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In Carter v. Carter Coal, the Supreme Court addressed the constitutionality of the Bituminous Coal Conservation Act of 1935 (“Act”).
The Act was part of President Franklin D. Roosevelt's New Deal legislation. It aimed at regulating the coal industry during the Great Depression. To that end, the Act:
Multiple lawsuits were filed challenging the Act's constitutionality. They alleged the Act exceeded Congress's power under the commerce clause. Lower courts issued conflicting rulings, and the cases were consolidated for review.
The Supreme Court ultimately heard the consolidated case.
In a 5-4 decision, the High Court determined the Act was unconstitutional. It held that coal mining and production were local activities, not interstate commerce that Congress could regulate.
The labor provisions of the Act, including those on wages and hours, were found to be beyond Congress's power to regulate interstate commerce.
The Court said the effect of coal production on interstate commerce was indirect, not direct, so Congress could not regulate it. It also struck down the price-fixing provisions as inseparable from the unconstitutional labor provisions.
The Court rejected the argument that Congress could regulate anything with even an indirect effect on interstate commerce. It said this would give the federal government nearly unlimited power.
Accordingly, the Court struck down the Act’s entire regulatory scheme as unconstitutional.
The ruling was a setback for New Deal legislation attempting to regulate the economy at a national level. It upheld a narrow interpretation of federal power and maintained a distinction between local activities and interstate commerce. And it limited Congress's ability to regulate labor conditions and production under the commerce clause.
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Beneficent aims however great or well directed can never serve in lieu of constitutional power.
[298 U.S. 238, 255] Messrs. Frederick H. Wood and William D. Whitney, both of New York City, and Richard H. Wilmer, of Washington, D.C., for petitioner Carter.
[298 U.S. 238, 269] Mr. Charles I. Dawson, of Louisville, Ky., for Tway Coal Co.
Messrs. Stanley F. Reed, Sol. Gen., of Washington, D.C., Homer S. Cummings, Atty. Gen., John Dickinson, Asst. Atty. Gen., Charles H. Weston, F. B. Critchlow, A. H. Feller, Robert L. Stern, and Charles Harwood, all of Washington, D.C., for the United States.
[298 U.S. 238, 277] Mr. Karl J. Hardy, of Washington, D.C., for respondents Carter Coal co. et al.
Mr. Joseph Selligman, of Louisville, Ky., for respondent Clark.
Mr. Justice SUTHERLAND delivered the opinion of the Court.
The purposes of the 'Bituminous Coal Conservation Act of 1935,' involved in these suits, as declared by the title, are to stabilize the bituminous coal-mining industry and promote its interstate commerce; to provide for co-operative marketing of bituminous coal; to levy a tax on such coal and provide for a drawback under certain conditions; to declare the production, distribution, and use of such coal to be affected with a national public interest; to conserve the national resources of such coal; to provide for the general welfare, and for other purposes. C. 824, 49 Stat. 991 (15 U.S.C.A. 801-827). The constitutional validity of the act is challenged in each of the suits.
Nos. 636 and 651 are cross-writs of certiorari in a stockholder's suit, brought in the Supreme Court of the District of Columbia by Carter against the Carter Coal Company and some of its officers, Guy T. Helvering ( Commissioner of Internal Revenue of the United
[298 U.S. 238, 279]
States), and certain other officers of the United States, to enjoin the coal company and its officers named from filing an acceptance of the code provided for in said act, from paying any tax imposed upon the coal company under the authority of the act, and from complying with its provisions or the provisions f the code. The bill sought to enjoin the Commissioner of Internal Revenue and the other federal officials named from proceeding under the act in particulars specified, the details of which it is unnecessary to state.
No. 649
is a suit brought in a federal District Court in Kentucky by petitioners against respondent collector of internal revenue for the district of Kentucky, to enjoin him from collecting or attempting to collect the taxes sought to be imposed upon them by the act, on the ground of its unconstitutionality.
No. 650 is a stockholder's suit brought in the same court against the coal company and some of its officers, to secure a mandatory injunction against their refusal to accept and operate under the provisions of the Bituminous Coal Code prepared in pursuance of the act.
By the terms of the act, every producer of bituminous coal within the United States is brought within its provisions.
Section 1 (15 U.S.C.A. 801) is a detailed assertion of circumstances thought to justify the act. It declares that the mining and distribution of bituminous coal throughout the United States by the producer are affected with a national public interest; and that the service of such coal in relation to industrial activities, transportation facilities, health and comfort of the people, conservation by controlled production and economical mining and marketing, maintenance of just and rational relations between the public, owners, producers, and employees, the right of the public to constant and adequate supplies of coal at reasonable prices, and the general welfare of the Nation, [298 U.S. 238, 280] require that the bituminous coal industry should be regulated as the act provides.
Section 1 (15 U.S.C.A. 802), among other things, further declares that the production and distribution by producers of such coal bear upon and directly affect interstate commerce, and render regulation of production and distribution imperative for the protection of such commerce; that certain features connected with the production, distribution, and marketing have led to waste of the national coal resources, disorganization of interstate commerce in such coal, and burdening and obstructing interstate commerce therein; that practices prevailing in the production of such coal directly affect interstate commerce and require regulation for the protection of that commerce; and that the right of mine workers to organize and collectively bargain for wages, hours of labor, and conditions of employment should be guaranteed in order to prevent constant wage cutting and disparate labor costs detrimental to fair interstate competition, and in order to avoid obstructions to interstate commerce that recur in industrial disputes over labor relations at the mines. These declarations constitute not enactments of law, but legislative averments by way of inducement to the enactment which follows.
The substantive legislation begins with section 2 (15 U.S.C.A. 803), which establishes in the Department of the Interior a National Bituminous Coal Commission, to be appointed and constituted as the section then specifically provides. Upon this commission is conferred the power to hear evidence and find facts upon which its orders and actions may be predicated.
Section 3 (15 U.S.C.A. 804) provides:
Section 4 (15 U.S.C.A. 805 et seq.) provides that the commission shall formulate the elaborate provisions contained therein into a working agreement to be known as the Bituminous Coal Code. These provisions require the organization of twenty-three [298 U.S. 238, 282] coal districts, each with a district board the membership of which is to be determined in a manner pointed out by the act. Minimum prices for coal are to be established by each of these boards, which is authorized to make such classification of coals and price variation as to mines and consuming market areas as it may deem proper. 'In order to sustain the stabilization of wages, working conditions, and maximum hours of labor, said prices shall be established so as to yield a return per net ton for each district in a minimum price area, as such districts are identified and such area is defined in the subjoined table designated 'Minimum-price area table,' equal as nearly as may be to the weighted average of the total costs, per net ton, determined as hereinafter provided, of the tonnage of such minimum price area. The computation of the total costs shall include the cost of labor, supplies, power, taxes, insurance, workmen's compensation, royalties, depreciation, and depletion (as determined by the Bureau of Internal Revenue in the computation of the Federal income tax) and all other direct expenses of production, coal operators' association dues, district board assessments for Board operating expenses only levied under the code, and reasonable costs of selling and the cost of administration.' ( 15 U.S.C.A. 807(a). The district board must determine and adjust the total cost of the ascertainable tonnage produced in the district so as to give effect to any changes in wage rates, hours of employment, or other factors substantially affecting costs, which may have been established since January 1, 1934
Without repeating the long and involved provisions with regard to the fixing of minimum prices, it is enough to say that the act confers the power to fix the minimum price of coal at each and every coal mine in the United States, with such price variations as the board may deem necessary and proper. There is also a provision authorizing the commission, when deemed necessary in the public [298 U.S. 238, 283] interest, to establish maximum prices in order to protect the consumer against unreasonably high prices.
All sales and contracts for the sale of coal are subject to the code prices provided for and in effect when such sales and contracts are made. Various unfair methods of competition are defined and forbidden.
The labor provisions of the code, found in part 3 of the same section ( 15 U.S.C.A. 808), require that in o der to effectuate the purposes of the act the district boards and code members shall accept specified conditions contained in the code, among which are the following:
Employees to be given the right to organize and bargain collectively, through representatives of their own choosing, free from interference, restraint, or coercion of employers or their agents in respect of their concerted activities.
Such employees to have the right of peaceable assemblage for the discussion of the principles of collective bargaining and to select their own check-weighman to inspect the weighing or measuring of coal.
A labor board is created, consisting of three members, to be appointed by the President and assigned to the Department of Labor. Upon this board is conferred authority to adjudicate disputes arising under the provisions just stated, and to determine whether or not an organization of employees had been promoted, or is controlled or dominated by an employer in its organization, management, policy, or election of representatives. The board 'may order a code member to meet the representatives of its employees for the purpose of collective bargaining.'
Subdivision (g) of part 3 (15 U.S.C.A. 808(g) provides:
The bill of complaint in Nos. 636 and 651 was filed in the Supreme Court of the District of Columbia on August 31, 1935, the day after the Coal Conservation Act came into effect. That court, among other things, found that the suit was brought in good faith; that if Carter Coal Company should join the code, it would be compelled to cancel existing contracts and pay its proportionate share of administering the code; that the production of bituminous coal is a local activity carried on within state borders; that coal is the Nation's greatest and primary source of energy, vital to the public welfare, of the utmost importance to the industrial and economic life of the Nation and the health and comfort of its inhabitants; and that its distribution in interstate commerce should be regular, continuous, and free of interruptions, obstructions, burdens, and restraints.
Other findings are to the effect that such coal is generally sold f.o. b. mine, and the predominant portion of it shipped outside the state in which it is produced; that the distribution and marketing is predominantly interstate in character; and that the intrastate distribution [298 U.S. 238, 285] and sale are so connected that interstate regulation cannot be accomplished effectively unless transactions of intrastate distribution and sale be regulated.
The court further found the existence of a condition of unrestrained and destructive competition in the system of distribution and marketing such coal, and of destructive price-cutting, burdening and restraining interstate commerce, and dislocating and diverting its normal flow.
The court concludes as a matter of law that the bringing of the suit was not premature; that the plaintiff was without legal remedy, and rightly invoked relief in equity; that the labor provisions of the act and code were unconstitutional for reaso stated, but the price-fixing provisions were valid and constitutional; that the labor provisions are separable; and, since the provisions with respect to price-fixing and unfair competition are valid, the taxing provisions of the act could stand. Therefore, except for granting a permanent injunction against collection of the 'taxes' accrued during the suit (Ex parte Young,
Appeals were taken to the United States Court of Appeals for the District of Columbia by the parties; but pending hearing and submission in that court, petitions for writs of certiorari were presented asking us to review the decree of the Supreme Court of the District without awaiting such hearing and submission. Because of the importance of the question and the advantage of a speedy final determination thereof, the writs were granted.
The remaining two suits (Nos. 649 and 650), involving the same questions, were brought in the federal District Court for the Western District of Kentucky. That court held the act valid and constitutional in its entirety and entered a decree accordingly. R. C. Tway Coal Co. v. Glenn, 12 F.Supp. 570. Appeals were taken to the Circuit Court of Appeals for the Sixth
[298 U.S. 238, 286]
Circuit; but, as in the Carter case and for the same reasons, this court granted writs of certiorari in advance of hearing and submission.
The questions involved will be considered under the following heads:
1. The right of stockholders to maintain suits of this character.
2. Whether the suits were prematurely brought.
3. Whether the exaction of 15 per centum on the sale price of coal at the mine is a tax or a penalty.
4. The purposes of the act as set forth in section 1, and the authority vested in Congress by the Constitution to effectuate them.
5. Whether the labor provisions of the act can be upheld as an exercise of the power to regulate interstate commerce.
6. Whether subdivision (g) of part 3 of the code is an unlawful delegation of power.
7. The constitutionality of the price-fixing provisions, and the question of severability-that is to say, whether, if either the group of labor provisions or the group of price-fixing provisions be found constitutionally invalid, the other can stand as separable.
First. In the Carter case (Nos. 636 and 651) the stockholder who brought the suit had formally demanded of the board of directors that the company should not join the code, should refuse to pay the tax fixed by the act, and should bring appropriate judicial proceedings to prevent an unconstitutional and improper diversion of the assets of the company and to have determined the liability of the company under the act. The board considered the demand, determined that, while it believed the act to be unconstitutional and economically unsound and that it would adversely affect the business of the company if accepted, nevertheless it should accept the code provided for by the act because the penalty in the form [298 U.S. 238, 287] of a 15 per cent. tax on its gross sales would be seriously injurous and might result in bankruptcy. This action of the board was approved by a majority of the shareholders at a special meeting called for the purpose of considering it.
In the Tway Company cases, the company itself brought suit to enjoin the enforcement of the act (No. 649); and a stockholder brought suit to compel the company to accept the code and operate under its provisions (No. 650).
Without repeating the long averments of the several bills, we are of opinion that the suits were properly brought and were maintainable in a court of equity. The right of stockholders to bring such suits under the circumstances disclosed is settled by the recent decision of this court in Ashwander et al. v. Tennessee Valley Authority,
Second. That the suits were not prematurely brought also is clear. Section 2 of the act is mandatory in its requirement that the commission be appointed by the President. The provisions of section 4 that the code be formulated and promulgated are equally mandatory. The so-called tax of 15 per cent. is definitely imposed, and its exaction certain to ensue.
In Pennsylvania v. West Virginia,
Pierce v. Society of Sisters,
See, also, Terrace v. Thompson,
Third. The so-called excise tax of 15 per centum on the sale price of coal at the mine, or, in the case of captive coal the fair market value, with its drawback allowance of 13 1/2 per cent., is clearly not a tax but a penalty. The exaction applies to all bituminous coal produced, whether it be sold, transported, or consumed in interstate commerce, or transactions in respect of it be confined wholly [298 U.S. 238, 289] to the limits of the state. It also applies to 'captive coal'-that is to say, coal produced for the sole use of the producer.
It is very clear that the 'excise tax' is not imposed for revenue but exacted as a penalty to compel compliance with the regulatory provisions of the act. The whole purpose of the exaction is to coerce what is called an agreement-which, of course, it is not, for it lacks the essential element of consent. One who does a thing in order to avoid a monetary penalty does not agree; he yields to compulsion precisely the same as though he did so to avoid a term in jail.
The exaction here is a penalty and not a tax within the test laid down by this court in numerous cases. Child Labor Tax Case,
Fourth. Certain recitals contained in the act plainly suggest that its makers were of opinion that its constitutionality could be sustained under some general federal [298 U.S. 238, 290] power, thought to exist, apart from the specific grants of the Constitution. The fallacy of that view will be apparent when we recall fundamental principles which, although hitherto often expressed in varying forms of words, will bear repetition whenever their accuracy seems to be challenged. The recitals to which we refer are contained in section 1 ( which is simply a preamble to the act), and, among others, are to the effect that the distribution of bituminous coal is of national interest, affecting the health and comfort of the people and the general welfare of the Nation; that this circumstance, together with the necessity of maintaining just and rational relations between the public, owners, producers, and employees, and the right of the public to constant and adequate supplies at reasonable prices, require regulation of the industry as the act provides. These affirmations-and the further ones that the production and distribution of such coal 'directly affect interstate commerce,' because of which and of the waste of the national coal resources and other circumstances, the regulation is necessary for the protection of such commerce-do not constitute an exertion of the will of Congress which is legislation, but a recital of considerations which in the opinion of that body existed and justified the expression of its will in the present act. Nevertheless, this preamble may not be disregarded. On the contrary it is important, because it makes clear, except for the pure assumption that the conditions described 'directly' affect interstate commerce, that the powers which Congress undertook to exercise are not specific but of the most general character-namely, to protect the general public interest and the health and comfort of the people, to conserve privately-owned coal, maintain just relations between producers and employees and others, and promote the general welfare, by controlling nation-wide production and distribution of coal. These, it may be conceded, are objects of great worth; [298 U.S. 238, 291] but are they ends, the attainment of which has been committed by the Constitution to the federal government? This is a vital question; for nothing is more certain than that beneficent aims, however great or well directed, can never serve in lieu of constitutional power.
The ruling and firmly established principle is that the powers which the general government may exercise are only those specifically enumerated in the Constitution, and such implied powers as are necessary and proper to carry into effect the enumerated powers. Whether the end sought to be attained by an act of Congress is legitimate is wholly a matter of constitutional power and not at all of legislative discretion. Legislative congressional discretion begins with the choice of means and ends wit the adoption of methods and details to carry the delegated powers into effect. The distinction between these two things-power and discretion-is not only very plain but very important. For while the powers are rigidly limited to the enumerations of the Constitution, the means which may be employed to carry the powers into effect are not restricted, save that they must be appropriate, plainly adapted to the end, and not prohibited by, but consistent with, the letter and spirit of the Constitution. McCulloch v. Maryland, 4 Wheat. 316, 421. Thus, it may be said that to a constitutional end many ways are open; but to an end not within the terms of the Constitution, all ways are closed.
The proposition, often advanced and as often discredited, that the power of the federal government inherently extends to purposes affecting the Nation as a whole with which the states severally cannot deal or cannot adequately deal, and the related notion that Congress, entirely apart from those powers delegated by the Constitution, may enact laws to promote the general welfare, have never been accepted but always definitely rejected by this court. Mr. Justice Story, as early as 1816,
[298 U.S. 238, 292]
laid down the cardinal rule, which has ever since been followed-that the general government 'can claim no powers which are not granted to it by the constitution, and the powers actually granted, must be such as are expressly given, or given by necessary implication.' Martin v. Hunter's Lessee, 1 Wheat. 304, 326. In the Framers Convention, the proposal to confer a general power akin to that just discussed was included in Mr. Randolph's resolutions, the sixth of which, among other things, declared that the National Legislature ought to enjoy the legislative rights vested in Congress by the Confederation, and 'moreover to legislate in all cases to which the separate States are incompetent, or in which the harmony of the United States may be interrupted by the exercise of individual Legislation.' The convention, however, declined to confer upon Congress power in such general terms; instead of which it carefully limited the powers which it thought wise to intrust to Congress by specifying them, thereby denying all others not granted expressly or by necessary implication. It made no grant of authority to Congress to legislate substantively for the general welfare, United States v. Butler, supra,
There are many subjects in respect of which the several states have not legislated in harmony with one another, and in which their varying laws and the failure of some of them to act at all have resulted in injurious confusion and embarrassment. See Addyston Pipe & Steel Co. v. United States,
Replying directly to the suggestion advanced by counsel in Kansas v. C lorado,
The general rule with regard to the respective powers of the national and the state governments under the Constitution is not in doubt. The states were before the Constitution; and, consequently, their legislative powers antedated the Constitution. Those who framed and those who adopted that instrument meant to carve from the general mass of legislative powers, then possessed by the states, only such portions as it was thought wise to confer upon the federal government; and in order that there should be no uncertainty in respect of what was taken and what was left, the national powers of legislation were not aggregated but enumerated-with the result that what was not embraced by the enumeration remained vested in the states without change or impairment. Thus, 'when it was found necessary to establish a national government for national purposes,' this court said in Munn v. Illinois,
The determination of the Framers Convention and the ratifying conventions to preserve complete and unimpaired state self-government in all matters not committed to the general government is one of the plainest facts which emerges from the history of their deliberations. And adherence to that determination is incumbent equally upon the federal government and the states. State powers can neither be appropriated on the one hand nor abdicated on the other. As this court said in Texas v. White, 7 Wall. 700, 725, 'The preservation of the States, and the maintenance of their governments, are as much within the design and care of the Constitution as the preservation of the Union and the maintenance of the National government. The Constitution, in all its provisions, looks to an indestructible Union, composed of indestructible States.' Every journey to a forbidden end begins with the first step; and the danger of such a step by the federal government in the direction of taking over the powers of the states is that the end of the journey may find the states so despoiled of their powers, or-what may amount to the same thing-so [298 U.S. 238, 296] relieved of the responsibilities which possession of the powers necessarily enjoins, as to reduce them to little more than geographical subdivisions of the national domain. It is safe to say that if, when the Constitution was under consideration, it had been thought that any such danger lurked behind its plain words, it would never have been ratified.
And the Constitution itself is in every real sense a law-the lawmakers being the people themselves, in whom under our system all political power and sovereignty primarily resides, and through whom such power and sovereignty primarily speaks. It is by that law, and not otherwise, that the legislative, executive, and judicial agencies which it created exercise such political authority as they have been permitted to possess. The Constitution speaks for itself in terms so plain that to misunderstand their import is not rationally possible. 'We the People of the United States,' it says, 'do ordain and establish this Constitution.' Ordain and establish! These are definite words of enactment, and without more would stamp what follows with the dignity and character of law. The framers of the Constitution, however, were not content to let the matter rest here, but provided explicitly-'This Constitution, and the Laws of the United States which shall be made in Pursuance thereof; ... shall be the supreme Law of the Land.' (Const. art. 6, cl. 2.) The supremacy of the Constitution as law is thus declared without qualification. That supremacy is absolute; the supremacy of a statute enacted by Congress is not absolute but conditioned upon its being made in pursuance of the Constitution. And a judicial tribunal, clothed by that instrument with complete judicial power, and, therefore, by the very nature of the power, required to ascertain and apply the law to the facts in every case or proceeding properly brought for adjudication, must apply the supreme law and reject the inferior stat-
[298 U.S. 238, 297]
ute whenever the two conflict. In the discharge of that duty, the opinion of the lawmakers that a statute passed by them is valid must be given great weight, Adkins v. Children's Hospital,
We have set forth, perhaps at unnecessary length, the foregoing principles, because it seemed necessary to do so in order to demonstrate that the general purposes which the act recites, and whic , therefore, unless the recitals be disregarded, Congress undertook to achieve, are beyond the power of Congress except so far, and only so far, as they may be realized by an exercise of some specific power granted by the Constitution. Proceeding by a process of elimination, which it is not necessary to follow in detail, we shall find no grant of power which authorizes Congress to legislate in respect of these general purposes unless it be found in the commerce clause-and this we now consider.
Fifth. Since the validity of the act depends upon whether it is a regulation of interstate commerce, the nature and extent of the power conferred upon Congress by the commerce clause becomes the determinative question in this branch of the case. The commerce clause (art. 1, 8, cl. 3) vests in Congress the power 'To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes.' The function to be exercised is that of regulation. The thing to be regulated is the commerce described. In exercising the authority conferred by this clause of the Constitution, Congress is powerless to regulate anything which is not commerce, as it is powerless to do anything about commerce which is not regulation. We first inquire, then-What is commerce? The term, as this court many times has said, is [298 U.S. 238, 298] one of extensive import. No allembracing definition has ever been formulated. The question is to be approached both affirmatively and negatively-that is to say, from the points of view as to what it includes and what it excludes.
In Gibbons v. Ogden, 9 Wheat. 1, 189, 190, Chief Justice Marshall said:
As used in the Constitution, the word 'commerce' is the equivalent of the phrase 'intercourse for the purposes of trade,' and includes transportation, purchase, sale, and exchange of commodities between the citizens of the different states. And the power to regulate commerce embraces the instruments by which commerce is carried on. Welton v. State of Missouri,
The distinct on between manufacture and commerce was discussed in Kidd v. Pearson,
And then, as though foreseeing the present controversy, the opinion proceeds:
Chief Justice Fuller, speaking for this court in United States v. E. C. Knight Co.,
That commodities produced or manufactured within a state are intended to be sold or transported outside the state does not render their production or manufacture subject to federal regulation under the commerce clause. As this court said in Coe v. Errol,
In Heisler v. Thomas Colliery Co.,
In Oliver Iron Co. v. Lord,
The same rule applies to the production of oil. 'Such production is essentially a mining operation, and therefore is not a part of interstate commerce, even though the product obtained is intended to be and in fact is immediately shipped in such commerce.' Champlin Refining Co. v. Corporation Commission,
We have seen that the word 'commerce' is the equivalent of the phrase 'intercourse for the purposes of trade.' Plainly, the incidents leading up to and culminating in the mining of coal do not constitute such intercourse. The employment of men, the fixing of their wages, hours of labor, and working conditions, the bargaining in respect of these things- whether carried on separately or collectively-each and all constitute intercourse for the purposes of production, not of trade. The latter is a thing apart from the relation of employer and employee, which in all producing occupations is purely local in character. Extraction of coal from the mine is the aim and the completed result of local activities. Commerce in the coal mined is not brought into being by [298 U.S. 238, 304] force of these activities, but by negotiations, agreements and circumstances entirely apart from production. Mining brings the subject- matter of commerce into existence. Commerce disposes of it.
A consideration of the foregoing, and of many cases which might be added to those already cited, renders inescapable the conclusion that the effect of the labor provisions of the act, including those in respect of minimum wages, wage agreements, collective bargaining, and the Labor Board and its powers, primarily falls upon production and not upon commerce; and confirms the further resulting conclusion that production is a purely local activity. It follows that none of these essential antecedents of production constitutes a transaction in or forms any part of interstate commerce. Schechter Poultry Corp. v. United States, supra,
Certain decisions of this court, superficially considered, seem to lend support to the defense of the act now under review. But upon examination, they will be seen to be inapposite. Thus, Coronado Co. v. United Mine Workers,
Another group of cases, of which Swift & Company v. United States,
The distinction suggested is illustrated by the decision in Arkadelphia Co. v. St. Louis S.W.R. Co.,
The restricted field covered by the Swift and kindred cases is illustrated by the Schechter Case, supra,
That the production of every commodity intended for interstate sale and transportation has some effect upon interstate commerce may be, if it has not already been, freely granted; and we are brought to the final and decisive inquiry, whether here that effect is direct, as the 'Preamble' recites, or indirect. The distinction is not formal, but substantial in the highest degree, as we pointed out in the Schechter Case, supra,
Whether the effect of a given activity or condition is direct or indirect is not always easy to determine. The word 'direct' implies that the activity or condition invoked or blamed shall operate proximately-not mediately, remotely, or collaterally-to produce the effect. It connotes the absence of an efficient intervening agency [298 U.S. 238, 308] or condition. And the extent of the effect bears no logical relation to its character. The distinction between a direct and an indirect effect turns, not upon the magnitude of either the cause or the effect, but entirely upon the manner in which the effect has been brought about. If the production by one man of a single ton of coal intended for interstate sale and shipment, and actually so sold and shipped, affects interstate commerce indirectly, the effect does not become direct by multiplying the tonnage, or increasing the number of men employed, or adding to the expense or complexities of the business, or by all combined. It is quite true that rules of law are sometimes qualified by considerations of degree, as the government argues. But the matter of degree has no bearing upon the question here, since that question is not-What is the extent of the local activity or condition, or the extent of the effect produced upon interstate commerce? but-What is the relation between the activity or condition and the effect?
Much stress is put upon the evils which come from the struggle between employers and employees over the matter of wages, working conditions, the right of collective bargaining, etc., and the resulting strikes, curtailment, and irregularity of production and effect on prices; and it is insisted that interstate commerce is greatly affected thereby. But, in addition to what has just been said, the conclusive answer is that the evils are all local evils over which the federal government has no legislative control. The relation of employer and employee is a local relation. At common law, it is one of the domestic relations. The wages are paid for the doing of local work. Working conditions are obviously local conditions. The employees are not engaged in or about commerce, but exclusively in producing a commodity. And the controversies and evils, which it is the object of the [298 U.S. 238, 309] act to regulate and minimize, are local controversies and evils affecting local work undertaken to accomplish that local result. Such effect as they may have upon commerce, however extensive it may be, is secondary and indirect. An increase in the greatness of the effect adds to its importance. It does not alter its character.
The government's contentions in defense of the labor provisions are really disposed of adversely by our decision in the Schechter Case, supra. The only perceptible difference between that case and this is that in the Schechter Case the federal power was asserted with respect to commodities which had come to rest after their interstate transportation; w ile here, the case deals with commodities at rest before interstate commerce has begun. That difference is without significance. The federal regulatory power ceases when interstate commercial intercourse ends; and, correlatively, the power does not attach until interstate commercial intercourse begins. There is no basis in law or reason for applying different rules to the two situations. No such distinction can be found in anything said in the Schechter Case. On the contrary, the situations were recognized as akin. The opinion,
Sixth. That the act, whatever it may be in form, in fact is compulsory clearly appears. We have already discussed section 3, which imposes the excise tax as a penalty to compel 'acceptance' of the code. Section 14 (15 U.S.C.A. 818) provides that the United States shall purchase no bituminous coal produced at any mine where the producer has not complied with the provisions of the code; and that each contract made by the United States shall contain a provision that the contractor will buy no bituminous coal to use on, or in the carrying out of, such contract unless the producer be a member of the code, as certified by the coal commission. In the light of these provisions we come to a consideration of subdivision (g) of part 3 of section 4, dealing with 'labor relations.'
That subdivision delegates the power to fix maximum hours of labor to a part of the producers and the miners-namely, 'the producers of more than two-thirds the annual national tonnage production for the preceding calendar year' and 'more than one-half the mine workers employed'; and to producers of more than two-thirds of the district annual tonnage during the preceding calendar year and a majority of the miners, there is delegated the power to fix minimum wages for the district [298 U.S. 238, 311] or group of districts. The effect, in respect of wages and hours, is to subject the dissentient minority, either of producers or miners or both, to the will of the stated majority, since, by refusing to submit, the minority at once incurs the hazard of enforcement of the drastic compulsory provisions of the act to which we have referred. To 'accept,' in these circumstances, is not to exercise a choice, but to surrender to force.
The power conferred upon the majority is, in effect, the power to regulate the affairs of an unwilling minority. This is legislative delegation in its most obnoxious form; for it not even delegation to an official or an official body, presumptively disinterested, but to private persons whose interests may be and often are adverse to the interests of others in the same business. The record shows that the conditions of competition differ among the various localities. In some, coal dealers compete among themselves. In other localities, they also compete with the mechanical production of electrical energy and of natural gas. Some coal producers favor the code; others oppose it; and the record clearly indicates that this diversity of view arises from their conflicting and even antagonistic interests. The difference between producing coal and regulating its production is, of course, fundamental. The former is a private activity; the latter is necessarily a governmental function, since, in the very nature of things, one person may not be intrusted with the power to regulate the business of another, and especially of a competitor. And a statute which attempts to confer such power undertakes an intolerable and unconstitutional interference with personal liberty and private property. The delegation is so clearly arbitrary, and so clearly a denial of rights safeguarded by the due process clause of the Fifth Amendment, that it is unnecessary to do more than refer to decisions of this court which foreclose the question. Schechter Poultry Corp. v. United States,
[298 U.S. 238, 312]
Seventh. Finally, we are brought to the price-fixing provisions of the code. The necessity of considering the question of their constitutionality will depend upon whether they are separable from the labor provisions so that they can stand independently. Section 15 of the act (15 U.S.C.A. 819) provides:
In the absence of such a provision, the presumption is that the Legislature intends an act to be effective as an entirety-that is to say, the rule is against the mutilation of a statute; and if any provision be unconstitutional, the presumption is that the remaining provisions fall with it. The effect of the statute is to reverse this presumption in favor of inseparability, and create the opposite one of separability. Under the nonstatutory rule, the burden is upon the supporter of the legislation to show the separability of the provisions involved. Under the statutory rule, the burden is shifted to the assailant to show their inseparability. But under either rule, the determination, in the end, is reached by applying the same test-namely, What was the intent of the lawmakers?
Under the statutory rule, the presumption must be overcome by considerations which establish 'the clear probability that the invalid part being eliminated the Legislature would not have been satisfied with what remains,' Williams v. Standard Oil Co.,
The statutory aid to construction in no way alters the rule that in order to hold one part of a statute unconstitutional and uphold another part as separable, they must not be mutually dependent upon one another. Perhaps a fair approach to a solution of the problem is to suppose that while the bill was pending in Congress a motion to strike out the labor provisions had prevailed, and to inquire whether, in that event, the statute should be so construed as to justify the conclusion that Congress, notwithstanding, probably would not have passed the price-fixing provisions of the code.
Section 3 of the act, which provides that no producer shall, by accepting the code or the drawback of taxes, be estopped from contesting the constitutionality of any provision of the code is thought to aid the separability clause. But the effect of that provision is simply to permit the producer to challenge any provision of the code despite his acceptance of the code or the drawback. It seems not to have anything to do with the question of separability.
With the foregoing principles in mind, let us examine the act itself. The title of the act and the preamble demonstrate, as we have already seen, that Congress desired to accomplish certain general purposes therein recited. To that end it created a commission, with man-
[298 U.S. 238, 314]
datory directions to formulate into a working agreement the provisions set forth in section 4 of the act. That being done, the result is a code. Producers accepting and operating under the code are to be known as code members; and section 4 specifically requires that, in order to carry out the policy of the act, 'the code shall contain the conditions, provisions, and obligations,' (15 U.S.C.A. 805), which are then set forth. No power is vested in the commission, in formulating the code, to omit any of these conditions, provisions, or obligations. The mandate to include them embraces all of them. Following the requirement just quoted, and, significantly, in the same section (International Text-Book Co. v. Pigg,
Thus, the primary contemplation of the act is stabilization of the industry through the regulation of labor and the regulation of prices; for, since both were adopted, we must conclude that both were thought essential. The regulations of labor on the one hand and prices on the other furnish mutual aid and support; and their associated force-not one or the other but both combined-was deemed by Congress to be necessary to achieve the end sought. The statutory mandate for a code upheld by two legs at once suggests the improbability that Congress would have assented to a code supported by only one.
This seems plain enough; for Congress must have been conscious of the fact that elimination of the labor provi- [298 U.S. 238, 315] sions from the act would seriously impair, if not destroy, the force and usefulness of the price provisions. The interdependence of wages and prices is manifest. Approximately two-thirds of the cost of producing a ton of coal is represented by wages. Fair prices necessarily depend upon the cost of production; and since wages constitute so large a proportion of the cost, prices cannot be fixed with any proper relation to cost without taking into consideration this major element. If one of them becomes unc rtain, uncertainty with respect to the other necessarily ensues.
So much is recognized by the code itself. The introductory clause of part 3 (15 U.S.C.A. 808) declares that the conditions respecting labor relations are 'to effectuate the purposes of this Act (chapter).' And subdivision (a) of part 2 (15 U.S.C.A. 807(a), quoted in the forepart of this opinion, reads in part: 'In order to sustain the stabilization of wages, working conditions, and maximum hours of labor, said prices shall be established so as to yield a return per net ton for each district in a minimum price area, ... equal as nearly as may be to the weighted average of the total costs, per net ton.' Thus wages, hours of labor, and working conditions are to be so adjusted as to effectuate the purposes of the act; and prices are to be so regulated as to stabilize wages, working conditions, and hours of labor which have been or are to be fixed under the labor provisions. The two are so woven together as to render the probability plain enough that uniform prices, in the opinion of Congress, could not be fairly fixed or effectively regulated, without also regulating these elements of labor which enter so largely into the cost of production.
These two sets of requirements are not like a collection of bricks, some of which may be taken away without disturbing the others, but rather are like the interwoven threads constituting the warp and woof of a fabric, one
[298 U.S. 238, 316]
set of which cannot be removed without fatal consequences to the whole. Paraphrasing the words of this court in Butts v. Merchants' Transp. Co.,
The price-fixing provisions of the code are thus disposed of without coming to the question of their constitutionality; but neither this disposition of the matter, nor anything we have said, is to be taken as indicating that the court is of opinion that these provisions, if separately enacted, could be sustained.
If there be in the act provisions, other than those we have considered, that may stand independently, the [298 U.S. 238, 317] question of their validity is left for future determination when, if ever, that question shall be presented for consideration.
The decrees in Nos. 636, 649, and 650 must be reversed and the causes remanded for further consideration in conformity with this opinion. The decree in No. 651 will be affirmed.
It is so ordered.
Separate opinion of Mr. Chief Justice HUGHES.
I agree that the stockholders were entitled to bring their suits; that, in view of the question whether any part of the act could be sustained, the suits were not premature; that the so-called tax is not a real tax, but a penalty; that the constitutional power of the federal government to impose this penalty must rest upon the commerce clause, as the government concedes; that production-in this case mining-which precedes commerce is not itself commerce; and that the power to regulate commerce among the several states is not a power to regulate industry within the state.
The power to regulate interstate commerce embraces the power to protect that commerce from injury, whatever may be the source of the dangers which threaten it, and to adopt any appropriate means to that end. Second Employers' Liability Cases,
I also agree that subdivision (g) of part 3 of the prescribed Code ( 15 U.S.C.A. 808(g) is invalid upon three counts: (1) It attempts a broad delegation of legislative power to fix hours and wages without standards of limitation. The government invokes the analogy of legislation which becomes effective on the happening of a specified event, and says that in this case the event is the agreement of a certain proportion of producers and employees, whereupon the other producers and employees become subject to legal obligations accordingly. I think that the argument is unsound and is pressed to the point where the principle would be entirely destroyed. It would remove all restrictions upon the delegation of legislative power, as the making of laws could thus be referred to any designated officials or private persons whose orders or agreements would be treated as 'events,' with the result that they would be invested with the force of law having penal sanctions. (2) The provision permits a group of producers and employees, according to their own views of expediency, to make rules as to hours and wages for other producers and employees who were not parties to the agreement. Such a provision, apart from the mere question of the delegation of legislative power, is not in accord with the requirement of due process of law which under the Fifth Amendment dominates the regulations which Congress may impose. (3) The provision goes beyond any proper measure of protection of interstate [298 U.S. 238, 319] commerce and attempts a broad regulation of industry within the state.
But that is not the whole case. The act also provides for the regulation of the prices of bituminous coal sold in interstate commerce and prohibits unfair methods of competition in interstate commerce. Undoubtedly transactions in carrying on interstate commerce are subject to the federal power to regulate that commerce and the control of charges and the protection of fair competition in that commerce are familiar illustrations of the exercise of the power, as the Interstate Commerce Act ( 49 U.S.C.A. 1 et seq.), the Packers and Stockyards Act (7 U.S.C.A. 181 et seq.), and the Anti-Trust Acts (15 U.S.C.A. 1 et seq.) abundantly show. The Court has repeatedly stated that the power to regulate interstate commerce among the several states is supreme and plenary. Minnesota Rate Cases,
Whether the policy of fixing prices of commodities sold in interstate commerce is a sound policy is not for our consideration. The question of that policy, and of its particular applications, is for Congress. The exercise of the power of regulation is subject to the constitutional restriction of the due process clause, and if in fixing rates, prices, or conditions of competition, that requirement is transgressed, the judicial power may be invoked to the end that the constitutional limitation may be maintained. Interstate Commerce Commission v. Union Pacific R. Co.,
Upon what ground, then, can it be said that this plan for the regulation of transactions in interstate commerce in coal is beyond the constitutional power of Congress? The Court reaches that conclusion in the view that the [298 U.S. 238, 321] invalidity of the labor provisions requires us to condemn the act in its entirety. I am unable to concur in that opinion. I think that the express provisions of the act preclude such a finding of inseparability.
This is admittedly a question of statutory construction; and hence we must search for the intent of Congress. And in seeking that intent we should not fail to give full weight to what Congress itself has said upon the very point. That act provides (section 15, 15 U.S.C.A. 819):
That is a flat declaration against treating the provisions of the act as inseparable. It is a declaration which Congress was competent to make. It is a declaration which reverses the presumption of indivisibility and creates an opposite presumption. Utah Power & Light Co. v. Pfost,
The above-quoted provision does not stand alone. Congress was at pains to make a declaration of similar import with respect to the provisions of the code (section 3, 15 U.S.C.A. 804):
This provision evidently contemplates, when read with the one first quoted, that a stipulation of the code may be found to be unconstitutional and yet that its invalidity shall not be regarded as affecting the obligations attaching to the remainder.
I do not think that the question of separability should be determined by trying to imagine what Congress would [298 U.S. 238, 322] have done if certain provisions found to be invalid were excised. That, if taken broadly, would lead us into a realm of pure speculation. Who can tell amid the host of divisive influences playing upon the legislative body what its reaction would have been to a particular excision required by a finding of invalidity? The question does not call for speculation of that sort, but rather for an inquiry whether the provisions are inseparable by virtue of inherent character. That is, when Congress states that the provisions of the act are not inseparable and that the invalidity of any provision shall not affect others, we should not hold that the provisions are inseparable unless their nature, by reason of an inextricable tie, demands that conclusion.
All that is said in the preamble of the act, in the directions to the commission which the act creates, and in the stipulations of the code, is subject to the explicit direction of Congress that the provisions of the statute shall not be treated as forming an indivisible unit. The fact that the various requirements furnish to each other mutual aid and support does not establish indivisibility. The purpose of Congress, plainly expressed, was that if a part of that aid were lost, the whole should not be lost. Congress desired that the act and code should be operative so far as they met the constitutional test. Thus we are brought, as I have said, to the question whether, despite this purpose of Congress, we must treat the marketing provisions and the labor provisions as inextricably tied together because of their nature. I find no such tie. The labor provisions are themselves separated and placed in a separate part (part 3) of the code (15 U.S.C.A. 808). It seems quite clear that the validity of the entire act cannot depend upon the provisions as to hours and wages in paragraph (g) of part 3. For what was contemplated by that paragraph is manifestly independent of [298 U.S. 238, 323] the other machinery of the act, as it cannot become effective unless the specified proportion of producers and employees reach an agreement as to particular wages and hours. And the provision for collective bargaining in paragraphs (a) and (b) of part 3 is apparently made separable from the code itself by section 9 of the act (15 U.S.C.A. 813), providing, in substance, that the employees of all producers shall have the right of collective bargaining even when producers do not accept or maintain the code.
The marketing provisions (part 2) of the cod (15 U.S.C.A. 807) naturally form a separate category. The interdependence of wages and prices is no clearer in the coal business than in transportation. But the broad regulation of rates in order to stabilize transportation conditions has not carried with it the necessity of fixing wages. Again, the requirement, in paragraph (a) of part 2 that district boards shall establish prices so as to yield a prescribed 'return per net ton' for each district in a minimum price area, in order 'to sustain the stabilization of wages, working conditions, and maximum hours of labor,' does not link the marketing provisions to the labor provisions by an unbreakable bond. Congress evidently desired stabilization through both the provisions relating to marketing and those relating to labor, but the setting up of the two sorts of requirements did not make the one dependent upon the validity of the other. It is apparent that they are not so interwoven that they cannot have separate operation and effect. The marketing provisions in relation to interstate commerce can be carried out as provided in part 2 without regard to the labor provisions contained in part 3. That fact, in the light of the congressional declaration of separability, should be considered of controlling importance.
In this view, the act, and the code for which it provides, may be sustained in relation to the provisions for [298 U.S. 238, 324] marketing in interstate commerce, and the decisions of the courts below, so far as they accomplish that result, should be affirmed.
Mr. Justice CARDOZO (dissenting in Nos. 636, 649, and 650, and in No. 651 Concurring in the result).
My conclusions compendiously stated are these:
(a) Part 2 of the statute sets up a valid system of price-fixing as applied to transactions in interstate commerce and to those in intrastate commerce where interstate commerce is directly or intimately affected. The prevailing opinion holds nothing to the contrary.
(b) Part 2, with its system of price-fixing, is separable from part 3, which contains the provisions as to labor considered and condemned in the opinion of the Court.
(c) Part 2 being valid, the complainants are under a duty to come in under the code, and are subject to a penalty if they persist in a refusal.
(d) The suits are premature in so far as they seek a judicial declaration as to the validity or invalidity of the regulations in respect of labor embodied in part 3. No opinion is expressed either directly or by implication as to those aspects of the case. It will be time enough to consider them when there is the threat or even the possibility of imminent enforcement. If that time shall arrive, protection will be given by clear provisions of the statute (section 3) against any adverse inference flowing from delay or acquiescence.
(e) The suits are not premature to the extent that they are intended to avert a present wrong, though the wrong upon analysis will be found to be unreal.
The complainants are asking for a decree to restrain the enforcement of the statute in all or any of its provisions on the ground that it is a void enactment, and void in all its parts. If some of its parts are valid and are separable from others that are or may be void, and if the parts upheld and separated are sufficient to sustain a
[298 U.S. 238, 325]
regulatory penalty, the injunction may not issue and hence the suits must fail. There is no need when that conclusion has been reached to stir a step beyond. Of the provisions not considered, some may never take effect, at least in the absence of future happenings which are still uncertain and contingent. Some may operate in one way as to one group and in another way as to others according to particular conditions as yet unknown and unknowable. A decision in advance as to the operation and validity of separable provisions in varying contingencies is premature and hence unwise. 'The Court will not 'anticipate a question of constitutional law in advance of the necessity of deciding it.' Liverpool, N.Y. & P. Stea ship Co. v. Emigration Commissioners,
First. I am satisfied that the act is within the power of the central government in so far as it provides for minimum and maximum prices upon sales of bituminous coal in the transactions of interstate commerce and in those of intrastate commerce where interstate commerce is directly or intimately affected. Whether it is valid also in other provisions that have been considered and condemned in the opinion of the Court, I do not find it necessary to determine at this time. Silence must not be taken as importing acquiescence. Much would have [298 U.S. 238, 326] to be written if the subject, even as thus restricted were to be explored through all its implications, historical and economic as well as strictly legal. The fact that the prevailing opinion leaves the price provisions open for consideration in the future makes it appropriate to forego a fullness of elaboration that might otherwise be necessary. As a system of price fixing, the act is challenged upon three grounds: (1) Because the governance of prices is not within the commerce clause; (2) because it is a denial of due process forbidden by the Fifth Amendment; and (3) because the standards for administrative action are indefinite, with the result that there has been an unlawful delegation of legislative power.
(1)
With reference to the first objection, the obvious and sufficient answer is, so far as the act is directed to interstate transactions, that sales made in such conditions constitute interstate commerce, and do not merely 'affect' it. Dahnke-Walker Milling Co. v. Bondurant,
Regulation of prices being an exercise of the commerce power in respect of interstate transactions, the question remains whether it comes within that power as applied to intrastate sales where interstate prices are directly or intimately affected. Mining and agriculture and manufacture are not interstate commerce considered by themselves, yet their relation to that commerce may be such that for the protection of the one there is need to regulate the other. Schechter Poultry Corporation v. United States,
One of the most common and typical instances of a relation characterized as direct has been that between interstate and intrastate rates for carriers by rail where the local rates are so low as to divert business unreasonably from interstate competitors. In such circumstances Congress has the power to protect the business of its carriers against disintegrating encroachments. Houston, E. & W.T.R. Co. v. U.S. (Shreveport Case),
What has been said in this regard is said with added certitude when complainants' business is considered in the light of the statistics exhibited in the several records. In No. 636, the Carter case, the complainant has admitted that 'substantially all' (over 97 1/2 per cent.) of the sales of the Carter Company are made in interstate commerce. In No. 649 the percentages of intrastate sales are, for one of the complaining companies, 25 per cent., for another 1 per cent., and for most of the others 2 per cent. or 4. The Carter Company has its mines in West Virginia; the mines of the other companies are located in Kentucky. In each of those states, moreover, coal from other regions is purchased in large quantities, and is trus brought into competition with the coal locally produced. Plainly, it is impossible to say either from the statute itself or from any figures laid before us that interstate sales will not be prejudicially affected in West Virginia and Kentucky if intrastate prices are maintained on a lower level. If it be assumed for present purposes that there are other states or regions where the effect may be different, the complaints are not the champions of any rights except their own. Hatch v.
[298 U.S. 238, 330]
Reardon,
(2)
The commerce clause being accepted as a sufficient source of power, the next inquiry must be whether the power has been exercised consistently with the Fifth Amendment. In the pursuit of that inquiry, Nebbia v. New York,
All this may be said, and with equal, if not greater force, of the conditions and practices in the bituminous coal industry, not only at the enactment of this statute in August, 1935, but for many years before. Overproduction was at a point where free competition had been degraded into anarchy. Prices had been cut so low that profit had become impossible for all except a lucky [298 U.S. 238, 331] handful. Wages came down along with prices and with profits. There were strikes, at times nation-wide in extent, at other times spreading over broad areas and many mines, with the accompaniment of violence and bloodshed and misery and bitter feeling. The sordid tale is unfolded in many a document and treatise. During the twenty-three years between 1913 and 1935, there were nineteen investigations or hearings by Congress or by specially created commissions with reference to conditions in the coal mines. 2 The hope of betterment was faint unless the industry could be subjected to the compulsion of a code. In the weeks immediately preceding the passage of this act the country was threatened once more with a strike of ominous proportions. The plight of the industry was not merely a menace to owners and to mine workers, it was and had long been a menace to the public, deeply concerned in a steady and uniform supply of a fuel so vital to the national economy.
Congress was not condemned to inaction in the face of price wars and wage wars so pregnant with disaster. Commerce had been choked and burdened; its normal flow had been diverted from one state to another; there had been bankruptcy and waste and ruin alike for capital and for labor. The liberty protected by the Fifth Amendment does not include the right to persist in this anarchic riot. 'When industry is grievously hurt, when producing concerns fail, when unemployment mounts and communities dependent upon profitable production are prostrated, the wells of commerce go dry.' Appalachian Coals, Inc., v. United States,
(3)
Finally, and in answer to the third objection to the statute in its price-fixing provisions, there has been no excessive delegation of legislative power. The prices
[298 U.S. 238, 333]
to be fixed by the district boards and the commission must conform to the following standards: They must be just and equitable; they must take account of the weighted average cost of production for each minimum price area; they must not be unduly prejudicial or preferential as between districts or as between producers within a district; and they must reflect as nearly as possible the relative market value of the various kinds, qualities, and sizes of coal, at points of delivery in each common consuming market area; to the end of affording the producers in the several districts substantially the same opportunity to dispose of their coals on a competitive basis as has heretofore existed. The minimum for any district shall yield a return, per net ton, not less than the weighted average of the total costs per net ton of the tonnage of the minimum price area; the maximum for any mine, if a maximum is fixed, shall yield a return not less than cost plus a reasonable profit. Reasonable prices can as easily be ascertained for coal as for the carriage of passengers or property under the Interstate Commerce Act (49 U.S.C.A. 1 et seq.), or for the services of brokers in the stockyards (Tagg Bros. & Moorhead v. United States,
The price provisions of the act are contained in a chapter known as section 4, part 2 (15 U.S.C.A. 807). The final subdivisions of that part enumerate certain forms of conduct which are denounced as 'unfair methods of competition.' For the most part, the prohibitions are ancillary to the fixing of a minimum price. The power to fix a price carries with it the subsidiary power to forbid and prevent evasion. Cf. United States v. Ferger,
Second. The next inquiry must be whether section 4, part 1 of the statute (15 U.S.C.A. 806) which creates the administrative agencies, and part 2 (15 U.S.C.A. 807), which has to do in the main with the price- fixing machinery, as well as preliminary sections levying a tax or penalty, are separable from part 3 (15 U.S.C.A. 808), which deals with labor relations in the industry with the result that what is earlier would stand if what is later were to fall.
The statute prescribes the rule by which construction shall be governed. 'If any provision of this Act (chapter), or the application thereof to any person or circumstances, is held invalid, the remainder of the Act (chapter) and the application of such provisions to other persons or circumstances shall not be affected thereby.' Section 15, 15 U.S.C.A. 819. The rule is not read as an inexorable mandate. Dorchy v. Kansas,
Undoubtedly the rules as to labor relations are important provisions of the statute. Undoubtedly the lawmakers were anxious that provisions so important should have the force of law. But they announced with all the directness possible for words that they would keep what they could have if they could not have the whole. Stabilizing prices would go a long way toward stabilizing labor relations by giving the producers capacity to pay a living wage. 6 To hold otherwise is to ignore the whole history of mining. All in vain have offici l committees [298 U.S. 238, 337] inquired and reported in thousands of printed pages if this lesson has been lost. In the face of that history the Court is now holding that Congress would have been unwilling to give the force of law to the provisions of part 2, which were to take effect at once, if it could not have part 3, which in the absence of agreement between the employers and the miners would never take effect at all. Indeed, the prevailing opinion goes so far, it seems, as to insist that if the least provision of the statute in any of the three chapters is to be set aside as void, the whole statute must go down, for the reason that everything from end to end, or everything at all events beginning with section 4, is part of the Bituminous Coal Code, to be swallowed at a single draught, without power in the commission or even in the court to abate a jot or tittle. One can only wonder what is left of the 'presumption of divisibility' which the lawmakers were at pains to establish later on. Codes under the National Recovery Act (48 Stat. 195) are not a genuine analogy. The Recovery Act made it mandatory (section 7a (15 U.S.C.A. 707(a))) that every code should contain provisions as to labor, including wages and hours, and left everything else to the discretion of the codifiers. Wages and hours in such circumstances were properly described as 'essential features of the plan, its very bone and sinew' (Schechter Poultry Corporation v. United States, supra, concurring opinion, 295 U.S. at page 555, 55 S.Ct. 854, 97 A.L.R. 947), which taken from the body of a code would cause it to collapse. Here on the face of the statute the price provisions of one part and the labor provisions of the other (the two to be administered by separate agencies) are made of equal rank.
What is true of the sections and subdivisions that deal with wages and the hours of labor is true also of the other provisions of the same chapter of the act. Employees are to have the right to organize and bargain collectively through representatives of their own choos- [298 U.S. 238, 338] ing, and shall be free from interference, restraint, or coercion of employers, or their agents, in the designation of such representatives, or in self-organization or in other concerted activities for the purpose of collective bargaining or other mutual aid or protection, and no employee and no one seeking employment shall be required as a condition of employment to join any company union. No threat has been made by any one to do violence to the enjoyment of these immunities and privileges. No attempt to violate them may be made by the complainants or indeed by any one else in the term of four years during which the act is to remain in force. By another subdivision employees are to have the right of peaceable assemblage for the discussion of the principles of collective bargaining, shall be entitled to select their own check-weighman to inspect the weighing or measuring of coal, and shall not be required as a condition of employment to live in company houses or to trade at the store of the employer. None of these privileges or immunities has been threatened with impairment. No attempt to impair them may ever be made by any one.
Analysis of the statute thus leads to the conclusion that the provisions of part 3, so far as summarized, are separable from parts 1 and 2, and that any declaration in respect of their validity or invalidity under the commerce clause of the Constitution or under any other section will anticipate a controversy that may never become real. This being so, the proper course is to withhold an expression of opinion until expression becomes necessary. A different situation would be here if a portion of the statute, and a portion sufficient to uphold the regulatory penalty, did not appear to be valid. If the whole statute were a nullity, the complainants would be at liberty to stay the hand of the tax-gatherer threatening to collect the penalty, for collection in such circumstances would be a trespass, an illegal and forbidden act. Child Labor
[298 U.S. 238, 339]
Tax Case,
A last assault upon the statute is still to be repulsed. The complainants take the ground that the act may not coerce them through the imposition of a penalty into a seeming recognition or acceptance of the code, if any of the code provisions are invalid, however separable from others. I cannot yield assent to a position so extreme. It is one thing to impose a penalty for refusing to come in under a code that is void altogether. It is a very different thing if a penalty is imposed for
[298 U.S. 238, 340]
refusing to come in under a code invalid at the utmost in separable provisions, not immediately operative, the right to contest them being explicitly reserved. The penalty in those circumstances is adopted as a lawful sanction to compel submission to a statute having the quality of law. A sanction of that type is the one in controversy here. So far as the provisions for collective bargaining and freedom from coercion are concerned, the same duties are imposed upon employers by section 9 of the statute (15 U.S.C.A. 813) whether they come in under the code or not. So far as code members are subject to regulation as to wages and hours of labor, the force of the complainants' argument is destroyed when reference is made to those provisions of the statute in which the effect of recognition and acceptance is explained and limited. By section 3 of the act, 'No producer shall by reason of his acceptance of the code provided for in section 4 (sections 805, 806, 807 and 808 of this chapter) or of the drawback of taxes provided in section 3 of this Act (this section) be held to be precluded or estopped from contesting the constitutionality of any provision of said code, or its validity as applicable to such producer.' These provisions are reinforced and made more definite by sections 5(c) and 6(b), 15 U.S.C.A. 809(c), 810(b), which so far as presently material are quoted in the margin. 7 For the subscriber to the code who is
[298 U.S. 238, 341]
doubtful as to the validity of some of its requirements, there is thus complete protection. If this might otherwise be uncertain, it would be made clear by our decision in Ex parte Young,
My vote is for affirmance.
I am authorized to state that Mr. Justice BRANDEIS and Mr. Justice STONE join in this opinion.
[
Footnote 1
] Hamilton v. Kentucky Distilleries Co.,
[ Footnote 2 ] The dates and titles are given in the brief for the government in No. 636, at pp. 15-18.
[ Footnote 3 ] See, also, the Report of the Fifteenth Annual Meeting of the National Coal Association, October 26-27, 1934, and the statement of the resolutions adopted at the Sixteenth Annual Meeting as reported at hearings preliminary to the passage of this act. Hearings before a Subcommittee of the Committee on Ways and Means, House of Representatives, 74th Congress, 1st Session, on H.R. 8479, pp. 20, 152.
[ Footnote 4 ] There is significance in the many bills proposed to the Congress after painstaking reports during successive nat onal administrations with a view to the regulation of the coal industry by Congressional action. S. 2557, October 4, 1921, 67th Cong., 1st Sess.; S. 3147, February 13, 1922, 67th Cong., 2nd Sess.; H.R. 9222, February 11, 1926, 69th Cong., 1st Sess.; H.R. 11898, May 4, 1926 (S. 4177), 69th Cong., 1st Sess.; S. 2935, January 7, 1932 (H.R. 7536), 72nd Cong., 1st Sess.; also same session H.R. 12916 and 9924.
[
Footnote 5
] 'Price control, like any other form of regulation, is unconstitutional only if arbitrary, discriminatory, or demonstrably irrelevant to the policy the Legislature is free to adopt, and hence an unnecessary and unwarranted interference with individual liberty.' Nebbia v. New York, supra,
[ Footnote 6 ] At a hearing before a Subcommittee of the Committee on Ways and Means, House of Representatives, 74th Congress, First Session, on H.R. 8479, counsel for the United Mine Workers of America, who had coo perated in the drafting of the Act, said (p. 35):
[ Footnote 7 ] 5(c); 'Any producer whose membership in the code and whose right to a drawback on the taxes as provided under this Act has been canceled, shall have the right to have his membership restored upon payment by him of all taxes in full for the time during which it shall be found by the Commission that his violation of the code or of any regulation thereunder, the observance of which is required by its terms, shall have continued. In making its findings under this subsection the Commission shall state specifically (1) the period of time during which such violation continued, and (2) the amount of taxes required to be paid to bring about reinstatement as a code member.'
6(b): 'Any person aggrieved by an order issued by the Commission or Labor Board in a proceeding to which such person is a party may obtain a review of such order in the Circuit Court of Appeals of the United States, within any circuit wherein such person resides or has his principal place of business, or in the United States Court of Appeals for the District of Columbia, by filing in such court, within sixty days after the entry of such order, a written petition praying that the order of the Commission or Labor Board be modified or set aside in whole or in part. ... The judgment and decree of the court, affirming, modifying, and enforcing or setting aside, in whole or in part, any such order of the Commission or Labor Board, as the case may be, shall be final, subject to review by the Supreme Court of the United States upon certiorari or certification as provided in sections 239 and 240 of the Judicial Code, as amended ( sections 346 and 347 of Title 28).'
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Citation: 298 U.S. 238
No. 636
Decided: May 18, 1936
Court: United States Supreme Court
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