Mr. WOOD. The fact of the matter is the Supreme Court decided the sick-chicken case was not in interstate commerce because it had reached its destination, whether dead or alive.

Mr. ELLENBOGEN. And the interstate commerce had ended.

Mr. WOOD. I am wondering how you can harmonize that with the former decision of the Supreme Court in the case of a large stone company at Bedford, Ind. Some couple of years ago they had a strike and had some difficulties with the employees, and the stonecutters' union placed that company on the unfair list, and the members of the stonecutters' union throughout the United States refused to handle that stone. In Kansas City, St. Louis, and the West, and in territory they were affected differently than the folks involved in the sick-chicken case. The company received a restraining order, and finally a permanent injunction restraining the stonecutters from refusing to handle the stone. There was a definite case in Kansas City with which I am very familiar where tons of stone had been delivered to a contractor by the Bedford Stone Co., and the stone was unloaded, out of the cars, delivered to the building site, and it was placed upon the ground.

To my mind I can see no difference as far as the equities in the cases are concerned between the sick-chicken case and the stone case, because the chicken had been delivered and the poultryman had begun to process the chicken; the stone had been delivered to the contractor, and the stonecutters had begun to process the stone or set it.

I have been unsuccessful in getting any constitutional lawyer to tell me the essential difference between the two cases. According to the Supreme Court decision there is a very great difference in the two cases, although each product, the sick chicken and the stone, had reached their destinations. The stone company had received their money for the stone, and the chicken man had received his money for the chicken. The purchasers in both instances had paid for the product; it is set upon the ground, and someone else was handling it. The stonecutter came in to handle the stone; the chicken picker came into process the chicken.

Now, what is the difference in the two cases?

The reason I asked the question is that I don't know how anyone can say what the Supreme Court will do with this bill in the light of past decisions. Of course, I agree with you that I feel quite sure that the law is constitutional. I am not a lawyer, but it seems to me that the Federal Government has some rights; and it seems to me that the Congress should have some rights in regulating interstate competition, if at all. But I could never determine how the Supreme Court could harmonize the two cases.

Mr. ELLENBOGEN. If I might say so, I don't believe that any sound distinction can be made between the two cases. But I am not willing to accept the N. R. A. decision as overruling that case. Mr. WOOD. I am not either.

Mr. ELLENBOGEN. And for this reason, because a court that wants to, can say that the N. R. A. decision is based upon the question of delegation of power. And I think the court is absolutely correct in saying that Congress illegally delegated the power; and the Court can base the N. R. A. decision on the illegal delegation of power by Congress and say that the stonecutters' decision is still the law--and

I hope the Court will say that-without finding any inconsistency between the two decisions.

Mr. KELLER. Might it be that the sick chicken appealed to the sympathy of the Supreme Court in making that decision?

Mr. ELLENBOGEN. I will say this, that had it not been for the question of delegation of power, I don't know what the decision in the N. R. A. case would have been, but it surely would not have been a unanimous decision.

But on that theory of an illegal delegation of power the decision of the court was unanimous because that was sufficient to support the decision that the law was invalid.

Mr. WOOD. There was some question about it, but some man who happened to have been there, or some of his friends, said he discovered that one of those chickens in the carload of chickens had a diamond in his craw that had been smuggled. Undoubtedly some of these chickens came from Mexico. And this gentleman asked in what category that chicken would be if that chicken had a contraband stone in its craw, that is, what would have been the legal aspect of the rest of the chickens in the car.

Mr. RAMSFECK. The difference between the Bedford Stone case and the N. R. A. case, as the Supreme Court construes it, is a question of conspiracy, isn't it? The Bedford Stone case rested on the conspiracy charge.

Mr. ELLENBOGEN. Of course, if the commerce in stone had ended and the stone had been delivered to the local contractor for building and for local handling, I would state then the conspiracy only affected intrastate commerce, and not interstate commerce. So I don't think that is a valid distinction.

The Supreme Court said it was a conspiracy which affected the interstate flow of the stone. But if it is true that the journey of the stones had ended, then that conspiracy could only affect the intrastate flow and not the interstate flow.

Mr. WOOD. Whatever might have been the reasons, in the sickchicken case it was an intrastate commerce, and so was the stone; it was an intrastate case and a case for the State courts and not for the Federal courts.

Mr. RAMSPECK. Does the gentleman think in the N. R. A. case that if the Schecter Co. was engaged in selling the chickens after they processed them, in interstate commerce, that insofar as that part of the N. R. A. Áct was concerned, that it would have been held constitutional?

Mr. ELLENBOGEN. I think it might have been. I think what appealed to the Court in that case were certain regulations regarding chickens. And all of us are swayed by our emotions in those things. I do not think the N. R. A. case is at all a precedent as regards what constitutes interstate commerce and what does not.

Mr. RAMSPECK. I assume you are familiar with the Grain Futures case?

Mr. ELLENBOGEN. Yes, I am.

Mr. RAMSPECK. Where they held that although the transactions. on the Grain Exchange were purely local that they were a part of a continuous stream of commerce and, therefore, Congress could define them as being effective upon the stream of commerce and regulate the local transactions as a part of a continuous flow.

I would like to ask the gentleman whether he drafted this bill or whether it was drafted for him by somebody else.

Mr. ELLENBOGEN. I drafted it with the aid of other people. But there is nothing in the bill for which I do not take responsibility and which I did not draft with the help of others.

Mr. RAMSPECK. I believe the gentleman said in his statement that they were not attempting to control the manufacture of textiles. But as I read page 2 it seems to me that the bill intends not only to control the manufacture of textiles, but also the flow of the raw products.

commerce.

Mr. ELLENBOGEN. The bill only intends to affect the manufacture of textile products that are intended to enter the flow of interstate The theory of the bill is this: If you, a manufacturer in one State, for instance, pay your employees only $5 a week, and I am a manufacturer in another State and pay my employees $10 a week, then you are able to cut the prices and prevent my entering the interstate market and thereby reduce the flow of interstate commerce. And the same is true of the fair-trade practices which affect it.

Mr. RAMSPECK. I am just trying to get the gentleman's own idea as to what his bill is intended to do. On page 2 in subsection 2, the bill says:

The flow of raw cotton, wool, silk, and other raw materials and supplies from certain States and from foreign countries to textile mills located primarily in the eastern seaboard and Southern States, the manufacture of such materials into various textile products, and the sale, transportation, and distribution of such textile products throughout all the States of the United States and numerous foreign countries constitute a continuous stream or current of commerce among the several States and between the States and foreign countries.

Is it intended to control that flow of raw materials?

Mr. ELLENBOGEN. No, sir. We cite the fact, for instance, that cotton from Georgia will go to Massachusetts to be manufactured into cotton goods which will flow back from Massachusetts to New York and Pennsylvania, and perhaps to Georgia. There is not a line in the bill which intends to regulate the sale of cotton in any way, except we say that that shows there is an uninterrupted flow of interstate commerce; that the raw cottons comes from one State into another to be manufactured, and the silk comes from Japan, let us say, and goes into the States and then flows into all of the States. There is no use in denying that we desire to control the conditions under which these goods are manufactured, but only insofar as those goods are designed to enter into interstate commerce. We realize we cannot regulate the manufacture of goods which are intended to remain within the same State.

Mr. RAMSPECK. In your statement you said you did not intend to regulate the retail sale of textile products. That is correct, is it not? Mr. ELLENBOGEN. That is correct.

Mr. RAMSPECK. Suppose a factory in Georgia manufactures cotton textiles and sells it to a selling agency, a Georgia corporation, and they, in turn, sell it in interstate commerce; would that product be affected by this bill?

Mr. ELLENBOGEN. It would be.

Mr. RAMSPECK. In what way?

Mr. ELLENBOGEN. Because those textile products would be intended for interstate commerce. The fact that ownership changes before the goods travel on or while they are in the flow of interstate

commerce does not change the fact that those goods are intended for interstate commerce.

Mr. RAMSPECK. Let's get this clear in your mind as well as in ours. Suppose the cotton is produced in Georgia and it is processed in Georgia in a textile mill and is sold to a Georgia corporation, a selling agency or a wholesale dealer, let us say. Then it is your contention that you can regulate the manufacturing processes because that is ultimately intended to be shipped in interstate commerce?

Mr. ELLENBOGEN. Well, here is what the bill does. That sale would be perfectly valid under the bill. But if the person who buys those goods in Georgia would attempt to ship them in interstate commerce he would be stopped because those goods would not have the label or the stamp.

Mr. RAMSPECK. Are you not going directly in the face of the N. R. A. decision, because there is no interstate commerce involved in the process until the wholesale dealer, who has nothing to do with the manufacture of the goods, puts them into the stream of commerce? Mr. ELLENBOGEN. That is when the bill applies. When the manufacturer in Georgia sells the goods to a Georgia corporation in Georgia the Commission established by this act has no jurisdiction. But when that corporation in Georgia then attempts to ship those same goods in interstate commerce we say that you cannot do that because these goods have not been manufactured under conditions fixed in the bill and, therfore, they cannot enter the stream of interstate commerce. I do not think that affects the N. R. A. decision, because in the N. R. A. decision the chickens had stopped and were no longer to enter the flow of interstate commerce.

Mr. RAMSPECK. But you propose to regulate in this bill a process which takes place and is finished before the article enters the stream of commerce.

Mr. ELLENBOGEN. No; I do not. I don't care what the manufacturer does. He can do as he pleases. But if those goods are to move in interstate commerce, we will stop them from so moving unless they are manufactured under certain conditions.

In other words, we do not dictate to the manufacturer. He can do whatever he pleases, so far as this bill is concerned; he can have any working conditions he pleases; but his goods cannot enter the flow of interstate commerce unless they live up to the standards fixed in the bill and he gets the label and obtains the license.

The N. R. A. went much further. The N. R. A. said to the manufacturer, "We are going to regulate the hours in your factory regardless of what you do with your goods."

We do not do that. We do not talk to the manufacturer at all; we only say these goods are contagious; they spread a social disease; they spread a disease which will destroy the Nation and, therefore, just like any other contagious article, we are going to keep them out of interstate commerce.

Mr. RAMSPECK. I want to make myself plain to the gentleman and to the committee. I am thoroughly in sympathy with a desire of the people who want to correct the evils in the textile industry and in every other industry. I do not confine it to textiles. But it is useless for us to pass an unconstitutional law. If we cannot make it constitutional we are wasting our time and putting the people of the country to a lot of trouble and expense.

There is a series of decisions of the Supreme Court which hold that you cannot exclude from interstate commerce articles that are not in themselves harmful. Now, they have held that lottery tickets cannot be shipped in interstate commerce.

Mr. ELLENBOGEN. That is where the Supreme Court went much further in its decision than its dictum would indicate, because the Supreme Court does say in its decisions that goods, for instance, which are contagious, physically speaking, are goods whose shipment in interstate commerce Congress can prohibit. But lottery tickets do not spread any disease and lottery tickets do not even socially affect any place until their journey is ended and they are sold in th local market. The lottery decision went much further than the Supreme Court in its dictum would indicate.

Mr. RAMSPECK. They did prohibit lottery tickets?

Mr. ELLENBOGEN. Yes; they did.

Mr. RAMSPECK. Or the shipment of liquor.

Mr. ELLENBOGEN. Liquor may be said to be harmful. But the package of lottery tickets in interstate commerce surely does no harm; it is the sale of the lottery in the States which might be said to do the harm, and the legislature so found and, therefore, prohibits them.

But when the Supreme Court sustained the regulation by Congress of the shipment of lottery tickets it went much further than its dictum would indicate, because lottery tickets are harmless. The ticket itself is harmless, physically speaking. They are much more harmless than the shipment of goods manufactured under such conditions as are referred to here.

Mr. RAMSPECK. Yet they did hold they could not be shipped on the theory they were harmful. What basis of constitutional law for the decision have you for the bill that can prohibit the shipment of a bolt of cloth, let us say, in interstate commerce, simply because it was not manufactured in accordance with the terms of this bill?

Mr. ELLENBOGEN. I am going to submit a brief, if I may say so to the Congressman. But the lottery ticket case decision is one that is a precedent for it, because a package of cloth is no more and no less harmful than a package of lottery tickets as such. When the Congress prohibited the flow of lottery tickets it did not regulate commerce, but it prohibited in effect the purchase of those tickets. It looked to the ultimate end and it did not look to the interstate

commerce.

Mr. RAMSPECK. Wasn't the reason they prohibited the lottery tickets because they were barred by State laws?

Mr. ELLENBOGEN. Not in all of the States.

Even if the State

would permit it, you still could not ship them into that State.

Mr. RAMSPECK. In sections 10 and 11 of this bill you say that, "Whenever the manufacture, processing, and/or production of textile products not eligible for entrance into interstate commerce under the provisions of this act is carried on in the same plant or establishment or is otherwise intermingled or connected with, or related to, the manufacture, processing, and/or production of textile products eligible for entrance into interstate commerce, so as directly and substantially to interfere with, prevent, impeded, or obstruct effective regulation of the latter products,"

the Commission may regulate it. That is the regulation of a purely local process, isn't it?

Mr. ELLENBOGEN. That section of the bill goes further than any other section, and it is based upon this: The Supreme Court has

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