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It might be pointed out that there were only two dissents from the opinion. A legislative declaration purporting to subject the textile industry to legislative regulation on the basis of a public use" is so clearly within the explicit language of the Supreme Court in that case that no reasonable conclusion is possible except that such a legislative declaration as is proposed here is clearly contrary to the law.

The production and sale of textiles is one of the so-called "common callings" to which the Supreme Court referred in the Wolff Packing Co. case:

It has never been supposed, since the adoption of the Constitution, that the business of the butcher, or the baker, the tailor, the wood chopper, the mining operator, or the miner was clothed with such a public interest that the price of his product or his wages could be fixed by State regulation. It is true that in the days of the early common law an omnipotent parliament did regulate prices and wages as it chose, and occasionally a colonial legislature sought to exercise the same power; but nowadays one does not devote one's property or business to the public use or clothe it with a public interest merely because one makes commodities for, or sells to, the public in the common callings of which those above mentioned are instances.

The authority to regulate cannot be created by a mere legislative assertion that such regulation is necessary, nor can a legislature enlarge its powers by declaring existing facts to be nonexistent. The Supreme Court has definitely stated this principle in respect to State legislation as is demonstrated by the opinion of Mr. Justice Holmes in the later phases of the District of Columbia rent cases.

We repeat what was stated in Block v. Hirsh as to the respect due to a declaration of this kind by the legislature so far as it relates to present facts. But, even as to them, a court is not at liberty to shut its eyes to an obvious mistake, when the validity of the law depends upon the truth of what is declared. And still more obviously, so far as this declaration looks to the future, it can be no more than prophecy, and is liable to be controlled by events. A law depending upon the existence of an emergency or other certain state of facts to uphold it may cease to operate if the emergency ceases or the facts change, even though valid when passed. Chasleton Corporation v. Sinclair (264 U. S. 547, 548).

The difference between the powers of the Federal government and those reserved to the State must be kept in mind. The right to regulate an industry, properly declared to be clothed with a public interest, is limited solely to the State legislatures. The Federal Government has no such right, because none is granted in the Constitution, and none has ever been implied.

Until recent months it has never even been suggested that there is a "national public interest” in the same legal sense as there is indutiably "a public interest” susceptible of regulation by the several States. The phrase is a legal concept justifying certain types of regulation by States Governments, which regulation could otherwise not be imposed. In other words, the phrase "affected with a public interest” has one definite meaning in our law, the recognition by a State legislature of the necessity of regulating a particular industry. We shall examine the types of industries which have been so regulated and it will be seen that not one relates to manufacturing as such. It is therefore clear that, although up to the present time the States themselves have never regulated manufacturing industries under "the public interest" theory, nevertheless it is now proposed in this bill that the Federal Government should exercise an asserted right under a so-called national-public-interest theory. And, in addition, as if this were not a sufficiently extreme departure from basic legal principles .and doctrines, it is further proposed that the Federal regulation should

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exercise this nonexistent right in a field which, as is demonstrated below, would not be a proper field for the exercise of Federal regulation even if there existed a "national public interest” as a legal concept.

Even if the textile industry could possibly be so considered, Congress has no power of regulation with regard thereto, but the sole and exclusive right to regulate is reserved to the States in view of the fact that the subject matter dealt with is production.

It would seem almost superfluous to state that the Supreme Court of the United States has adopted, repeated, and rigidly adhered to an inescapable legal conclusion that manufacture is not commerce and that the production of food, clothing, and other products is not interstate commerce. It is so well established a principle that repetition of statements by the United States Supreme Court to this effect would merely cover unnecessary space and take unnecessary time. A few sentences briefly quoted from decisions to that effect may, however, serve to show that no reservations have been attached by the Supreme Court to this general principle.

The making of goods and the mining of coal are not commerce, nor does the fact that these things are to be afterward shipped or used in interstate commerce make their production a part thereof. Hammer v. Degenhart (247 L. S. 251, at p. 272).

Mining is not interstate commerce, but like manufacturing it is a local business, subject to local regulation and taxation. Kidd v. Pearson (128 U. S. 1, at p. 20).

The alleged conspiracy and the acts here complained of spent their intended and direct force upon a local situation—for building is as essentially local as mining, manufacturing, or growing crops-and if, by resulting diminution of the commercial demand, interstate trade was curtailed either generally or in specific instances, that was a fortuitous consequence so remote and indirect as plainly to cause it to fall outside the reach of the Sherman Act. Industrial Association v. U. S. (268 U. S. 64, at p. 82).

It has been suggested that, despite the established law of the Supreme Court as expressed in the foregoing citations and many other cases, the Federal Government nevertheless has power to regulate production if such production exerts a "direct" and "substantial” effect upon interstate commerce. Such was the argument made by the Government in its attempt to support the validity of the National Industrial Recovery Act. The Court considered the contention at some length and distinguished the cases relied upon by the Government. One excerpt from the decision of the Supreme Court in the Schechter case effectively disposes of the argument that production may be regulated upon this theory. The court, after quoting the excerpt from the case of the Industrial Association v. United States, supra, and certain cases arising under the Sherman Antitrust Act, said:

While these decisions related to the application of the Federal statute, and not to its constitutional validity, the distinction between direct and indirect effects of intrastate transactions upon interstate commerce must be recognized as a fundamental one, essential to the maintenance of our constitutional system, Otherwise, as we have said, there would be virtually no limit to the Federal Federal power, and for all practical purposes we should have a completely centralized government (Schechter Pouliry Corporation v. l'niled States).

If this broad statement required clarification it can be found in the opinion of the Supreme Court in the Schechter case itself as is shown by the following quotation:

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 the activities of the people

and the authority of the State over its domestic concerns would exist only by the sufferance of the Federal Government.

It might still be argued that the Supreme Court has nevertheless upheld the right of the Government to regulate local matters where & direct effect has been found to extend from such local activities to the flow of interstate commerce. It is, therefore, pertinent to point out that the Supreme Court, in the Schechter case, analyzed the three types of cases in which the regulation of local activities was upheld and distinguished each of the three types from the statute in question which cought to regulate hours, wages, and working conditions in precisely the same way as does the bill under consideration. Thus, the Supreme Court distinguished those cases which involved railroads and instrumentalities of commerce. The court showed that the regulation in such instances was based on the theory that the relationship of the matters regulated to the free flow of interstate commerce was so direct as actually to be incidental to interstate commerce. The Supreme Court said:

We have held that, in dealing with common carriers engaged in both interstate and intrastate commerce, the dominant authority of Congress necessarily embraces the right to control their intrastate operations in all matters having such a close and substantial relation to interstate traffic that the control is essential or appropriate to secure the freedom of that traffic from interference or unjust discrimination and to promote the efficiency of the interstate service.

Similarly, in considering the cases involving conspiracy in violation of the Antitrust Act, the Court pointed out that not only did these cases merely involve the construction of a statute so that a conspiracy with intent to restrain commerce violated the statute, but in addition the intent and effect of the actions of the defendants in those cases was directly to curtail the flow in interstate commerce of the products in question. Again, in the cases involving the regulation of dealings in grain futures and in the regulation of packers and stockyards, the Court found that the relationship between the activities regulated and the flow of the products with which those activities dealt was so intimately interrelated that there was, in reality, no beginning and no end to the interstate flow, but, on the contrary, there was merely one unbroken stream or current. In this connection the Supreme Court said:

Hence, decisions which deal with a stream of interstate commerce—where goocis come to rest within a State temporarily and are later to go forward in interstate commerce and with the regulations of transactions involved in that practical continuity of movement, are not applicable here.

In view of the well-established law it is therefore not surprising to find an apparent reluctance on the part of the sponsors of the Ellenbogen bill to seek some ground for attempting to uphold the bill other than as a regulation of commerce.

Carrying an impossible assumption one step further, even if Congress has this power, the things sought to be regulated must bear some reasonable relation to what the public interest is alleged to require, and it is obvious that the multifarious restrictions and regulations contemplated in the proposed bill have no reasonable connection with the evils stated to require regulation.

If we concede two legal impossibilities (1) that a "national public interest" exists with which the textile industry may be considered to be "affected”, and (2) that Congress may regulate the production of goods, nevertheless the proposed bill is invalid in that the regula



tion proposed bears no reasonable relationship to the public interest asserted to exist. The Supreme Court said in the Wolf Packing Company case that private businesses subject to regulation because affected with a public interest must be regulated in different ways {reading]:

To say that a business is clothed with a public interest is not to determine what regulation may be permissible in view of the private rights of the owner.

It is not a matter of legislative discretion solely. It depends on the nature of the business, on the feature which touches the public, and on the abuses reasonably to be feared. To say that a business is clothed with a public interest is not to import that the public may take over its entire management and run it at the expense of the owner.-Wolff Packing Company v. Court of Industrial Relations (262 U. S. 536).

The foregoing quotation has two phases worthy of consideration at this point: First, the regulation must be logical and factually related to the public interest. Secondly, the regulation must not violate other provisions of the Constitution.

First. Consider the regulations proposed by this bill, even in the light of the exaggerated and inflated "findings of fact” which this committee is asked to make. These findings may be summarized as (a) the flow of interstate and foreign commerce in textile products has declined and been diverted by "excessive competition” in all phases of textile production (sec. I (a) (4) and (b) "present unregulated conditions”, including wages, hours, conditions of work, and excessive production, constitute a menace to the well-being of the citizens of the United States.

A reading of the above proposed findings might lead one to the conclusion that almost any regulation could be considered “related" to such a broad declared public interest. But, consider some of the regulations comprised in this bill:

1. Payment of wages to striking employees, irrespective of the cause of the strike (sec. 3 (B) (5), in conjunction with sec. 16).

2. The deprivation of the right to use the mails, to borrow from the Government, to register securities, on the part of a stockholder or a part owner of a textile business (sec. 9 (b) and secs. 12, 13, and 14).

3. The regulation of wages to be paid clerical and office employees (sec. 16 (b)).

4. The regulation of the times and methods of paying wages, of purchases at company stores and living in company houses, of the right to make deductions from wages paid employees, of the right to give bonuses or "anything of value” for the purpose of influencing "working conditions" (sec. 16).

5. The regulation of the length of employees' vacations (sec. 16 (1)).

6. Classified minimum wage rates and differentials above minimum wages to be fixed by the Commission (sec. 18).

7. The regulation of hours of labor of clerical and office workers, of the starting and stopping time of the work of female employees, and the requirement of double time for work performed on Sundays and legal holidays (sec. 19).

8. The prohibition of the employment of persons under the age of 16, or under the age of 18 at certain occupations to be fixed by the commission (sec. 21).

9. The imposition of new burdens and penalties for violations of the National Labor Relations Act (sec. 22).

10. Requirements regarding "safety and health conditions"; of notice before discharge for whatever reason; the imposition of speci


fied dismissal and "separation wages"; compulsory compensation insurance even where not required by State law; the prohibition of work of any kind without reservation or exception; the requirement that licenses be posted "in 10-point bold-faced type or larger” (sec. 24).

11. The compulsory arbitration of disputes regarding “work assignment” (sec. 25).

12. A list of "fair trade practices" (sec. 28).

The foregoing requirements, restrictions, and regulations are not intended to be an exhaustive list of those provisions of the bill to which violent objection may be made, but are merely random instances of requirements which on their face bear no reasonable relationship to the "public interest" which purports to be the basis of this bill. On the contrary, it is obvious that no attempt whatever seems to have been made to limit the proposed regulations within the field of the evils which are asserted to exist. The bill proposes a more complex and intricate framework of regulatory restrictions than was attempted or contemplated in any N. R. A. code with which we are familiar. The multifareous proposals of the Labor Advisory Board of the N. R. A., rejected time and again by responsible administrators and by industry after industry, now reappear in some instances with new language to cloak their legal nudity. It may be said with accuracy that the bill resembles a composite Code of Fair Competition, with the further thought that the defunct chicken" is plumed with feathers borrowed from union agreements, the union proposals and the most arbitrary rules and regulations.

Second, the regulations are not only unrelated to the alleged evils, but they violate other provisions of the Constitution.

We have discussed above (par. II, p. 9) the legal limitation upon the right of the Federal Government to regulate production under the commerce clause. These considerations need not be restated here. Attention is again called to the Wolff Packing Co. case, and it should be pointed out that the court unanimously upheld the right of employer and employee to contract with respect to wages (under the due process clause of the Constitution) and that the court held void that part of the Kansas Court of Industrial Relations Act of 1920 which, with respect to such businesses as the production of food and clothing and of mining, required employers to pay wages fixed by an industrial court." (See Willoughby, Constitution of the United States, second edition, vol. III, p. 1762.)

The decision of the Supreme Court, in the Wolff Packing Co. case, clearly represents the only conclusion which could reasonably have been reached by the court in the light of (a) the types of businesses which have been regulated under the "public interest” theory and (b) the form which such regulation has taken.

(a) The following types of industries have been regulated under the “public interest” theory: Canals, waterways, booms; bridges, and ferries; wharves, docks, elevators and stockyards; telephone, telegraph, electric, gas and oil lines; highways, railroads and the various forms of common carriers; inns, hotels; irrigation ditches, dams; toll mills (grist mills and others); insurance companies.

Although the above may not be exhaustive, it is unquestionably comprehensive enough to be fairly considered to be broad enough to justify certain conclusions. A careful examination of the list reveals that, except in the case of insurance companies, and even in that case

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