J. W. HAMPTON, JR., & CO. v. U. S.(1928)
[276 U.S. 394, 395] Mr. Walter E. Hampton, of New York City, for petitioner.
[276 U.S. 394, 398] The Attorney General and Mr. W. D. Mitchell, Sol. Gen., of Washington, D. C., for the United States.
Mr. Chief Justice TAFT delivered the opinion of the Court.
J. W. Hampton, Jr., & Co. made an importation into New York of barium dioxide which the collector of customs assessed at the dutiable rate of six cents per pound. This was two cents per pound more than that fixed by statute. Paragraph 12, c. 256, 42 Stat. 858, 860 (19 USCA 121, par. 12). The rate was raised by the collector by virtue of the proclamation of the President, 45 Treas. Dec. 669, T. D. 40216, issued under, and by authority of, section 315 of title 3 of the Tariff Act of September 21, 1922 (c. 356, 42 Stat. 858, 941 (19 USCA 154-159)), which is the so-called flexible tariff provision. Protest was made and an appeal was taken under section 514, part 3, title 4 (chapter 356, 42 Stat. 969-970 (19 USCA 398)). The case came on for hearing before the United States Customs Court, 49 Treas. Dec. 593, T. D. 41478. A majority held the act constitutional. Thereafter the case was appealed to the United States Court of Customs Appeals. On the 16th day of October, 1926, the Attorney General certified that in his opinion the case was of such importance as to render expedient its review by this Court. Thereafter the judgment of the United States Customs Court, was affirmed. [276 U.S. 394, 401] 14 Ct. Cust. App. 350. On a petition to this Court for certiorari, filed May 10, 1927, the writ was granted June 6, 1927. 274 U.S. 735 , 47 S. Ct. 769. The pertinent parts of section 315 of title 6 of the Tariff Act (chapter 356, 42 Stat. 858, 941, U. S. C. tit. 19, 154, 156 ( 19 USCA 154, 156)) are as follows:
The issue here is as to the constitutionality of section 315, upon which depends the authority for the proclamation of the President and for two of the six cents per pound duty collected from the petitioner. The contention of the taxpayers is twofold-first, they argue that the section is invalid in that it is a delegation to the President of the legislative power, which by article 1, 1 of the Constitution, is vested in Congress, the power being that declared in section 8 of article 1, that the Congress shall have power to lay and collect taxes, duties, imposts and excises. Their second objection is that, as section 315 was enacted with the avowed intent and for the purpose of protecting the industries of the United States, it is invalid because the Constitution gives power to lay such taxes only for revenue.
First. It seems clear what Congress intended by section 315. Its plan was to secure by law the imposition of customs duties on articles of imported merchandise which should equal the difference between the cost of producing in a foreign country the articles in question and laying them down for sale in the United States, and the cost of producing and selling like or similar articles in the United States, so that the duties not only secure revenue, but at the same time enable domestic producers to compete on terms of equality with foreign producers in the markets of the United States. It may be that it is difficult to fix with exactness this difference, but the difference which is sought in the statute is perfectly clear and perfectly intelligible. Because of the difficulty in practically determining what that difference is, Congress seems to have [276 U.S. 394, 405] doubted that the information in its possession was such as to enable it to make the adjustment accurately, and also to have apprehended that with changing conditions the difference might vary in such a way that some readjustments would be necessary to give effect to the principle on which the statute proceeds. To avoid such difficulties, Congress adopted in section 315 the method of describing with clearness what its policy and plan was and then authorizing a member of the executive branch to carry out its policy and plan and to find the changing difference from time to time and to make the adjustments necessary to conform the duties to the standard underlying that policy and plan. As it was a matter of great importance, it concluded to give by statute to the President, the chief of the executive branch, the function of determining the difference as it might vary. He was provided with a body of investigators who were to assist him in obtaining needed data and asscertaining the facts justifying readjustments. There was no specific provision by which action by the President might be invoked under this act, but it was presumed that the President would through this body of advisers keep himself advised of the necessity for investigation or change, and then would proceed to pursue his duties under the act and reach such conclusion as he might find justified by the investigation and proclaim the same, if necessary.
The Tariff Commission does not itself fix duties, but, before the President reaches a conclusion on the subject of investigation, the Tariff Commission must make an investigation, and in doing so must give notice to all parties interested and an opportunity to adduce evidence and to be heard.
The well-known maxim 'Delegata potestas non potest delegari,' applicable to the law of agency in the general and common law, is well understood and has had wider [276 U.S. 394, 406] application in the construction of our federal and state Constitutions than it has in private law. Our Federal Constitution and state Constitutions of this country divide the governmental power into three branches. The first is the legislative, the second is the executive, and the third is the judicial, and the rule is that in the actual administration of the government Congress or the Legislature should exercise the legislative power, the President or the state executive, the Governor, the executive power, and the courts or the judiciary the judicial power, and in carrying out that constitutional division into three branches it is a breach of the national fundamental law if Congress gives up its legislative power and transfers it to the President, or to the judicial branch, or if by law it attempts to invest itself or its members with either executive power or judicial power. This is not to say that the three branches are not co-ordinate parts of one government and that each in the field of its duties may not invoke the action of the two other branches in so far as the action invoked shall not be an assumption of the constitutional field of action of another branch. In determining what it may do in seeking assistance from another branch, the extent and character of that assistence must be fixed according to common sense and the inherent necessities of the governmental co-ordination.
The field of Congress involves all and many varieties of legislative action, and Congress has found it frequently necessary to use officers of the executive branch within defined limits, to secure the exact effect intended by its acts of legislation, by vesting discretion in such officers to make public regulations interpreting a statute and directing the details of its execution, even to the extent of providing for penalizing a breach of such regulations. United States v. Grimaud, 220 U.S. 506, 518 , 31 S. Ct. 480; Union Bridge Co. v. United States, 204 U.S. 364 , 27 S. Ct. 367; Buttfield v. [276 U.S. 394, 407] Stranahan, 192 U.S. 470 , 24 S. Ct. 349; In re Kollock, 165 U.S. 526 , 17 S. Ct. 444; Oceanic Steam Navigation Co. v. Stranahan, 214 U.S. 320 , 29 S. Ct. 671
Congress may feel itself unable conveniently to determine exactly when its exercise of the legislative power should become effective, because dependent on future conditions, and it may leave the determination of such time to the decision of an executive, or, as often happens in matters of state legislation, it may be left to a popular vote of the residents of a district to be affected by the legislation. While in a sense one may say that such residents are exercising legislative power, it is not an exact statement, because the power has already been exercised legislatively by the body vested with that power under the Constitution, the condition of its legislation going into effect being made dependent by the Legislature on the expression of the voters of a certain district. As Judge Ranney of the Ohio Supreme Court in Cincinnati, Wilmington & Zanesville Railroad Co. v. Commissioners, 1 Ohio St. 77, 88, said in such a case:
See, also, Moers v. Reading, 21 Pa. 188, 202; Locke's Appeal, 72 Pa. 491, 498, 13 Am. Rep. 716.
Again, one of the great functions conferred on Congress by the Federal Constitution is the regulation of interstate commerce and rates to be exacted by interstate carriers for the passenger and merchandise traffic. The rates to be fixed are myriad. If Congress were to be required to fix every rate, it would be impossible to exercise the power at all. Therefore, common sense requires that in the fixing of such rates Congress may provide a Com- [276 U.S. 394, 408] mission, as it does, called the Interstate Commerce Commission, to fix those rates, after hearing evidence and argument concerning them from interested parties, all in accord with a general rule that Congress first lays down that rates shall be just and reasonable considering the service given and not discriminatory. As said by this Court in Interstate Commerce Commission v. Goodrich Transit Co., 224 U.S. 194, 214 , 32 S. Ct. 436, 441 ( 56 L. Ed. 729):
The principle upon which such a power is upheld in state legislation as to fixing railway rates is admirably stated by Judge Mitchell in the case of State v. Chicago, Milwaukee & St. Paul Railway Co., 38 Minn. 281, 298 to 302, 37 N. W. 782. The learned judge says on page 301 (37 N. W. 788):
See, also, the language of Justices Miller and Bradley in the same case in this Court. Chicago, M. & St. P. R. Co. v. Minnesota ex rel. Railroad & W. Commission, 134 U.S. 418, 459 , 461 S., 464, 10 S. Ct. 462, 702.
It is conceded by counsel that Congress may use executive officers in the application and enforcement of a policy declared in law by Congress and authorize such officers in the application of the congressional declaration to enforce it by regulation equivalent to law. But it is said that this never has been permitted to be done where Congress has exercised the power to levy taxes and fix customs duties. The authorities make no such distinction. The same principle that permits Congress to exercise its rate-making power in interstate commerce by declaring the rule which shall prevail in the legislative fixing of rates, and enables it to remit to a rate-making body created in accordance with its provisions the fixing of such rates, justifies a similar provision for the fixing of customs duties on imported merchandise. If Congress shall lay down by legislative act an intelligible principle to which the person or body authorized to fix such rates is directed to conform, such legislative action is not a forbidden delegation of legislative power. If it is thought wise to vary the customs duties according to changing conditions of production at home and abroad, it may authorize the Chief Executive to carry out this purpose, with the advisory assistance of a Tariff Commission appointed under congressional authority. This conclusion is amply sustained by a case in which there was no advisory commis- [276 U.S. 394, 410] sion furnished the President-a case to which this Court gave the fullest consideration nearly 40 years ago. In Marshall Field & Co. v. Clark, 143 U.S. 649, 680 , 12 S. Ct. 495, 500 (36 L. Ed. 294), the third section of the Act of October, 1, 1890 (26 Stat. 612), contained this provision:
Then followed certain rates of duty to be imposed. It was contended that this section delegated to the President both legislative and treaty- making powers and was unconstitutional. After an examination of all the authorities, the Court said that, while Congress could not delegate legislative power to the President, this act did not in any real sense invest the President with the power of legislation, because nothing involving the expendiency or just operation of such legislation was left to the determination of the President; that the legislative power was exercised when Congress declared that the suspension should take effect upon a named contingency. What [276 U.S. 394, 411] the President was required to do was merely in execution of the act of Congress. It was not the making of law. He was the mere agent of the lawmaking department to ascertain and declare the event upon which its expressed will was to take effect.
Second. The second objection to section 315 is that the declared plan of Congress, either expressly or by clear implication, formulates its rule to guide the President and his advisory Tariff Commission as one directed to a tariff system of protection that will avoid damaging competition to the country's industries by the importation of goods from other countries at too low a rate to equalize foreign and domestic competition in the markets of the United States. It is contended that the only power of Congress in the levying of customs duties is to create revenue, and that it is unconstitutional to frame the customs duties with any other view than that of revenue raising. It undoubtedly is true that during the political life of this country there has been much discussion between parties as to the wisdom of the policy of protection, and we may go further and say as to its constitutionality, but no historian, whatever his view of the wisdom of the policy of protection, would contend that Congress since the first revenue act in 1789 (1 Stat. 24) has not assumed that it was within its power in making provision for the collection of revenue to put taxes upon importations and to vary the subjects of such taxes or rates in an effort to encourage the growth of the industries of the nation by protecting home production against foreign competition. It is enough to point out that the second act adopted by the Congress of the United States July 4, 1789 (chapter 2, 1 Stat. 24), contained the following recital:
In this first Congress sat many members of the Constitutional Convention of 1787. This Court has repeatedly laid down the principle that a contemporaneous legislative exposition of the Constitution when the founders of our government and framers of our Constitution were actively participating in public affairs long acquiesced in fixes the construction to be given its provisions. Myers v. United States, 272 U.S. 52, 175 , 47 S. Ct. 21, and cases cited. The enactment and enforcement of a number of customs revenue laws drawn with a motive of maintaining a system of protection since the revenue law of 1789 are matters of history.
More than a hundred years later, the titles of the Tariff Acts of 1897 (30 Stat. 151) and 1909 (36 Stat. 11) declared the purpose of those acts, among other things, to be that of encouraging the industries of the United States. The title of the Tariff Act of 1922 (42 Stat. 858), of which section 315 is a part, is 'An act to provide revenue, to regulate commerce with foreign countries, to encourage the industries of the United States, and for other purposes.' Whatever we may think of the wisdom of a protection policy, we cannot hold it unconstitutional.
So long as the motive of Congress and the effect of its legislative action are to secure revenue for the benefit of the general government, the existence of other motives in the selection of the subjects of taxes cannot invalidate congressional action. As we said in the Child Labor Tax Case, 259 U.S. 20, 38 , 42 S. Ct. 449, 451 (66 L. Ed. 817):
The judgment of the Court of Customs Appeals is affirmed.