The Bismarck Tribune Newspaper, January 8, 1936, Page 6

THE BISMARCK TRIBUNE. WEDNESDAY, JANUARY 8, 1986 Jan, 8.—(?)—The text of the majority opinion read * by Justice Roberts, in which the supreme court killed the AAA, In this case we must determine ‘whether certain provisions of the ag- Ficultural adjustment act, 1933, con- flict with the federal constitution. Title I of the statute is captioned ‘Agricultural Adjustment.” Section 1 recites that an ecomonic emergency hhas arisen, due to disparity between the prices of agricultural and other commodities with consequent de- struction of farmers’ purchasing power and breakdown in orderly ex- change, which in turn, have affected transactions in agricultural commodi- ties with a national’ public interest and burdened and obstructed the nor- mal currents of commerce, calling for the enactment of legislation. . Review Second Section Section 2 declares it to be the pol- icy of congress: “To establish and maintain such balance between the production and consumption of agricultural commod- ities, and such marketing conditions therefor, as will re-establish prices to farmers at a level that will give agricultural commodities a purchas- ing power with respect to articles that farmers buy, equivalent to the pur- . chasing power of agricultural com- mmodities in the base period.” ‘The base period, in the case of cotton, and all other commodities ex- cept tobacco, is designated as that be- tween August, 1903, and July, 1914. The further policies announced are in approach to the desired equality ‘by gradual correction of present in- equalities “at as rapid a rate as is deemed feasible in view of the cur- rent consumptive demand in domestic and foreign markets,” and the pro- tection of consumers’ interest by re- adjusting farm production at such level as will not increase the percent- ‘age of the consumers’ retail expendi- tures for agricultural commodities or products derived therefrom, which is returned to the farmer, above the percentage returned to him in the base period. Cite Section Eight Section 8 provides, amongst other things, that “in order to effectuate the declared policy,” the secretary of agriculture shall have power: “(1) To provide for reduction in the acreage or reduction in the production for market, or both, of any basic ag- ricultural commodity, through agree- ments with producers or by other vol- untary methods, and to provide for rental or benefit payments in connec- tion therewith or upon that part of ‘the production of any basic agricul- tural commodity required for domes- tic consumption, in such amounts as ‘the secretary deems fair and reason- able, to be paid out of any moneys available for such payments.” “(2) To enter into marketing agreements with processors, associa- tions of producers, and- others en- - gaged in the handling, in the cur- rent of interstate or foreign commerce of any agricultural commodity or product thereof, after due notice and Doct aie for -hearing. to ‘interested arties.” ~{3) To Issue licenses permiting rs, associations of producers, and others to engage in the handling, in the nt of interstate or foreign commerce, of any agricultural com- modity or product thereof, or any Sompesing commodity or product It will be observed that the secre- tary is not required, but is permitted, ff in his uncontrolled judgment, the policy of the act will so be promoted, to make agreements with individual farmers for a reduction of acreage or production upon such terms as he may think fair and reasonable. Cite Tax Section Section 9 (A) enacts: “To obtain revenue for extraordi- mary expenses incurred by reason of the national economic emergency, there shall be ievied processing taxes fs hereinafter provided. When the secretary of agriculture determines that rental or benefit payments are to be made with respect to any basic agricultural commodity, he shall pro- claim such determination, and a proc: essing tax shall be in effect with r @pect to such commodity from the of the marketing year there- tor next following the date of such proclamation. The processing tax shall be levied, assessed, and collected upon the first domestic processing of peaeun Bee aes whether of domestic mn or imported, and shall be paid by the processor... .” The secretary may from time to time, if he finds it necessary for the effectuation of the policy of the act, the amount of the exaction the requirements of subsec- ). The tax is to terminate at if any marketing year if the or benefit payments ate dis- continued by the secretary with the expiration of that year. it Provided Readjustmen: Section 9 (B) fixes the tax “at such @ rate as equals the difference be- ‘tween the current average farm price for the commodity and the fair ex- Power in the sec- 7, after investigation, notice and hearing, to peadijuss the tax so as to prevent accumulation of surplus Stocks and depression of farm prices. Section 9 (X) directs that the fair value of @ commodity shall such @ price as will give that com- the same purchasing power respect to articles farmers buy it had during the base period and the fair exchange value and the average farm price of a com- ascertained by the from available statistics in change value,” with exchange shall be appropriates $100,- wailable to the secre- » tary of agriculture for administrative this title and for rent-; of August 3, 1882, entitled “an act) + .”3 and: ‘before this court in the head money ‘congress. But two of its clauses available to the | of agriculture for expansion | markets and prod see refunds on taxes. Taxes sub-| and to be used by processed if the processing had oc- curred on the date when the proc- essing tax becomes effective. On July 14, 1933, the secretary of j agriculture, with the approval of the President, proclaimed that he had determined rental and benefit pay- ments should be made with respect that commodity was to begin August 1, 1933; and calculated and fixed the rates of processing and floor taxes on cotton in accordance with the terms ot the act. | i 2 resented a claim to the respondents as receivers of the Hdosac Mills corporation for processing and floor taxes on cotton | levied under s ions 9 and 16 of the The receivers recommended that he claim be disallowed. The district court found the taxes valid and or- dered them paid. Upon appeal the circuit court of appeals reversed the order. The judgment under review was entered prior to the adoption of ; the amending act of August 24, 1935, jand we are therefore concerned only with the original act. | First Government Claim First. At the outset the United States contends that the respondents‘ have no standing to question the val- idity of the tax. The position is that the act is merely a revenue measure levying an excise upon the activity of processing cotton—a proper subject for the imposition of such a tax—the | proceeds of which go into the federal | treasury and thus become available for appropriation for any purpose, It/ is said that what the respondents are} endeavoring to do is to challenge the | intended use of the money pursuant to congressional appropriation when, by confession, that money will have become the property of the govern- ment’and the taxpayer will no longer | jhave any interest in it, Massachu-) pe vs. Mellon, 262 U. S. 447, is! claimed to forestall litigation by the {respondents or other taxpayers, as} such, looking to restraint of the ex- penditure of government funds. That: case might be an authority in the| Ppetitioner’s favor if we were here con-| cerned merely with a suit by a tax- payer to restrain the exepnidture of the public moneys. It was there held! that a taxpayer of the United States may not question expenditures from its treasury on the ground that the alleged unlawful diversion will deplete the public funds and thus increase the burden of future taxation. Ob- viously the asserted interest of a tax- payer in the federal government's funds and the supposed increase of the future burden of taxation is min- ute and indeterminable. But here the respondents who are called upon to pay moneys as taxes, resist the ex- action as a step in an unauthorized plan. This circumstance clearly dis- | tinguishes the case. The government in substance and effect asks us to; separate the agricultural adjustment act into two statutes, the one levying | an excise on processors of certain commodities, the other appropriating the public moneys independently of the first. Passing the novel sugges- tion that two statutes enacted as parts of a single scheme should be tested as if they were distinct and/ unrelated, we think the legislation ; now before us is not susceptible of such separation and treatment, Object Established ‘The tax can only be sustained by ignoring the avowed purpose and op-! eration of the act, and holding it aj) measure merely laying an excise upon | processors to raise revenue for the| support of government. Beyond cavil the sole object of the legislation is to} restore the purchasing power of agri- cultural products to a parity with that prevailing in an earlier day; to take money from the processor and bestow it upon farmers who will reduce their | acreage for the accomplishment of | the proposed end, and meanwhile, to} aid these farmers during the period required to bring the prices of their | crops to the desired level. | ‘The tax plays an indispensable part | in the plan of regulation. As stated) by the agricultural adjustment ad- ministrator, it is “the heart of the law”; @ means of accomplishing one} or both of two things intended to help | farmers attain parity prices and pur- chasing power.” A tax automatically |the funds raised by, the tax. | misconception, cised in this instance is not the tax- ing power. The burden imposed on the ship owner by this statute is the mere incident of the regulation of commerce—of that branch of for- eign commerce which is involved in immigration.” . {upon the congress power “to lay }and collect taxes, duties, imposts conform to the limits set upon the use jof a granted power. When such a Coercion Is Cited If the cotton grower elects not to jand excises, to pay the debts and jcontention comes here we naturally /accept the benefits, he will receive {provide for | States...” It is not contended that “It is true not much is said about} late agricultural production upon the |the man who reaps the profit from | the transaction .. .the sum demanded jof him is not, theref jspeaking, a tax or duty within the {meaning of the constitution, The money thus raised, though paid into the treasury, is appropriated in ad-| vance to the uses of the statute, and | does not go to the general support of the government.” : While there the exaction was sus- tained as an appropriate element in a plan within the power of congress “to regulate commerce with foreign nations,” no question was made of the standing of the shipowner to raise the question of the validity of the scheme and consequently of the exaction which was an incident of it. Tax Inaccurate ‘ It is inaccurate and misleading to speak of the exaction from proces- sors prescribed by the challenged act as a tax, or to say that as a tax it is subject to no infirmity. A tax, in the general understanding of the term, and as used in the constitution, signifies an exaction for the support of the government. The word has never been thought to connote the expropriation of money from one group for the benefit of another. We may concede that the latter sort of imposition is constitutional when imposed to effectuate regulation of a@ matter in which both groups are interested and in respect of which there is a power of legislative reg- ulation. But manifestly no justifi- cation for it can be found unless as an integral part of such regulation. |The exaction cannot be wrested out of its setting, denominated an excise for raising revenue and legalized by ignoring its purpose as a mere instru- mentality for bringing about a de- sired end. To do this would be to shut our eyes to what all others than we can see and understand. Child labor tax case, 259 U. S. 20, 37. We conclude that the act is one regulating agricultural production; that the tax is a mere incident of such regulation and that the re- spondents have standing to challenge the legality of the exaction. Not Exercise of Tax Power It does not follow that as the act is not an exertion of the taxing power and the exaction not a true tax, the statute is void or the exac- tion uncollectible. For, to paraphrase what was said in the head money cases (supra), if this is an expedient regulation by congress, of a subject within one of its granted powers, “and the end to be attained is one falling within that power, the act is not void, because, within a loose and more extended sense than was used in the constitution,” the exaction is called a tax, Second. The government asserts that even if the respondents thay question the propriety of the appro- priation embodied in the statute their attack must fgll because article 1, section 8 of the constitution author- izes the contemplated expenditure of contention presents the great and the controlling question in the case. We approach its decision with a sense of our grave responsibility to render judgment in accordance with the principles established for the govern- ance of all three branches of the government. Constitution Supreme Law There should be no misunderstand- ing as to the function of this court in such a case. It is sometimes said that the court assumes a power to overrule or control the action of the People’s representatives. This is a The constitution is the supreme law of the land ordained and established by the people. All legislation must conform to the prin- ciples it lays down. When an act of congress is appropriately challenged in the courts as not conforming to the constitutional mandate the judi- clal branch of the government has strictly | * to cotton; that the marketing year for | protecting the ship owner. But he is; theory that such iegisiation would promote the general welfare. The} ernment concedes that the phrase | provide for the general welfare” | qualifies the power “to lay and col. lect taxes.” The view that the clause grants power to provide for the gen- eral welfare, independently of the | taxing power, has never been author- itatively accepted. Mr. Justice Story points out that if it were adopted “it is obvious that under color of the gen- erality of the words, to ‘provide for | the common defense and general wel- fare,’ the government of the United States is, in reality, a government of general and unlimited powers, not- withstanding the subsequent enum- in aid of agriculture falls within it.|the present Wholly apart from that question, an-|department of agriculture has prop- | ac’ the common defense | require a showing that by no reason-|less for his crops; those who receive and general welfare of the United |able possibility can the payments will be able to undersell challenged jlegislation fall within the wide range|him. The result may well be financial this provision grants power to regu-jof discretion permitted to the con- and ruin. gress. How great is the extent of that |tent range, when the subject isythe pro-|the fact motion of the general welfare of the | successful. United States, we need hardly re-|because mark. But, despite the breadth of the jity whom. legislative discretion, our duty to hear |ments were jand to render judgment remains. If |surrender the statute plainly violates the stated |tion, the congress principle of the constitution we must |and, in the Bankhead cotton so declare. the taxing power We are not now required to ascer-/minatory fashion tain the scope of the phrase “ sion, This progression welfare of the United States” or to|more fully to expose the coercive pur- determine whether an appropriation | pose of the so-called tax imposed by Tt is clear that the other principle embedded in our con-| erly described the p! stitution prohibits the enforcement|a non-cooperating minorit ot the agricultural adjustment act.|'This is coercion by economic matter, its exertion cannot be displaced ‘by state action. erwise nis wel severe cardinal principle embodied in constitution and substitute one which declares that congress may only ef- fectively legislate as to matters within federal competence when the gion apap rg is etn Congress no power SS eee is Un aareaieiel ite ends sought agricultural ad- justment act. It must follow kere it May not indirectly accomplish those ends by taxing and spending to pur- compliance, The constitutoin [Supreme Court Decision Declaring AAA Unconstitutional] | of the affars or concerns of the Judgment Affirmed To say | states. the power to tax and to appropri- ate for the general welfare, never suggested that any power grantes by tne constitution could be usett for the destruction of local self-gov- ernment in the states. Story coun- tenances no such doctrine. It seems composed of indestructible states’ might be served by obliterating the constituent members of the union, But to this fatal conelusion the doc- trine contended for would inevitably lead. And its sole premise is that, though the makers of the constitu- tion, in erecting the federal govern- ‘This | ogy, for taxation and appropriation |other federal power. Said the court, eration of specific powers.” The|The act invades the reserved rights true construction undoubtedly is that | of the states. It is a statutory the only thing granted is the power |to regulate and control agricultural to tax for the purpose of providing | production, A matter beyond the funds for payment of the nation’s | powers delegated to the federal gov- debts and making provision for the ernment. The tax, the appropriation general welfare. “| of the funds raised, and the direction Nevertheless the governméht as-|for their disbursement, are but parts serts that warrant is found in this!of the plan. They are but means to clause for the adoption of the agri- ‘an unconstitutional end. cultural adjustmnet act. The argu- Cite 10th Amendment ment is that congress may appropri-| From the accepted doctrine that the ate and authorize the spending of | United States is a government of moneys for the “general welfare”; | delegated powers, it follows that those that the phrase should be liberally|not expressly granted, or reasonably construed to cover anything con- | to be implied from such as are con- ducive to national welfare; that de-| ferred, are reserved to the states or ;cision as to what will promote such|to the people. To forestall any sug- welfare rests with congress alone,!gestion to the contrary, the tenth and the courts may not review its/amendment was adopted. The same jdetermination; and finally that the Proposition, otherwise stated, is that appropriation under attack was in| powers not granted are prohibited. fact for the general welfare of the | None to regulate agricultural produc- United States. jtion is given, and therefore legislation Discuss Welfare Clause Ms ie ard for that purpose is for- idden. is The congress is expressly empow-) Tt is an established principle that ered to lay taxes to provide for the |the attainment of a prohtbited end general welfare. Funds in the treas- may not be accomplished under the ury as a result of taxation may be pretext of the exertion of powers expended only through appropria-| Which are granted. tion, (Article 1, section 9, clause 7)./ “Should congress, in the execution They can never accomplish the ob-|o¢ its powers, adopt measures which jects for which they were collected | are prohibited by the constitution; or unless the power to appropriate is | sould congress, under the pretext of as broads as the power to tax. The| executing its powers, pass laws for necessary implication from the terms | the accomplishment of objects not en- of the grant is that the public funds |irysted to the government; it would may be appropriated “to provide for |pecome the painful duty of this trib- the general welfare of the United nal, should a case requiring such ® States. “These words cannot be before it, meaningless, else they would not have bret cat ea not hn ei been used. The conclusion must be! ” q h | that they were intended to Hit ana |4and., MCulloch 'V. Maryland, 4 define the granted power to raise and “Congress cannot, under the pretext to expend money. How shall they be | o¢ executing delegated power, pass construed to effectuate the intent of |inws tor the accomplishment of ob- Since the foundation of the Reg Pied ret ry soecuas coun tion sharp differences of opinion have |jished doctrine that any provision of das to the true sae: an act of congress ostensibly enacted tion of the phrase. Madison assert under power granted by the constitu- erence to the other powers enum- ercise erated in the subsequent clauses of marae ae paclescsily Anat Roped the same section; that, as the United! ment of something plainly within States is a government of limited | power reserved to the states, is in- and enumerated powers, the grant| valid and cannot be enforced.” Linder of power to tax and spend for the|y United States, 268 U. 8, 5, 17. general national welfare must , be ‘ confined to the enumerated legislative End Not Legitimate These principles are as applicable fields committed to the congress. In this view the phrase is mere tautol-|to the power to lay taxes.as to any are or may be necessary incidents of |in M’Culloch V. Maryland, supra, 421: the exercise of any of the enumer-| “Let the end be legitimate, let it ated legislative powers. Hamilton,/be within the scope of constitution, on the other hand, maintained the |and all means which are appropriate, clause confers a power separate and|which are plainly adapted to that distinct from those later enumerated, |end, which are not prohibited, but is not restricted in meaning by the|consistent with the letter and spirit grant of them, and congress conse-jof the constitution, are constitu- quently, has a substantive power to /| tional.” tax and to appropriate, limited only} The power of taxation, which is ex- by the requirement that it shall be|pressly granted, may, of course, be exercised to provide for. the general | adopted as a means to carry into op- welfare of the United States. Each eration another power also expressly contention has had the support of}granted. But resort to the taxing those whose views are entitled to|power to effectuate an end which is weight. The court has noticed the/not legitimate, not within the scope question, but has never found it{of the constitution, is obviously in- necessary to decide which is the true | admissible. construction. Mr. Justice Story, in Certain Limitations his commentaries, espouses the} “Congress is not empowered to tax Hamilton position. We shall not re-|for those purposes which are within view the writings of public men and |the exclusive province of the states.” commentators or discuss the legisla-| Gibbons V. Ogden, 9 Wheat. 1, 199, it amounted to no more than @ ref-/tion, not naturally and reasonably |ly pressure. The asserted power of choice is il- plan | lusory. In Frost Trucking Co. V. R. R. Com- mission, 271 United States 583, a stat act was considered which provided for supervision and regulation of trans- portation for hire by automobile on the public highways. Certificates of convenience and necessity were to be obtained by persons desiring to use the highways for this purpose. The regulatory commission required that a contract carrier should secure such a certificate as a condition of its opera- tion. The effect of the commission's action was to transmute the private carrier into a public carrier. In other words, the privilege of using the high- ‘ways as a private carrier for compen- sation was conditioned upon his ded- icating his property to the quasi- public use of public transportation. While holding that the private car- tier was not obliged to submit him- self to the condition the commission denied him the privilege of using the ment, intended sedulously to limit ; for this is but to say that|and define its powers, so as to pre- whenever there is @ widespread|serve to the United States and the similarity of local conditions, con-|people sovereign power, to be wield- ite | gress may ignore constitutional lim-|ed by the states and their citizens itations upon its own powers and|and not to be invaded by the United usurp those reserved to the states.|States, they nevertheless by a single If, in lieu of compulsory regulation | clause gave power to the congress to of subjects within the states’ re-|tear down the barriers, to invade the served jurisdiction, which is prohib-|state’s jurisdiction, and to become a mi exaction, it would evidently the regulation of all in-)not lawfully ratify or confirm what dustry throughout the United States | an executive officer had done in that may be accomplished by similar ex-|regard. Consequently the act of 1933 ercises of the same power. It would|does not affect the rights of the be possible to exact money from one | parties. pay it} The judgment is affirmed. highways if he did not do so. The|inee of argument was, as here, that the car- rier had a free choice. This court said, in holding the act as construed ‘unconstitutional: Termed Compulsion “If so, constitutional guaranties, so carefully safeguarded against direct assault, are open to destruction by the indirect but no less effective process of requiring surrender, which, though, in form voluntary, in fact lacks none of the elements of com- pulsion. Having regard to form alone, the act here is an offer to the private carrier of a privilege, which the state may grant or deny, upon a condition, which the carrier is free to accept or reject. In reality, the carrier is given no choice, except a choice between the rock and the whirlpool—an option to forego a privilege which may be vital to his livelihood or submit to « re- quirement which may constitute an intolerable burden. But, if the plan were one for pure- voluntary cooperation it would stand no better so far as federal pow- er is concerned. At best it is a scheme for purchasing with federal funds submission to federal regulation of a subject reserved to the states. It is said that congress has the un- doubted right to appropriate money to executive officers for expenditure under contracts between the - ment and individuals; that much of the total expenditures is so made. i apieopeiaiions and expenditures un mental purposes cannot justify con- tracts which are not within federal power, and contracts for the reduc- tion of acreage and the control of Production are outside the range of that power. An appropriation to be expended by the United States under contracts calling for violation of a Buried at M’Clusky Rites for Harold Haux, 17, Mc- Clusky farm youth, who died here "| Monday, have been tentatively set for Thursday at the McClusky Evan- Powerless gelical church with Reverend Heimer, Let is Sapporo should de- Leecona in charge. Interment will be miner le there. Matic ecdiper eine ma.| , Young Haux was born Fel b. 9, 191 his at McClusky, the son of Mr. and are, Christ Haux, who live on a farm it miles northwest of the town, sisters, Luella, i " | Hl F Es ther a tions Z + for payment of] | Today’s Recipe | ——$<—<—<$ —____ ig Schechter Poul- pen pele . United English Monkey is a suggestion for are buffet supper featuring cheese, congress has no % cup evaporated and % cup water or 1 cup whole 1 tablespoon butter, 1 package Liederkranz chese, 1 egg slightly tracts | beaten, % teaspoon salt, few grains with | cayenne, fixed by federal law] Soften bread crumbs in milk and water which have been blended. Melt Should congress ascertain that|butter in blazer of chafing dish over sugar refiners are not receiving a|hot water. Add cheese cut in fair profit, and that this is detri-|and cook and stir until melted. Add mental to the entire industry, and|crumb mixture, slightly beaten egg in turn has its repercussions in trade |and seasonings. Cook until thorough- 3 i gfe g rc iF state law clearly would offend the | th constitution. Is a statute less objec- tionable which authorizes expenditure of federal moneys to induce action in 8 field in which the United States has no power to intermeddle? The con- gress cannot invade state jurisdiction to compel individual action; no more can it purchase such action, Opinion Is Cited We are referred to numerous types of federal appropriation which have tra- rental and benefit pay- goes into effect for a commodity when | Only one duty, to lay the article of the secretary of agriculture deter- | the-constitution which is invoked be- mines that rental or benefit payments | Side the statute which is challenged are to be made for reduction of pro-/and to decide whether the latter duction of that commodity. The tax |Squares with the former. All the is to cease when rental or benefit Court does, or can do, is to announce Payments sease. The rate is fixed/its considered judgment upon the with the purpose of bringing about | question. The only power it has, if crop-reduction and price-raising. It |Such it may be called, is the power is to equal the aifference between the Of judgment. This court neither ap- “current average farm price” and proves nor condemns any legislative “fair exchange value.” It may be!policy. Its delicate and difficult of- altered to such amount as will pre- | fice is to ascertain whether the legis- vent accumulation of surplus stocks. |lation is in accordance with or in If the secretary finds the policy of contravention of, the provisions of the act will not be promoted by the|the constitution; and, having done levy of the tax for a given commodity, | that, its duty ends. he may exempt it. (Section 11). The! The question is not what power the whole revenue from the levy is ap-|federal government ought to- have Propriated in aid of crop contiol: | but what powers in fact have been none of it is made available for gen- | given by the people: It hardly seems eral governmental use. The entire |Necessary to reiterate that ours is agricultural adjustment program em-!a dual form of government; that in bodied in title I of the act is to be-|every state there are two govern- come inoperative when, in the judg-| ments, the state and the United ment of the President, the national | States. Each state has all govern- economic emergency ends; and as to|mental powers save such as the peo- any commodity he may terminate the !ple, by their constitution, have con- provisions of the law, if he finds them! ferred upon the United States, de- no longer requisite in carrying out/nied to the states, or reserved to the declared policy with respect to| themselves. The federal union is a such commodity (Section 13). government of delegated powers. It Aim Foreign to Revenue Bill has only such as are expresslly con- ‘The statute not only avows an aim|ferred upon it and such as are rea- foreign to the procurement of rev-|sonably to be implied from those \enue for the support of government, | granted. In this Tespect we differ but by its operation shows the ex- {radically from nations where all leg- action laid upon processors to be the 'islative power, without restriction or necessary means for the intended | limitation, is vested in a parliament control of agricultural production. | or other legislative body subject to no Cite Immigration Act restrictions except the discretion of In these aspects the tax, so-called,/its members, ~ closely resembles that laid by the act; Power to Regulate Commerce € Article I, section 8, of the consti- to regulate immigration,” which came {tution vests sundry powers in the jcases, 112 U. 8. 580. The statute have any bearing upon the valldits directed that there should be levied,|of the statute under | review. E collected and paid a duty of 50 cents} The third clause endows the con- removal of surplus | for each alien passenger who should | gress with power “to regulate com- come by vessel from a foreign port i merce ... Among the several states.” to one in the United States. Pay- Despite a reference in its first sec- ment was to be made to the collector | tion to a burden upon, and an ob- was to be paid into the treasury, distress, and for the expenses of ef- \fectuating the act. Various objections to the act were presented. court said: may be put aside as irrevelant. “But the true answer to all these The ta objections is that the power exer-| the basis of the commerce clause, which, of the port by the master owner, con- | struction of, the normal currents of signee or agent of the ship; the money | commerce, the act under review does |mot purport to regulate transactions \in interstate or foreign commerce. Its une secretary of jstated purpose 1s the control of ag- | the treasury to defray the expense of | ricultural production, a purely local regulating immigration, for the care! activity, in an effort to raise the of immigrants and relieving those in| prices’paid the farmer. Indeed, the government does not attempt to up- hold the validity of the act on the tive practice. Study of all these leads us to conclude that the reading ad- vocated by Mr.. Justice Story is the correct one. While, therefore, the power to tax is not unlimited, its confines are set in the clause which confers it, and not in those of sec- tion 8 which bestow and define the legislative powers of the congress, It results that the power of congress to authorize expenditure of public moneys for public purposes is not limited by the direct grants of legis- |lative power found in the constitu- tion. But the adoption of the broader construction leaves the power to spend subject to limitations. As Story says: Frame of Government “The constitution was, from its very origin, contemplated to be the frame of a national government, of ;Special and enumerated powers, and not of general and unlimited pow- ers.” Again he says: . “A power to lay taxes for the com- mon defense and general welfare of the United States is not in common sense a general power. It is limited to those objects. It cannot constitu- tionally transcend them.” | That the qualifying phrase must be given effect all advocates of broad construction admit. Hamilton, in his well known report on manufactur- ers, states that the purpose must be “general, and not local.” Monroe, an advocate of Hamilton’s doctrine, wrote: “Has congress a right to taise and appropriate the money to any and to every purpose according to their will and pleasure? They certainly have not.” Story says that if the tax be not proposed for the common defense or general welfare, but for other objects wholly extrane- ous, it would be wholly indefensible upon constitutional principles. And he makes it clear that the powers of taxation and appropriation extend only to matters of national, as dis- tinguished from local welfare. Principles Control Power As elsewhere throughout the con-| stitution the section in question lays down principles which control the use of the power, and does not at- tempt meticulous or detailed direc- tions. Every presumption is to be in- Gulged in favor of faithful compliance fundamental law. Courts are reluc- »{tant to adjudge any statute in con- In answering them the |for the purpose of the present case,|travention of them, but, under our form of government, no other place is clause thought to authorize|provided where the citizen may be Iegislation—the. first—confers|heard to urge that the law fails to by congress with the mandates of the | price of such refusal is the loss of “There are, indeed, certain virtual|been made in the past, and it is as- limitations, arising from the prin-|Serted no question has been raised as ciples of the constitution itself. It|to their validity. We need not stop (taxing) power if so exercised as to|Said in Massachusetts V. Mellon, impair the separate existence and in- | SUPra: ; dependent self-government of the| “.. . As an examination of the states, or if exercised for ends incon-| Acts of congress will disclose, a large sistent with the limited grants of umber of statutes appropriating or Power in the constitution.” Veazle|{nvolving the expenditure of moneys Bank V. Fenno, 8 Wall. 533, 541. for non-federal purposes have been In the child labor tax case, 259|€nacted and carried into effect.” United States 20, and in Hill V, Wal-| As the opinion points out, such ex- lace, 259 United States 44, this court |Penditures have not been challenged had before it statutes ‘which purported | because no remedy was open for test- to be taxing measures. But their pur- ho their constitutionality in the Pose was found to be to regulate the | courts. conduct of manufacturing and trad-| We sre not here concerned with a ing, not in interstate commerce, but |Conditlonal appropriation of money, in the states—matters not within any|00r with » provision that if certain constitution—and the levy of the tax | @Ppropriation shall no longer be avail- @ means to force compliance: The| Able. By the agricultural adjustment court held this was not a constitu-|#ct the amount of the tax is appro- tional use, but an unconstitutional | Priated to be expended only in pay- abuse of the power to tax, In Linder |ment under contracts whereby the V. United States, supra, we held parties bind themselves to regulation the power to tax could not justify regulation of the practice of a fession, under the pretext of Fevanue, ti United States V. Con- which neers, penton 8 December 11, 1935), we declared that congress ‘could et, of @ contractual obligation to submit in the guise of a tax, impose sanctions | to @ regulation which otherwise for violation of state law respecting |not be enfe the ‘local sale of liquor. These de- ting cisions demonstrate that congress | Cited. could not, under the pretext of ing revenue, lay a tax on price agree F z 4 gue ie 8 who refuse to pay a certain cotton and exempt those who’ to do, with the purpose of producers, Two Answers Third. If the taxing power be used as the instrument to @ regulation of matters of state cern with respect to which the gress has no authority to, interfere, ployed to raise the money necessary to purchase a compliance witch the | all congress is powerless to command? | legislative The government asserts that whatever might be sajd against the validity of] But it is the plan, if compulsory, it is constitu. | difference in ished by Ponsa a tier fairs of a state's cl comp! v There are two sufficient answers to| making of s contract relating to the contention, The regulation is not | conduct; that, if any 88 t iiss atk f Be ef i B a8 a8 s i i Ey : ze i & : i g ils E Czar Alexander I, of Russia, brought up the question of disarmament be- fore nations as early as 1816, Glass may: lose, through dirt, as much as 50 per cent of its efficiency within six months, The sere boopeery a, a bird of prehis- toric ti > gers on its wings, commerce @ flexible tail with feathers down each to enter into contracts with shoe man- side, and teeth set in sockets, would undoubtedly be an abuse of the |to examine or consider them. As was | U! power conferred upon congress by the | Conditions are not complied with the| eral go’ oF the 5,000,000 new trans-Pe cific airmail stamps printed by the U. S., fewer than 2,000,000 arg said to be of collectible value, and most of these are sold out, Collectors have turned to the poorer remainders for position blocks, in the belief that no mors. of this particular type of stamp will be printed and that it is bound to go up in value, whatever its con- dition, eee Another valuable set of stamps, in connection with the first trans. Pacific airmail flight of the Ching Clipper, is that which the Philip pine government overprinted im gold for this particular occasion, eee The return of the China Clipper disappointed many collectors who ~ expected return covers which they had dispatched on the Clipper’s westward flight. This mail could not be handled by the Manila postal authorities in time to cateh the plane on its way back so it had to be heM™ up for the return of the second ship, the Philippine expressions of the} Clipper. framers of the constitution, the de- ae eis : tisions of this court interpreting that Revenue collectors should watch instrument and the writings of great| for the potato tax stamp, Uncle commentators will be searched in| Sam's latest innovation. There are vain for any suggestion that there| two classes of these stamps, one for exists in the clause under discussion tax paid, the other for tax exeusgs. eee in fact voluntary. The farmer, of|may declare the contract vold and course, may refuse to comply, but the| thus prevent those under the state’s jurisdiction from complying with its benefits. The amount offered is in-| terms. ‘The erences 8 Dina fal- tended to be sufficient to exert pres-|lacious. The United States make sure on him to agree to the the contract .only if the federal regulation. The power to confer or|power to and to sppropriat withhold unlimited benefits is the| reaches subject matter of power to coerce of desttroy. . this does reach the sub- exercising trolled the|in every state of the union, or elsewhere in the constitution, the A Return of King George II to the authority whereby every provision and every fair implication from that! throne of Greece has brought out the first stamps under the new monarchy. These are two valnes of the 1933 series, surcharged with the date of Nov. 3, 1935, when the king was recalled, by popular vote, a crown and new values. Two post: 960 dues also are suncharged. Police super- seding all local control or regulation | \