Black's Law Dictionary,
Sixth Edition, p. 269
“Commerce.
…Intercourse by way
of trade and traffic between different peoples or states and the
citizens or inhabitants thereof, including not only the purchase,
sale, and exchange of commodities, but also the instrumentalities
[governments] and agencies by which it is promoted and the means
and appliances by which it is carried on…”
[Black’s Law Dictionary, Sixth Edition, p. 269]
United States Code
TITLE 15 - COMMERCE AND TRADE
CHAPTER 1 - MONOPOLIES AND COMBINATIONS IN RESTRAINT OF TRADE
Sec. 17. Antitrust laws not applicable to labor organizations
The labor of a human being is not a commodity or article of commerce….
Defined
"'Commerce' in the
sense in which the word is used in the constitution is co-extensive
in its meaning with 'intercourse.'" Carson River Lumbering Co. v. Patterson
(1867), 33 C. 334.
"Term 'commerce' as
employed in U.S. Const. Art. I §8, is not limited to exchange of commodities
only, but includes, as well, 'intercourse' with foreign nations, and
between states; and term 'intercourse' includes transportation of passengers."
People v. Raymond (1868), 34 C. 492.
"Commerce includes
intercourse, navigation, and not traffic alone." Lord v. Goodall, Nelson
& Perkins S. S. Co. (1881), 102 U.S. 541, 26 L.Ed. 224.
Regulation
"Whole doctrine of Brown v. State of Maryland, has been doubted, and
the right of states to regulate their own internal commerce, and to
tax every species of property within their own jurisdiction -- nay more,
concurrent power of states over subject of commerce, is now firmly established
by opinion of majority of judges of Supreme Court of United States."
People v. Coleman (1854), 4 C. 46, 60 Am.D. 581, overruled on another
point by People v. McCreery (1868), 34 C. 432.
"By well-settled rules of construction, right of state to regulate commerce
is concurrent with that of Congress, with understanding always, that
all state regulations, inconsistent with those of the federal government
on this subject, must give way. -- " People v. Coleman (1854), 4 C.
46, 60 Am.D. 581, overruled on another point by People v. McCreery (1868),
34 C. 432.
"Federal Constitution has vested in general government power to regulate
commerce in all its branches; and this power extends to every species
of commercial intercourse, and may be exercised upon persons as well
as property." Lin Sing v. Washburn (1862), 20 C. 534.
"When Congress, in exercise of its constitutional right, has by its
legislation established regulations of commerce with foreign nations,
and among several states, its authority is paramount and exclusive,
and its enactments supersede all state legislation on those subjects.
Whether states could constitutionally exercise this power in absence
of congressional legislation is not decided." People v. Raymond (1868),
34 C. 492.
Woodruff v. Parham, 75 U.S. (8 Wall.) 123 (1868): [EXCELLENT
ruling relating to the meaning of "foreign commerce" within the meaning
of the Constitution]
The words impost, imports, and exports
are frequently used in the Constitution. They have a necessary correlation,
and when we have a clear idea of what either word means in any particular
connection in which it may be found, we have one of the most satisfactory
tests of its definition in other parts of the same instrument.
In the case of Brown v. Maryland,
the word imports, as used in the clause now under consideration,
is defined, both on the authority of the lexicons and of usage,
to be articles brought into the country; and impost is there said
to be a duty, custom, or tax levied on articles brought into the
country. In the ordinary use of these terms at this day, no one
would, for a moment, think of them as having relation to any other
articles than those brought from a country foreign to the United
States, and at the time the case of Brown v. Maryland was decided-namely,
in 1827-it is reasonable
to suppose that the general usage was the same, and that in defining
imports as articles brought into the country, [75 U.S. 123, 132]
the Chief Justice used the word country as a synonymous for United
States.
But the word is susceptible of being
applied to articles introduced from one State into another, and
we must inquire if it was so used by the framers of the Constitution.
Leaving, then, for a moment, the
clause of the Constitution under consideration, we find the first
use of any of these correlative terms in that clause of the eighth
section of the first article, which begins the enumeration of the
powers confided to Congress.
'The Congress shall have power
to levy and collect taxes, duties, imposts, and excises, . .
. but all duties, imposts, and excises shall be uniform throughout
the United States.'
Is the word impost, here used, intended
to confer upon Congress a distinct power to levy a tax upon all
goods or merchandise carried from one State into another? Or is
the power limited to duties on foreign imports? If the former be
intended, then the power conferred is curiously rendered nugatory
by the subsequent clause of the ninth section, which declares that
no tax shall be laid on articles exported from any State, for no
article can be imported from one State into another which is not,
at the same time, exported from the former. But if we give to the
word imposts, as used in the first-mentioned clause, the definition
of Chief Justice Marshall, and to the word export the corresponding
idea of something carried out of the United States, we have, in
the power to lay duties on imports from abroad, and the prohibition
to lay such duties on exports to other countries, the power and
its limitations concerning imposts.
It is also to be remembered that
the Convention was here giving the right to lay taxes by National
authority in connection with paying the debts and providing for
the common defence and the general welfare, and it is a reasonable
inference that they had in view, in the use of the word imports,
those articles which, being introduced from other nations and diffused
generally over the country for consumption, would contribute, in
a common and general way, to the support [75 U.S. 123, 133]
of the National government. If internal taxation should become necessary,
it was provided for by the terms taxes and excises.
There are two provisions of the clause
under which exemption from State taxation is claimed in this case,
which are not without influence on that prohibition, namely: that
any State may, with the assent of Congress, lay a tax on imports,
and that the net produce of such tax shall be for the benefit of
the Treasury of the United States. The framers of the Constitution,
claiming for the General Government, as they did, all the duties
on foreign goods imported into the country, might well permit a
State that wished to tax more heavily than Congress did, foreign
liquors, tobacco, or other articles injurious to the community,
or which interfered with their domestic policy, to do so, provided
such tax met the approbation of Congress, and was paid into the
Federal treasury. But that it was intended to permit such a tax
to be imposed by such authority on the products of neighboring States
for the use of the Federal government, and that Congress, under
this temptation, was to arbitrate between the State which proposed
to levy the tax and those which opposed it, seems altogether improbable.
Yet this must be the construction
of the clause in question if it has any reference to goods imported
from one State into another.
If we turn for a moment
from the consideration of the language of the Constitution to the
history of its formation and adoption, we shall find additional
reason to conclude that the words imports and imposts were used
with exclusive reference to articles imported from foreign countries.
Section three, article six, of the
Confederation provided that no State should lay imposts or duties
which might interfere with any stipulation in treaties entered into
by the United States; and section one, article nine, that no treaty
of commerce should be made whereby the legislative power of the
respective States should be restrained from imposing such imposts
and duties on foreigners as their own people were subjected to,
or from prohibiting the exportation or [75 U.S. 123, 134]
importation of any species of goods or commodities whatsoever. In
these two articles of the Confederation, the words imports, exports,
and imposts are used with exclusive reference to foreign trade,
because they have regard only to the treaty-making power of the
federation.
As soon as peace was restored by
the success of the Revolution, and commerce began to revive, it
became obvious that the most eligible mode of raising revenue for
the support of the General Government and the payment of its debts
was by duties on foreign merchandise imported into the country.
The Congress accordingly recommended the States to levy a duty of
five per cent. on all such imports, for the use of the Confederation.
To this, Rhode Island, which, at that time, was one of the largest
importing States, objected, and we have a full report of the remonstrance
addressed by a committee of Congress to that State on that subject. 11 And the discussions of the Congress
of that day, as imperfectly as they have been preserved, are full
of the subject of the injustice done by the States who had good
seaports, by duties levied in those ports on foreign goods designed
for States who had no such ports.
In this state of public feeling in
this matter, the Constitutional Convention assembled.
Its very first grant of power to
the new government about to be established, was to lay and collect
imposts or duties on foreign goods imported into the country, and
among its restraints upon the States was the corresponding one that
they should lay no duties on imports or exports. It seems, however,
from Mr. Madison's account of the debates, that while the necessity
of vesting in Congress the power to levy duties on foreign goods
was generally conceded, the right of the States to do so likewise
was not given up without discussion, and was finally yielded with
the qualification to which we have already referred, that the States
might lay such duties with the assent of Congress. Mr. Madison moved
that the words 'nor lay imposts or duties on imports' be placed
in [75 U.S. 123, 135] that class of prohibitions which
were absolute, instead of those which were dependent on the consent
of Congress. His reason was that the States interested in this power,
(meaning those who had good seaports), by which they could tax the
imports of their neighbors passing through their markets, were a
majority, and could gain the consent of Congress to the injury of
New Jersey, North Carolina, and other non-importing States. But
his motion failed. 12 In the Convention
of Virginia, called to adopt the Constitution, that distinguished
expounder and defender of the instrument, so largely the work of
his own hand, argued, in support of the authority to lay direct
taxes, that without this power, a disproportion of burden would
be imposed on the Southern States, because, having fewer manufactures,
they would consume more imports and pay more of the imposts. 13
So, in defending the clause of the Constitution now under our consideration,
he says: 'Some States export the produce of other States. Virginia
exports the produce of North Carolina; Pennsylvania those of New
Jersey and Delaware; and Rhode Island, those of Connecticut and
Massachusetts. The exporting States wished to retain the power of
laying duties on exports to enable them to pay expenses incurred.
The States whose produce was exported by other States, were extremely
jealous lest a contribution should be raised of them by the exporting
States, by laying heavy duties on their own commodities. If this
clause be fully considered it will be found to be more consistent
with justice and equity than any other practicable mode; for, if
the States had the exclusive imposition of duties on exports, they
might raise a heavy contribution of the other States for their own
exclusive emoluments.' 14 Similar
observation, from the same source, are found in the 42d number of
the Federalist, but with more direct reference to the power to regulate
commerce.
Governor Ellsworth, in opening the
debate of the Connecticut Convention on the adoption of the Constitution,
says: 'Our being tributary to our sister States, is in consequence
of [75 U.S. 123, 136] the want of a Federal system.
The State of New York raises 60,000 or 80, 000 in a year by impost.
Connecticut consumes about one-third of the goods upon which this
impost is laid, and consequently pays one-third of this sum to New
York. If we import by the medium of Massachusetts, she has an impost,
and to her we pay tribute.' 15 A few
days later, he says: 'I find, on calculation, that a general impost
of five per cent. would raise a sum of 245,000,' and adds: 'it is
a strong argument in favor of an impost, that the collection of
it will interfere less with the internal police of the States than
any other species of taxation. It does not fill the country with
revenue officers, but is confined to the seacoast, and is chiefly
a water operation. . . . If we do not give it to Congress, the individual
States will have it.' 16
It is not too much to
say that, so far as our research has extended, neither the word
export, import, or impost is to be found in the discussions on this
subject, as they have come down to us from that time, in reference
to any other than foreign commerce, without some special form of
words to show that foreign commerce is not meant. The only allusion
to imposts in the Articles of Confederation is clearly limited to
duties on goods imported from foreign States. Wherever we find the
grievance to be remedied by this provision of the Constitution alluded
to, the duty levied by the States on foreign importations is alone
mentioned, and the advantages to accrue to Congress from the power
confided to it, and withheld from the States, is always mentioned
with exclusive reference to foreign trade.
Whether we look, then,
to the terms of the clause of the Constitution in question, or to
its relation to the other parts of that instrument, or to the history
of its formation and adoption, or to the comments of the eminent
men who took part in those transactions, we are forced to the conclusion
that no intention existed to prohibit, by this clause, the right
of one State to tax articles brought into it from another. If we
examine for a moment the results of an opposite doctrine, [75 U.S.
123, 137] we shall be well satisfied with the wisdom
of the Constitution as thus construed.
"We need scarcely repeat what this court has more than once said, that
the power to regulate interstate commerce, great and paramount as that
power is, cannot be exerted in violation of any fundamental right secured
by other provisions of the Constitution. Gibbons v. Ogden, 9 Wheat.
1, 196, 6 L. ed. 23, 70; Lottery Case (Champion v. Ames) 188 U.S. 321, 353 , 47 S. L. ed. 492, 500, 23 Sup. Ct. Rep. 321."
"...the statute...arbitrarily sanctions an illegal invasion of the personal
liberty as well as the right of property of the defendant, Adair. .
."
[Adair
v. U.S., 208 U.S. 161 (1908)]
Due respect for the decisions of a coordinate branch of Government demands that we invalidate a congressional enactment only upon a plain showing that Congress has exceeded its constitutional bounds. See United States v. Lopez, 514 U. S., at 568, 577-578 (Kennedy, J., concurring); United States v. Harris, 106 U. S., at 635. With this presumption of constitutionality in mind, we turn to the question whether § 13981 falls within Congress' power under Article I, § 8, of the Constitution. Brzonkala and the United States rely upon the third clause of the section, which gives Congress power "[t]o regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes."
As we discussed at length in Lopez, our interpretation of the Commerce Clause has changed as our Nation has developed. See 514 U. S., at 552-557; id., at 568-574 (Kennedy, J., concurring); id., at 584, 593-599 (Thomas, J., concurring). We need not repeat that detailed review of 608*608 the Commerce Clause's history here; it suffices to say that, in the years since NLRB v. Jones & Laughlin Steel Corp., 301 U. S. 1 (1937), Congress has had considerably greater latitude in regulating conduct and transactions under the Commerce Clause than our previous case law permitted. See Lopez, 514 U. S., at 555-556; id., at 573-574 (Kennedy, J., concurring).
Lopez emphasized, however, that even under our modern, expansive interpretation of the Commerce Clause, Congress' regulatory authority is not without effective bounds. Id., at 557.
"[E]ven [our] modern-era precedents which have expanded congressional power under the Commerce Clause confirm that this power is subject to outer limits. In Jones & Laughlin Steel, the Court warned that the scope of the interstate commerce power `must be considered in the light of our dual system of government and may not be extended so as to embrace effects upon interstate commerce so indirect and remote that to embrace them, in view of our complex society, would effectually obliterate the distinction between what is national and what is local and create a completely centralized government.' " Id., at 556-557 (quoting Jones & Laughlin Steel, supra, at 37).[3]
As we observed in Lopez, modern Commerce Clause jurisprudence has "identified three broad categories of activity that Congress may regulate under its commerce power." 609*609 514 U. S., at 558 (citing Hodel v. Virginia Surface Mining & Reclamation Assn., Inc., 452 U. S. 264, 276-277 (1981); Perez v. United States, 402 U. S. 146, 150 (1971)). "First, Congress may regulate the use of the channels of interstate commerce." 514 U. S., at 558 (citing Heart of Atlanta Motel, Inc. v. United States, 379 U. S. 241, 256 (1964); United States v. Darby, 312 U. S. 100, 114 (1941)). "Second, Congress is empowered to regulate and protect the instrumentalities of interstate commerce, or persons or things in interstate commerce, even though the threat may come only from intrastate activities." 514 U. S., at 558 (citing Shreveport Rate Cases, 234 U. S. 342 (1914); Southern R. Co. v. United States, 222 U. S. 20 (1911); Perez, supra, at 150). "Finally, Congress' commerce authority includes the power to regulate those activities having a substantial relation to interstate commerce, . . . i. e., those activities that substantially affect interstate commerce." 514 U. S., at 558-559 (citing Jones & Laughlin Steel, supra, at 37).
Petitioners do not contend that these cases fall within either of the first two of these categories of Commerce Clause regulation. They seek to sustain § 13981 as a regulation of activity that substantially affects interstate commerce. Given § 13981's focus on gender-motivated violence wherever it occurs (rather than violence directed at the instrumentalities of interstate commerce, interstate markets, or things or persons in interstate commerce), we agree that this is the proper inquiry.
Since Lopez most recently canvassed and clarified our case law governing this third category of Commerce Clause regulation, it provides the proper framework for conducting the required analysis of § 13981. In Lopez, we held that the Gun-Free School Zones Act of 1990, 18 U. S. C. § 922(q)(1)(A), which made it a federal crime to knowingly possess a firearm in a school zone, exceeded Congress' authority under the Commerce Clause. See 514 U. S., at 551. Several significant considerations contributed to our decision.
[United States v. Morrison, 529 U.S. 598 (2000)]
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 all embracing 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:
'Commerce, undoubtedly, is traffic,
but it is something more-it is intercourse. It describes the
commercial intercourse between nations, and parts of nations,
in all its branches, and is regulated by prescribing rules for
carrying on that intercourse.'
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, 91 U.S. 275 , 280; Addyston Pipe & Steel Co. v. United States, 175 U.S. 211, 241 , 20 S.Ct. 96; Hopkins v. United States, 171 U.S. 578, 597 , 19 S.Ct. 40. In Adair v. United States, 208 U.S. 161, 177 , 28 S.Ct. 277, 281, 13 Ann. Cas. 764, the
phrase 'Commerce among the several states' was defined as comprehending
'traffic, intercourse, trade, navigation, communication, the transit
of persons, and the transmission of messages by telegraph,-indeed,
every species on commercial intercourse among the several states.'
In Veazie et al. v. Moor, 14 How. 568, 573, 574, this court, after
saying that the phrase could never be applied to transactions wholly
internal, significantly added: 'Nor can it be properly concluded,
that, because the products of domestic enterprise in agriculture
or manufactures, or in the arts, may ultimately become the subjects
of foreign commerce, that the control of the means or the encouragements
by which enterprise is fostered and protected, is legitimately within
the import of the phrase foreign commerce, or fairly im- [298 U.S.
238, 299] plied in any investiture of the power to regulate
such commerce. A pretension as far reaching as this, would extend
to contracts between citizen and citizen of the same State, would
control the pursuits of the planter, the grazier, the manufacturer,
the mechanic, the immense operations of the collieries and mines
and furnaces of the country; for there is not one of these avocations,
the results of which may not become the subjects of foreign commerce,
and be borne either by turnpikes, canals, or railroads, from point
to point within the several States, towards an ultimate destination,
like the one above mentioned.'
The distinct on between manufacture
and commerce was discussed in Kidd v. Pearson, 128 U.S. 1, 20 , 21 S., 22, 9 S.Ct. 6, 10, and it was said:
'No distinction is more popular
to the common mind, or more clearly expressed in economic and
political literature, than that between manufactures and commerce.
Manufacture is transformation-the fashioning of raw materials
into a change of form for use. The functions of commerce are
different. ... If it be held that the term includes the regulation
of all such manufactures as are intended to be the subject of
commercial transactions in the future, it is impossible to deny
that it would also include all productive industries that contemplate
the same thing. The result would be that congress would be invested,
to the exclusion of the states, with the power to regulate,
not only manufacture, but also agriculture, horticulture, stock-raising,
domestic fisheries, mining,-in short, every branch of human
industry. For is there one of them that does not contemplate,
more or less clearly, an interstate or foreign market? Does
not the wheat-grower of the northwest, and the cotton-planter
of the south, plant, cultivate, and harvest his crop with an
eye on the prices at Liverpool, New York, and Chicago? The power
being vested in congress and [298 U.S. 238, 300]
denied to the states, it would follow as an inevitable result
that the duty would devolve on congress to regulate all of these
delicate, multiform, and vital interests,-interests which in
their nature are, and must be, local in all the details of their
successful management.'
And then, as though foreseeing the
present controversy, the opinion proceeds:
'Any movement towards the establishment
of rules of production in this vast country, with its many different
climates and opportunities, could only be at the sacrifice of
the peculiar advantages of a large part of the localities in
it, if not of every one of them. On the other hand, any movement
towards the local, detailed, and incongruous legislation required
by such an interpretation would be about the widest possible
departure from the declared object of the clause in question.
Nor this alone. Even in the exercise of the power contended
for, congress would be confined to the regulation, not of certain
branches of industry, however numerous, but to those instances
in each and every branch where the producer contemplated an
interstate market. ... A situation more paralyzing to the state
governments, and more provocative of conflicts between the general
government and the states, and less likely to have been what
the framers of the constitution intended, it would be difficult
to imagine.'
Chief Justice Fuller, speaking for
this court in United States v. E. C. Knight Co., 156 U.S. 1, 12 , 13 S., 15 S.Ct. 249, 253, said:
'Doubtless the power to control
the manufacture of a given thing involves, in a certain sense,
the control of its disposition, but this is a secondary, and
not the primary, sense; and, although the exercise of that power
may result in bringing the operation of commerce into play,
it does not control it, and affects it only incidentally and
indirectly. Commerce succeeds to manufacture, and is not a part
of it. ... [298 U.S. 238, 301] 'It is vital that
the independence of the commercial power and of the police power,
and the delimitation between them, however sometimes perplexing,
should always be recognized and observed, for, while the one
furnishes the strongest bond of union, the other is essential
to the preservation of the autonomy of the states as required
by our dual form of government; and acknowledged evils, however
grave and urgent they may appear to be, had better be borne,
than the risk be run, in the effort to suppress them, of more
serious consequences by resort to expedients of even doubtful
constitutionality. ...
'The regulation of commerce applies
to the subjects of commerce, and not to matters of internal
police. Contracts to buy, sell, or exchange goods to be transported
among the several states, the transportation and its instrumentalities,
and articles bought, sold, or exchanged for the purposes of
such transit among the states, or put in the way of transit,
may be regulated; but this is because they form part of interstate
trade or commerce. The fact that an article is manufactured
for export to another state does not of itself make it an article
of interstate commerce, and the intent of the manufacturer does
not determine the time when the article or product passes from
the control of the state and belongs to commerce.'
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, 116 U.S. 517, 526 , 6 S.Ct. 475, 478, 'Though intended for exportation,
they may never be exported,-the owner has a perfect right to change
his mind,-and until actually put in motion, for some place out of
the state, or committed to the custody of a carrier for transportation
to such place, why may they not be regarded as still remaining a
part of the general mass of [298 U.S. 238, 302] property
in the state?' It is true that this was said in respect of a challenged
power of the state to impose a tax; but the query is equally pertinent
where the question, as here, is with regard to the power of regulation.
The case was relied upon in Kidd v. Pearson, supra, 128 U.S. 1 , at page 26, 9 S.Ct. 6, 12. 'The application of
the principles above announced,' it was there said, 'to the case
under consideration leads to a conclusion against the contention
of the plaintiff in error. The police power of a state is as broad
and plenary as its taxing power, and property within the state is
subject to the operations of the former so long as it is within
the regulating restrictions of the latter.'
In Heisler v. Thomas Colliery Co., 260 U.S. 245, 259 , 260 S., 43 S.Ct. 83, 86, we held that the
possibility, or even certainty of exportation of a product or article
from a state did not determine it to be in interstate commerce before
the commencement of its movement from the state. To hold otherwise
'would nationalize all industries, it would nationalize and withdraw
from state jurisdiction and deliver to federal commercial control
the fruits of California and the South, the wheat of the West and
its meats, the cotton of the South, the shoes of Massachusetts and
the woolen industries of other states at the very inception of their
production or growth, that is, the fruits unpicked, the cotton and
wheat ungathered, hides and flesh of cattle yet 'on the hoof,' wool
yet unshorn, and coal yet unmined because they are in varying percentages
destined for and surely to be exported to states other than those
of their production.'
In Oliver Iron Co. v. Lord, 262 U.S. 172, 178 , 43 S.Ct. 526, 529, we said on the authority
of numerous cited cases: 'Mining is not interstate commerce, but
like manufacturing, is a local business, subject to local regulation
and taxation. ... Its character in this regard is intrinsic, is
not affected by the intended use or disposal of the product, is
not controlled by contractual engagements, and persists even [298
U.S. 238, 303] though the business be conducted in close
connection with interstate commerce.'
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, 286 U.S. 210, 235 , 52 S.Ct. 559, 565, 86 A.L.R. 403. One who
produces or manufactures a commodity, subsequently sold and shipped
by him in interstate commerce, whether such sale and shipment were
originally intended or not, has engaged in two distinct and separate
activities. So far as he produces or manufactures a commodity, his
business is purely local. So far as he sells and ships, or contracts
to sell and ship, the commodity to customers in another state, he
engages in interstate commerce. In respect of the former, he is
subject only to regulation by the state; in respect of the latter,
to regulation only by the federal government. Utah Power & L. Co.
v. Pfost, 286 U.S. 165, 182 , 52 S.Ct. 548. Production is not commerce;
but a step in preparation for commerce. Chassaniol v. Greenwood, 291 U.S. 584, 587 , 54 S.Ct. 541.
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, 295 U.S. 495 , at page 542 et seq., 55 S.Ct. 837, 97 A.L.R.
947. Everything which moves in interstate commerce has had a local
origin. Without local production somewhere, interstate commerce,
as now carried on, would practically disappear. Nevertheless, the
local character of mining, of manufacturing, and of crop growing
is a fact, and remains a fact, whatever may be done with the products.
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, 268 U.S. 295, 310 , 45 S.Ct. 551, and kindred cases, involved
conspiracies to restrain interstate commerce in violation of the
Anti-Trust Laws. The acts of the persons involved were local in
character; but the intent was to restrain interstate commerce, and
the means employed were calculated to carry that intent into effect.
Interstate commerce was the direct object of attack; and the restraint
of such commerce was the necessary consequence of the acts and the
immediate end in view. Bedford Cut Stone Co. [298 U.S. 238, 305]
v. Journeyman Stone Cutters' Ass'n, 274 U.S. 37, 46 , 47 S.Ct. 522, 54 A.L.R. 791. The applicable
law was concerned not with the character of the acts or of the means
employed, which might be in and of themselves purely local, but
with the intent and direct operation of those acts and means upon
interstate commerce. 'The mere reduction in the supply of an article,'
this court said in the Coronado Co. Case, supra, 268 U.S. 295 , at page 310, 45 S.Ct. 551, 556, 'to be shipped
in interstate commerce by the illegal or tortious prevention of
its manufacture or production is ordinarily an indirect and remote
obstruction to that commerce. But when the intent of those unlawfully
preventing the manufacture or production is shown to be to restrain
or control the supply entering and moving in interstate commerce,
or the price of it in interstate markets, their action is a direct
violation of the Anti-Trust Act (15 U.S.C.A. 1 et seq.).'
Another group of cases, of which
Swift & Company v. United States, 196 U.S. 375 , 25 S.Ct. 276, is an example, rest upon the circumstance
that the acts in question constituted direct interferences with
the 'flow' of commerce among the states. In the Swift Case, live
stock was consigned and delivered to stockyards-not as a place of
final destination, but, as the court said in Stafford v. Wallace, 258 U.S. 495, 516 , 42 S.Ct. 397, 402, 23 A.L.R. 229, 'a throat
through which the current flows.' The sales which ensued merely
changed the private interest in the subject of the current without
interfering with its continuity. Industrial Ass'n of San Francisco
v. United States, 268 U.S. 64, 79 , 45 S.Ct. 403. It was nowhere suggested in
these cases that the interstate commerce power extended to the growth
or production of the things which, after production, entered the
flow. If the court had held that the raising of the cattle, which
were involved in the Swift Case, including the wages paid to and
working conditions of the herders and others employed in the business,
could be regulated by Congress, that decision and decisions holding
similarly would be in [298 U.S. 238, 306] point; for
it is that situation, and not the one with which the court actually
dealt, which here concerns us.
The distinction suggested is illustrated
by the decision in Arkadelphia Co. v. St. Louis S.W.R. Co., 249 U.S. 134 , 150-152, 39 S.Ct. 237. That case dealt with orders
of a state commission fixing railroad rates. One of the questions
considered was whether certain shipments of rough material from
the forest to mills in the same state for manufacture, followed
by the forwarding of the finished product to points outside the
state, was a continuous movement in interstate commerce. It appeared
that when the rough material reached the mills it was manufactured
into various articles which were stacked or placed in kilns to dry,
the processes occupying several months. Markets for the manufactured
articles were almost entirely in other states or in foreign countries.
About 95 per cent. of the finished articles was made for outbound
shipment. When the rough material was shipped to the mills, it was
expected by the mills that this percentage of the finished articles
would be so sold and shipped outside the state. And all of them
knew and intended that this 95 per cent. of the finished product
would be so sold and shipped. This court held that the state order
did not interfere with interstate commerce, and that the Swift Case
was not in point; as it is not in point here.
The restricted field covered by the
Swift and kindred cases is illustrated by the Schechter Case, supra, 295 U.S. 495 , at page 543, 55 S. Ct. 837, 97 A.L.R. 947. There
the commodity in question, although shipped from another state,
had come to rest in the state of its destination, and, as the court
pointed out, was no longer in a current or flow of interstate commerce.
The Swift doctrine was rejected as inapposite. In the Schechter
Case the flow had ceased. Here it had not begun. The difference
is not one of substance. The applicable principle is the same. [298
U.S. 238, 307] But section 1 (the Preamble) of the act
now under review declares that all production and distribution of
bituminous coal 'bear upon and directly affect its interstate commerce';
and that regulation thereof is imperative for the protection of
such commerce. The contention of the government is that the labor
provisions of the act may be sustained in that view.
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, 295 U.S. 495 , at page 546 et seq., 55 S.Ct. 837, 850, 97 A.L.R.
947. 'If the commerce clause were construed,' we there said, 'to
reach all enterprises and transactions which could be said to have
an indirect effect upon interstate commerce, the federal authority
would embrace practically all the activities of the people, and
the authority of the state over its domestic concerns would exist
only by sufferance of the federal government. Indeed, on such a
theory, even the development of the state's commercial facilities
would be subject to federal control.' It was also pointed out, 295 U.S. 495 , at page 548, 55 S.Ct. 837, 851, 97 A.L.R. 947,
that 'the distinction between direct and indirect effects of intrastate
transactions upon interstate commerce must be recognized as a fundamental
one, essential to the maintenance of our constitutional system.'
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, 295 U.S. 495 , at page 546, 55 S.Ct. 837, 850, 97 A.L.R. 947,
after calling attention to the fact that if the commerce clause
could be construed to reach transactions having an indirect effect
upon interstate commerce, the federal authority would embrace practically
all the activities of the people, and the authority of the state
over its domestic concerns would exist only by sufferance of the
federal government, we said: 'Indeed, on such a theory, even the
development of the state's commercial facilities would be subject
to federal control.' And again, after pointing out that hours and
wages have no direct relation to interstate commerce and that if
the federal government had power to determine the wages and hours
of employees in the internal commerce of a state because of their
relation to cost and prices and their [298 U.S. 238, 310]
indirect effect upon interstate commerce, we said, 295 U.S. 495 , at page 549, 55 S.Ct. 837, 851, 97 A.L.R. 947:
'All the processes of production and distribution that enter into
cost could likewise be controlled. If the cost of doing an intrastate
business is in itself the permitted object of federal control, the
extent of the regulation of cost would be a question of discretion
and not of power.' A reading of the entire opinion makes clear,
what we now declare, that the want of power on the part of the federal
government is the same whether the wages, hours of service, and
working conditions, and the bargaining about them, are related to
production before interstate commerce has begun, or to sale and
distribution after it has ended.
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] 295 U.S. 495 , at page 537, 55 S.Ct. 837, 97 A.L.R. 947; Eubank
v. Richmond, 226 U.S. 137, 143 , 33 S.Ct. 76, 42 L.R.A.( N.S.) 1123; Washington
ex rel. Seattle Trust Co. v. Roberge, 278 U.S. 116, 121 , 122 S., 49 S.Ct. 50, 86 A.L.R. 654.
[Carter
v. Carter Coal Co., 298 U.S. 238 (1936)]
|