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ment of the money to producers pursuant to rental and benefit contracts could not be treated separately.
Regulation of commerce and prohibition of shipments in interstate commerce. The constitutional source of Federal power for the enactment of this bill, if any, must be found in the commerce clause of the Constitution and, along with that the Federal power over the mails. The constitutionality of the act, if it could be sustained at all, must be on the theory that this bíll is an exercise of the power of Congress to close the mails and the channels of interstate commerce to transactions inherently harmful, or that the manufacturing and distribution of textile fabrics are inseparable and both constitute a part of interstate commerce, or that such manufacturing and distribution so directly affect interstate commerce as to be a part of it, and, hence, within the congressional power to regulate.
Since this bill provides for the denial of the use of the channels of interstate commerce and the use of the mails, brief reference should be made to these specific phases. Federal statutes have been sustained which exclude from interstate commerce lottery tickets, impure food, liquor in contravention of State laws, misbranded articles of food, stolen automobiles and diseased cattle.
and diseased cattle. (Lottery case, 188 U. S. 321; Hipolite Egg Co. v. U. S., 220 U. S. 45; Clark Distil'ing Co. v. West Maryland Ry., 242 U. S. 311; Weeks v. United States, 245 U. S. 618; Brooks v. United States, 267 U. S. 432; Reid v. Colorado, 187 U. S. 137; Thorton v. United States, 271 U. S. 414). The power of exclusion of all those cases arouse under very general power in Congress to exclude matter from interstate commerce because of the inherently harmful or dangerous character of the particular subjects excluded.
As regards commodities and transactions not inherently harmful, Congress has no general power to close the channels of interstaté commerce.
Such a point has been presented but once to the Supreme Court, namely, in the Child Labor case (Hammer v. Dagenheart, 247 U. S. 251). The exclusion from interstate commerce of goods produced in factories employing child labor was there held unconstitutional, The courts said that the congressional power to regulate commerce did not include power to exclude from commerce harmless goods. As the Court further said—the power to regulate commerce is the power to control the means for carrying on commerce, which is directly contrary to the assumed right to forbid commerce from moving and thus destroy it as to particular commodities. The difference between a Federal statute closing the channels of interstate commerce to stolen automobiles and one prohibiting shipments of goods made in a factory where child labor is employed is real and apparent. To interpret the commerce clause in such a way that Congress can prescribe conditions of manufacture, as was attempted in the Child Labor case, would involve, as has been stated frequent'y by the Supreme Court a complete surrender of States' rights, which is a very different matter from empowering Congress to prosecute the theft of automobiles. The one wou d compel States to adopt a social welfare policy; the other would merely assist the States in the suppression of crime. In short, the regulating of conditions of employment in a factory, through a Federal law, would violate the tenth amendment to the Federal Constitution, whereas the automobile theft case would not. In any event, it is settled doctrine that Congress has no power to close the channels of interstate commerce to transactions that are inherently harmless, and by such means forced Federal regulation on a field beyond its control.
The power to regulate foreign commerce and the power to regulate interstate commerce were delegated to the Congress in the same sentence of the Constitution and the word "regulate” was used but once. The Court has held that the word "regulate” gives Congress the power to destroy commerce with foreign nations by prohibiting the importation of any articles, however harmless, and it may even condition the importation upon compliance with Federal regulation (Buttfield v. Stranahan, 192 U. S. 470, 492-493). However, even this point has been cleared up by the Court on the ground that the power of Congress over interstate commerce is subject to certain constitutional limitations which do not apply to foreign commerce. The Court has said that no individual has any vested right to trade with foreign nations; hence, the power of the Congress over foreign commerce is not limited by the due process requirements of the fifth amendment (Buttfield v. Stranahan, supra). "But as to interstate commerce, the fifth amendment is squarely applicable (Carroll v. Insurance Company, 149 U. S. 401). In that case, Justice Holmes said:
It is true that by the provision in the body of the instrument (Constitution), Congress has attempted to regulate commerce, and that the act of Congress referred to in the cases cited was passed in pursuance to that power. But even if the fifth amendment (which prevents the taking of property without due process of law) were read as contemporaneous with the original Constitution, the power given in the commerce clause would not be taken to override it so far as the fifth amendment protects fundamental personal rights.
Also, the tenth amendment reserves to the States powers not specifically granted to the Federal Government, and this amendment is even far more applicable to Congress' power over interstate commerce than over foreign commerce.
In view of these decisions, the law becomes very clear and it perhaps would have been more accurate for the Court, in the Child Labor case, to have amplified to the extent of saying that the delegated power to regulate interstate commerce gives the Congress sovereign power over such commerce, but that power is limited by the Bill of Rights; that the Congress may not close the channels of interstate commerce to inherently harmless matter, because, to do so, would be confiscatory-hence violative of the due process provision of the fifth amendment, and, in addition, would give the Congress power, by indirection, to regulate purely intrastate activities in violation of the tenth amendment.
It has been stated frequently in the decisions that because of the very complexity of business, as adequately amplified in the findings of policy of this bill, although the findings of policy do not include many other factors which might reasonably contribute to the conditions complained of, under such comprehensive powers, under the commerce clause, Congress could arbitrarily exclude harmless matter from interstate commerce unless Federal regulations were observed, and the result would be, as made so very clear in all of the Court decisions, including the recent Schecter decision, could control practically every feature of intrastate business life. Such comprehensive
regulatory powers would be held destructive of the rights reserved to the States. (Employers' Liability cases, 207 U. S. 463), in which case Chief Justice White stated:
It is apparent that if the contention were well-founded, it would extend the power of Congress to every conceivable subject, howver inherently local; would obliterate all of the limitations of power imposed by the Constitution, and would destroy the authority of the States as to all conceivable matters, which from the beginning have been, and must continue to be, under their control so long as the Constitution endures.
See also Kidd v. Pearson, 128 U. S. 1, 21; Keller v. U. S., 213 U.S. 138, 148; Hill v. Wallace, 259 U. S. 44, 67. The announced decision in Schecter v. U. S., 295 U. S. 495 at 546 adheres to this rule, when the Court said:
If the commerce clause were construed to reach all enterprises and transactions which could be said to have an indirect effect upon interstate commerce, the Federal authority would embrace practically all of the activities of the people, and the authority of the State over its domestic concerns would exist only by sufferance of the Federal Government.
The tenth amendment positively blocks any interpretation of the commerce clause that would give the Congress arbitrary power to close the channels of interstate commerce, and to condition their use upon compliance with Federal regulation of labor conditions. Recently, in the press, in connection with pending measures in Congress, a statement made in 1913 by the late Justice Holmes, in a speech entitled “The Law and the Court” has been quoted. That statement is: While the Union would be imperiled if the Court could not declare the State laws unconstitutional, he did not believe that the United States would come to an end if the Court lost its power to declare an act of Congress void. Chief Justice Hughes, in a series of lectures, delivered in 1927, now printed in a book entitled “The Supreme Court of the United States”, commencing at page 95, made the following comment regarding this statement of Justice Holmes. After quoting the statement, Chief Justice Hughes (who was not at that time a member of the Supreme Court), said:
Such observations undoubtedly have derived support from the infrequency, during a long period of decisions holding acts of Congress to be invalid, and from the fact that few of these cases have been of great importance in shaping the course of the Nation. But the suggestion fails, as it seems to me, to take adequate account of considerations which ought not to be lightly dismissed. The dual system of Government implies the maintenance of the constitutional restrictions of the powers of Congress as well as of those of the States. The existence of the function of the Supreme Court is a constant monition to Congress. A judicial, as distinguished from a mere political, solution of the questions arising from time to time has its advantages in a more philosophical and uniform exposition of constitutional principles than would otherwise be probable. Moreover, the expansion of the country has vastly increased the volume of legislative measures and there is severe pressure toward an undue centralization. In Congress, theories of State autonomy, strongly held so far as profession goes, may easily yield to the demands of interests seeking Federal support. Many of our citizens in their zeal for particular measures have little regard for any of the limitations of Federal authority. We have entered upon an era of regulation with a great variety of legislative proposals, constantly multiplying governmental contacts with the activities of industry and trade. These proposals raise more frequently than in the past questions of National, as opposed to State, power. If our dual system with its recognition of local authority in local concerns is worth maintaining, judicial review is likely to be of increasing value. The Bill of Rights in the Federal Constitution, sustained by the judicial power, must still be regarded as of importance to the liberty of the citizen.
This bill prescribes most drastic regulations for intrastate activities, as well as interstate activities, and then seeks to compel compliance by closing the channels of commerce and the mails and, therefore, shows on its face that it is not a regulation of commerce, but is an attempt to try to do indirectly what Congress cannot do directly. This appears on the face of the bill and the Supreme Court would consider the congressional motive back of the statute and declare it unconstitutional, even though Congress had the unquestioned power to close the channels of commerce, which it has not. It is merely another case where the Court would hold that Congress cannot use its powers, even those it admittedly has, to accomplish indirectly a result beyond its power, when its purpose to that effect appears upon the face of the act. (Child Labor Tax case, 259 U. S. 20.) In that case, Congress had unquestioned power to tax, yet it appeared on the face of the act that the real motive was to regulate child labor, a subject beyond the Federal jurisdiction. This same rule, as regards the use of the taxing power, applies with equal force to the commerce power. (Hill v. Wallace, supra.)
Closing of mails: This bill cannot be sustained under the congressional power to close the mails. The precise limitations of the congressional power to close the mails has not been established. No Federal statute closing the mails to any type of matter has ever been held unconstitutional, but the power of Congress on this point has never been severely tested. As in the case of interstate commerce, Congress may exclude from the mails matters that are inherently harmful, such as the closing of the mails to lottery tickets, schemes to defraud, and so forth. But Congress has never attempted to close the mails for the purpose, as in this bill, to regulate activities beyond its jurisdiction, such as the manufacturing of goods. The postal power is limited by the Bill of Rights, just as is the commerce power (Burton v. U. S., 202 U.S. 344, 371). And, like the commerce power, the tenth amendment prohibits any interpretation of the postal power that would enable Congress to close the mails at will, or to permit their use only upon compliance with Federal regulation. Otherwise, every feature of modern business life could be brought under Federal control. All of the arguments advaced by the Court with regard to the commerce power apply with even greater force to the postal power.
Power of Congress to regulate intrastate commerce which directly affects interstate commerce.
Notwithstanding the fact that the Supreme Court has consistently drawn, for more than 100 years, a clear line of demarcation between intra- and inter-state commerce, and, as far as the purpose of this bill is concerned, clearly defined what constitutes affecting interstate commerce to the degree necessary to make it a part thereof, the night after the Schechter decision was rendered, General Johnson stated, over the radio, that Congress could pass a law preserving the objectives of the N. R. A., as far as interstate commerce was concerned, which would not be condemned by the reasoning in the Schechter decision. His theory, as then announced, was this. As appeared in the Schechter case, the chickens were shipped to Brooklyn across State lines, dressed, and sold locally, that is, within the State of New York. Therefore, the decision had no application to a case where raw materials were assembled at a plant and the finished goods were intended to be sold
or actually sold later in interstate commerce, that is, transported across the State lines. In other words, such a theory would determine the character of intra- or inter-state commerce according to the intent of the manufacturer as regards his contemplated disposition of the goods, or what he actually did with them after they were made. This, likewise, was the announced philosophy of the Wagner bill and has been urged as a reason why this Ellenbogen bill might be sustained. It is not necessary to go into that theory in detail because it is archaic and has been exploded by the Supreme Court in Coe v. Errol, 116 U.S. 517, 525. In this case, the Court said:
No distinction is more popular to the common mind, or more clearly expressed in economic and political literature, than that between manufacture and commerce. Manufacture is transformation—the fashioning of raw materials into a change of form for use. The functions of commerce are different. The buying and selling and the transportation incidental thereto constitute commerce, and the regulation of commerce in the constitutional sense embraces the regulation at least of such transportation. * * If it be held that the term includes the regulation of all such manufactures as are intended to be the subject of commercial transactions in the future, it is impossible to deny that it would also include all productive industries that contemplate the same thing. The result would be that Congress would be invested, to the exclusion of the States, with the power to regulate, not only manufacturers, but also agriculture, horticulture, stock raising, domestic fisheries, mining-in short, every branch of human industry. For is there one of them that does not contemplate, more or less clearly, an interstate or foreign market? Does not the wheat grower of the Northwest or the cotton planter of the South, plant, cultivate, and harvest his crop with an eye on the prices at Liverpool, New York, and Chicago? The power being vested in Congress and denied to the States, it would follow as an inevitable result that the duty would devolve on Congress to regulate all of these delicate, multiform and vital interests-interests which in their nature are and must be local in all details of their successful management. The demands of such a supervision would require, not uniform legislation generally applicable throughout the United States, but a swarm of statutes only locally applicable and utterly inconsistent. Any movement toward the establishment of rule of production in this vast country, with its many different climates and opportunities, could only be at the sacrifice of the peculiar advantage of a large part of the localities in it, if not of every one of them. On the other hand, any movement toward the local, detailed and incongruous legislation required by such interpretation would be about the widest possible departure from the declared object of the clause in question. Nor this alone. Even in the exercise of the power contended for, Congress would be confined to the regulation, not of certain branches of industry, however numerous, but to those instances in each and every branch where the producer contemplated an interstate market. These instances would be almost infinite, as we have seen; but still there would always remain the possibility, and often it would be the case, that the producer contemplated a domestic market. In that case the supervisory power must be executed by the State; and the interminable trouble would be presented, that whether the one power or the other should exercise the authority in question would be determined, not by any general or intelligible rule, but by the secret and changeable intention of the producer in each and every act of production. A situation more paralyzing to the State governments, and more provocative of conflicts between the General Government and the States, and less likely to have been what the framers of the Constitution intended, it would be difficult to imagine.
The Supreme Court has said that errors in construing the meaning of the commerce clause have resulted from not observing the difference between the regulating power of Congress over contracts and negotiations for sales of goods to be delivered across State lines, and that over the merchandise, the subject of such sales and negotiations; that the goods are not within the control of Congress until they are in actual transit from one State to another. The manufacture of goods to be shipped without the State is not interstate commerce (Danville