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CRS Annotated Constitution

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Agricultural Adjustment Act.—Congress’ second attempt to combat the Depression comprised the Agricultural Adjustment Act of 1933.727 As is pointed out elsewhere, the measure was set aside as an attempt to regulate production, a subject held to be “prohibited” to the United States by the Tenth Amendment.728

Bituminous Coal Conservation Act.—The third measure to be disallowed was the Guffey–Snyder Bituminous Coal Conserva[p.189]tion Act of 1935.729 The statute created machinery for the regulation of the price of soft coal, both that sold in interstate commerce and that sold “locally,” and other machinery for the regulation of hours of labor and wages in the mines. The clauses of the act dealing with these two different matters were declared by the act itself to be separable so that the invalidity of the one set would not affect the validity of the other, but this strategy was ineffectual. A majority of the Court, speaking by Justice Sutherland, held that the act constituted one connected scheme of regulation, which, inasmuch as it invaded the reserved powers of the States over conditions of employment in productive industry, was violative of the Constitution.730 Justice Sutherland’s opinion set out from Chief Justice Hughes’ assertion in the Schechter case of the “fundamental” character of the distinction between “direct” and “indirect” effects, that is to say, from the doctrine of the Sugar Trust case. It then proceeded: “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 . . . 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 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.”731

Railroad Retirement Act.—Still pursuing the idea of protecting commerce and the labor engaged in it concurrently, Congress, by the Railroad Retirement Act of June 27, 1934,732 ordered the compulsory retirement of superannuated employees of interstate carriers, and provided that they be paid pensions out of a fund comprising compulsory contributions from the carriers and their present and future employees. In Railroad Retirement Board v.[p.190]Alton R. Co.,733 however, a closely divided Court held this legislation to be in excess of Congress’ power to regulate commerce and contrary to the due process clause of the Fifth Amendment. Said Justice Roberts for the majority: “We feel bound to hold that a pension plan thus imposed is in no proper sense a regulation of the activity of interstate transportation. It is an attempt for social ends to impose by sheer fiat noncontractual incidents upon the relation of employer and employee, not as a rule or regulation of commerce and transportation between the States, but as a means of assuring a particular class of employees against old age dependency. This is neither a necessary nor an appropriate rule or regulation affecting the due fulfillment of the railroads’ duty to serve the public in interstate transportation.”734

Chief Justice Hughes, speaking for the dissenters, contended, on the contrary, that “the morale of the employees [had] an important bearing upon the efficiency of the transportation service.” He added: “The fundamental consideration which supports this type of legislation is that industry should take care of its human wastage, whether that is due to accident or age. That view cannot be dismissed as arbitrary or capricious. It is a reasoned conviction based upon abundant experience. The expression of that conviction in law is regulation. When expressed in the government of interstate carriers, with respect to their employees likewise engaged in interstate commerce, it is a regulation of that commerce. As such, so far as the subject matter is concerned, the commerce clause should be held applicable.”735 Under subsequent legislation, an excise is levied on interstate carriers and their employees, while by separate but parallel legislation a fund is created in the Treasury out of which pensions are paid along the lines of the original plan. The constitutionality of this scheme appears to be taken for granted in Railroad Retirement Board v. Duquesne Warehouse Co.736


Footnotes

727 48 Stat. 31 (1933).
728 United States v. Butler, 297 U.S. 1, 63–64, 68 (1936).
729 49 Stat. 991 (1935).
730 Carter v. Carter Coal Co., 298 U.S. 238 (1936).
731 Id., 308–309.
732 48 Stat. 1283 (1934).
733 295 U.S. 330 (1935).
734 Id., 374.
735 Id., 379, 384.
736 326 U.S. 446 (1946). Indeed, in a case decided in June, 1948, Justice Rutledge, speaking for a majority of the Court, listed the Alton case as one “foredoomed to reversal,” though the formal reversal has never taken place. See Mandeville Island Farms v. American Crystal Sugar Co., 334 U.S. 219, 230 (1948). Cf. Usery v. Turner Elkhorn Mining Co., 428 U.S. 1, 19 (1976).
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