# Transcript of Record — Rickert Rice Mills, Inc. v. Fontenot > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386009_0294%3A03 ## Record - **Collection:** Supreme Court brief - **Document type:** Transcript of Record - **Published:** January 1, 1936 - **Citation:** 297 U.S. 110 ## Text TRANSCRIPT OF RECORD . f i Supreme Court of the United States OCTOBER TERM, 1935 ‘No. 579 . att, - UNITED RICE MILLING PRODUCTS CO., INC,, PETITIONER, US, RUFUS W. FONTENOT, ee roe AS ACTING. UNITED STATES COLLECTOR OF IN- TERNAL REVENUE FOR THE. DISTRICT OF LOUISIANA . _ ON WRIT OF CERTIORARI TO THE UNITED STATES CIRCUIT COURT OF APPEALS FOR THE FIFTH CIRCUIT \ ' PETITION FOR CERTIORARI FILED NOVEMBER 11, 1935. CERTIORARI GRANTED NOVEMBER 25, 1935. oT ag rte 2 pene alee ep eS SA Stated at ia Art seercart Sle Se la aed oeggce ] “=P ‘ BOP RE x» _ SUPREME COURT OF’ THE UNITED STATES OCTOBEB TERM, 1935 “No. 579 € UNITED RICE MILLING PRODUCTS CO., INC., PETITIONER, US. RUFUS W. FONTENOT, INDIVIDUALLY AND AS ACTING UNITED STATES COLLECTOR OF IN- TERNAL REVENUE FOR THE DISTRICT OF LOUISIANA ON WRIT OF CERTIORARI TO THE UNITED STATES CIRCUIT COURT | OF APPEALS FOR THE FIFTH CIRCUIT INDEX. Page Record from D. ©. DU. B. Mapteorm Lomislame ..passed back, _has been wholly taken away. by sad amendments to said Agricultuggl Adjustment Act. Moreover, Section 21a) of said Acé and Section 405 of the Revenue Act of 1935 deprive the Courts of power to render declaratory judgments with respect to such alleged taxes. By reason of the _impossibilities of proof here- ae inabove referred to, ‘the’ practical effect of said Act will be to deny taxpayers and the plaintiff all means of securing a judicial decision as to the, constitutional- ity of the processing taxes, unless the Court grants . the relief herein sought. . 15. Plaintiff chi. shows that by Section 30 of said Amendment of August 24, 1935, Section 21(a) was er constitutionality of such taxes. ae ae added to said ed, which in substance. provides that ” no suit to enjoin the collection of any tax imposed by ‘said Act shall be maintained.. Plaintiff alleges that ~~ said section is not» intended to apply, and’ does not apply, to the injunction prayed far by this plaintiff inasmuch :as plaintiff has no adequate remedy at law. Plaintiff alleges, however, that if said section should ~. be-interpreted as providing that no injunction should be granted to the plaintiff as prayed for in this causé, ‘then the said section, together with the other provi- | sions df said Aet, is invalid and in violation of the”, Fifth Amendment to the Constitution of the United States, that ro person shall be deprived of his property without due process of-law, in that said illegal and un- constitutional taxes will be’ ‘collected from the: plain- tiff and the plaintiff will have no remedy to prevent the collection of said unlawful taxes, and will be for- “ever deprived of the right in any manner to test the © a 16. ' ‘Said’ Section 21(d) further denies to: the. plaintiff a complete and adequate remedy at law, because a multiplicity of claims and suits would be required to enforce such rights as. are, granted thereunder and because said subsection requires that the facts re- quired ta, be proved thereunder be established to the satisfaction of the Commissioner of Internal Revenue _and makes no provision for a judicial review of his decision. ; a 17. A: vebund of processing taxes paid by the plaintiff could not actually be obtained even if it were possible for the plaintiff to prove the negative facts required. by subsection (d) of Article 21, because Congress has 2 * + 24 not appropriated funds for the payment of such whine aid plaintiff believes, that in view of the aggregate amount involved, there i is a reasonable doubt whether . such appropriation would ever be made. es - upon the property, real or gervonal, . of the plaintiff; red “ih. That 1 at ‘the final hearing it be adjudicated that “tthe provisions of said Agricultural Adjustment Act providing for the levying, assessing and collecting of said. processing taxes, against and from the plaintiff are invalid, unlawful and unconstitutional on each and every one of the grounds upon which they are herein- above alleged to be unlawful, invalid and unconstitu- tional; and that the defendant has no lawful right to attempt in any manner. to collect said . processing taxes from the plaintiff or any of the penalties or in- _ terest thereon purported ‘to be provided for in said © Agricultural —— Act; 6. And plaintiff ; ‘prays for such other and further relief, both general and special, to which it may be justly entitled. ((Signed) _E. V, SCHAFER, (Signed). JOHN P. BULLINGTON, HOMER L. BRUCE, (Signed) BAKER, BOTTS, ANDREWS : — & WHARTON, By JOHN P. BULLINGTON, . Attorneys, for Plaintiff. g . . State of Louisiana, | s Parish of Orleans. Oh Before: mé, the undersigned authority on this day personally appeared E. V. Schafer, who having been by me first duly sworn, stated on oath. that he the Feveeue ., a corporation plaintiff in the above cause, pee that he has been duly authorized by said corpora- . tion to make t me affidavit for and in its behalf; that » & * he has read the a and pom bill and knows “ the contents thereof and that the facts therein set out are true, except as,to such facts as are therein stated -on ‘information and belief, and that as to those: facts, . so stated to be on information and belief, he believes them to be ‘true. | : (Signed) FE. V. SCHAFER. Subscribed anid Sworn to before me this 25th day of October, we.” e (Signed) -HAROLD J. ZERINGER, } 3 Notary Public in and for (Seal) Orleans Parish,~Louisiana. " Ka EXHIBIT “A.” Filed October 25, 1935. ° Issued April 18, 1935. Gs United States Department of Agriculture, Agricultural Adjustment Administration. Adininlatoutive Rulings Relating to the 1935 Southern Rice Production Adjustment Program. a ‘Explanation. These Administrative Rulings apply to and are part : of the Southern: Rice Production Adjustment Gontract: . - _ and documents pertaining thereto. | maar | If any of the provisions are not understgod,. the Community or County Committee should be consulted. No producer should make out .and submit to his. Community or County Committee an Application or a’ Contract or other documents pertaining thereto with- - ie ¢ 4 28 ‘out knowing exactly what he must do in ordér to. receive, the benefits of the programn. . ~ 2 me Definitions —As used i in the Southern Rice Pro- «duction Adjustment Application, Declaration, Con- tract, ‘Schedule, and these Administrative Rulings: . ‘ (a) “Person,” “tenant,” “landlord, * “producer,” and “well or canal operator,” include individuals, CO- partnerships, and corpofations; and where it is _re- quired by the context, the singular shall include the plural. ». a ‘(b) “arm” means one contiguous tract of land operated as one unit substantially apes from any other such tract of land. {c) “Producer” includes persons owning and oper- ating their own farms; tenants operating farms rented for cash; tenants operating farms under a crop-share lease, contract, or agreement; landlords leasing t6 share tenants; corporations, copartnerships, or individuals furnishing water for production ‘of ricé. on a share basis; and such other persons: or classes of persons as the Secretary may determine to be eligible to sign Southern. Rice Production Adjustment Contracts. -(d) “Participation in the froduction.of rice” means - sharing as a producer in any manner in the produc- tion of rice on a farm. (a) If a producer dies or has been. declared in- competent By a Court of competent jurisdiction after executing an Application but before executing a Con- . ‘tract, his allotment and quota may be: transferred to such heirs, devisees, or such members of the family of such deceased producer or such members -of the family of such incompetent producer as are continuing the farming operations of the deceased or incompetent producer, upon their furnishing proof of such relation- . ship and succession to the producer’s farming opera- . tion. ‘ nt (b) If a producer voluntarily withdraws, either wholly’ or in part, from the production ‘of rice after executing an Application but before exe- -cuting a Contract, he may transfer all or part of his Allotment and Quota to such persons as are continu- ing his farming operation, upon proof of such with- drawal and succession. te 7 (c) Ifa siihaies has become disabled and has icieed from the production of rice after executing an Application but before executing a Contract, he may transfer all or part of his Allotment and Quota to such. - — ae = art TAY RR NS BF, ee a i CAN DOU SLE GOGH GEG SA aS wn eis CEP we person as is continuing his farming operations upon proof of such disability, retirement, and succession. (d) Upon dissolution of a partnership, after an Application has been executed by or on behalf of ‘the partnership, but befor Contract has been executed’ by or on behalf of the Rare the Allotment and, Quota shall be divided“among the partners in such proportions as is agreed upon by the partners or their: duly .authorized representatives in writing pei to the State Committee. : IV. Use of Allotment and Quotas by Well or Canal Operators.—If a well or canal operator kas an allot- ment and quota assigned to him by the State Commit- tee on the basis of his personal history as a furnisher of water on a crop share basis, such well or canal operator shall not change his status so as to use Such allotment and quota in a capacity other than as a fur- nisher of water on a share crop basis. V. Signing of Application, Declaration, Contracts, . and Other Documents by a Person‘in a Representative Capacity. — (1) In the event any document is to be executed on behalf of a Corporation, it shall be signed on behalf of the Corporation by an officer of the Corporation, who shall state his title, and affix the corporate seal to the Contract, (If the Corporation has no cor-. ° porate seal, the following statement in writing shall appear over the signature, “No corporate seal re- quired or adopted,”) or by a representative of the corporation other than an officer, who has been au- thorized by the corporation to execute the ‘contract by power of attorney, under seal, duly executed on behalf of the corporatior on a prescribed form and filed with the Comptroller of the Agricultural Ad- justment Administration at Washington, D. C., or 36 ~ attached to the contract, which authorization shall .be cormidered a_ part of the contract documents. (2) In dw event a document is to be signed by an executor, administrator, guardian of’ an incompe- tent person, receiver, or other person appointed-by a Court in a fiduciary capacity, there shall be furnished ~ either the original or a.certified copy of the Court order of appointment or a certificate on a presexibed form showing that such person was duly appointed as such fiduciary and that the appointment is still in full force and effect. (3) \ Where ‘a document is signed by a manager or an agent for a producer, the original or a certified copy of a Power of Attorney, on a prescribed form, author- izing the manager or agent so to sign shall be fur- nished. (4) If the producer is a Governmental body or - agency, there shall be attached to the document a certified copy of a resolution of the Board or other authority authorized by statute to lease and contract - in regard to the land .and_ personal property covered | by the contract, authorizing the execution of such document by. the person executing the document on its behalf. | 7 c (5). When one producer has several documents to be signed by the same agent or attorney, a properly executed power of attorney may be filed with the Comptroller of the Agricultural Adjustment Adminis- tration to cover all such cases, and shall be considered. as a part of each document so signed. (6) A document to be signed for a. partnership shall be executed in the name of the partnership and of each partner as an individual, by each member of , : 37 the ‘oieeiiy or on behalf of each partner who does not personally sign, by, an agent duly author- - . ized to so sign by a Power of Attorney, on-a prescribed form. VI. Pledge of Adjustment Payments.—Adjustment payments may not be assigned under. any condition. This is forbidden by the Contract, as well as prohibited by law. However, the producer’s right to adjustment pay- ments under the Contract may be pledgéd in order to obtain funds (or credit) for carrying on the current operation of the farm. The expression “funds” (or credit) for carrying on the current operation of the farm and “current production credit” means funds or credit to meet any necessary expense of preparing _ of land, planting, cultivating, watering, harvesting, and marketing of the rice crop grown: in the year 1935. Without in any way limiting the exelusiveness of the above definition, the expression shall not include cash rent or debts incurred i in connection with the produc- tion of past crops. No pledge of’ any producer’s right to adjustment payments under his contract for any purpose other than to procure current production credit as defined above shall give rise to any obligation under the Con- tract upon any payee designated therein by the pro- ducer to distribute ‘such payment, when and if accepted - by such payee, to the person claiming to hold such a pledge not given for current production: credit. Dated April 18, 1935. R. G: TUGWE ELL, Acting Secretary of Agriculture. 38 EXHIBIT -““B”. Filed Oct. 25, 1935. Form Rice 36, - U.S. Départment of Agriculture, - Agricultural Adjustment Administration, ‘Rice Section. Form approved by Comptroller | | u. S., May 1, 1935. - 1935 Southern Rice Production Adjustment Bradtect. (Pursuant to and to effectuate the purposes of the Agricultural Adjustment Act, approved May 12, 1933, as amended, hereinafter referred to as the Act.) I. Performance by Producer: Jd ’ . 1. The undersigned producer (and each and all of them: if more than one signs this instrument) here- by offer(s) to enter into a contract with the Secretary of Agriculture (hereinafter referred to as the “Secre- fary”) upon the terms and conditions hereinafter set forth and subject to such regulations or administra- tive’ rulings (which shall be part of the terms and conditions of this contract) as have been heretofore or may hereafter be ‘prescribed by the Secretary relating to 1935 Southern Rice Production Adjustment Con- tracts. This contract ‘shall apply to every farm-upon which the producer participates in any manner in the production of rice in 1935 (hereinafter referred to as “the farm(s) covered by this contract”). This offer shall become a binding contract upon its accept- ance by the Secretary. 2. : The producer, 39 (a) Represents that he has allocated to each farm upon which he will participate in any manner in the production of rice in 1935 some part .of his allotment and that the total acreage allocated by the producer to all such farms does not exceed his allotment; | (b) Agrees that he will not share or participate: in , any manner in the production of rice in 1935 on any farm to- which he has not allocated a portion of his allotment; (c) Agrees that for the. purposes of checking .com- pliance and making payments. under this contract “the -producer’s share of the acreage planted to rice in “1935” on each farm covered by this contract shall be that acreage actually planted to rice.on such farm in 1935 which bears the same ratio to the total acre- age planted to rice on such farm in 1935 that the acreage allocated by the producer to such farm bears to the total acreage allocated thereto by all persons participating in the pre of rice thereon ; (d) « - Agrees that his total share of the acreage planted to rice in 1935 on all the farms covered by this contfact shall not exceed his allotment; (e) ‘Agrees that the acreage permitted under this contract to be planted to rice in 1935 shall oe farmed in a workmanlike manner throughout 1935; (f) Applies for membership in the Rice Production Control Association organized pursuant to Form Rice 35 in each County or. Parish in which a farm covered by this contract is located; (g) Agrees to permit access by: any authorized agent of the, Secretary to the farm(s) covered by this contract, and to all fiscal books, records, and docu- ments, regardless of where located, pertaining to the production and/or sale of rice on or from any and all of such farms, and expressly waives any right to have such’ records kept confidential ; . (h) Agrees not to sell, pledge, transfer, or assign, in whole or in part, this contract or his. right to or claim for* payments under this contract,gand not to. execute any power of attorney _ to collect such . payments, and any sale, pledge or assignment, order or power of attorney shall be null and void, @xcept that the producer may pledge or hypothecate his right to any adjustment payments under this contract for . the purpose of obtaining funds (or credit) for carry- -: ing on the current operation of the farm(s) | covered by this. contract. (hereinafter referred to as “current production credit”) and such pledge or hypothecation shall operate to establish an interest or right on the . part of the pledgee in and to said adjustment pay- _ ments as against any other person ‘or persons, but the pledge or: hypothecation thereof shall not alter the provisions of paragraph 5 that all adjustment pay- ment checks drawn in compliance with this contract shall be made pavable to the payee therein stipulated. If the adjustment payments herein provided for shall have been pledged by the producer for current pro-- duction credit, the producer, or if a payee is designated in paragraph 5 hereof and accepts such payment, then such payee if .notified in writing of the pledge, shall receive the adjustment payment in trust to pay there- from to the pledgee the-amounft of the obligation owing for current production credit secured by such pledge and to pay the balance of said payment to the producer. If a. payee other than the producer is named in para- graph 5 hereof, and if such payee shall not have been ° notified of any pledge of the adjustment payments for current production credit made pursuant to the terms of this numbered paragraph, such payee shall receive such paytents in trust to pay the whole amount er 41 thereof to the producer, it being expressly understood © and agreed that the Secretary shall have no duty or obligation to see that distribution is made in accord- ance with the foregoing provisions, but shall have the right to enforce the performance of said trust by the- payee; a i re | \ (i): Represents that the statements contained here- in are true to the best of his information and belief. Without limitation of any other right or. remedy of the Secretary conferred by law or this contract, a material misstatement herein or in any information - furnished by the producer in connection with this | contract or any noncompliance by the producer with any of the terms hereof, or with any applicable regula- tion or administrative ruling which has been: or may hereafter be prescribed by the Secretary with reference to 1935 Southern Rice Production Adjustment Con- tracts shall be grounds for termination of this contract _by the Secretary. ‘The determination of*the Secretary that any such misstatement or noncompliance has oceurred shall be final and conclusive. In the event of termination of this contract by the Secretary, the producer shall return to the Secretary all payments theretofore made under this contract, together with all costs incident to the collection thereoh, II. Performance by Secretary: 3. Amount of Payments.—The Secretary shall, as a consideration for the performance by the producer of all the terms and conditions of this contract, and in the manner and at the times specified in paragraph 4 hereof, make (1) A first adjustment payment at a rate of: 81 cents per barrel of rice, and ° 42 (2) A second adjustment payment at a rate per barrel of: rice, uniformly applicable to all such con- tracts, to be detémined by the Secretary, upon an amount of rice determined in -the manner specified in sub-paragraph (a) or (b) of this num- bered. paragraph, whichever shall apply: (a): If the producer’s total share of ‘the acreage planted to rice in 1935 on all the farm(s) covered by this contract is not more than 100 per cent nor less than 85 per cent of the producer’s allotment, such pay- ments shall be made upon ‘that number of barrels of rice which equals 85 per cent of the producer’s quota. (b) If the producer’s total share df ‘the acreage planted to rice in 1935-on-all the farm(s) Covered by this contract is less than 85 per cent of the producer’s allotment,»-such payments shall be made upon that number of barrels of rice which bears the same ratio to the producer’s quota that the producer’s total share of the acréage planted to rice in 1935 on all such farms © ‘bears to’ the producer’ s allotment. 4. Time of Payments. (a) The first eljastuitnt payment shall be made a§ soon as practicable after August 1, 1935, provided that proof satisfactory to the Secretary, of compliance with the terms and conditions of this contract, has. been submitted to the Secretary or his authorized agent. (b) The second adjustment payment shall be made as soon as practicable after December 1, 1935, provided that proof satisfactory to the Secretary, of compliance with the terms and conditions of this con- tract, hag been submitted to the Secretary or his authorized agent. > 43 5. (a). All adjustment payments hereunder are for the benefit.of the producer and shall be made only to ‘the producer unléss the producer shall, by naming an- other person in this numbered paragraph, direct * ‘such payments be made to the person so named, which event the payments shall be made by chegk dan payable to the person so named who shall receive them subject to the provisions of this contract, “and particu- larly subject to the provisions of subparagraph (h) of paragraph 2 hereof. If the person so. named shall have | died or shall refuse to accept such payment, or shall for any reason be unable to receive and distribute such payment subject to the provisions of this contract then such payment shafl be made to the producer, who like- wise shall receive such payments subject to the pro- visions of this contract and particularly subject to the provisions of subparagraph (h) of paragraph 2 hereof. (Stamp State and County code above.) - TE, 5°. . cewxncdseess . .. oar Seer eee _ County §- Community........ .. Contract ] . ok re | (Address of payee) III. Signature(s) of Producer(s).: 6. In Witness Whereof, each of the undersigned has hereunto set his hand on the date indicated ne his signatyre. edeteded ridbe eles DL anewenaee a. B (Witness) (Date of Producer’s signature) (Signature of Producer) > (Application No)" * * 44 Address of Producer (Rural Route No.) .... (Box. No.) .... (Post Office) ........ . (Stateh es... ee. ea Meade reia tee os hea vonage ee (Wines) (Date of Producer’s signature) (Signature of Producer) (Application N . _ Address of Producer (Rural Route No.) .... (Box NO.) ....: (Poet ORs) .....3 Eyl k ME sa Sow oles IV. Certification of Committees. We Herekty Certify that we haveeexamined the fore- - going offer -and that, to the best of our information _ and belief, the total acreage allocated by the producer to al the farm(s) covered by this contract does not exceed the producer’s allotment, and hereby recom- mend that the foregoing offer be accepted by the Sec- retary. oeereeree eee eee ee ee we we we we we we we $66 8 6 ¢ ©. 4 ©. BO OE OCS 4 4. OO EO eS e @'6 aS 69 8 Se. 4. 6.9 6°66 6.4 6 CE DS BS SC 1 Ee F288 SS SS ON 8 2 SOO SE Ee Se Se ee S @C Gee CRBS EON TF C88 BS HY Seseteeseeun oepeseeeeeadvnvnesc ew eves ee b 8 (For State Committee) Date..... , 1935: Date..... , 1935. Date....., 1935. Vv. Acceptance by Secretary. In consideration of and in reliance upon the agree- ‘ ments of the producer herein set forth and the repre- oe sentations made by the producer in and in connection with this contract, this offer is hereby accepted, this See [. Seeeeeeeeeee ee eee 1935. HENRY A. WALLACE, _ Secretary of Agriculture, for and on behalf of the United States, coveuniidiies of Secretary _ of Agriculture. VI. State Committee’s Certificate of CompMance. The undersigned State committeemen certify that the producer’s total share of the acreage planted to’ rice in 1935 on all farm(s) covered by this Contract does not exceed the producer’s allotment, and further certify that the producer’s allotment and quota and the pro- ducer’s total share. of the .acreage planted to rice in 1935 on all farms upon which the producer is partici- pating in the production of rice in 1935 are correctly stated in items 1, 2, and 3, respectively, of part VIII below, and further certify that to the best of their in- formation and belief the producer has fully complied with all terms of this Contract and all regulations and administrative rulings issued by the Secretary .applic- able up to and including the date of this certificate. ee OC Ce BDAC E SC VCH CBSE CRHB CHEE GD HES / - + (For State Committee) < e “_ VII. Producer’s Certificate of Compliance. The producer certifies that his total share of the acreage planted to rice in 1935 on all farms upon which he is participating in any manner in the production of 46 rice does not exceed his allotment, that his allotment _and quota, and his total share of the acreage planted to - rice in 1935 on all farms on which he is participating in any manner in the production of rice in 1935 are correctly stated in items 1, 2, and 3,- -respectively, in part VIII of this contract, and further certifies that he-is not sharing in the production of rice on any farms covered by this Contract are being farmed in a workmanlike manner, and that he has fully complied with all other terms‘of this Contract, and with all regulations and sadministrative rulings issued by the Secretary, applicable up to and inclvding the date of this certification. if ere eshaaeiees , 1935. (Producer.) VIII. Certified Basis for Determining Payments. 1. Producer’s allotment .......... CS) 2. Predwcer’s quete ......6...5.: - ° ee 3. Producer’s share of acreage measured ........ 4. Quota percentage (item 3 + item1).... ..... %* 5. Number of barrels for payment (item 4 eS Ee er ee rae aes *If the above percentage is not more than 100 nor less than 85 per cent, then 85 per cent shall be used. Do not write in ‘this — for use by Comptroller’ S ' Office. Computation of payments: 1935 first adjustment payment Item 5 times cg: chee netswa ews - See ees 47 1935 second adjustment payment, Item 5 ee A 2 Sees Do Not Write in Space Below. Certificate of Cemtnatiee. Audited and approved for 1935 first adjustment payment in the amount of .............. | Ae JOHN B. PAYNE, Comptroller, ad cilia sg balaats a Auditor. Schedule No. ........ De ese ee NE is einen arian by check on Treasurer of the United States in favor of payee or payees named thereon. Certificate of Comptroller. Audited and approved for 1935 second adjustment payment in the amount of .............. Brees vee JOHN B. PAYNE, | Comptroller, eg ew ra aye iy ee a Auditor. schedule INO. ........ ee Pee. ee PU ie aha aaa y by check on Treasurer of the United States in favor of payee or ‘Payees named thereon. Check No Sey anes eee Paves. re rere? 48 (Any intentional misreprésentation of fact made in this contract for the purpose of defrauding the United States will be subject to the criminal provisions of the United States Code.) EXHIBIT “C”. Filed October 25, 1935. — Sec. 21. (a) No suit, action, or proceeding (includ- ing probate, administration, receivership, and bank- ruptcy proceedings) shall be brought or maintained in any Court if such suit, action, or proceeding is for the purpose or has ‘the. effect (1) of prevent- ing or restraining the assessment or collection of any tax imposed or the amount of any penalty or ir- terest accrued under this.title on or after the date of the adoption of this amendment, or (2) of obtaining a declaratory judgment under the Federal Declaratory Judgments Act in connection with any such tax or such amount of any such interest or penalty: In-pro- bate, administration, receivership, bankruptcy, or other similar proceedings, the claim-of the United States _ for any such tax or such amount of any such. intetest or penalty, in the’ amount assessed by the Commis- sioner of Internal Revenue, shall be allowed and ordered to be paid, but the right to claim the refund or credit thereof and to maintain such claim pursuant. to the applicable provisions of law, including sub- section (d) of this section, may be reserved in the Court’s order. — (b) The taxes imposed under this title, as de- termined, prescribed, proclaiméd and made effective by the proclamations and certificates of the Secretary of Agriculture or of the President and by the regulations of the Secretary with the approval of the President prior to the date of the adoption of this amendment, 49 are hereby. legalized and ratified, and the assessment, levy, collection, and accrual of all such taxes (to- gether with penalties and interest with respect there- to) prior to said date are hereby: legalized and ratified and confirmed as fully to all intents and purposes as if each such tax had been made. effective-and the rate thereof fixed specifically by prior Act of Congress. All such taxes which have accrued and remain unpaid on, the date’ of the adoption of this amendment shall be assessed and collected pursuant to section 19, and to the provisions of law made applicable thereby. - Noth- ‘ing in this section shall be construed to import illegal- ity to any act, determination; proclamation, certificate, or regulation of the Secretary of Agriculture or of the President done or made prior to the date of the adop- tion of this amendment. ea (c) The making of rental and benefit payments under this title, prior to the date of the adoption of this amendment, as determined, prescribed, proclaimed and made effective by the proclamations of the Secre- tary of Agriculture or of the President or by regula- tions of the Secretary, and the initiation, if formally _ approved by the Secretary of Agriculture prior to such ' date of adjustment programs under section 8 (1) of _ this title, and the making of aggeements with producers prior to such date, and thé adoption of other voluntary methods. prior to such date, by the Secretary of Agri- culture under this title, and .rental and benefit pay- ‘ ments made pursuant thereto, are hereby legalized and ratified, and the making of all such agreements and payments, the initiation of such programs, and the adoption of all such methods prior to such date are hereby legalized, ratified, and confirmed as fully to all intents and purposes as if each such agreement, pro- gram, method, and payment had been specifically au- _+ thorized and made effective and the rate and amount thereof fixed specifically by prior Act of Congress. 50 (d). (1) No recovery, recoupment, set-off, refund, or credit shall be made or allowed of, nor shall any counter claim. be allowed for,.any amount of any tax, penalty, or interest which accrued before, on, or after the date of the adoption of this amendment under this title (including any overpayment of such tax), unless, after a claim has been duly filed, it shall be established, in addition to all other facts required to be established, to the satisfaction of the ‘Commissioner of Internal Revenue, and the Commissioner shall find and declare of record, after due notice by the Commissioner to such claimant and opportunity for hearing, that neither the claimant nor any person directly or indirectly under his control or having control over him, has, directly or indirectly, included such amount in the price of the article with respect to which it was imposed or of any. article processed from the commodity with respect to which it was imposed, or passed on any part of such amount to the vendee or to any other person in any _ manner, or included any part of such amount in the charge or fee for processing, and that the price paid by the claimant or such person was not reduced by any part of such amount. In any judicial proceeding re- lating to such claim, a transcript of the hearing before the Commissioner shall be duly certified and filed as. the record in the case and shall be so considered by the Court. The provisions of this subsection shall not apply to any refund or credit authorized by subsection (a) or (c) of section 15, section 16, or section 17 of this title,-or to any refund or credit to the processor of any tax paid by him .with respect to the provisions of sec- tion 317 of. the Tariff Act of 1930. (2) In the event that any tax iene’ by this title is finally held invalid by reason of any provision of ° ‘the Constitution, or is finally held invalid by reason of the Secretary ‘of Agriculture’s exercise or failure to exercise any power conferred on him under this title, there shall be refunded or eredited to any person (not 51. a processor or other'person who paid tlfe tax) who would have been entitled to a refund or credit pur- suant to the provisions of subsections (a) and (b) of section 16, had the tax terminated by proclamation pursuant to the provisions of section 13, and in lieu thereof, a sum in an amount equivalent to the amount to which such person would have been entitled had the Act been valid and had the tax with respect to the particular commodity termihated immediately prior to the effective date of such’holding’of invalidity, sub- ject, however, to the following condition: Such claim- ant shall establish to the satisfaction of the Commis- sioner, and the Commissioner shall find and declare: of record, after due notice by the Commissioner to the claimant and opportunity for hearing, that the amount of the tax paid upon the processing of the commodity used in the floor stocks with respect to: which the claim is made was included by the _ pro- cessor or other person. who paid the tax in. the price‘of such stocks (or of the material from . which such stocks were made). In any judicial pro- ceeding relating to such claim, a transcript of .the hearing before the Commissioner shall be duly certi- fied and filed as the record in the case and shall be so considered by the Court. Notwithstanding any other provision of law: (1) no suit or proceeding for the re- covery, recoupment, set-off, refund or credit of any tax imposed by this title, or of any penalty or interest, which is based upon the. invalidity of such tax by reason of any provision of the Constitution or by reason of the Secretary of Agriculture’s exercise or failure to exercige any power conferred on him under this title, shall be maintained in any. Court, unless prior to the expiration of six months after the date on which, such tax imposed by this title. has been finally held invalid a claim therefor (conforming to such regu-_ - lations as the Commissioner of Internal Revenue with the approval of the Secretary of the Treasury, may .prescribe) is filed by the person entitled thereto; (2) 52 no such suit or proceeding shall be begun before the expiration of one_year from the date of filing such claim unless the Commissioner renders a _ decision thereon within that time, nor after the expiration. of five years fronr the date of the pay:nent of such tax, penalty, or sum,.‘unless suit or proceeding is begun within two years after the disallowance of the part of such claim to Which such suit or proceeding re- lates. The Commissioner shall within $0 days after such disallowance notify the taxpayer thereof by mail. (3) The District Courts of the United States shall have jurisdiction of cases ‘to which this subsection applies, regardless of the amount in. controversy, if such Courts would have-had jurisdiction of such cases but for limitations under the Judicial Code, as amended, on jurisdiction of such Courts based upon the amount in controversy. | (e) In connection with the establishment, by any claimant, of the facts required to be established in. subsection (d) of this section, the Commissioner of Internal Revenue is hereby authorized, by any officer or employee of the Bureau of Internal Revenue, in-. cluding the fiéld service, designated by him for ‘that purpose, to examine any books, papers, records, or, memoranda, relative to any matter affecting the find- ings to be made by the. Commissioner pursuant to sub- section {d) of this section, to require the attendance of the claimant or of any officer or employee of the claimant, Or the attendance of any. other person having knowledge i in the premises, and to take, or cause to be taken, his testimony with reference to any such matter, with power to administer oaths to such person or persons. It shall be lawful for the Commissioner, or any callector designated by him, to. summon witnesses on behalf of the United States or of any claimant to appear before the Commissioner, or before any person designated by him, at a time and place named in the 53 summons, and to produce such books, papers, cor- respondence,- memoranda, or other records as the Commissioner may’ deem relevant or ma- terial, and to give testimagny or answer in- terrogatories, under oath, relating‘to any matter affect- ing the findings to be made by the,Commissioner pur- suant to subsection (d) of this section. The provisions of Revised Statutes 3174 and of Revised Statutes 3175 - shall be applicable with respect to any summons issued pursuant to the provisions of. this subsection. Any witness summoned under this subsection shall be paid, by the party on whose behalf such witness was summoned, the same fees and mileage as are paid _ witnesses -in the Courts of, the United States. All in- formation obtained by the Commissioner pursuant to this subsection shall be available to the Secretary o Agriculture upon written request therefor. Such in- - formation’ shall be kept confidential by all officers and employees of the Department of Agriculture, and any such officer or employee who violates this requirement shall, upon conviction, be subject to a fine of not m6re than $1,000 or to imprisonment for not. more than one year, or both, and shall be removed from office. (f) No refund, credit, or abatement shall be made or allowed of the amount of any tax, under section 15, or section 17, unless, within one year after the right to such refund, credit, or abatement has accrued, a claim for such refund, credit,.or abatement (conform- ‘ing to such regulations as the Commissioner of In- ternal Revenue, with the approval of the Secretary of the Treasury, may prescribe) is filed by the person entitled to such refund, credit, or abatement,: except that if the right to any such refund, credit, or abate-. ment accrued prior to the date of. the adoption of this amendment, then such one year period shall be com-- puted from the date of this amendment. No interest shall be allowed or paid, or included in any judgment, with respect to any such claim for refund or credit. (g) The ‘provisions of section 3226, “Revised Statutes, as amended, are hereby extended to apply to any suit for the recovery of any amount of any tax, penalty, or imterest, which accrued, before, on, or after the date of the ‘adoption of this amendment under this title (whether an overpayment or otherwise), and to any suit for the recovery of any amount of tax which results from an error in the computation of the tax or from duplicate payments of any tax, or any refund or credit authorized by subsection (a) or (c) of sec- tion 15, section 16, or section 17 of this title or any refund or credit to the processor of any tax paid by him with respect to articles exported pursuant to the ‘provisions of section 317 of the Tariff Act of 1930. -RETURN TO RULE TO SHOW .CAUSE WHY" TEMPORARY INJUNCTION SHOULD NOT: ISSUE. Filed Oct 28th, 1935. (Title Omitted.) To the Honorable the Judge of the District Court of the United States in and for the Eastern District of Louisiana: Now into Court comes Rufus W. Fontenot, Acting Collector of Internal Revenue, Defendant in the above entitled and numbered cause, ‘through Rene A. Viosca, United States Attorney in and for the Eastern District of Louisiana, and Robert Weinstein, Assistant United. . States Attorney for said District, his attorneys, and. by virtue of the rules and practice of this Court re- quiring the defendant in.rule to file all defenses to the . rule on the date set for the hearing on the application _for.a temporary injunction, and with full reservation of all of his: rights under the pleadings in this cause, Xs ‘ «55 answers the rule by stating that for lack of sufficient information to justify a belief ‘he denies all of the allegations of paragraph two, three, four, five, six, ’ seven, eight, nine, ten, eleven, twelve, thirteen, four- teen, ‘fifteen, sixteen, eventéen and eighteen of the Bill of Complaint, and also denies the allegations of paragraph one with the exception of the. statement relative to the defendant, which statement is admitted. Your Respondent further. avers that the proceedings should be dismissed for the reasons that this Honor- -able Court has no jurisdiction and that the Agricul- tural ‘Adjustment Act is constitutional, valid and enforceable. “s Wherefore, your ' Repondies prays this Honorable Court to dismiss the Bill of Complaint at Complain- ant’s costs and to refuse granting any injunction in these’ proceedings, and for all general and equitable relief. (Signed) RENE A. VIOSCA, | , United States. Attorney. (Signed) ROBERT WEINSTEIN, Asst. United States: Attorney. ( Verification. ) : State of Louisiana, Parish of Orleans. -Before me, the undersigned authority, personally came Rene A. Viosca, who is the United States At- ‘ torney for the Eastern District of Louisiana, who in his oath says: That -in his aforesaid offical capacity he is of counsel for defendant in the above case; that he has drawn thevreturn to the rule to show cause and that all the allegations of fact therein are true and correct to the best ‘of his knowledge, information and ' belief. ee (Sigtied) RENE A. VIOSCA. a a iii a 56 tub to and —e before me this 28th day of ‘October, 1935. Seed) CLAUDE D. SHAW. Deputy Clerk, U. S. District Court, Eastern District of Louisiana. MOTION TO DISMISS. Filed Oct. 28, 1935. (Title Omitted.) ae To the Honorable, the Judge of the ae Caan of the United States in and for the Eastern District of Louisiana: Comes now Rufus W. Fontenot, Acting Collector of Internal Revenue, defendant in the above entitled — and numbered cause, ty Rene A. Viosca, United States Attorney in.and for the Eastern District of Louisiana, and Robert Weinstein, Assistant United States At- torney for said District, his attorneys, with full re- servation of his rights to further plead in this cause, and moves the Court to dismiss the Bill of Complaint filed herein, with costs to be paid by the Complainant upon. the following. grounds and for the following reasons: I. That this Court is without jurisdiction to restrain or enjoin the collection of taxes herein involved, or to hear and/or determine the issues presented by . said bill of complaint because: 1. Section 3224 of the Revised Statutes of the United States prohibits the maintaining in any Court of a suit for the purpose of restraining the assessment and/or collection of Federal Tax. 57 z. Section 21-A of the Agricultural Adjustment Act, as amended, prohibits the maintaining in any Court of a suit ‘for the purpose of. restraining the assessment and/or collection of any processing tax under the said Agricultural Adjustment Act. ; 3. _The bill of complaint sets forth no facts which, if true, would entitle complainant to the relief. yay ed for in a Court of Equity. 4. Complainant has a plain, adequate and complete remedy.in the ordinary course of law. II. That the United States of America is the real party in interest, which may not be sued without its con- sent. IIT. That there is no actual controversy between com- plainant and defendant or between any parties over which this Court has jurisdiction within the purview of the Declaratory Judgment ‘Act. IV. That the Declaratory Judgment Act was not intended by the Congress to be used for the litigation of ques- tions arising under the Revenue Laws, and particu- larly was not intended as a means for obtaining in- jundtive relief. — V. This ptoceeding is prohibited by the provisions of the’ | All sito Judgment Act, as amended, and can- not be maintained. ( Revenue Act of 1935, approved August 31, 1935, Section 405). —— ~ 58 Dated: this 28th day of October, 1935. (Sed.) RENE A. VIOSCA, | United States "Attorney. (Sg¢d.) ROBERT WEINSTEIN, Assistant United States Attorney. ORDER OF COURT CONSOLIDATING ALL CASES FOR TRIAL, ETC. | Filed Oct. 28, 1935. United States District Court, Eastern District of ° Louisiana, New Orleans Division. Docket No. 321—In.Equity: a Rickert Rice Mills, Inc., versus Rufus W. ey Individually and as~ Acting Collector of Internal Revenue. Docket No. 322—In Equity: A. B. Dore, doing business under the name of The Dore Rice Mill, versus Rufus W. Fontenat, Individually and as Acting Collector of Internal Revenue. Docket No. 323—In Fquity: United Rice Milling Products Co., Inc., versus Rufus W. Foenenct, Individually and as ‘Acting . Collector of Internal Revenue. 59 Docket No. 324—In Equity: Baton Rouge Rice Mill, Inc., , versus | Rufus W. Fontenot, Individually and as Acting Collector of Internal Revenue. Docket No. 325-—In Fquity:: T.Simon ~ | versus Rufus W. Fontenot, Individually and as ‘Acting . Collector of Internal Revenue.. Docket No. 326—In Equity. Levy Rice Milling Company, Inc., versus ° ‘Rufus W. Fontenot, Individually and as Acting Collector of Internal Revenue. Docket No. 327—In Equity: Farmers Rice Milling Company, Inc., versus Rufus W. Fontenot, Individually and as Acting - Collector of Internal Revenue. - Docket No. 328—In Equity: Noble-Trotter Rice Milling Co., Inc.,, versus Rufus W. Fontenot, Individually and as Acting Collector of Internal Revenue. Considering the stipulation and agreement of coun- sel for all parties made this day in open Court; It is Ordered that the above numbered and entitled cases be and they are hereby consolidated for the 60 purpose of trial and that the affidavits and evidence | offered in one case be considered to apply to all. (Signed) JOHN McDUFFIE, Judge. New Orleans, Louisiana, October 28, 1935. . State of Louisiana, Parish of Orleans. Beforé me, the undersigned authority, on this day personally appeared W. M. Reid, known to me, who being by me first duly sworn in terms of law deposed and said on his oath as follows: My name is W. M. Reid. I reside in New Orleans, Louisiana, and am Executive Secretary of .the Rice Millers’ Association. My principal duties are the preparation and interpretation of statistical and econ- omic data with regard to the rice milling industry. I have been engaged in the rice milling business since - 1909, and from 1916 to 1928, I personally operated a rice mill. I am thoroughly familiar with the rice milling industry in all of its phases. . I have read all of the allegations contained in Sec- tion 12 of Plaintiff’s bill of complaint and Fquity. 321, ~ Rickert Rice Milling Company vs. Rufus W. Fontenot, Equity 322, A. B- Dore vs. Rufus W. Fontenot, Equity 323, United Rice Milling Products Company, Inc., vs. Rufus W. Fontenot and companion cases, and all of such allegations are true and correct in every re- spect. It is true that rice millers, when they’ purchase rough rice, consider the fact that they will have to pay a processing tax on the milling of such rough rice. How- ever, this is simply one of the many factors entering into the miller’s determination of what he ought to aS 61 pay for rough rice. As a practical matter, when the rice miller negotiates for the purchase of a given lot of rice, he first estimates what he believes he could get for such rice after. milling on the existing market for clean rice and rice products. He then ‘estimates what he thinks it will cost him to process the rough rice into its various grades and products, and in this esti- mate is included the amount of the processing tax, as well as other taxes. Having made these estimates, he determines what he ought to pay for the rough rice. However this is not necessatily what he does pay, be- cause each indiyidual miller is buying in competition with other millers. Thus, if other millers are paying more than he thinks he ought to pay, he has to meet the price: the others are paying, if he is to get any | rice. No individual miller makes the rough rice market. It is a market made. of the composite pur-.- chasing of all millers in the particular terri- tory. While the estimates above referred to are made with regard to the market for clean rice and rice products at the time of the purchase of the rough rice, that market, however, does not neces- sarily control since rough rice is not ordinarily milled, -and the clean rice and products sold until several - months after the purchase of the rough rice. Since the market for clean rice and rice products fluctuates from day to day and month to month, the prospects of the future market has a bearing on what the miller may have to pay for rough rice. Optimism with reference to the future market for clean rice on the part of a sufficient number of rice millers will force up the market for rough rice, and all millers will have to meet the increased price of rough rice (if they are to have any rice at all), even though some of them may be pessimistic as to: the future market. For example, the present market price of rough rice is quite high with reference to the present market price for clean rice and rice products. In _ other words, using the estimates above referred to, the cost 62 of rough rice on today’s market plus estimated cost of milling (including the processing tax) is more than the miller could reasonably expect to procure for the rice and rice products made from such rough rice on thé existing market for clean rice and rice products. This present day market for rough rice is not made by any individual miller; but is made by the com- posite of purchases by all millers in the territory. | Thus, as I have previously said, while the processing tax is considered by the miller in determining what he ought to pay for rough rice, it is simply one of many factors entering into. such determination, and is by no means controlling. - Furthermore, it is impossible to tell on any given purchase of rough rice how much, if at all, that price has been affected Ly the existence of the ‘processing tax. I am —s -with accoufting and_ statistical methods, and I know of no possible method of keep- _ ing books and records in the rice business which would accurately reflect the gain or loss from the purchase, milling and sale of any given lot of -rice as dis- tinguished from ‘the gain or loss from the aggregate of all transactions during a season.. A profit or loss, - however;“may be estimated at any given time by the use of averages, predictions and arbitraries. The rice milling business is seasonal; the season beginning on August Ist and_ ending on July 31st, the operations gradually. in- creasing until the peak is reached during the months of October, November and December, ‘and decreasing to the end of the season. For this reason as well as others, the cost of milling.varies greatly from time to time during the season. The estimated cost 'of milling which millers use in budgeting and determining what they want to pay for rough. rice is arrived at by aver- aging the cost of the entire season so that this factor, . when used to estimate’ a profit or loss on a given transaction, could never be exact, and might be very 63 ~ much too high or very much too low when applied to that particular transaction. Under these circumstances, when a miller purchases a particular lot of rice, he may Felieve that all, or a part of the processing tax to be assessed on. such rice will be absorbed by the farmer. On the other hand, he may believe that all, or a part of stich tax will be absorbed by himself. However, he can never even know, much less prove, even after all the clean rice and rice products made from the particular lot of rough rice has been sold, whether he, or the farmer, or the purchaser, or all of them together has borne the ultimate economic burden of the tax. This is because any belief he may have had as to. whether the burden of the tax would fall, must of necessity, have been “ based in part on estimates, which are in turn, based on averages, which are never accurate with respect to any given lot of rice. In addition, such belief must. also be based in part on assumptions as to market conditions on clean rice and rice products, which may or may not be correct. The rough rice may go through the mill on a day when. large amounts are being milled, and the cost per. unit is lower than the _ average; or, it might go through on a day when little rice was being milled resulting in a unit cost higher than the ayerage; or, it might go through partly on one. kind of a day, and partly on another. Furthermore, the rice may not mill out what he expected, even if the market on clean rice and rice products remains the same. And, in addition, the price at which he eventually sells the clean rice and rice products may be substantially less or substantially more:than the sale price on which he based his presumptions. _ There is no necessary relation between the. market for clean rice and for rice products, since they are sold for different purposes, and this is an added reason why the miller cannot possibly allocate the’cost of a given lot of rough rice among the clean rice and rice products. produced from it. 64 For example, it is entirely possible for-the market on bran or hulls to be relatively high, while the market on the various grades of head rice is relatively low. | The rough rice market is affected by the clean rice and rice products market and vice versa, but it.is as impossible to determine their relative affect on each other as it is to determine whether the hen or the egg came first. I know of no way of determining what either: the rough rice or clean rice marked would be if there were no processing tax. I‘ do know, however, that: the individual miller cannot force down the price paid to the farmer for rough rice because of the tax, and thus force the farmer to pay all, or a part of the burden of the tax. The individual miller simply pays the market price for rough rice which has been fixed by the composite action of all millers, and it would be impossible to prove .whether a lowering of the rough rice market was the result of the assessment of the tax, or whether it was caused by other factors, such as a. drop in time clean rice and rice: products market, a composite pessimism on the part of rice millers as to the future market or other factors. The same thing i is true with regard to the market for clean rice and rice products, and no individual miller can arbitrarily force-that market upwards in order to pass on the tax. | (Sed.) ‘W. M. REID. Sworn and subscribed to before me, the undersigned authority, this 28 day of October, 1935.. (Sed.) HARRY R. CABRAL. (Seal) Notary Public. State of Texas, County of Harris. Before me, the undersigned authority, on this day personally appeared Homer L. Bruce, who, having been by me duly sworn, stated on oath as follows: He lives in Houston, Harris County, Texas, and is duly licensed and practicing attorney at law. He is 65 familiar with the bills of complaint that are being pre- sented to the United States District Court at New Orleans; Louisiana, on behalf of certain rice millers of Louisiana seeking an injunction against the collec- tion of processing taxes on rice, having worked with his partner Mr. John P. Bullington in the preparation of said bills of complaint, and is familiar with the general practice of the rice. industry of selling rice on samples and the. filling of orders for clean rice by: ° mixing rice from different lots of clean: rice in the manner set out in the bills of complaint. This affidavit is made in connection with the allega- zs tions in said bills that it is impossible for the plaintiff rice millers to comply with the requirements -of Section 21 (d) of the Agricultural Adjustment Act that they shall establish that no part of the processing tax has been passed on to the consumer or taken out of the _ price paid the producer before they are allowed to re- cover. any processing taxes paid. — . = Section 8 (3) of the Agricultural Adjustment Act . gave the Secretary of Agriculture authority to issue licenses to processors, including processors of rice, and provided that the Secretary should have the right to revoke any license for violations of its terms. Sec-_ tion 8 (2) of the same Act authorized the Secretary to enter into. marketing agreements with processors. -In the fall of 1933, the Secretary entered into a marketing agreement with members of the southern rice milling industry, and at the same time issued a license applicable to all mills... This marketing agree- ment and the license were in substantially the same form. Later various amendments were made to both the marketing agreement and the license. In the marketing agreement and in the license,. the Secretary of Agriculture fixed the price to be paid to farmers for rough rice, these prices being set out in Article III of the marketing agreement and license hereinafter referred to, namely, the one effective on July 21, 1934. Article IV, Section 1 of the license _ 66 effective July 21, 1934, set gut the minimum price ‘that millers might sell clean rice for in the domestic market and that section is as follows: “Section 1. To effectuate the purposes of this Amended license ahd to aid in the carrying out and enforcement of the provisions hereof, no miller shall offer for sale, sell or deliver for domestic consumption any quantity of clean rice for an amount per pocket less than the sum of (a) the minimum price, determined pursuant to article III and Schedule 1, for the grade, variety and -quantity of the rough rice ‘trom which such clean rice was milled, ; ~ (b) the ‘conversion charge for such quantit} of rough rice and prevailing at the time of such offer, sale or delivery, and (c) the published car lot rail rate for transporting such rough rice from the customary point of delivery to the ‘miller’s mill, and (d) the administrative assessment for such quan- — tity of rough rice and prevailing when such rice was milled ; Provided, however, that any miller may offer clean rice for sale for export to foreign countries, on the foregoing basis less a maximum discount of 20 cents per barrel of such rough rice and may, if the rice is actually exported, sell or. deliver clean rice for export to foreign countries on sdid basis less said maximum discount. The determination of the Millers Commit- tee as to whether or not clean rice is actually exported “a 67° shall be final and conclusive, subject to appeal to the Secretary. Said minimum amounts, below which this section provides that clean rice shall not be offered for sale, sold, or delivered by a miller, apply f: o. b. the miller’s mill. Sec. 2. The conversion charge per barrel of rough rice shall, until and except -as changéd by. the Secre- tary, be an amount equal to the sum of (a) seventy (70) cents per barrel of rough rice, (b) nine (9) cents per barrel of rough rice if standard one-hundred pound single packages are used for the clean rice, and (c) if cotton or paper inner. linings or regula’ burlap outer slips are used for the clean rice, an additional five (5) cents per barrel of. rough rice, or (d) if any other type of container is used for the clean rice, the actual ‘in- voice price for the container used. The Secretary may at any timie and from time to time during the effective period, increase or decrease the amount of, and/or ‘change the basis of computation of, gthe conversion charge.” ‘ One of the main purposes, if not actually the main purpose, of the Agricultural Adjustment Act and this license was to increase the price of rough rice paid the farmer, and in order to keep the rough rice price - at’a higher level, the Secretary -attempted_by this .Section 1 to fix the price that clean rice might be sold at as roughly 79¢ per barrel above the cost of the rough rice. It was extremely important to keep the clean rice up to this level in order to maintain the rough rice price. In the fall of 1934, the Secretary of Agriculture brought proceedings, according to the in- formation and. belief of the affiant, against a number of: different rice mills in Louisiana and to affiant’s knowledge against Bay City Rice Mills of Bay City, Texas, a partnership composed of W. M. Loving and three other partners. The case against the Bay City Mills was case No. 11-1-7, entitled In the Matter of W. 68 M. Loving; R. Q. Pegram, S. M. Clements and L. D. Cléments, Individually and as Co-partners trading -under the name Bay City Rice Mills. One of the orig- inal charges against the, Bay City ° ‘Rice Mills was Charge No. 11, which charged in general: terms that the Mill had sold clean. rice for domestic consumption for an amount less than the price fixed for the sale of the clean rice pursuant to this license. This Charge 11 was later made more specific as follows : - “11. That the said Licensee since the effective date ‘of said License has violated Section 1 of Article V of said License as in effect until July 21, 1934, 12:01 A. M. Eastern Standard Time, and Section 1 of Article IV: of said License as in effect from July 21, 1934, 12:01 A. M. Eastern Standard Time on, in that said Licensee has offered for sale, sold and delivered, for domestic consumption, quantities of clean rice, to-wit: Clean _rice lot numbered 36 on the books of the respondent derived from rf&ugh rice lot numbered 33 on the books . of the respondent and purchased from C. E. Everitt; clean rice lot.numbered 43 on the books of the re- spondent derived from rough rice lot number 33 on the books of the respondent and purchased from C. E. Everitt; clean rice lot numbered 123 on the books of the respondent derived from rough rice lot - numbered 153 on, the books .of the respondent and purchased from