,000 of wages paid during the current year, and

a war risk rate of 2.7 per cent on the excess over $100,000.

It is argued that this is an unlawful and improper classi-

fication. It is contended that employers whose pay rolls

have expanded in excess of 100 per cent are in no different

class, with respect to the objectives and purposes of the

Unemployment Compensation Act, than employers whose

entire pay roll expansion is no greater than 99 per cent

in excess of the wages paid in the calendar year 1940. Simi-

larly, it is contended that an employer whose pay roll ex-

pansion has exceeded 150 per cent over the 1940 pay roll,

with respect to that portion of his current pay roll between

100 per cent and 150 per cent greater than his 1940 pay

roll, is in no different position than the employer whose

pay roll expanded 100 per cent, but less than 150 per cent.

It is said that an employer subject to the war risk rate of

2.7 per cent on the excess over $100,000 of his pay roll

should only pay such war risk rate upon that portion of

his pay roll which exceeds his 1940 pay roll by more than

150 per cent; that with respect to that portion of his pay

roll which exceeds his 1940 pay roll by 100 per cent and

not more than 150 per cent, he should be subject to the

2 per cent war risk rate, and not the higher rate of 2.7 per

cent.

Appellants’ notion of a fair distribution of the pay roll

contributions is that an employer who paid wages during the

next preceding calendar year of 150 per cent or more in

excess of the wages paid by such employer in the calendar

year 1940 should pay on the first $100,000 of his pay roll

at the basic experience variable rate fixed by the Directors ;

that as to the amount of such pay roll which exceeded the

1940 pay roll from 100 per cent to 150 per cent, he should be

required to pay the war risk rate of 2 per cent and 2.7 per

cent on the amount his pay roll was increased more than

150 per cent over his 1940 pay roll, and that the war risk

amendments are invalid because they did not adopt such

a plan.

The determination of the subjects and objects to which

legislation shall apply, and the manner in which such legisla-

tion shall be applied, is primarily a question for the legis-

lature. In Stewart v. Brady, 300 Ill. 425, we said: ‘‘Its

classification of the objects of legislation is not required to

be scientific, logical or consistent if it is reasonably adapted

to secure the purpose for which it is intended and is not

purely arbitrary. Legislative elassification does not have to

be so broad and comprehensive as to include all the evils

which might by possibility be brought within its terms. Clas-

sification must be accommodated to the problems of legisla-

tion and must be palpably arbitrary to authorize a judicial

review of it. It cannot be disturbed by the courts unless

they can see clearly that there is no fair reason for the law

that would not require with equal force its extension to

others whom it leaves untouched. It is competent for a leg-

islature to determine upon what differences a distinction

may be made for the purpose of statutory classification

between objects otherwise having resemblance, though such

power cannot be arbitrarily exercised and the distinction

must have a reasonable basis. (International Harvester

Co. v. Missouri, 234 U. S. 199.) In that case attention is

called to the distinction between legislative power and the

wisdom of its exercise in these words: ‘It is to be remem-

bered that the question presented is of the power of the

legislature, not the policy of the exercise of power. To be

able to find fault, therefore, with such policy is not to es-

tablish the invalidity of the law based upon it.’ ’’

Applying what is there said to the classification of em-

ployers by the War Risk Amendments, we do not think

appellants have discharged the burden of showing that

such classification does not rest upon a reasonable basis.

From a consideration of the legislative history of the War

Risk Amendments, the study made by the Board of Un-

employment Compensation and Free Employment Office

Advisors, under the direction of the Sixty-second General

Assembly to make such study and report to the next ses-

sion (Ill. Rev. Stat. 1941, chap. 48, par. 234(d),) we are

not convinced that the classification made was not necessary

and appropriate to the accomplishment of the purposes of

the legislation and the elimination of the evils sought to be

remedied. It must be assumed that the legislature, in mak-

ing the classifications, acted upon its experience, and as a

result of its investigation and study of the conditions which

the legislation was intended to remedy. A classification

so made will not be disturbed by the courts unless it clearly

appears that there is no fair reason or basis for the classi-

fication.

The relation of those employers whose pay rolls expanded

more than 100 per cent over their pay rolls in the normal

year of 1940 to the purposes of the amendments and the po-

tential evils sought to be avoided is so different from those

employers whose pay rolls have not expanded to that extent

as to justify the first classification made by the amendments.

Likewise the relation of those employers whose pay rolls have

expanded more than 150 per cent over the normal basic year

is so different from those employers whose pay roll expan-

sions are between 100 per cent and 150 per cent over the

normal basic year as to constitute a sufficient basis for the

second classification made by the amendments. Obviously,

the greater the wartime expansion of the pay rolls, the

greater the potential liability for the payment of unemploy-

ment compensation during the post-war period when there

will be the greatest drain on the unemployment. compensa-

tion fund. There is, therefore, a direct relation between

war-expanded pay rolls and the potential liability which will

be incurred as a result of wartime increase in employment.

This constitutes an ample basis for the classifications made.

The final contention of appellants is that the determina-

tions by the Director of the contribution rates for each ap-

pellant for the calendar year 1944 were not lawfully made

under the Unemployment Compensation Act. Appellants

are not in a position to raise this objection. This proceed-

ing, as already noted, was a claim for refund under see-

tion 25(d) of the act.

Section 18(c)(7)(C) provides: ‘“‘The Director shall

promptly notify each employer of his rate of contributions

for each calendar year as determined pursuant to this See-

tion, by mailing notice thereof to his last known address.

Such rate determination shall be final and conclusive upon

the employer for all purposes and in all proceedings what-

soever, unless within 15 days after mailing of notice thereof,

the employer files with the Director an application for re-

view of such rate determination setting forth his reasons

in support thereof.’’

Section 25(a)(2) provides: ‘‘The Cireuit Court of the

county wherein the hearing was held shall by writ of cer-

tiorari to the Director have power to review all questions

of law and fact presented by the record. Such suit by writ

of certiorari shall be commenced within 20 days of the serv-

ice of notice of the decision of the Director upon the em-

ploying unit affected thereby.’’

The record does not show that either of the appellants

pursued the remedy provided by section 18(c)(7)(C), or

by section 25(a) (2). The determination, therefore, of the

Director, as to the variable rates of appellants for the year

1944, was final and is not subject to review, either in the

certiorari proceeding or in the mandamus cases involved

on this appeal.

Counsel on both sides are to be commended upon the

energy and clarity with which they have presented this

most difficult case. It has been ably presented on both

sides. The briefs have been a great aid to the court. From

a careful consideration of all the authorities cited and of

all the arguments made, we are of the opinion that the trial

court did not err in quashing the writ in the certiorari case

and dismissing the petitions for mandamus.

The orders of the circuit court of Cook county are affirmed.

Orders affirmed.

The Last Page of Opinion Showing by Italics Modi-

fications by Way of Additions as Per Order of March 20,

1945.

drain on the unemployment compensation fund. There is,

therefore, a direct relation between war-expanded pay rolls

and the potential liability which will be incurred as a re-

sult of war-time increase in employment. This constitutes

an ample basis for the classifications made.

The final contention of appellants is that the determina-

tions by the Director of the contribution rates for each

appellant for the calendar year 1944 were not lawfully made

under the Unemployment Compensation Act. Appellants

are not in a position to raise this objection, in view of our

holding that the War Risk Amendments are valid. This

proceeding, as already noted, was a claim for refund under

_ section 25(d) of the act.

Section 18(c)(7) (C) provides: ‘The Director shall

promptly notify each employer of his rate of contributions

for each calendar year as determined pursuant to this Sec-

tion, by mailing notice thereof to his last known address.

Such rate determination shall be final and conclusive upon

the employer for all purposes and in all proceedings what-

soever, unless within 15 days after mailing of notice thereof,

the employer files with the Director an application for re-

view of such rate determination, setting forth his reasons

in support thereof.”’

Section 25(a)(2) provides: “The Circuit Court of the

county wherein the hearing was held shall by writ of certi-

orari to the Director have power to review all questions of

law and fact presented by the record. Such suit by writ of

certiorari shall be commenced within 20 days of the service

of notice of the decision of the Director upon the employing

unit affected thereby.’’

The record does not show that either of the appellants

pursued the remedy provided by section 18(¢c)(7)(C), or

by section 25(a) (2). Since we have upheld the validity of

the War Risk Amendments, it follows that they are a part

of section 18 and that determinations pursuant to them are

pursuant to section 18. The determination, therefore, of

the Director, as to the variable rates of appellants for the

year 1944, was final and is not subject to review, either in

the certiorari proceeding or in the mandamus cases involved

on this appeal.

Counsel on both sides are to be commended upon the

energy and clarity with which they have presented this

most difficult case. It has been ably presented on both

sides. The briefs have been a great aid to the court. From

a careful consideration of all the authorties cited and of

all the arguments made, we are of the opinion that the trial

court did not err in quashing the writ in the certiorari case

and dismissing the petitions for mandamus.

The orders of the circuit court of Cook county are

affirmed.

Orders affirmed. ,

(8158)

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