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+*** START OF THE PROJECT GUTENBERG EBOOK 14104 ***
+
+OUR CHANGING CONSTITUTION
+
+BY
+
+CHARLES W. PIERSON
+
+
+[Illustration: decorative anchor]
+
+
+GARDEN CITY NEW YORK
+
+DOUBLEDAY, PAGE & COMPANY
+
+1922
+
+
+COPYRIGHT, 1922, BY DOUBLEDAY, PAGE & COMPANY
+
+ALL RIGHTS RESERVED, INCLUDING THAT OF TRANSLATION INTO FOREIGN
+LANGUAGES, INCLUDING THE SCANDINAVIAN
+
+PRINTED IN THE UNITED STATES AT THE COUNTRY LIFE PRESS, GARDEN CITY,
+N.Y.
+
+
+
+
+PREFACE
+
+
+Citizens of the United States are wont to think of their form of
+government, a political system based on a written constitution, as
+something fixed and stable. In reality, it is undergoing a profound
+change. The idea which constituted its most distinctive feature, and in
+the belief of many represents America's most valuable contribution to
+the science of government, is being forgotten. Formed to be "an
+indestructible Union composed of indestructible states," our dual system
+is losing its duality. The states are fading out of the picture.
+
+The aim of this volume is to point out the change and discuss some of
+its aspects. A few chapters have already appeared in print. "Our
+Changing Constitution" and "Is the Federal Corporation Tax
+Constitutional?" were published in the _Outlook_. "The Corporation Tax
+Decision" appeared in the _Yale Law Journal_. "Can Congress Tax the
+Income from State and Municipal Bonds?" was printed in the New York
+_Evening Post_. All of these have been more or less revised and some new
+matter has been added.
+
+
+
+
+CONTENTS
+
+
+I. THE SALIENT FEATURE OF THE CONSTITUTION 1
+
+The American Constitution, its origin and contents. Wherein its novelty
+and greatness lay. Importance of maintaining the equilibrium established
+between national and state power. View of John Fiske.
+
+II. THE SUPREME COURT OF THE UNITED STATES 3
+
+Place of the Court in the constitutional scheme. Its most important
+function. Personnel of the Court. Its power moral rather than physical.
+Its chief weapon the power to declare legislative acts unconstitutional.
+Limitations on this power--political questions; necessity of an actual
+controversy; abuses of legislative power. Erroneous popular impressions.
+Impairment of the constitutional conscience.
+
+III. OUR CHANGING CONSTITUTION 18
+
+Change in popular attitude toward the Constitution. Causes of the change
+(growth of national consciousness, wars, foreign relations, influence of
+later immigrants and their descendants, desire to obtain federal
+appropriations, economic development, railroads, free trade among the
+states). Methods by which change has been put into effect
+(constitutional amendment, treaties, federal legislation under cover of
+power to regulate commerce and lay taxes). Attitude of the Supreme
+Court. Differences of opinion in the Court.
+
+IV. THE EIGHTEENTH OR PROHIBITION AMENDMENT 35
+
+History and radical character of amendment. Efforts to defeat it in the
+courts. Unusual course taken by Supreme Court. Discussion of its true
+place in the development of American constitutional law. Less a point of
+departure than a spectacular manifestation of a change already under
+way. Effect of the change on the principle of local self-government.
+
+V. THE NINETEENTH OR WOMAN SUFFRAGE AMENDMENT 49
+
+Attitude of the Constitution toward question of suffrage qualifications.
+Effect of Civil War amendments. Growth of woman suffrage movement and
+adoption of Suffrage Amendment. How far the amendment constitutes a
+federal encroachment on state power. Effect of woman suffrage on
+questions of governmental theory.
+
+VI. CONGRESS VERSUS THE SUPREME COURT--THE CHILD LABOR LAWS 59
+
+The child labor question. Philanthropic and commercial aspects. Attempt
+of Congress to legislate under power to regulate commerce. Decision of
+Supreme Court holding law unconstitutional. The decision explained.
+Reënactment of law by Congress under cover of power to lay taxes.
+Arguments for and against constitutionality of new enactment.
+
+VII. STATE RIGHTS AND THE SUPREME COURT 69
+
+The Supreme Court at first a bulwark of national power; to-day the
+defender of the states. Explanation of this apparent change. Attitude of
+the Court in the first period. The period of Chief Justice Marshall. The
+period of Chief Justice Taney. The Reconstruction Period. Attitude of
+the Court to-day. Reasons why the Court is unable to prevent federal
+encroachment. Attitude of Hamilton and Marshall toward state rights
+misunderstood.
+
+VIII. THE FEDERAL TAXING POWER AND THE INCOME TAX AMENDMENT 85
+
+America's embarrassing position if the late war had come before adoption
+of Income Tax Amendment. Limitations of federal taxing power under the
+Constitution. Meaning of "uniformity." Apportionment of "direct taxes."
+The Supreme Court decision in the Income Tax cases in 1894 a reversal of
+long settled ideas. The Income Tax Amendment an example of recall of
+judicial decisions. Implied limitations on federal taxing power
+(compensation of federal judges, due process clause of the Constitution,
+no power to tax property or governmental activities of the states).
+
+IX. CAN CONGRESS TAX THE INCOME FROM STATE AND MUNICIPAL BONDS? 97
+
+No express prohibition of such taxation; it lies in an implied
+limitation inherent in our dual system of government. Discussion of
+doctrine and its development by the Supreme Court. Effect of the Income
+Tax Amendment. Present dissatisfaction with doctrine and efforts to
+abolish it.
+
+X. IS THE FEDERAL CORPORATION TAX CONSTITUTIONAL? 106
+
+Nature of the tax. An interference with state power to grant corporate
+franchises. Nature of our dual government and Supreme Court decisions on
+the subject discussed. The debate in Congress.
+
+XI. THE CORPORATION TAX DECISION 122
+
+Importance of the decision likely to be overlooked. Criticism of the
+Court's arguments. Effects of the decision.
+
+XII. THE FEDERAL GOVERNMENT AND THE TRUSTS 129
+
+Origin and history of Sherman Act. Its meaning now clear. Earlier
+uncertainties owing chiefly to two questions--What is interstate trade
+and Does the act enlarge the common-law rule as to what restraints were
+unlawful? How these questions have been settled. Statement of the
+common-law rule. Incompatibility between the law and present economic
+conditions. Suggestions for legal reform. The holding company device,
+its abuses and the possibility of abolishing it. Advantages of the
+scheme of federal incorporation.
+
+XIII. WHAT OF THE FUTURE? 143
+
+Rapid progress and present extent of federal encroachment on state
+power. Growth of federal bureaucracy. A reaction against centralization
+inevitable sooner or later. Adequacy of Constitution to deal with
+changing conditions. The railroads and the trusts. Dangerous assaults
+upon Constitution in field of social welfare legislation. Exercise of
+police power a matter for local authority. Elihu Root's view. Outlook
+for the future.
+
+APPENDIX 153
+
+
+
+
+OUR CHANGING CONSTITUTION
+
+
+
+
+I
+
+THE SALIENT FEATURE OF THE CONSTITUTION
+
+
+Few documents known to history have received as much praise as the
+United States Constitution. Gladstone called it "the most wonderful work
+ever struck off at a given time by the brain and purpose of man." The
+casual reader of the Constitution will be at a loss to account for such
+adulation. It will seem to him a businesslike document, outlining a
+scheme of government in terse and well-chosen phrases, but he is apt to
+look in vain for any earmarks of special inspiration. To understand the
+true greatness of the instrument something more is required than a mere
+reading of its provisions.
+
+The Constitution was the work of a convention of delegates from the
+states, who met in Philadelphia in May, 1787, and labored together for
+nearly four months. They included a large part of the best character
+and intellect of the country. George Washington presided over their
+deliberations. The delegates had not been called together for the
+purpose of organizing a new government. Their instructions were limited
+to revising and proposing improvements in the Articles of the existing
+Confederation, whose inefficiency and weakness, now that the cohesive
+power of common danger in the war of the Revolution was gone, had become
+a byword. This task, however, was decided to be hopeless, and with great
+boldness the convention proceeded to disregard instructions and prepare
+a wholly new Constitution constructed on a plan radically different from
+that of the Articles of Confederation. The contents of the Constitution,
+as finally drafted and submitted for ratification, may be described in
+few words. It created a legislative department consisting of a Senate
+and a House of Representatives, an executive department headed by a
+President, and a judicial department headed by a Supreme Court, and
+prescribed in general terms the qualifications, powers, and functions of
+each. It provided for the admission of new states into the Union and
+that the United States should guarantee to every state a republican form
+of government. It declared that the Constitution and the laws of the
+United States made in pursuance thereof, and treaties, should be the
+supreme law of the land. It provided a method for its own amendment.
+Save for a few other brief clauses, that was all. There was no
+proclamation of Democracy; no trumpet blast about the rights of man such
+as had sounded in the Declaration of Independence. On the contrary, the
+instrument expressly recognized human slavery, though in discreet and
+euphemistic phrases.
+
+Wherein, then, did the novelty and greatness of the Constitution lie?
+Its novelty lay in the duality of the form of government which it
+created--a nation dealing directly with its citizens and yet composed of
+sovereign states--and in its system of checks and balances. The world
+had seen confederations of states. It was familiar with nations
+subdivided into provinces or other administrative units. It had known
+experiments in pure democracy. The constitutional scheme was none of
+these. It was something new, and its novel features were relied upon as
+a protection from the evils which had developed under the other plans.
+The greatness of the Constitution lay in its nice adjustment of the
+powers of government, notably the division of powers which it effected
+between the National Government and the states. The powers conferred on
+the National Government were clearly set forth. All were of a strictly
+national character. They covered the field of foreign relations,
+interstate and foreign commerce, fiscal and monetary system, post office
+and post roads, patents and copyrights, and jurisdiction over certain
+specified crimes. All other powers were reserved to the states or the
+people. In other words, the theory was (to quote Bryce's "The American
+Commonwealth") "local government for local affairs; general government
+for general affairs only."
+
+The Constitution as it left the hands of its framers was not entirely
+satisfactory to anybody. Owing to the discordant interests and mutual
+jealousies of the states, it was of necessity an instrument of many
+compromises. One of the great compromises was that by which the small
+states were given as many senators as the large. Another is embalmed in
+the provisions recognizing slavery and permitting slaves to count in the
+apportionment of representatives. (The number of a state's
+representatives was to be determined "by adding to the whole number of
+free persons ... three-fifths of all other persons.") Another was the
+provision that direct taxes should be apportioned among the states
+according to population. With all its compromises, however, the
+Constitution embodied a great governmental principle, full of hope for
+the future of the country, and the state conventions to which it was
+submitted for ratification were wise enough to accept what was offered.
+Ratification by certain of the states was facilitated by the publication
+of that remarkable series of papers afterward known as the "Federalist."
+These were the work of Alexander Hamilton, James Madison, and John Jay,
+and first appeared in New York newspapers.
+
+One of the objections to the new Constitution in the minds of many
+people was the absence of a "bill of rights" containing those provisions
+for the protection of individual liberty and property (e.g., trial by
+jury, freedom of speech, protection from unreasonable searches and
+seizures) which had come down from the early charters of English
+liberties. In deference to this sentiment a series of ten brief
+amendments were proposed and speedily ratified. Another amendment (No.
+XI) was soon afterward adopted for the purpose of doing away with the
+effect of a Supreme Court decision. Thereafter, save for a change in
+the manner of electing the President and Vice-president, the
+Constitution was not again amended until after the close of the Civil
+War, when Amendments XIII, XIV, and XV, having for their primary object
+the protection of the newly enfranchised Negroes, were adopted. The
+Constitution was not again amended until the last decade, when the
+Income Tax Amendment, the amendment providing for the election of
+Senators by popular vote, the Prohibition Amendment, and the Woman
+Suffrage Amendment were adopted in rapid succession. Some of these will
+be discussed in later chapters.
+
+It is interesting to note that two of the amendments (No. XI, designed
+to prevent suits against a state without its permission by citizens of
+another state, and No. XVI, paving the way for the Income Tax) were
+called forth by unpopular decisions of the Supreme Court, and virtually
+amounted to a recall of those decisions by the people. These instances
+demonstrate the possibility of a recall of judicial decisions by
+constitutional methods, and tend to refute impatient reformers who
+preach the necessity of a more summary procedure. Such questions,
+however, lie outside the scope of this book. We emphasize here the fact
+that the great achievement of the Constitution was the creation of a
+dual system of government and the apportionment of its powers. That was
+what made it "one of the longest reaches of constructive statesmanship
+ever known in the world."[1] It offered the most promising solution yet
+devised for the problem of building a nation without tearing down local
+self-government.
+
+[Footnote 1: Fiske: "The Critical Period of American History," p. 301.]
+
+John Fiske, the historian, writing of the importance of preserving the
+constitutional equilibrium between nation and states, said:[1]
+
+     If the day should ever arrive (which God forbid!) when the
+     people of the different parts of our country shall allow their
+     local affairs to be administered by prefects sent from
+     Washington, and when the self-government of the states shall
+     have been so far lost as that of the departments of France, or
+     even so far as that of the counties of England--on that day
+     the progressive political career of the American people will
+     have come to an end, and the hopes that have been built upon
+     it for the future happiness and prosperity of mankind will be
+     wrecked forever.
+
+[Footnote 1: Id., p. 238.]
+
+If allowance be made for certain extravagances of statement, these words
+will serve as a fitting introduction to the discussions which follow.
+
+
+
+
+II
+
+THE SUPREME COURT OF THE UNITED STATES
+
+
+The Constitution effected an apportionment of the powers of government
+between nation and states. The maintenance of the equilibrium thus
+established was especially committed to the Supreme Court. This novel
+office, the most important of all its great functions, makes the Court
+one of the most vital factors of the entire governmental scheme and
+gives it a unique preëminence among the judicial tribunals of the world.
+
+How the office has been performed, and whether the constitutional
+equilibrium is actually being maintained, are the questions to be
+considered in this book. Before taking them up, however, it will be
+useful to glance briefly at the Court itself and inquire how it is
+equipped for its difficult task.
+
+The United States Supreme Court at present is composed of nine judges.
+The number originally was six. It now holds its sessions at the Capitol
+in Washington, in the old Senate Chamber which once echoed with the
+eloquence of the Webster-Hayne debate. The judges are nominated by the
+President, and their appointment, like that of ambassadors, must be
+confirmed by the Senate. The makers of the Constitution took the utmost
+care to insure the independence of the Court. Its members hold office
+during good behavior, that is to say for life. They cannot be removed
+except by impeachment for misconduct. Only one attempt has ever been
+made to impeach a judge of the Supreme Court[1] and that attempt failed.
+Still further to insure their freedom from legislative control, the
+Constitution provides that the compensation of the judges shall not be
+diminished during their continuance in office.[2]
+
+[Footnote 1: Justice Samuel Chase of Maryland in 1804-5.]
+
+[Footnote 2: It is interesting to observe that this Court, safeguarded
+against popular clamor and composed of judges appointed for life, has
+consistently shown itself more progressive and more responsive to modern
+ideas than have most of the state Supreme Courts whose members are
+elected directly by the people and for limited terms only.]
+
+From the time of John Jay, the first Chief Justice, down to the present
+day the men appointed to membership in the Court have, for the most
+part, been lawyers of the highest character and standing, many of whom
+had already won distinction in other branches of the public service.
+The present Chief Justice (Taft) is an ex-President of the United
+States. Among the other members of the Court are a former Secretary of
+State of the United States (Justice Day); two former Attorneys General
+of the United States (Justices McKenna and McReynolds); a former Chief
+Justice of Massachusetts (Justice Oliver Wendell Holmes, the
+distinguished son and namesake of an illustrious father); a former Chief
+Justice of Wyoming (Justice Van Devanter); and a former Chancellor of
+New Jersey (Justice Pitney).
+
+It is well that the personnel of the Court has been such as to command
+respect and deference, for in actual power the judiciary is by far the
+weakest of the three coördinate departments (legislative, executive,
+judicial) among which the functions of government were distributed by
+the Constitution. The power of the purse is vested in Congress: it alone
+can levy taxes and make appropriations. The Executive is
+Commander-in-Chief of the Army and Navy and wields the appointing power.
+The Supreme Court controls neither purse nor sword nor appointments to
+office. Its power is moral rather than physical. It has no adequate
+means of enforcing its decrees without the coöperation of other
+branches of the Government.
+
+That coöperation has not always been forthcoming. In the year 1802,
+Congress, at the instigation of President Jefferson, the inveterate
+enemy of Chief Justice Marshall, suspended the sessions of the Court for
+more than a year by abolishing the August term. In 1832, when the State
+of Georgia defied the decree of the Court in a case involving the status
+of the Cherokee Indians, the other departments of the Federal Government
+gave no aid and President Andrew Jackson is reported to have remarked:
+"John Marshall has made the decision, now let him execute it." In 1868,
+Congress, in order to forestall decision in a case pending before the
+Court, hastily repealed the statute on which the jurisdiction of the
+Court depended.[1] Such instances, however, have been rare. The
+law-abiding instinct is strong in the American people, and for the most
+part the decisions of the Supreme Court have been received with respect
+and unquestioning obedience.
+
+[Footnote 1: See _ex parte McCardle_, 6 Wall. (Supreme Court Reports),
+318; 7 _id._, 506.]
+
+The chief weapon in the arsenal of the Court is the power to declare
+legislative acts void on the ground that they overstep limits
+established by the people in the Constitution. This power has been
+frequently exercised. It is stated that the congressional statutes thus
+nullified have not numbered more than thirty, while at least a thousand
+state laws have been nullified.[1]
+
+[Footnote 1: Brief of Solicitor General James M. Beck in the Child Labor
+Tax cases. It is to be borne in mind that there are forty-eight state
+legislatures and only one Congress.]
+
+The assumption of this power in the Court to declare statutes
+unconstitutional has been bitterly assailed, and is still denounced in
+some quarters, as judicial usurpation originated by John Marshall.
+
+On the historical side this objection is not well founded. Various state
+courts had exercised the power to declare statutes unconstitutional
+before the Supreme Court came into existence.[1] The framers of the
+Constitution clearly intended that such a power should be exercised by
+the Supreme Court.[2] Moreover, a somewhat similar power appears to have
+been exercised long before in England,[3] though it gave place later to
+the present doctrine of the legal omnipotence of Parliament.
+
+[Footnote 1: See Bryce: "The American Commonwealth," Vol. I, p. 250.]
+
+[Footnote 2: See e.g., "Federalist," No. LXXVIII.]
+
+[Footnote 3: See opinion of Lord Coke in Bonham's Case, 8 Coke's
+Reports, 118, decided in 1610.]
+
+On the side of reason and logic, the argument in favor of the power
+formulated more than a century ago by Chief Justice Marshall has never
+been adequately answered and is generally accepted as final. He said:[1]
+
+     The powers of the legislature are defined and limited; and
+     that those limits may not be mistaken or forgotten, the
+     Constitution is written. To what purpose are powers limited,
+     and to what purpose is that limitation committed to writing,
+     if these limits may, at any time, be passed by those intended
+     to be restrained?... The Constitution is either a superior
+     paramount law, unchangeable by ordinary means, or it is on a
+     level with ordinary legislative acts, and, like other acts, is
+     alterable when the legislature shall please to alter it. If
+     the former part of the alternative be true, then a legislative
+     act, contrary to the Constitution, is not law: if the latter
+     part be true, then written constitutions are absurd attempts,
+     on the part of the people, to limit a power in its own nature
+     illimitable.
+
+[Footnote 1: _Marbury v. Madison_, 1 Cranch, 176.]
+
+It would seem at first blush that the power in the Court to declare
+legislative acts unconstitutional affords a complete safeguard against
+congressional encroachment on the prerogatives of the states. Such is
+not the fact, however. The veto power of the Court by no means covers
+the entire field of legislative activity. In the Convention which
+framed the Constitution, attempts were made to give to the judiciary, in
+conjunction with the executive, complete power of revision over
+legislative acts, but all such propositions were voted down.[1] As
+matters stand, there may be violations of the Constitution by Congress
+(or for that matter by the executive) of which the Court can take no
+cognizance.
+
+[Footnote 1: See e.g., Farrand: "Records of the Federal Convention,"
+Vol. I, pp. 138 et seq.; Vol. II, p. 298.]
+
+For one thing, the Court cannot deal with questions of a political
+character. The function of the Court is judicial only. Upon this ground
+it was decided that the question which of two rival governments in the
+State of Rhode Island was the legitimate one was for the determination
+of the political department of government rather than the courts;[1]
+that the question, whether the adoption by a state of the initiative and
+referendum violated the provision of the Federal Constitution
+guaranteeing to every state a republican form of government, was
+political and therefore beyond the jurisdiction of the Court.[2] In 1867
+a sovereign state sought to enjoin the President of the United States
+from enforcing an act of Congress alleged to be unconstitutional. The
+Supreme Court, without determining the constitutionality of the act,
+declined to interfere with the exercise of the President's political
+discretion.[3] In the famous Dred Scott case[4] the effort of the
+Supreme Court to settle a political question accomplished nothing save
+to impair the influence and prestige of the Court.
+
+[Footnote 1: _Luther v. Borden_, 7 Howard, 1.]
+
+[Footnote 2: _Pacific Telephone Co. v. Oregon_, 223 U.S., 118.]
+
+[Footnote 3: _State of Mississippi v. Andrew Johnson_, 4 Wall., 475.]
+
+[Footnote 4: _Dred Scott v. Sandford_, 19 Howard, 393.]
+
+The power of the Court to declare legislative acts unconstitutional is
+subject to another important limitation. The judicial power is limited
+by the Constitution to actual cases and controversies between opposing
+parties. The Court cannot decide moot questions or act as an adviser for
+other departments of the government. A striking illustration is found in
+the so-called Muskrat case.[1] Congress having legislated concerning the
+distribution of property of the Cherokee Indians, and doubts having
+arisen as to the constitutional validity of the legislation, Congress
+passed another act empowering one David Muskrat and other Cherokee
+citizens to file suit, naming the United States as defendant, to settle
+the question. The Supreme Court declined to take jurisdiction and
+dismissed the suit, holding that it was not a case or controversy
+between opposing parties within the meaning of the Constitution.
+
+[Footnote 1: _Muskrat v. United States_, 219 U.S., 346.]
+
+Still another limitation is encountered in cases involving abuse of
+legislative power rather than lack of power. If Congress passes an act
+within one of the powers expressly conferred upon it by the
+Constitution, for example the power to lay taxes or the power to
+regulate interstate commerce, the Supreme Court cannot interfere though
+the incidental effect and ulterior purpose of the legislation may be to
+intrude upon the field of state power. We shall have occasion to refer
+to this limitation more than once in later chapters.
+
+An impression is abroad that the Supreme Court has plenary power to
+preserve the Constitution. Hence the tendency of groups to demand, and
+of legislators to enact, any kind of a law without regard to its
+constitutional aspect, leaving that to be taken care of by the Court.
+
+Any such impression is erroneous and unfortunate. It puts upon the Court
+a burden beyond its real powers. It undermines the sense of
+responsibility which should exist among the elected representatives of
+the people. It impairs what someone has called the constitutional
+conscience, and weakens the vigilance of the people in preserving their
+liberties. Men and women need to be reminded that the duty of upholding
+the Constitution does not devolve upon the Supreme Court alone. It rests
+upon all departments of government and, in the last analysis, upon the
+people themselves.
+
+
+
+
+III
+
+OUR CHANGING CONSTITUTION
+
+
+In a celebrated case[1] decided a few years ago the Supreme Court of the
+United States said:
+
+     The Constitution is a written instrument. As such its meaning
+     does not alter. That which it meant when adopted it means now.
+     Being a grant of powers to a government its language is
+     general, and as changes come in social and political life it
+     embraces in its grasp all new conditions which are within the
+     scope of the powers in terms conferred. In other words, while
+     the powers granted do not change, they apply from generation
+     to generation to all things to which they are in their nature
+     applicable. This in no manner abridges the fact of its
+     changeless nature and meaning. Those things which are within
+     its grants of power, as those grants were understood when
+     made, are still within them, and those things not within them
+     remain still excluded....
+
+     To determine the extent of the grants of power we must,
+     therefore, place ourselves in the position of the men who
+     framed and adopted the Constitution, and inquire what they
+     must have understood to be the meaning and scope of those
+     grants.
+
+[Footnote 1: _South Carolina v. United States_, 199 U.S., 437.]
+
+Thus speaks the voice whose word is law.
+
+Viewed in the sense intended--as the formulation of a legal rule for the
+interpretation and construction of a written instrument--the statement
+compels assent. As a statement of historical and political fact,
+however, it would not be accepted so readily. An acute critic of our
+institutions has said that the Constitution "has changed in the spirit
+with which men regard it, and therefore in its own spirit."[1] Men
+realize that the words of the Constitution, like the words of Holy Writ,
+have not always meant the same thing to those who regulate their conduct
+by its precepts; that the system of government which those words embody
+has in reality changed, is changing to-day.
+
+[Footnote 1: Bryce: "The American Commonwealth," Vol. I, p. 400.]
+
+The makers of the Constitution represented the people of distinct and
+independent states, jealous of their rights and of each other but
+nevertheless impelled by experience of danger lately past and sense of
+other perils impending to substitute for their loose and ill-working
+confederation a more effective union. The most formidable obstacle,
+apart from mutual jealousies, was a fear of loss of liberties, state and
+individual, through encroachment of the central power. The instrument,
+drawn with this fear uppermost, was designed to limit the National
+Government to "the irreducible minimum of functions absolutely needed
+for the national welfare."[1] To this end the powers granted were
+specifically enumerated. All other powers were by express enactment[2]
+"reserved to the States respectively, or to the people."
+
+[Footnote 1: Bryce, "The American Commonwealth," Vol. I, p. 324.]
+
+[Footnote 2: Tenth Amendment.]
+
+The strength of the popular sentiment against any encroachment of
+federal power was speedily demonstrated in a striking and dramatic way.
+Under the grant of power to determine controversies "between a state and
+citizens of another state"[1] the Supreme Court in 1793 proceeded to
+entertain a suit by one Chisholm, a citizen of South Carolina, against
+the State of Georgia.[2] It had not been supposed that the grant of
+power contemplated such a suit against a state without its consent. The
+decision aroused an indescribable state of popular fury, not only in
+Georgia but throughout the Union, and led to the adoption of a
+constitutional amendment[3] prohibiting such suits in future.
+
+[Footnote 1: Art. III, Sec. 2.]
+
+[Footnote 2: See 2 Dallas, 419.]
+
+[Footnote 3: Eleventh Amendment.]
+
+There is a long step between such an attitude toward the Constitution
+and the viewpoint which finds in it authority for the enactment by
+Congress of White Slave and Child Labor laws. Obviously there has been a
+profound change in what the Constitution means to its adherents. It will
+be interesting to consider briefly what has caused the change of view,
+and how it has been put into effect.
+
+To one searching for causes the most striking phenomenon is the growth
+of a national consciousness. At the outset it was practically
+non-existent. To-day its power has astonished enemy and friend alike.
+Its growth has been due to both pressure from without and developments
+within. Our foreign wars, especially the war with Germany, have drawn
+the people together and enhanced the importance of interests purely
+national. Some of our other foreign relations have brought into relief
+the advantages of a strong central government as well as certain
+inconveniences of our system as it left the hands of the framers.
+Witness the embarrassment toward Italy growing out of lack of federal
+jurisdiction in respect of the New Orleans riots, and the ever-present
+danger to our relations with Japan from acts of the sovereign State of
+California which the Federal Government is powerless to control. Among
+developments from within was the Civil War, with its triumph for the
+idea of national supremacy and an indissoluble union. Another, which has
+hardly received the attention it deserves, has been the influence of the
+large element of our population composed of immigrants since the
+Revolution and their descendants. The state sovereignty doctrine was not
+a mere political dogma but had its roots in history. It was an
+expression of the pride of the inhabitants of the Thirteen Colonies in
+their respective commonwealths. To them it stood for patriotism and
+traditions. These feelings the later immigrant neither shared nor
+understood. When he gave up his Old World allegiance and emigrated he
+came to America, not to New York or Massachusetts. To him the nation was
+everything, the state merely an administrative subdivision of the
+nation.
+
+Another cause has been the desire to obtain aid in local matters from
+the national treasury. This has proved an exceedingly potent and
+insidious influence, leading state officials to surrender voluntarily
+state prerogatives in exchange for appropriations of federal money.
+Notable examples of this influence may be found in the field of river
+and harbor improvements, the creation of various new bureaus in the
+Department of Commerce, the enormous extension of the activities of the
+Agricultural Department and the Bureau of Education. The temptation in
+this direction is particularly strong among the less prosperous states,
+for it means the expenditure in those states of federal moneys raised
+chiefly from the taxpayers in wealthier states.
+
+The most potent influence of all, however, has been the matter of
+internal economic development, stimulated by free trade among the
+states. This development has gone on apace with little regard for state
+lines. The invention of railways drew the different sections of the
+country together in a common growth, and tended to make the barriers
+interposed by state lines and state laws seem artificial and cumbersome.
+In fact, they sometimes came to be regarded as intolerable and
+destructive of progress. The spectacle of men clamoring for federal
+control of their industries to escape the burdens of a diversified state
+interference has been a frequent phenomenon of recent years.[1]
+
+[Footnote 1: See e.g. the efforts of the life insurance interests: _N.Y.
+Life Ins. Co. v. Deer Lodge County_, 231 U.S., 495.]
+
+The foregoing enumeration by no means covers all the forces which have
+been at work. In recent years a strong tendency toward centralization
+and combination has developed, a tendency pervading all the interests
+and activities of men. Moreover, new views have arisen concerning the
+functions and scope of government, views challenging the _laissez faire_
+doctrines of earlier days and demanding a greater measure of
+governmental interference with the affairs of the individual. These
+tendencies, however, are not peculiar to America and lie outside the
+scope of the present discussion.
+
+In considering the methods by which the change of spirit toward the
+Constitution has been put into effect, one is struck by the
+comparatively small part played by the only method contemplated by the
+framers, viz., constitutional amendment. This method is entirely
+practicable and fairly expeditious provided a sufficient number favor
+the change proposed. In the one hundred years prior to the recent Income
+Tax Amendment, however, only three amendments were enacted (Numbers
+XIII, XIV, and XV), all of them dealing primarily with the abolition of
+slavery and the civil rights of the Negro. The only one which need be
+noticed here is Number XIV, which substituted a federal test of
+citizenship for state tests and provided that no state should "deprive
+any person of life, liberty, or property, without due process of law;
+nor deny to any person within its jurisdiction the equal protection of
+the laws." There was nothing new in these prohibitions. In substance
+they are as old as Magna Charta and were already embodied in most if not
+all of the state constitutions. The novelty lay in bringing the
+question, whether a state had in fact denied due process of law to an
+individual or corporation, within the jurisdiction of the federal
+courts. From a legal viewpoint this was a change of great importance. To
+the general student of constitutional government, however, it is less
+significant than others presently to be mentioned.
+
+Right here it may be proper to notice a new theory of construction of
+the Constitution, not yet accepted but strenuously urged and containing
+enormous potentialities. This is the "doctrine of sovereign and inherent
+power," i.e., the doctrine that powers of national scope for whose
+exercise no express warrant is found in the Constitution are
+nevertheless to be implied as inherent in the very fact of sovereignty.
+This is a very different thing from the famous doctrine of implied
+powers developed by Chief Justice Marshall--that all powers will be
+implied which are suitable for carrying into effect any power expressly
+granted. It is a favorite theory of what may be termed the Roosevelt
+school. They consider that it is rendered necessary by the discovery of
+fields suitable for legislative cultivation, lying outside the domain of
+state power but not within the scope of any express grant of power to
+the nation. As practical men they abhor the existence of such a
+constitutional no man's land as nature abhors a vacuum.
+
+During the presidency of Mr. Roosevelt a determined effort was made by
+the representatives of the Administration[1] to secure the recognition
+by the Supreme Court of the doctrine of sovereign and inherent power. It
+was claimed in the brief filed by the Attorney General and Solicitor
+General that the doctrine had already been applied by the Court in the
+Legal Tender cases.[2] The effort failed, however, the Court declaring
+that any such power, if necessary to the nation, must be conferred
+through constitutional amendment by the people, to whom all powers not
+granted had been expressly reserved by the Tenth Amendment.
+
+[Footnote 1: In _Kansas v. Colorado_, 206 U.S., 46.]
+
+[Footnote 2: Bryce makes a statement to the same effect. "The American
+Commonwealth," Vol. I, p. 383.]
+
+A method by which the federal power and jurisdiction have been much
+extended has been the occupation by Congress, through legislation of an
+exclusive character, of fields where the states had exercised a
+concurrent jurisdiction. A familiar example is found in federal
+bankruptcy laws. Another and striking example is the so-called "Carmack
+Amendment" of the federal Interstate Commerce law. The question of
+liability for loss or damage to goods in the hands of railways and other
+carriers had been a fruitful field for state legislatures and state
+courts. The Carmack Amendment brushed away at a single stroke whole
+systems of state statutes and judicial decisions (in so far as they
+affected traffic across state lines) and substituted a uniform system
+under the control of the federal courts.
+
+The federal power has also been extended at the expense of the states
+through the use of the treaty-making prerogative. The subjects upon
+which Congress may legislate are limited by specific enumeration. The
+treaty-making power, however, is not thus limited. Treaties may cover
+any subject. It follows that while the Federal Government has no power
+(for example) to regulate the descent of real property in the various
+states the treaty-making power permits it, by treaties with foreign
+nations, to destroy the alienage laws of the states.[1] Another very
+recent example is afforded by the Migratory Bird Treaty with Great
+Britain.[2] One will search the Constitution in vain for any grant of
+power to the Federal Government to enact game laws. Nevertheless, under
+this treaty, many state game laws have been practically annulled.
+
+[Footnote 1: _Hauenstein v. Lynham_, 100 U.S., 483.]
+
+[Footnote 2: Sustained by the Supreme Court in _Missouri v. Holland_,
+252 U.S., 416.]
+
+But the most far-reaching method by which federal power under the
+Constitution has been extended has been the adaptation--some will say
+the perversion--by Congress of old grants of power to new ends. Under
+the spur of public sentiment Congress has discovered new legislative
+possibilities in familiar clauses of the Constitution as one discovers
+new beauties in a familiar landscape. The clause offering the greatest
+possibilities has been the so-called Commerce Clause, which grants to
+Congress power "to regulate commerce with foreign nations, and among the
+several states."[1] Under this grant of power Congress has enacted, and
+the courts have upheld, a great mass of social and economic legislation
+having to do only remotely with commerce. For example, the Sherman Act
+and other anti-trust legislation, ostensibly mere regulations of
+commerce, but actually designed for the control and suppression of
+trusts and monopolies; the federal Pure Food and Drugs Act, designed to
+prevent the adulteration or mis-branding of foods and drugs and check
+the abuses of the patent-medicine industry;[2] the act for the
+suppression of lotteries, making it a crime against the United States to
+carry or send lottery tickets or advertisements across state lines;[3]
+an act to prevent the importation of prize-fight films.[4] These are
+only a few among many similar statutes which might be mentioned. In all
+of them the motive is clear. There is no concealment about it. Their
+primary object is to suppress or regulate the trusts, lotteries,
+patent-medicine frauds. The regulation of commerce is merely a matter of
+words and legal form.
+
+[Footnote 1: Art. I, Sec. 8.]
+
+[Footnote 2: _Hipolite Egg Company v. United States_, 220 U.S., 45.]
+
+[Footnote 3: _Champion v. Ames_, 188 U.S., 321.]
+
+[Footnote 4: _Weber v. Freed_, 239 U.S., 325.]
+
+Especially noteworthy is the rapidly expanding body of social
+legislation--federal Employers' Liability Act, Hours of Service acts,
+Child Labor Law, White Slave Act and the like, all drawn with an eye to
+the commerce clause but designed to accomplish objects quite distinct
+from the regulation of commerce.
+
+As already said, the Commerce Clause has been found most available for
+purposes of such legislation. Other clauses have, however, served their
+turn. For example, the grant of power to lay taxes was utilized to
+destroy an extensive industry obnoxious to the dairy interests--the
+manufacture of oleomargarine artificially colored to look like
+butter.[1] Also to invade the police power of the States in respect of
+the regulation of the sale and use of narcotic drugs.[2] Also to check
+speculation and extortion in the sale of theatre tickets![3] The power
+to borrow money and create fiscal agencies was utilized to facilitate
+the making of loans upon farm security at low rates of interest through
+the incorporation of Federal land banks or Joint Stock land banks.[4]
+
+[Footnote 1: _McCray v. United States_, 195 U.S., 27.]
+
+[Footnote 2: Narcotic Drug Act. Held constitutional in _United States v.
+Doremus_, 249 U.S., 86; _Webb v. United States_, 249 U.S., 96.]
+
+[Footnote 3: Revenue Act of 1921, Title VIII, subdivisions 2 and 3.]
+
+[Footnote 4: _Smith v. Kansas City Title Co._, 255 U.S., 180.]
+
+It would be an insult to intelligence to claim that legislation such as
+this, wearing the form of revenue measure or regulation of commerce but
+in reality enacted with a different motive, does not involve an enormous
+extension of the national power beyond what the makers of the
+Constitution supposed they were conferring or intended to confer. What,
+then, of the declaration by the Supreme Court with which we began, that
+"to determine the extent of the grants of power we must place ourselves
+in the position of the men who framed and adopted the Constitution, and
+inquire what they must have understood to be the meaning and scope of
+these grants." The answer must be that the Court itself has not always
+adhered strictly to this test. The Court has taken the position that
+when power exists under the Constitution to legislate upon a given
+subject--say interstate commerce or taxation--it is not for the
+judiciary to seek to correct abuses by Congress of that power, or to
+question Congressional motives. As said in the decision sustaining the
+constitutionality of the oleomargarine law:[1]
+
+     The judiciary is without authority to avoid an act of Congress
+     lawfully exerting the taxing power, even in a case where to
+     the judicial mind it seems that Congress had, in putting such
+     power in motion, abused its lawful authority by levying a tax
+     which was unwise or oppressive, or the result of the
+     enforcement of which might be to indirectly affect subjects
+     not within the powers delegated to Congress, nor can the
+     judiciary inquire into the motive or purpose of Congress in
+     adopting a statute levying an excise tax within its
+     constitutional power.
+
+[Footnote 1: _McCray v. United States_, 195 U.S., 27.]
+
+The Court, however, has had great difficulty with these cases and
+developed sharp differences of opinion. For example, the case upholding
+the anti-lottery statute as a valid exercise of the power to regulate
+commerce[1] was twice ordered for reargument and finally decided by a
+bare majority of 5 to 4. The Child Labor Law of 1916 was declared
+unconstitutional[2] and the Narcotic Drug Act was sustained[3] by a
+similar vote, 5 to 4. In the Narcotic Drug case the four dissenting
+justices, speaking through Chief Justice White, characterized portions
+of the statute as "beyond the constitutional power of Congress to enact
+... a mere attempt by Congress to exert a power not delegated, that is,
+the reserved police power of the states." In the Lottery case the
+dissenting opinion of the four, written by Chief Justice Fuller,
+concludes:
+
+     I regard this decision as inconsistent with the views of the
+     framers of the Constitution, and of Marshall, its great
+     expounder. Our form of government may remain notwithstanding
+     legislation or decision, but, as long ago observed, it is with
+     governments, as with religions, the form may survive the
+     substance of the faith.
+
+[Footnote 1: _Champion v. Ames_, 188 U.S., 321.]
+
+[Footnote 2: _Hammer v. Dagenhart_, 247 U.S., 251.]
+
+[Footnote 3: _United States v. Doremus_, 249 U.S., 86.]
+
+Whatever view one may hold to-day as to the question of expediency, no
+thoughtful mind can escape the conclusion that, in a very real and
+practical sense, the Constitution has changed. In a way change is
+inevitable to adapt it to the conditions of the new age. There is
+danger, however, that in the process of change something may be lost;
+that present-day impatience to obtain desired results by the shortest
+and most effective method may lead to the sacrifice of a principle of
+vital importance.
+
+The men who framed the Constitution were well advised when they sought
+to preserve the integrity of the states as a barrier against the
+aggressions and tyranny of the majority acting through a centralized
+power. The words "state sovereignty" acquired an odious significance in
+the days of our civil struggle, but the idea for which they stand is
+nevertheless a precious one and represents what is probably America's
+most valuable contribution to the science of government.
+
+We shall do well not to forget the words of that staunch upholder of
+national power and authority, Salmon P. Chase, speaking as Chief Justice
+of the Supreme Court in a famous case growing out of the Civil War:[1]
+
+     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.
+
+[Footnote 1: _Texas v. White_, 7 Wall., 700.]
+
+
+
+
+IV
+
+THE EIGHTEENTH AMENDMENT
+
+
+Could Washington, Madison, and the other framers of the Federal
+Constitution revisit the earth in this year of grace 1922, it is likely
+that nothing would bewilder them more than the recent Prohibition
+Amendment. Railways, steamships, the telegraph, the telephone,
+automobiles, flying machines, submarines--all these developments of
+science, unknown in their day, would fill them with amazement and
+admiration. They would marvel at the story of the rise and downfall of
+the German Empire; at the growth and present greatness of the Republic
+they themselves had founded. None of these things, however, would seem
+to them to involve any essential change in the beliefs and purposes of
+men as they had known them. The Prohibition Amendment, on the contrary,
+would evidence to their minds the breaking down of a principle of
+government which they had deemed axiomatic, the abandonment of a purpose
+which they had supposed immutable. As students of the science of
+government they would realize that the most fundamental change which can
+overtake a free people is a change in their frame of mind, for to that
+everything else must sooner or later conform.
+
+The amendment was proposed by Congress in 1917 and proclaimed as having
+been ratified in 1919.[1]
+
+[Footnote 1: 40 Stat. 1050, 1941.]
+
+The comparative ease and dispatch with which it was put through argue
+alike the skill and vigor of its sponsors and the strength of the
+sentiment behind them. Legal warfare over the amendment did not end,
+however, with its ratification by the legislatures of the requisite
+number of states. Passions had been aroused. Vast property interests
+were menaced. Moreover, in the minds of students of government the
+amendment stirred misgivings which were quite independent of the
+sentimental and material considerations involved. Eminent counsel were
+retained and a determined effort was made to defeat or nullify the
+amendment in the courts. To this end suits were begun in various
+jurisdictions to test its validity and enjoin the enforcement of the
+Volstead Act, which sought to carry it into effect. Two sovereign
+states (Rhode Island and New Jersey) joined in the attack and through
+their respective Attorneys General brought original suits in the United
+States Supreme Court to have the amendment declared invalid. Seven test
+cases were argued together in the Supreme Court, five days in all being
+devoted to the argument. It will be of interest to note some of the
+reasons advanced against the validity of the amendment, as they are
+summarized in the official report.[1]
+
+[Footnote 1: National Prohibition cases, 253 U.S., 350.]
+
+The Attorney General of the State of Rhode Island argued[1] that:
+
+     The amendment is an invasion of the sovereignty of the
+     complaining state and her people, not contemplated by the
+     amending clause of the Constitution. The amending power ... is
+     not a substantive power but a precautionary safeguard inserted
+     incidentally to insure the ends set forth in that instrument
+     against errors and oversights committed in its formation.
+     Amendments, as the term indeed implies, are to be limited to
+     the correction of such errors....
+
+     It is "This Constitution" that may be amended. "This
+     Constitution" is not a code of transient laws but a framework
+     of government and an embodiment of fundamental principles. By
+     an amendment, the identity or purpose of the instrument is
+     not to be changed; its defects may be cured, but "This
+     Constitution" must remain. It would be the greatest absurdity
+     to contend that there was a purpose to create a limited
+     government and at the same time to confer upon that government
+     a power to do away with its own limitations.
+
+[Footnote 1: Id., pp. 354-356.]
+
+The Attorney General of the State of New Jersey:[1]
+
+     attacked the amendment as an invasion of state sovereignty not
+     authorized by the amending clause and as not, properly
+     speaking, an amendment, but legislation, revolutionary in
+     character.
+
+[Footnote 1: 253 U.S., pp. 356-357.]
+
+The eminent Chicago lawyer, Levy Mayer, and ex-Solicitor General William
+Marshall Bullitt, contended,[1] among other things, that
+
+     the power of "amendment" contained in Art. V does not
+     authorize the invasion of the sovereign powers expressly
+     reserved to the states and the people by the Ninth and Tenth
+     Amendments, except with the consent of _all_ the states....
+
+     If amendment under Art. V were unlimited, three-fourths of the
+     legislatures would have it in their power to establish a state
+     religion and prohibit free exercise of other religious
+     beliefs; to quarter a standing army in the houses of citizens;
+     to do away with trial by jury and republican form of
+     government; to repeal the provision for a president; and to
+     abolish this court and with it the whole judicial power
+     vested by the Constitution.
+
+[Footnote 1: Id., pp. 357-361.]
+
+Elihu Root, preëminent as a constitutional lawyer, appeared as counsel
+in one of the test cases. His main contention was summarized in his
+brief as follows:[1]
+
+     (a) That the authority to amend the Constitution is a
+     continuance of the constitution-making power and as such is a
+     power quite different and altogether distinct from the
+     law-making power under the Constitution.
+
+     (b) That a grant of the one power does not include or imply a
+     grant of the other.
+
+     (c) That the natural and ordinary meaning of the words used in
+     Article V of the Constitution [the article providing for
+     amendment] limits the power granted to the function of
+     constitution-making as distinguished from ordinary law-making.
+
+     (d) That the purposes of the grant imply the same limitation.
+
+     (e) That other parts of the Constitution--notably Article
+     I--express the same limitation.
+
+     (f) That the existence of authority under Article V to enact
+     ordinary laws regulating the conduct of private citizens under
+     color of amendment, would be so in conflict with the
+     fundamental principles and spirit of the Constitution that
+     such a construction is not permissible.
+
+[Footnote 1: For the Reporter's Summary see 253 U.S., pp. 361-367.]
+
+There were other arguments of a more technical character. Article V of
+the Constitution provides that the Congress shall propose amendments
+"whenever two-thirds of both Houses shall deem it necessary." It was
+urged that this required the affirmative vote of two-thirds of the
+entire membership of both Houses, and that two-thirds of a quorum was
+not sufficient. It was also urged that the proposal was fatally
+defective because it did not on its face declare that both Houses deemed
+the amendment necessary. It was also argued that the amendment had not
+been effectively ratified in certain of the states where it had been
+approved by the state legislature (notably Ohio) because under the
+constitutions of those states it was subject to a referendum to the
+people before becoming effective. The Supreme Court of Ohio had so
+decided[1] and a referendum had actually been held in that state,
+resulting in a rejection of the amendment by popular vote. Various
+arguments were also advanced based on the puzzling phraseology of
+Section 2 of the amendment that "the Congress and the several States
+shall have _concurrent power_ to enforce this article by appropriate
+legislation." The eminent constitutional lawyer, W.D. Guthrie, addressed
+himself particularly to this phase of the controversy.[2] It was urged
+with much force that the effect of these words was to save the rights of
+the states, in respect of intrastate matters, by requiring their
+concurrence in any legislation of Congress regulating such matters.
+
+[Footnote 1: See _Hawke v. Smith_, 253 U.S., 221.]
+
+[Footnote 2: 253 U.S., pp. 368-380.]
+
+All the arguments advanced were alike unavailing. The nine members of
+the Supreme Court were unanimous in sustaining the validity of the
+amendment, holding that it "by lawful proposal and ratification, has
+become a part of the Constitution, and must be respected and given
+effect the same as other provisions of that instrument."[1] The Court,
+however, adopted the very unusual course of deciding the various cases
+before it (affirming four, reversing one, and dismissing the original
+bills filed by the states of Rhode Island and New Jersey) without any
+written opinion. Speaking through Mr. Justice Van Devanter, the Court
+merely announced its conclusions. This was an unprecedented procedure in
+a case involving constitutional questions of such importance. It drew
+criticism from some of the members of the Court itself. Chief Justice
+White said:[2]
+
+     I profoundly regret that in a case of this magnitude,
+     affecting as it does an amendment to the Constitution dealing
+     with the powers and duties of the national and state
+     governments, and intimately concerning the welfare of the
+     whole people, the court has deemed it proper to state only
+     ultimate conclusions without an exposition of the reasoning by
+     which they have been reached.
+
+and proceeded to announce the reasons which had actuated him personally.
+Justice McKenna said:[3]
+
+     The court declares conclusions only, without giving any
+     reasons for them. The instance may be wise--establishing a
+     precedent now, hereafter wisely to be imitated. It will
+     undoubtedly decrease the literature of the court if it does
+     not increase lucidity.
+
+[Footnote 1: Id., p. 386.]
+
+[Footnote 2: Id., p. 388.]
+
+[Footnote 3: 253 U.S., p. 393.]
+
+Perhaps a hint as to the reasons actuating the majority of the Court may
+be found in the brief concurring memorandum of Mr. Justice McReynolds.
+He said:[1]
+
+     I do not dissent from the disposition of these causes as
+     ordered by the Court, but confine my concurrence to that. It
+     is impossible now to say with fair certainty what construction
+     should be given to the Eighteenth Amendment. Because of the
+     bewilderment which it creates, a multitude of questions will
+     inevitably arise and demand solution here. In the
+     circumstances, I prefer to remain free to consider these
+     questions when they arrive.
+
+[Footnote 1: Id., p. 392.]
+
+Justices McKenna and Clarke dissented from portions of the decision
+dealing with the question of the proper construction of the grant of
+"concurrent power" to Congress and the States, and wrote opinions
+setting forth the grounds of their dissent. Both Justices, however,
+concurred in affirming the validity of the amendment.
+
+Thus the legal battle was fought and lost. The amendment had withstood
+attack and men's minds settled back to the practical question of its
+enforcement.
+
+Upon that question, however difficult and interesting, we do not here
+enter. Our present concern is to ascertain as nearly as may be the true
+place of the amendment in the development of American constitutional
+law.
+
+That it affords startling evidence of a radical departure from the views
+of the founders of the Republic is beyond question. Such a blow at the
+prerogatives of the states, such a step toward centralization, would
+have been thought impossible by the men of 1787. It would be a mistake,
+however, to view the departure as having originated with this amendment.
+Rather is the amendment to be regarded as merely a spectacular
+manifestation of a change which was already well under way.
+
+In the early days of the Republic the dominating purpose was the
+protection of state prerogatives, so far as that was compatible with the
+common safety. The first eleven amendments of the Federal Constitution
+were all limitations upon federal power. Not until the people of the
+various states had been drawn together and taught to think in terms of
+the nation by a great Civil War was there any amendment which enlarged
+the powers of the National Government. The three post-war amendments
+(Nos. XIII, XIV, and XV) marked a distinct expansion of federal power
+but one that seemed to find its justification, as it found its origin,
+in the necessity for effectuating the purposes of the war and protecting
+the newly enfranchised Negroes.
+
+A long period of seeming inactivity, more than forty years, elapsed
+before another constitutional amendment was adopted.[1] The inaction,
+however, was apparent rather than real. As matter of fact, a change was
+all the time going on. In a very real sense the Constitution was being
+altered almost from year to year. That the alterations did not take the
+shape of formal written amendments was largely due to the tradition of
+constitutional immobility. The idea had grown up that the machinery of
+amendment provided by the Fathers was so slow and cumbersome that it was
+impossible as a practical matter to secure a change by that method
+except under stress of war or great popular excitement. That idea is now
+exploded. We of to-day know better, having seen the Income Tax Amendment
+(No. XVI), the Election of Senators by Popular Vote Amendment (No.
+XVII), the Prohibition Amendment (No. XVIII), and the Woman Suffrage
+Amendment (No. XIX) go through within a period of seven years. For
+generations, however, the tradition of constitutional immobility held
+sway and the forces of change worked through channels that seemed easier
+and less obstructed.
+
+[Footnote 1: No. XVI, the Income Tax Amendment, ratified in 1913.]
+
+The principal channel has been congressional legislation. Congress has
+found ways of reaching by indirection objects which could not be
+approached directly. Under the express grants of power contained in the
+Constitution statutes have been enacted which were really designed to
+accomplish some ulterior object. A striking example is found in the
+child labor laws, discussed more at length in a subsequent chapter.
+Congress at first sought to regulate child labor by a statute enacted
+ostensibly as a regulation of commerce under the Commerce Clause of the
+Constitution. The Supreme Court held the Act unconstitutional as
+exceeding the commerce power of Congress and invading the powers
+reserved to the states.[1] Thereupon Congress practically reënacted it,
+coupled with a provision for a prohibitive tax on the profits of
+concerns employing child labor, as part of a revenue act enacted under
+the constitutional grant of power to lay taxes.[2]
+
+[Footnote 1: _Hammer v. Dagenhart_, 247 U.S., 251.]
+
+[Footnote 2: Revenue Act of 1918, Title XII.]
+
+The assumption by the National Government of jurisdiction over the
+manufacture and sale of intoxicating liquors is no more of an
+encroachment on the prerogatives of the states than is its assumption of
+jurisdiction over child labor and the use of narcotic drugs. We come
+back, therefore, to the proposition that the Prohibition Amendment is to
+be regarded less as a departure in American fundamental law than as a
+spectacular manifestation of a change already well under way.
+
+The change, however much students of our institutions may deplore it, is
+not difficult to explain. The earlier solicitude for state rights was in
+a sense accidental. It was based on sentiment and mutual jealousies
+among the colonies rather than on any fundamental differences in race,
+beliefs, or material interests. The traditions behind it, while strong,
+were of comparatively recent growth. When they entered the Union the
+colonies were still new and undeveloped. As men died and their sons
+succeeded them prejudices gradually yielded and sentiment changed.
+Moreover, various other forces--immigration, free trade among the
+states, the growth of railways and other nationwide industries, foreign
+wars--have been at work to obliterate state lines.
+
+Advocates of the old order see in the change a breaking down of the
+principle of local self-government. To their minds the danger of
+majority tyranny, made possible by a centralization of power in a
+republic of such vast extent and varied interests, outweighs all the
+advantages of national uniformity and efficiency. Advocates of the new
+order think otherwise. They argue, moreover, that the states have become
+too great and populous to serve as units for purposes of home rule;
+that their boundaries are for the most part artificial and correspond to
+no real distinctions in the ordinary life of men. They assert that the
+instinct for local self-government remains as strong as it ever was, and
+instance the resentment of New York City over interference from Albany.
+
+The average man gives little thought to the constitutional aspect of the
+controversy. His interest in the prohibition movement is focused on
+other features which seem to him of more immediate concern. And yet, did
+he but realize it, the constitutional aspect transcends all the others
+in its importance for the future welfare and happiness of himself, his
+children, and his country.
+
+
+
+
+V
+
+THE NINETEENTH AMENDMENT
+
+
+A prudent man touches the question of woman suffrage gingerly. Many
+fingers have been burnt in that fire and its embers are not yet dead.
+Some mention of the Nineteenth Amendment seems necessary, however, in
+any discussion of federal encroachment on state power, and it may be
+possible to approach the suffrage movement from the standpoint of
+constitutional law without getting upon controversial ground.
+
+The United States Constitution as originally adopted did not prescribe
+who should be entitled to vote. That matter was left entirely in the
+hands of the states. The Constitution provided[1] that, for the election
+of members of the House of Representatives, "the electors in each state
+shall have the qualifications requisite for electors of the most
+numerous branch of the state legislature." It was further provided that
+Senators should be chosen by the legislatures of the states[2] and that
+the President and Vice-president should be chosen by presidential
+electors appointed in such manner as the state legislatures might
+direct.[3] These were the only elective federal officials.
+
+[Footnote 1: Article I, Section 2.]
+
+[Footnote 2: Article I, Section 3.]
+
+[Footnote 3: Article II, Section 1.]
+
+While the states were thus left in full control, it does not follow that
+the matter was deemed wholly outside the proper scope of national
+authority. No argument is necessary to demonstrate that the regulation
+of the suffrage in national elections is or may be a matter of national
+concern. The question of prescribing the qualifications of voters in
+such elections was much debated in the Convention which framed the
+Constitution.[1] Some members were in favor of prescribing a property
+qualification and limiting the suffrage to freeholders. It was finally
+decided, however, to accept the qualifications prescribed by state law.
+In adopting this plan the Convention followed the line of least
+resistance. The qualifications of voters in the various states
+differed.[2] Most states required a property qualification, but some
+did not. It was felt that to attempt to impose a uniform rule on all the
+states would arouse opposition and create one more obstacle to be
+overcome in the formidable task of getting the Constitution ratified.
+
+[Footnote 1: See e.g., Farrand, "Records of the Federal Convention,"
+Vol. II, p. 201 et seq.]
+
+[Footnote 2: For a statement of the qualifications in the various states
+see _Minor v. Happersett_, 21 Wall., 162.]
+
+There the matter rested, with suffrage qualifications regulated entirely
+by state law, until after the Civil War. Meanwhile, the states had been
+abolishing property tests, and universal male suffrage had been written
+into state constitutions. The cry for woman suffrage had begun, but as
+yet it was only a still small voice, inaudible to legislators.
+
+After the Civil War the problem of protecting the emancipated slaves had
+to be dealt with, and three constitutional amendments (Nos. XIII, XIV,
+and XV) were adopted with that end primarily in view. Number XIII,
+ratified in 1865, formally abolished slavery. Number XIV, ratified in
+1868, extended citizenship to all persons born in the United States and
+provided (among other things) that no state should abridge the
+privileges or immunities of citizens of the United States. Number XV,
+ratified in 1870, provided that "the right of citizens of the United
+States to vote shall not be denied or abridged by the United States or
+by any State on account of race, color, or previous condition of
+servitude." Here was the entering wedge of federal interference. The
+amendments did not purport to deal with woman suffrage, but the pioneers
+of the suffrage movement thought they discovered in them a means of
+advancing their cause and lost no time in putting the matter to the
+test. Susan B. Anthony voted at Rochester, N.Y., in an election for a
+representative in Congress, claiming that the restriction of voting to
+males by the constitution and laws of New York was void as a violation
+of the Fourteenth Amendment providing that "no state shall make or
+enforce any law which shall abridge the privileges or immunities of
+citizens of the United States." She was indicted for voting unlawfully,
+and on her trial before Justice Hunt of the United States Supreme Court,
+sitting at Circuit, the Court directed the jury to find a verdict of
+guilty and imposed a fine of $100 and costs.[1]
+
+[Footnote 1: _United States v. Anthony_, 11 Blatchford, 200.]
+
+Mrs. Virginia Minor raised a similar question in the courts of Missouri.
+The Missouri constitution limited the right to vote to male citizens.
+Mrs. Minor applied for registration as a voter, and on being refused
+brought suit against the Registrar of Voters on the ground that this
+clause of the Missouri constitution was in violation of the Fourteenth
+Amendment. The Missouri state courts decided against her, and the case
+was taken to the Supreme Court of the United States where the decision
+of the state courts was affirmed.[1] The Supreme Court held in effect
+that while Mrs. Minor was a citizen that fact alone did not make her a
+voter; that suffrage was not coextensive with citizenship, either when
+the Constitution was adopted or at the date of the Fourteenth Amendment,
+and was not one of the "privileges and immunities" guaranteed by that
+amendment.
+
+[Footnote 1: _Minor v. Happersett_, 21 Wall., 162.]
+
+A similar decision was rendered in the matter of Mrs. Myra Bradwell's
+application for a license to practise law in Illinois.[1] The Supreme
+Court held that the right to practise law in the state courts was not a
+privilege or immunity of a citizen of the United States within the
+meaning of the Fourteenth Amendment, and affirmed the decision of the
+Illinois Court denying Mrs. Bradwell's application.
+
+[Footnote 1: _Bradwell v. Illinois_, 16 Wall., 130.]
+
+The failure of these attempts to turn the Fourteenth Amendment to the
+advantage of the woman suffrage movement in no wise checked the
+movement or discouraged its leaders. They redoubled their efforts among
+the separate states, and worked to such good purpose that the opposition
+presently began to take on the aspect of a forlorn hope. "Votes for
+Women" became an accomplished fact in many states, and appeared on the
+verge of accomplishment in most of the others. Some states, however,
+were still holding out when the leaders of the movement, impatient of
+further delay and determined to coerce the recalcitrants, took the
+matter into the national arena and procured the proposal and
+ratification of an amendment to the Federal Constitution. The amendment
+provides:
+
+     The right of citizens of the United States to vote shall not
+     be denied or abridged by the United States or by any state on
+     account of sex.
+
+In other words, it adopts verbatim the phraseology of the Fifteenth
+Amendment, merely substituting the word "sex" for the words "race,
+color, or previous condition of servitude."
+
+So much for the historical background of the so-called Susan B. Anthony
+Amendment. It remains to consider just how far the amendment
+constitutes an encroachment by the Federal Government on the powers of
+the states.
+
+In so far as it affects the qualifications of voters at national
+elections (i.e., for president, senators, representatives) the
+encroachment is more apparent than real. As has already been pointed
+out, this is essentially a national question, and the Constitution
+adopted the suffrage qualifications prescribed by state law, not as a
+matter of principle, but for reasons of expediency and convenience.
+
+In so far, however, as the amendment imposes woman suffrage on the
+states in elections of state and local officials the situation is
+entirely different. That staunch advocate of national power, Alexander
+Hamilton, said in the _Federalist_:[1]
+
+     Suppose an article had been introduced into the Constitution,
+     empowering the United States to regulate the elections for the
+     particular states, would any man have hesitated to condemn it,
+     both as an unwarrantable transposition of power, and as a
+     premeditated engine for the destruction of the state
+     governments?
+
+[Footnote 1: _Federalist_ LIX.]
+
+What Hamilton scouted as impossible has been accomplished in the
+Nineteenth Amendment. It in effect strikes out the word "male" from the
+suffrage provisions of state constitutions. It overrides state policy
+and interferes with the right of states to manage their own affairs.
+From the theoretical standpoint a more serious inroad on state
+prerogatives would be hard to find. Control of the suffrage is one of
+the fundamental rights of a free state. It belonged to the North
+American states before their union, and was not surrendered to the
+National Government when the union was effected. Moreover, the
+encroachment has a very practical side. To confer the suffrage on the
+educated women of Connecticut was one thing; to confer it on the Negro
+women of Alabama was quite a different matter, involving different
+considerations. The amendment took no heed of such differences but
+imposed a uniform rule on all the states, regardless of local prejudices
+or conditions.
+
+It is true that a somewhat similar encroachment on state power had been
+made by the Fifteenth Amendment, designed to enfranchise the Negroes.
+That amendment, however, had its origin in conditions growing out of the
+Civil War, and claimed its justification in the necessity for protecting
+the freed slaves against hostile state action. It was avowedly an
+emergency measure, and the success with which it has been nullified in
+some quarters testifies to the unwisdom of forcing such measures upon
+reluctant states.
+
+The conditions surrounding the adoption of the Nineteenth Amendment were
+altogether different. Few people take seriously the alleged analogy
+between the women and the slaves. The constitutional method--action
+through the separate states--was being pursued with signal success. The
+states were rapidly falling in line. Most of them had already granted
+woman suffrage or were ready to grant it. There was no overmastering
+need for coercing the states that were not yet ready. An impartial
+student of the period will be apt to conclude that the Nineteenth
+Amendment was the product of impatience rather than necessity.
+
+Someone may ask, "What effect will the granting of votes to women have
+on the problem of preserving the constitutional equilibrium?" The
+ultimate power lies with the voters, and the women with votes now equal
+or outnumber the men. What is the reaction of women voters likely to be
+toward questions of political theory?
+
+Ours is a governmental scheme of extreme complexity. As with animal
+organisms so with political systems, the higher they rise in the scale
+of development the more complicated they tend to become. An absolute
+monarchy is simplicity itself compared with our dual system. To maintain
+the proper adjustment of such a machine requires intelligence of a high
+order. The machine will not run itself and male tinkers have abundantly
+demonstrated that it is not fool-proof. But something more is required
+than mere intelligence. There must be, at least among the leaders, an
+instinct for governmental problems as distinguished from those of a
+merely social or personal character; an ability to recognize and a
+willingness to conform to underlying principles.
+
+How will the women voters meet this test? Granting (what few will
+dispute) that their intelligence at least equals that of the men, will
+they be as likely as men to look beyond the immediate social welfare
+problem to the governmental principle at stake? Will an abstract
+proposition hold its own in their minds against a concrete appeal?
+
+We do not attempt to answer these questions, but they contain food for
+thought.
+
+
+
+
+VI
+
+CONGRESS _versus_ THE SUPREME COURT--THE CHILD LABOR LAWS
+
+
+The present Federal Revenue Act is noteworthy in more aspects than its
+complexity and the disproportionate burden cast on possessors of great
+wealth. To students of our form of government it is particularly
+interesting because of provisions[1] purporting to impose a tax on
+employers of child labor, for these represent an attempt by Congress to
+nullify a decision of the Supreme Court and grasp a power belonging to
+the states. The story of these provisions throws a flood of light on a
+method by which our Constitution is being changed.
+
+[Footnote 1: Revenue Act of 1921, Title XII.]
+
+The evils of child labor have long engaged the attention of
+philanthropists and lawmakers. In comparatively recent years child labor
+laws are said to have been enacted in every state of the Union. These
+statutes, however, lacked uniformity. Some of them were not stringent
+enough to satisfy modern sentiment. Moreover, commercial considerations
+entered into the reckoning. Industries in states where the laws were
+stringent were found to be at a disadvantage in comparison with like
+industries in states where the laws were lax, and this came to be
+regarded as a species of unfair competition. The advantages of
+uniformity and standardization seemed obvious from both the
+philanthropic and the commercial viewpoints, and Congress determined to
+take a hand in the matter.
+
+No well-informed person supposed for a moment that the regulation of
+child labor was one of the functions of the General Government as those
+functions were planned by the makers of the Constitution. The United
+States Supreme Court had declared over and over again that such matters
+were the province of the states; that "speaking generally, the police
+power is reserved to the states and there is no grant thereof to
+Congress in the Constitution."[1] For some years, however, Congress had
+been finding ways to legislate indirectly upon matters which it had no
+power to approach directly. Under the grant of power in the Constitution
+"to regulate commerce with foreign nations and among the several
+States,"[2] Congress had enacted laws purporting to regulate commerce
+but in reality designed for the suppression or regulation of some other
+form of activity. These enactments had for the most part been sustained
+as constitutional by the Supreme Court (though with misgivings and sharp
+differences of opinion), the Court holding that it could not pass on the
+motives for congressional action. The enactment of a law regulating
+child labor seemed therefore but another step along a trail already
+blazed, and Congress determined to take that step.
+
+[Footnote 1: _Keller v. United States_, 213 U.S., 138.]
+
+[Footnote 2: Art. I, Sec. 8.]
+
+The statute enacted by Congress[1] prohibited transportation in
+interstate commerce of goods made at a factory in which, within thirty
+days prior to their removal therefrom, children under the age of
+fourteen years had been employed or permitted to work, or children
+between the ages of fourteen and sixteen had been employed or permitted
+to work more than eight hours in any day, or more than six days in any
+week, or after the hour of 7 P.M. or before the hour of 6 A.M. The
+constitutionality of the act was at once challenged and suit brought to
+test the question. The Supreme Court held, by a vote of five to
+four,[2] that Congress had overstepped its power. The previous decisions
+which had upheld somewhat similar inroads on the police power of the
+states were distinguished and the act was declared unconstitutional.
+
+[Footnote 1: Act of September 1, 1916, 39 Stat., 675.]
+
+[Footnote 2: _Hammer v. Dagenhart_, 247 U.S., 251.]
+
+The distinction drawn by the majority of the Court between this and
+previous decisions was a narrow one and its validity has been questioned
+by some writers. It has nowhere been more clearly explained than in an
+address delivered before a body of lawyers by a former member of the
+Court.[1] Mr. Hughes said:
+
+     There has been in late years a series of cases sustaining the
+     regulation of interstate commerce, although the rules
+     established by Congress had the quality of police regulation.
+     This has been decided with respect to the interstate
+     transportation of lottery tickets, of impure food and drugs,
+     of misbranded articles, of intoxicating liquors, and of women
+     for the purpose of debauchery. It was held to be within the
+     power of Congress to keep "the channels of interstate commerce
+     free from immoral and injurious uses." But the Court in this
+     most recent decision has pointed out that in each of these
+     cases "the use of interstate commerce was necessary to the
+     accomplishment of harmful results." The Court, finding this
+     element to be wanting in the Child Labor Case, denied the
+     validity of the act of Congress. The Court found that the
+     goods shipped were of themselves harmless. They were permitted
+     to be freely shipped after thirty days from the time of
+     removal from the factory. The labor of production, it was
+     said, had been performed before transportation began and thus
+     before the goods became the subject of interstate commerce.
+
+     The fundamental proposition thus established is that the power
+     over interstate commerce is not an absolute power of
+     prohibition, but only one of regulation, and that the prior
+     decisions in which prohibitory rules had been sustained rested
+     upon the character of the particular subjects there involved.
+     It was held that the authority over interstate commerce was to
+     regulate such commerce and not to give Congress the power to
+     control the states in the exercise of their police power over
+     local trade and manufacture.
+
+[Footnote 1: Charles E. Hughes, President's Address, Printed in Year
+Book of New York State Bar Association, Vol. XLII, p. 227 et seq.]
+
+Congress did not receive this decision of the Supreme Court
+submissively. On the contrary, plans were laid to nullify it. The effort
+to legislate on child labor under cover of the power to regulate
+commerce having failed, recourse was had to the constitutional grant of
+power to lay taxes. Within six months after the decision of the Supreme
+Court declaring the act unconstitutional was announced, another statute
+similar in purpose and effect was enacted as part of a Federal Revenue
+Act.[1] This act provided for an additional tax of ten per cent. of the
+net profits received from the sale or distribution of the product of any
+establishment in which children under the age of fourteen years had been
+employed or permitted to work or children between the ages of fourteen
+and sixteen had been employed or permitted to work more than eight hours
+in any day or more than six days in any week or after the hour of 7 P.M.
+or before the hour of 6 A.M. during any portion of the taxable year. In
+other words, the law which had been declared void was substantially
+reënacted, with the substitution of a prohibitive tax for the clause
+prohibiting transportation in interstate commerce.
+
+[Footnote 1: Revenue Act of 1918, Title XII.]
+
+There was no pretense that this act was enacted for the purpose of
+raising revenue. The revenue feature was merely legislative camouflage.
+To quote the words of Justice Holmes in a recent case,[1] "Congress gave
+it the appearance of a taxing measure in order to give it a coating of
+constitutionality."
+
+[Footnote 1: _United States v. Jin Fuey Moy_, 241 U.S., 394.]
+
+The debate in the Senate was highly illuminating.[1] Its sponsors
+admitted that the measure was not expected or intended to produce
+revenue but was designed to regulate child labor and nullify the
+decision of the Supreme Court. Senators learned in the law conceded that
+if this purpose and effect were declared on the face of the act, or were
+necessarily inferable from its provisions, it must inevitably be
+declared unconstitutional. Reliance was placed, however, on the facts
+that the act was entitled "A bill to raise revenue," and that its
+provisions did not necessarily, on their face, belie this label. It was
+argued that the Supreme Court would be bound, under its own previous
+rulings, to treat the act as if it were what it purported on its face to
+be--a revenue measure--and to ignore common knowledge and senatorial
+admissions to the contrary. The measure passed the Senate by a
+substantial majority and was enacted as part of the revenue bill then
+under consideration, from which it has been carried forward into the
+present revenue law.
+
+[Footnote 1: See "Congressional Record" of December 18, 1918.]
+
+There the matter stands at this writing. A District Court judge has
+declared the new act unconstitutional but the question has not yet been
+passed upon by the Supreme Court.
+
+It would be venturesome to attempt to predict what the Supreme Court
+will do about it. Many constitutional lawyers seem to think that
+Congress has succeeded in its attempt and that the act will be
+sustained. Certainly there are strong precedents pointing that way.
+Three in particular will be relied upon--the Veazie Bank case, the
+Oleomargarine case and the Narcotic Drug Act case.
+
+In the Veazie Bank case[1] the Supreme Court upheld the validity of a
+so-called tax law whose purpose and effect were to suppress the
+circulation of notes of the state banks. In the Oleomargarine case[2]
+the Court upheld a tax whose purpose and effect were to suppress the
+manufacture and sale of oleomargarine artificially colored to look like
+butter. In the Narcotic Drug case[3] the Court upheld a tax imposed by
+the so-called Harrison Act[4] whose purpose was to regulate the sale and
+use of narcotic drugs. In each of these cases there could be no doubt in
+the mind of any intelligent man as to the motive for the enactment. The
+Court has uniformly maintained, however, that
+
+     when Congress acts within the limits of its constitutional
+     authority, it is not the province of the judicial branch of
+     the Government to question its motives.[5]
+
+[Footnote 1: _Veazie Bank v. Fenno_, 8 Wall., 533, decided in 1870.]
+
+[Footnote 2: _McCray v. United States_, 195 U.S., 27, decided in 1904.]
+
+[Footnote 3: _United States v. Doremus_, 249 U.S., 86, decided in 1919.]
+
+[Footnote 4: 38 Stat., 785.]
+
+[Footnote 5: _Smith v. Kansas City Title Company_, 255 U.S., 180, 210.]
+
+
+In the Narcotic Drug Act case[1] the Court held
+
+     While Congress may not exert authority which is wholly
+     reserved to the states, the power conferred by the
+     Constitution to levy excise taxes, uniform throughout the
+     United States, is to be exercised at the discretion of
+     Congress; and, where the provisions of the law enacted have
+     some reasonable relation to this power, the fact that they may
+     have been impelled by a motive, or may accomplish a purpose,
+     other than the raising of revenue, cannot invalidate them; nor
+     can the fact that they affect the conduct of a business which
+     is subject to regulation by the state police power.
+
+[Footnote 1: _United States v. Doremus_, 249 U.S., 86.]
+
+It is true that, while the Supreme Court may not question congressional
+motives, it cannot escape the obligation to construe a statute in the
+light of its true nature and effect. The Court has said:[1]
+
+     The direct and necessary result of a statute must be taken
+     into consideration when deciding as to its validity, even if
+     that result is not in so many words either enacted or
+     distinctly provided for. In whatever language a statute may be
+     framed, its purpose must be determined by its natural and
+     reasonable effect.
+
+[Footnote 1: _Collins v. New Hampshire_, 171 U.S., 30.]
+
+As already indicated, however, the nature and effect of a statute must
+ordinarily be determined from the form and contents of the act itself,
+rather than from outside sources, and the measure under consideration
+purports to be a revenue act.
+
+In the light of the decisions and principles of interpretation to which
+reference has been made, the case against the constitutionality of the
+act may seem well-nigh hopeless. The fact remains, however, that
+Congress has not met the fundamental objection raised by the Supreme
+Court. The Court declared the former act unconstitutional, not only
+because it transcended the power of Congress under the particular
+provision of the Constitution then invoked, viz., the Commerce Clause,
+but also on the broad ground of state rights, because it "exerts a power
+as to a purely local matter to which the federal authority does not
+extend." It is difficult to see how this objection is obviated by
+reënacting the act as a revenue measure. Under the circumstances perhaps
+the apprehensive foes of federal encroachment should withhold their
+lamentations until the Supreme Court has spoken again.[1]
+
+[Footnote 1: Since this chapter was put into print the Court has spoken.
+In _Bailey v. The Drexel Furniture Co._ (decided May 15, 1922) the Child
+Labor Tax Law was pronounced unconstitutional. The Court, while
+conceding that it must interpret the intent and meaning of Congress from
+the language of the act, held that the act on its face is an attempt to
+regulate matters of state concern by the use of a so-called tax as a
+penalty. The opinion of the Court, written by Chief Justice Taft, is an
+emphatic assertion of the duty and function of the Court to preserve the
+constitutional equilibrium between nation and states.]
+
+
+
+
+VII
+
+STATE RIGHTS AND THE SUPREME COURT
+
+
+A century ago the United States Supreme Court was the bulwark of
+national power against the assaults and pretensions of the states.
+To-day it is the defender of the states against the encroachments of
+national power. Let no one suppose, however, that this is because the
+Court itself has faced about. On our revolving planet a ship may be
+sailing toward the sun at sunrise and away from the sun in the afternoon
+without having changed its course. The Supreme Court has been the most
+consistent factor in our governmental scheme. While there have been
+differences of viewpoint between liberal constructionists and strict
+constructionists among its members, the Court on the whole has steered a
+fairly straight course. What has really altered is the environment in
+which the Court moves. The earth has been turning on its axis. The frame
+of mind of the people who compose states and nation has changed.
+
+At the outset (to cling for a moment to our nautical metaphor) the Court
+was obliged to put forth on an unknown sea. Its sailing orders under the
+new Constitution were unique. Precedents, those charts and lighthouses
+of the judicial mariner, were lacking. Progress was tentative and
+groping. Little wonder therefore that at first the business of the Court
+was meager and membership in its body seemed less attractive than
+membership in the judiciary of a state. Robert Hanson Harrison, one of
+President Washington's original appointees to the Supreme bench,
+declined to serve, preferring to accept a state judicial office. John
+Rutledge, another of the original appointees, resigned after a few
+months, preferring the position of Chancellor of his native state to
+which he had been chosen. John Jay, the first Chief Justice, resigned to
+become Governor of New York, and later declined a reappointment as Chief
+Justice in words indicating entire lack of faith in the powers and
+future of the Court.
+
+Nevertheless, the first period of the Court was by no means barren of
+achievement. A beginning was made. The supremacy of the national
+authority under the new Constitution was asserted. So stoutly indeed was
+it maintained in the memorable case of _Chisholm v. Georgia_,[1] that
+the country was thrown into a ferment. The Court had entertained a suit
+against a sovereign state by a private citizen of another state and
+rendered a decision in favor of the private citizen. The legislature of
+the sovereign state concerned (Georgia) responded by a statute
+denouncing the penalty of death against anyone who should presume to
+enforce any process upon the judgment within its jurisdiction. The
+matter was taken up in Congress and resulted in the proposal, and
+subsequent ratification by the states, of a constitutional amendment
+designed to prevent such actions in future.[2] It has been the fashion
+to speak of this incident as a striking example of the recall of
+judicial decisions. Such indeed it was. The decision did not suit the
+popular frame of mind and was promptly overruled in the method
+prescribed by the Constitution. It went a long way, however, toward
+establishing the Supreme Court as a power to be reckoned with on the
+side of national supremacy and authority.
+
+[Footnote 1: 2 Dallas, 419, decided in 1793.]
+
+[Footnote 2: Amendment XI.]
+
+Three years later the Court again took occasion to assert the national
+supremacy in no uncertain fashion. The case was _Ware v. Hylton_[1] and
+the Court laid down the proposition that a treaty of the Federal
+Government (in this case the treaty of peace with Great Britain)
+nullified previous state laws dealing with the subject matter. It is an
+interesting circumstance that one of the counsel on the losing side in
+this case was John Marshall of Virginia, and that this was the only case
+he ever argued before the tribunal through which he was destined to play
+so momentous a part in history.
+
+[Footnote 1: 3 Dallas, 199, decided in 1796.]
+
+In the annals of the Supreme Court and the development of American
+constitutional law the name of John Marshall stands preëminent. He was
+appointed Chief Justice by President John Adams, and took his seat on
+the Bench at the beginning of the new century (February 4, 1801). He was
+without judicial experience, but his record in other fields of activity
+and his well-known Federalist principles pointed him out as a man to be
+reckoned with and explain the aversion with which he was viewed by
+Thomas Jefferson, the incoming President. The breach between the
+President and the Chief Justice was widened by some of the early
+decisions of the latter upholding the supremacy of the National
+Government and the powers of the Supreme Court, notably the famous case
+of _Marbury v. Madison_,[1] in which was asserted the power of the Court
+to declare an act of Congress void as in conflict with the Constitution.
+Some years elapsed, however, before a case was decided which squarely
+involved a conflict between the powers of the Federal Government and the
+powers of a state. The issue came up in the case of _United States v.
+Judge Peters_.[2] This case involved a conflict of jurisdiction between
+the federal courts and the authorities of the State of Pennsylvania over
+the distribution of some prize money. Marshall's decision was a strong
+assertion of the federal jurisdiction and power. The Governor of
+Pennsylvania, under sanction of the state legislature, called out the
+state militia to resist enforcement of the judgment of the Court.
+Matters were tense for a time and bloodshed seemed imminent but the
+state finally backed down.
+
+[Footnote 1: 1 Cranch, 137.]
+
+[Footnote 2: 5 Cranch, 115, decided in 1809.]
+
+In the following year (1810) came the case of _Fletcher v. Peck_,[1] in
+which for the first time a statute of a state was held by the Supreme
+Court to be void as repugnant to the Federal Constitution. The State of
+Georgia had sought by statute to destroy rights in lands acquired under
+a previous act. It was held that the statute was unconstitutional as
+impairing the obligation of contracts within the meaning of the
+Constitution.
+
+[Footnote 1: 6 Cranch, 87.]
+
+In _Martin v. Hunter's Lessee_[1] was asserted the right of the Federal
+Supreme Court to overrule the judgment of a state court on questions
+arising under the Federal Constitution. The State of Virginia had denied
+that right and the Supreme Court reversed the judgment of the Virginia
+Court of Appeals.
+
+[Footnote 1: 1 Wheat., 304 (1816.)]
+
+In _McCulloch v. State of Maryland_,[1] a case involving an attempt by
+the State of Maryland to tax the Bank of the United States, Marshall's
+doctrine of implied powers was elaborated, and the judgment of the state
+court upholding the tax was reversed.
+
+[Footnote 1: 4 Wheat., 316 (1819).]
+
+In the _Dartmouth College case_[1] the doctrine of the inviolability of
+contracts against attack by state legislation was further developed. An
+act of the state legislature of New Hampshire had sought to alter the
+charter of Dartmouth College, and the New Hampshire courts had upheld
+the legislature. The Supreme Court reversed the state court and declared
+the statute unconstitutional under the clause of the Constitution which
+declares that no state shall make any law impairing the obligation of
+contracts.
+
+[Footnote 1: _Dartmouth College v. Woodward_, 4 Wheat., 518 (1819).]
+
+In the great case of _Gibbons v. Ogden_[1] the Court asserted the
+paramount jurisdiction of the National Government over interstate
+commerce. This was one of the most important and far-reaching of all
+Marshall's decisions. An injunction had been granted by Chancellor Kent
+and unanimously sustained by the Court of Errors of New York,
+restraining Gibbons from navigating the Hudson River by steamboats
+licensed by Congress for the coasting trade on the ground that he was
+thereby infringing the exclusive right, granted by the legislature of
+New York, to Robert R. Livingston and Robert Fulton to navigate the
+waters of the state with vessels moved by steam. The Supreme Court
+reversed the state courts and held the New York legislation void as an
+interference with the right of Congress, under the Constitution, to
+regulate interstate commerce.
+
+[Footnote 1: 9 Wheat., 1 (1824).]
+
+These were only a few of that series of great decisions which stand out
+like mountain peaks on the horizon of our national life. Marshall's
+judgments transformed a governmental experiment into something assured
+and permanent. They confirmed the national supremacy and made the
+Constitution workable.
+
+Marshall is known to history for his work in vindicating the national
+power under the Constitution. That was the need in his day and he met it
+with superlative wisdom and skill. It would be a mistake, however, to
+suppose that he favored federal encroachment upon the powers reserved to
+the states. On the contrary, he rendered decisions in favor of state
+rights which would be notable were they not overshadowed by the greater
+fame of the decisions which went to the building of the nation.
+
+With the passing of Marshall and the accession of Taney as Chief Justice
+a new chapter opened in the history of the Court. The Federalists had
+become extinct. Andrew Jackson had come into power and it had fallen to
+his lot to fill a majority of the seats upon the bench by appointments
+to vacancies. The result was at once apparent. Two cases[1] involving
+important constitutional questions, which had been argued during
+Marshall's lifetime but assigned for reargument on account of a division
+in the Court, were now decided contrary to Marshall's known views and in
+favor of a strict construction of national powers. Justice Story,
+Marshall's longtime associate on the bench, dissented strongly in both
+cases, lamenting the loss of Marshall's leadership and the change in the
+viewpoint of the Court.
+
+[Footnote 1: _Mayor of New York v. Miln_, 11 Peters, 102; _Briscoe v.
+Bank of Kentucky_, 11 Peters, 257, decided in 1837.]
+
+It would serve no useful purpose to enter upon a detailed consideration
+of the various decisions upon constitutional questions made during the
+twenty-eight years of Taney's Chief Justiceship. They were marked by
+great diversity of views among the members of the Court. In some of
+them, notably the famous Passenger cases,[1] the Court fell into a state
+reminiscent of the confusion of tongues that arose at the building of
+the Tower of Babel. The scope of certain of Marshall's decisions was
+limited.[2] Upon the whole, however, the structure of constitutional law
+which Marshall had reared was not torn down or greatly impaired. The
+national supremacy was upheld. Taney and his associates were for the
+most part patriotic men and eminent lawyers, proud of the Court and its
+history and anxious to add to its prestige. It is regrettable that the
+merits of some of them have been so obscured and their memory so clouded
+by a well-meaning but unfortunate excursion into the field of political
+passions. In the Dred Scott case[3] they thought to quiet agitation and
+contribute to the peace of their country by passing judgment upon
+certain angrily mooted questions of a political character. The effort
+was a failure and brought upon their heads, and upon Chief Justice Taney
+in particular, an avalanche of misrepresentation and obloquy.
+
+[Footnote 1: 7 Howard, 283 (1849).]
+
+[Footnote 2: Not always for the worse: vide the Charles River Bridge
+case, 11 Peters, 420, imposing salutary restrictions on the doctrine of
+the Dartmouth College case.]
+
+[Footnote 3: _Dred Scott v. Sandford_, 19 Howard, 393 (1857).]
+
+The suppression of the Great Rebellion brought an enormous increase in
+the national power and in the popular will to national power. State
+rights did not loom large in the popular or the legislative mind in
+reconstruction days. Taney was dead. The Supreme Court had been
+practically reconstituted by appointments made by President Lincoln and
+his immediate successors and it seems to have been anticipated that the
+new Court would take the view of national powers prevailing in Congress
+and the country at large. In this the popular expectation was doomed to
+disappointment. The Court displayed an unexpected solicitude for the
+rights of the states and firmness against federal encroachment. Chief
+Justice Salmon P. Chase, who had been President Lincoln's war Secretary
+of the Treasury, went so far as to pronounce unconstitutional some of
+his own official acts performed under the stress of war.
+
+In the great case of _State of Texas v. White_[1] the rights of Texas as
+a sovereign state were asserted, though Texas had joined in the
+Rebellion and was not represented in the national legislature.
+
+[Footnote 1: 7 Wall., 700 (1869).]
+
+In _The Collector v. Day_[1] it was held that Congress had no power to
+tax the salary of a state official.
+
+[Footnote 1: 11 Wall., 113 (1871).]
+
+In the Slaughter House cases[1] an act of the Legislature of Louisiana,
+granting to a corporation created by it exclusive rights to maintain
+slaughter houses for the City of New Orleans and other territory, was
+upheld, as a valid exercise of state police power, against claims that
+the legislation violated rights secured under the newly adopted
+amendments to the Federal Constitution (Amendments XIII, XIV, XV). The
+opinion of the Court delivered by a Northern judge (Miller of Iowa)
+stands as one of the bulwarks of state authority.
+
+[Footnote 1: 16 Wall., 36 (1873).]
+
+In a series of later cases various reconstruction acts of Congress
+involving encroachments upon state rights were either held
+unconstitutional or radically limited in their effect. For example, the
+decision in _United States v. Cruikshank_[1] greatly limited the effect
+of the so-called Federal Enforcement Act. The decision in _United States
+v. Harris_[2] declared unconstitutional portions of an act of Congress
+designed for the suppression of activities of the Ku-Klux variety. In
+the so-called Civil Rights cases[3] certain provisions of the federal
+Civil Rights Act, passed in furtherance of the purposes of the new
+constitutional amendments and designed to secure to persons of color
+equal enjoyment of the privileges of inns, public conveyances, theatres,
+etc., were held unconstitutional as an encroachment on the rights of the
+states.
+
+[Footnote 1: 92 U.S., 542 (1875).]
+
+[Footnote 2: 106 U.S., 629.]
+
+[Footnote 3: 109 U.S., 3.]
+
+These are but a few of the many decisions of the Supreme Court in the
+reconstruction period upholding the rights of the states against
+attempted federal encroachment arising from the conditions of the Civil
+War. The nation owes a debt of gratitude to the men who composed the
+Court at this time for their courage and firmness in the face of popular
+clamor and passion.
+
+The solicitude of the Court for the rights of the states did not end
+with the reconstruction period. It has continued down to the present
+day. In the Income Tax cases[1] the Court held that a tax upon income
+from bonds of a state municipal corporation was repugnant to the
+Constitution as a tax upon the borrowing power of the state.
+
+[Footnote 1: _Pollock v. Farmers Loan & Trust Co._, 157 U.S., 429
+(1895).]
+
+In _Keller v. United States_[1] the Court declared unconstitutional, as
+an encroachment on the police power of the states, an act of Congress
+making it a felony to harbor alien prostitutes, the Court declaring that
+"speaking generally, the police power is reserved to the states and
+there is no grant thereof to Congress in the Constitution."
+
+[Footnote 1: 213 U.S., 138 (1909).]
+
+In the Child Labor case[1] the Court held the federal Child Labor Law
+of 1916 unconstitutional as invading the police power reserved to the
+states. The Court said:
+
+     This Court has no more important function than that which
+     devolves upon it the obligation to preserve inviolate the
+     constitutional limitations upon the exercise of authority,
+     federal and state, to the end that each may continue to
+     discharge, harmoniously with the other, the duties entrusted
+     to it by the Constitution.[2]
+
+[Footnote 1: _Hammer v. Dagenhart_, 247 U.S., 251 (1918).]
+
+[Footnote 2: An even stronger assertion of state rights is found in the
+Child Labor Tax Case (_Bailey v. The Drexel Furniture Co._) decided May
+15, 1922, after this chapter had been put into print.]
+
+How is it then, someone may ask, if the Supreme Court is so zealous in
+defense of the rights of the states, that those rights are being
+encroached upon more and more by the National Government? The answer
+must be that there has been a change in the popular frame of mind. The
+desire for uniformity, standardization, efficiency, has outgrown the
+earlier fears of a centralization of power. Congress has found ways,
+under the constitutional grants of power to lay taxes and regulate
+interstate commerce, to legislate in furtherance of the popular demands.
+The Court is not strong enough (no governmental agency which could be
+devised would be strong enough) to hold back the flood or permanently
+thwart the popular will. In a government of the people everything has to
+yield sooner or later to the deliberate wish of the majority.
+
+Some profess to view the recent encroachments of federal power as a
+triumph of the principles advocated by Alexander Hamilton and John
+Marshall over the principles of Thomas Jefferson. Such a claim does
+Hamilton and Marshall an injustice. While they both stood for a strong
+National Government, neither of them contemplated any encroachment by
+that government on the principle of local self-government in local
+matters or the police power of the states.
+
+Marshall in one of his most powerful and far-reaching pronouncements in
+support of the national supremacy[1] speaks of
+
+     that immense mass of legislation, which embraces everything
+     within the territory of a state not surrendered to the General
+     Government;... inspection laws, quarantine laws, health laws
+     of every description ... are component parts of this mass.
+
+[Footnote 1: _Gibbons v. Ogden_, 9 Wheat., 1, 203, 208.]
+
+Later in the same opinion he refers to
+
+     the acknowledged power of a state to regulate its police, its
+     domestic trade, and to govern its own citizens.
+
+     ... The power of regulating their own purely internal affairs
+     whether of trading or police.
+
+Hamilton devotes an entire number of the _Federalist_[1] to combatting
+the idea that the rights of the states are in danger of being invaded by
+the General Government. In another place[2] he returns to the idea
+
+     that there is greater probability of encroachments by the
+     members upon the federal head, than by the federal head upon
+     the members
+
+and concludes that it is to be hoped that the people
+
+     will always take care to preserve the constitutional
+     equilibrium between the general and the state governments.
+
+[Footnote 1: _Federalist_, Number XVII.]
+
+[Footnote 2: Id., Number XXXI.]
+
+That hope has failed of realization. The "constitutional equilibrium" of
+which Hamilton wrote is not being preserved. Some will say that this is
+an age of progress and we are improving upon Hamilton. Others, however,
+think we are forgetting the wisdom of the Fathers.
+
+
+
+
+VIII
+
+THE FEDERAL TAXING POWER AND THE INCOME TAX AMENDMENT
+
+
+Had the World War come five years earlier the United States would have
+been much handicapped and embarrassed in financing its share of the
+struggle. One of the chief sources of national revenue during and since
+the war, the income tax, would not have been available. The federal
+income tax had been declared unconstitutional by the Supreme Court in
+1895, and it was not until eighteen years later that the obstacle
+pointed out by that decision was removed through the adoption of an
+amendment to the Constitution. The Sixteenth or Income Tax Amendment was
+proposed by Congress to the legislatures of the several states in 1909
+and took effect, having been ratified by three-fourths of the states, in
+1913. Declared by its sponsors at the outset to be intended merely as a
+recourse in case of emergency, the tax authorized by the amendment was
+at once put into operation and there seems to be little likelihood that
+it will ever be abandoned.
+
+Without the constitutional amendment no general income tax would be
+practicable. And yet the amendment conferred no new power of taxation on
+the National Government. To explain this seeming paradox it will be
+necessary to consider briefly the scope and limitations of the federal
+taxing power.
+
+One of the chief defects, perhaps the most vital defect of all, in the
+Confederation which carried through the Revolutionary War and preceded
+the Union, was its inability to raise revenue directly by taxation. The
+Confederation was obliged to call upon the several states to furnish
+their respective contributions or quotas, and requisitions upon the
+states encountered delays and sometimes were ignored altogether. There
+were no effective means of compulsion.
+
+With these facts before them the founders of the Union determined that
+the new government should not be wrecked upon this rock at any rate, and
+therefore insisted, against great opposition, in conferring upon it
+powers of taxation which were practically unlimited in their reach. The
+Constitution was made to provide that[1]
+
+     the Congress shall have power to lay and collect taxes,
+     duties, imposts and excises, to pay the debts and provide for
+     the common defense and general welfare of the United States.
+
+[Footnote 1: Const., Art. I, Sec. 8, Clause 1.]
+
+The only tax which Congress was expressly forbidden to lay was a tax on
+exports.[1] It was, however, provided that indirect taxes (duties,
+imposts, and excises) should be uniform throughout the United States,[2]
+and that direct taxes should be apportioned among the states according
+to population.[3] The last mentioned provision was a concession to the
+fears of the wealthier states lest their citizens be taxed unduly for
+the benefit of the poorer states, and represented one of the great
+compromises by which the ratification of the Constitution as a whole was
+secured.
+
+[Footnote 1: Const., Art. I, Sec. 9, Clause 5.]
+
+[Footnote 2: Id., Art. I, Sec. 8, Clause 1.]
+
+[Footnote 3: Id., Art. I, Sec. 2, Clause 3. Sec. 9, Clause 4.]
+
+The Constitution nowhere specified just what taxes were to be deemed
+"direct" (Madison in his notes of the Constitutional Convention records:
+"Mr. King asked what was the precise meaning of direct taxation? No one
+answd.")[1] or what kind of uniformity was intended by the provision
+that indirect taxes should be uniform, and more than a century was to
+elapse before either of these fundamental questions was finally
+settled. The answer to the latter question (that the term "uniform"
+refers purely to a geographical uniformity and is synonymous with the
+expression "to operate generally throughout the United States") was
+given by the Supreme Court in the year 1900 in the celebrated case of
+_Knowlton v. Moore_,[2] and met with general approval. The answer to the
+question of what constitutes a direct tax within the meaning of the
+Constitution, given by the Supreme Court in 1895 in the Income Tax
+cases,[3] met with a different reception. The decision upset
+long-settled ideas, disarranged the federal taxing system, aroused
+popular resentment, and ultimately led to the enactment of the Sixteenth
+Amendment.
+
+[Footnote 1: Farrand, "Records of the Federal Convention," Vol. II, p.
+350.]
+
+[Footnote 2: 178 U.S., 41.]
+
+[Footnote 3: _Pollock v. Farmers Loan & Trust Co._, 157 U.S., 429.]
+
+The question had arisen early in the life of the Republic in the case of
+_Hylton v. United States_, decided in 1796.[1] This litigation involved
+the validity of a tax on carriages which had been imposed by Congress
+without apportionment among the states. Alexander Hamilton argued the
+case before the Supreme Court in support of the tax. The Court adopted
+his view and sustained the tax, holding that it was a tax on consumption
+and therefore a species of excise or duty. The Justices who wrote
+opinions expressed doubt whether anything but poll taxes and taxes on
+land were "direct" within the meaning of the Constitution. That point,
+however, was not necessarily involved and was not decided, though later
+generations came to assume that it had been decided.
+
+[Footnote 1: 3 Dallas, 171.]
+
+The tax on carriages was soon repealed and many years elapsed before the
+question came up again. After the Civil War broke out, however, the need
+of revenue became acute and various statutes taxing income without
+apportionment among the states were enacted by Congress. These met with
+general acquiescence. It was felt that they were emergency measures
+necessitated by the war, and they were in fact abandoned as soon as
+practicable after the war. A well-known lawyer, however (William M.
+Springer of Illinois), did not acquiesce and refused to pay his income
+tax, on the ground that it was a direct tax not levied in accordance
+with the Constitution. In the action brought to test the question[1] it
+appeared that the income on which Mr. Springer had been taxed was
+derived in part from the practice of his profession as an attorney. To
+this extent it was clearly an excise or duty, i.e., an indirect tax. As
+it was incumbent upon Mr. Springer, by reason of the form of the action,
+to demonstrate that the tax was void _in toto_ the Court could not do
+otherwise than decide against him. In rendering its decision, however,
+the Court took occasion to discuss the question as to what were direct
+taxes within the meaning of the Constitution, and expressed the view
+that the term included only capitation or poll taxes, and taxes on real
+estate. There the matter rested until the year 1894 when Congress
+enacted another income tax law. This time the argument from necessity
+was lacking. The country was in a state of profound peace. Opposition to
+the tax among the moneyed interests was widespread. Test suits were
+brought and after most elaborate and exhaustive argument and reargument
+the Hylton and Springer cases were distinguished and the act was held
+unconstitutional.[2] The decision was by a closely divided Court (five
+to four), the majority finally holding that "direct taxes" within the
+meaning of the Constitution included taxes on personal property and the
+income of personal property, as well as taxes on real estate and the
+rents or income of real estate. This conclusion was fatal to the act. It
+was conceded that the tax, in so far as it affected income derived from
+a business or profession, was an indirect tax and therefore valid
+without apportionment among the states, but the provisions for taxing
+the income of real and personal property were held to be an essential
+part of the taxing scheme invalidating the whole statute.
+
+[Footnote 1: _Springer v. United States_, 102 U.S., 586.]
+
+[Footnote 2: _Pollock v. Farmers Loan & Trust Co._, 157 U.S., 429; same
+case on rehearing, 158 U.S., 601.]
+
+This momentous decision was almost as unpopular with Congress and the
+general public as the decision in _Chisholm v. Georgia_ had been a
+hundred years earlier. Many legislators were in favor of enacting
+another income tax law forthwith and endeavoring to coerce the Court,
+through the force of legislative and popular opinion, to overrule its
+decision. Calmer counsels prevailed, however, and plans were initiated
+to get over the difficulty by a constitutional amendment. Meanwhile,
+steps were taken to eke out the national revenue by various excise
+taxes, notably the so-called Federal Corporation Tax. This novel tax,
+which was thought by many to involve a very serious encroachment by the
+Federal Government on the powers of the states, will be discussed more
+at length in later chapters.[1]
+
+[Footnote 1: See Chapters X and XI, infra.]
+
+The constitutional amendment as proposed by Congress and ratified by the
+states provided:
+
+"The Congress shall have power to lay and collect taxes on incomes, from
+whatever source derived, without apportionment among the several states,
+and without regard to any census or enumeration."
+
+Thus far we have dealt only with such limitations upon the federal
+taxing power as are expressly imposed by the Constitution. As has been
+seen, the only express limitations are that direct taxes shall be
+apportioned among the states, that indirect taxes shall be uniform, and
+that exports shall not be taxed at all. There are, however, certain
+other limitations which we proceed to notice briefly.
+
+The Constitution provides[1] that the compensation of federal judges
+"shall not be diminished during their continuance in office." There is a
+similar provision as to the compensation of the President.[2] No attempt
+seems to have been made to tax the compensation of federal judges prior
+to 1862. A statute of that year subjected the salaries of all civil
+officers of the United States to an income tax and was construed by the
+revenue officers as including the compensation of the President and the
+judges. Chief Justice Taney, the head of the judiciary, wrote the
+Secretary of the Treasury a letter[3] protesting against the tax as a
+virtual diminution of judicial compensation in violation of the
+constitutional provision. No heed was paid to the protest at the time
+but some years later, upon the strength of an opinion by Attorney
+General Hoar, the tax on the compensation of the President and the
+judges was discontinued and the amounts theretofore collected were
+refunded. There the matter rested until after the Income Tax Amendment,
+when Congress again sought to impose a tax upon the income of the
+President and the judges. A federal judge of a Kentucky district
+contested the tax and the question came up before the Supreme Court for
+final decision. On behalf of the revenue department it was urged that a
+general income tax, operating alike on all classes, did not involve any
+violation of the constitutional provision. It was also contended that
+such a tax was expressly authorized by the Sixteenth Amendment giving
+Congress power to tax incomes "from whatever source derived." The Court
+in an exhaustive opinion[4] overruled both these contentions and held
+the tax to be a violation of the Constitution.
+
+[Footnote 1: Art. 3, Sec. 1.]
+
+[Footnote 2: Art. 2, Sec. 1, Clause 6.]
+
+[Footnote 3: See 157 U.S., 701.]
+
+[Footnote 4: _Evans v. Gore_, 253 U.S., 245.]
+
+It has often been asserted that a limitation of the federal taxing power
+is found in the "due process" clause of the Fifth Amendment of the
+Constitution, providing that no person shall "be deprived of life,
+liberty, or property without due process of law." This amendment relates
+to the powers of the General Government. A similar limitation on the
+powers of the states is found in the Fourteenth Amendment. Taxing laws
+have frequently been attacked in the courts on the ground that, by
+reason of some inequality or injustice in their provisions, the taxpayer
+was deprived of his property without due process of law. In cases
+involving state laws such objections have sometimes been sustained.[1]
+There seems, however, to have been no case in which a federal taxing law
+was declared invalid on this ground, and the Supreme Court has recently
+remarked that it is "well settled that such clause (viz., the due
+process clause of the Fifth Amendment) is not a limitation upon the
+taxing power conferred upon Congress by the Constitution."[2]
+Nevertheless, it is believed that if a federal tax were clearly imposed
+for other than a public use, or were imposed on tangible property lying
+outside the national jurisdiction, or were so arbitrary and without
+basis for classification as to amount to confiscation, relief might be
+obtained under the due process clause of the Fifth Amendment.
+
+[Footnote 1: See, e.g., _Union Tank Line Co. v. Wright_, 249 U.S., 275.]
+
+[Footnote 2: _Brushaber v. Union Pacific R.R._, 240 U.S., 24.]
+
+By far the most important and interesting of the implied limitations of
+the federal taxing power remains to be noticed. That is the limitation
+which prohibits the National Government from burdening by taxation the
+property or revenues or obligations of a state, or the emoluments of a
+state official, or anything connected with the exercise by a state of
+one of its governmental functions. In other words, while the National
+Government may tax income from bonds issued by England or France or
+their cities, it is powerless to tax the income from bonds of Rhode
+Island or the smallest of its towns.
+
+This implied limitation, nowhere categorically expressed but enunciated
+in a series of decisions of the Supreme Court, has not always met with
+acquiescence from the executive and legislative branches of the
+Government. In fact, Congress is now engaged in an effort to do away
+with it, at least in so far as concerns the right to tax the income from
+state and municipal bonds. To-day, however, it still stands as one of
+the most striking and unique characteristics of our governmental system.
+It will be discussed more at length in the next chapter.
+
+
+
+
+IX
+
+CAN CONGRESS TAX THE INCOME FROM STATE AND MUNICIPAL BONDS?
+
+
+That is a question which is agitating a good many people just now.
+Congress from time to time has seemed disposed to try it, in spite of
+misgivings as to the constitutionality of such legislation.[1] A recent
+Revenue Bill contained provisions taxing the income of future issues of
+such obligations, and a motion for the elimination of those provisions
+was defeated in the House 132 to 61. Meanwhile, protests were pouring in
+from state and municipal officers assailing the justice and expediency
+of such a tax.
+
+[Footnote 1: See, e.g., H. Report No. 767, 65th Cong., 2d Sess.,
+accompanying House Revenue Bill of 1918 as reported by Mr. Kitchin from
+the Committee on Ways and Means, page 89.]
+
+It is not the purpose of this chapter to discuss the questions of
+justice and expediency (as to which there is much to be said on both
+sides) but rather to deal with the strictly legal aspects of the matter
+and indicate briefly why such a tax cannot be laid without a change in
+our fundamental law.
+
+Let it be said at the outset that no express provision of the United
+States Constitution forbids. On the contrary, that instrument confers on
+Congress the power to lay taxes without any restriction or limitation
+save that exports shall not be taxed, that duties, imposts, and excises
+shall be uniform throughout the United States, and that direct taxes
+must be apportioned among the states in proportion to population. The
+obstacle lies rather in an implied limitation inherent in our dual
+system of government and formulated in decisions of the Supreme Court.
+
+The founders of this republic established a form of government wherein
+the states, though subordinate to the Federal Government in all matters
+within its jurisdiction, nevertheless remained distinct bodies politic,
+each one supreme in its own sphere. In the famous phrase of Salmon P.
+Chase, pronouncing judgment as Chief Justice of the Supreme Court[1]:
+
+     The Constitution in all its provisions looks to an
+     indestructible Union, composed of indestructible states.
+
+[Footnote 1: _Texas v. White_, 7 Wall., 700, 725.]
+
+In a later case[1] another eminent justice (Samuel Nelson of New York)
+put the matter thus:
+
+     The General Government, and the states, although both exist
+     within the same territorial limits, are separate and distinct
+     sovereignties, acting separately and independently of each
+     other, within their respective spheres. The former, in its
+     appropriate sphere, is supreme; but the states within the
+     limits of their powers not granted, or, in the language of the
+     10th Amendment, "reserved", are as independent of the General
+     Government as that government within its sphere is independent
+     of the states.
+
+[Footnote 1: _The Collector v. Day_, 11 Wall., 113, 124.]
+
+It follows that the two governments, national and state, must each
+exercise its powers so as not to interfere with the free and full
+exercise by the other of its powers. To do otherwise would be contrary
+to the fundamental compact embodied in the Constitution--in other words,
+it would be _unconstitutional_.
+
+This proposition was affirmed at an early day by Chief Justice John
+Marshall in the great case of _McCulloch vs. The State of Maryland_,[1]
+which involved the attempt of a state to tax the operations of a
+national bank. That case is one of the landmarks of American
+constitutional law. While it did not expressly decide that the Federal
+Government could not tax a state instrumentality but only the converse,
+i.e., that a state could not tax an instrumentality of the nation, the
+Court has held in many subsequent decisions that the proposition
+enunciated by the great Chief Justice works both ways. For example, it
+has declared that a state cannot tax the obligations of the United
+States because such a tax operates upon the power of the Federal
+Government to borrow money[2] and conversely, that Congress cannot tax
+the obligations of a state for the same reason;[3] that a state cannot
+tax the emoluments of an official of the United States[4] and
+conversely, that the United States cannot tax the salary of a state
+official;[5] that a state cannot impose a tax on the property or
+revenues of the United States[6] and conversely, that Congress cannot
+tax the property or revenues of a state or a municipality thereof.[7]
+
+[Footnote 1: 4 Wheaton, 316.]
+
+[Footnote 2: _Weston v. City of Charleston_, 2 Pet., 449.]
+
+[Footnote 3: _Mercantile Bank v. New York_, 121 U.S., 138, 162.]
+
+[Footnote 4: _Dobbins v. Commissioner of Erie County_, 16 Pet., 435.]
+
+[Footnote 5: _Collector v. Day_, 11 Wall., 113.]
+
+[Footnote 6: _Van Brocklin v. Tennessee_, 117 U.S., 151.]
+
+[Footnote 7: _United States v. Railroad Co._, 17 Wall., 322.]
+
+The Supreme Court has said (and many times reiterated in substance) that
+the National Government "cannot exercise its power of taxation so as to
+destroy the state governments, or embarrass their lawful action."[1] One
+of the most distinguished writers on American Constitutional law
+(Thomas M. Cooley, Chief Justice of the Supreme Court of Michigan and
+afterward Chairman of the federal Interstate Commerce Commission) has
+said:
+
+     There is nothing in the Constitution which can be made to
+     admit of any interference by Congress with the secure
+     existence of any state authority within its lawful bounds. And
+     any such interference by the indirect means of taxation is
+     quite as much beyond the power of the national legislature as
+     if the interference were direct and extreme.[2]
+
+[Footnote 1: _Railroad Co. v. Peniston_, 18 Wall., 5, 30.]
+
+[Footnote 2: _Cooley's Constitutional Limitations_, 7th Ed., 684.]
+
+The question as to the right of Congress to levy an income tax on
+municipal securities came up squarely in the famous Income Tax Cases[1]
+involving the constitutionality of the Income Tax Law of 1804. While the
+Supreme Court was sharply divided as to the constitutionality of other
+features of the law, it was unanimous as to the lack of authority in the
+United States to tax the interest on municipal bonds.
+
+[Footnote 1: _Pollock v. Farmers Loan & Trust Co._, 157 U.S., 429; same
+case on rehearing, 158 U.S., 601.]
+
+The decision in those cases is the law to-day (except in so far as it
+has been changed by the recent Sixteenth Amendment) with one possible
+limitation. It has been held that state agencies and instrumentalities,
+in order to be exempt from national taxation, must be of a strictly
+governmental character; the exemption does not extend to agencies and
+instrumentalities used by the state in carrying on an ordinary private
+business. This was decided in the South Carolina Dispensary case.[1] The
+State of South Carolina had taken over the business of selling liquor
+and the case involved a federal tax upon such business. The Court, while
+reaffirming the general doctrine, nevertheless upheld the tax on the
+ground that the business was not of a strictly governmental character.
+This decision suggests the possibility that if an attempt were made to
+tax state and municipal bonds the Court might draw a distinction based
+on the purpose for which the bonds were issued, and hold that only such
+as were issued for strictly governmental purposes were exempt.
+
+[Footnote 1: _South Carolina v. United States_, 199 U.S., 437, decided
+in 1905.]
+
+It remains to consider the effect of the Sixteenth Amendment.
+
+After the Supreme Court had held the Income Tax Law of 1894
+unconstitutional on the ground that it was a direct tax and had not been
+apportioned among the states in proportion to population the Sixteenth
+Amendment to the Constitution was proposed and ratified. This amendment
+provides that
+
+     the Congress shall have power to lay and collect taxes on
+     incomes, from whatever source derived, without apportionment
+     among the several states, and without regard to any census or
+     enumeration.
+
+When the amendment was submitted to the states for approval some lawyers
+apprehended that the words "incomes from whatever source derived" might
+open the door to the taxation by the Government of income from state and
+municipal bonds. Charles E. Hughes, then Governor of New York, sent a
+special message to the Legislature opposing ratification of the
+amendment on this ground.
+
+Other lawyers, notably Senator Elihu Root, took a different view of the
+scope of the amendment, holding that it would not enlarge the taxing
+power but merely remove the obstacle found by the Supreme Court to the
+Income Tax Law of 1894, i.e., the necessity of apportionment among the
+states in proportion to population. This latter view has now been
+confirmed by the Supreme Court. In a case involving a tax on income from
+exports the Court said:[1]
+
+     The Sixteenth Amendment ... does not extend the taxing power
+     to new or excepted subjects, but merely removes all occasion,
+     which otherwise might exist, for an apportionment among the
+     states of taxes laid on income, whether it be derived from one
+     source or another....
+
+[Footnote 1: _Peck v. Lowe_, 247 U.S., 165.]
+
+In a case decided a little earlier[1] the Court, speaking through Chief
+Justice White, had said:
+
+     By the previous ruling (i.e., in _Brushaber v. Union Pacific
+     Railway Co._, 240 U.S., 1) it was settled that the provisions
+     of the Sixteenth Amendment conferred no new power of
+     taxation....
+
+[Footnote 1: _Stanton v. Baltic Mining Co._, 240 U.S., 103, 112.]
+
+From what has been said it will be evident that the doctrine of
+exemption of state and municipal bonds from federal taxation is firmly
+embedded in our law and has not been affected by the Sixteenth
+Amendment.
+
+Whether it is a doctrine suited to present-day conditions is a question
+outside the scope of this paper.
+
+The fear of federal encroachment, so strong in the minds of the makers
+of our Constitution, has become little more than a tradition. To many it
+doubtless will seem that any rule of law which operates to prevent the
+nation, in the great exigency of war, from taxing a portion of the
+property of its citizens is pernicious and should be changed.
+
+If this be the view of a sufficient number the change can and will be
+made. Lawyers think, however, that it will have to be done by the
+orderly method of constitutional amendment, not by passing taxing
+statutes which a reluctant Court will be obliged to declare
+unconstitutional.
+
+Just now the tide of popular sentiment is setting strongly toward such a
+change. It was advocated in a recent Presidential message.[1] The
+immunity enjoyed by state bond issues is coming to be regarded less as a
+safeguard of state rights than as a means whereby the rich escape
+federal income surtaxes. One is tempted to predict that the next formal
+amendment of the Constitution will deal with this subject. If so,
+another inroad will have been made by the General Government on the
+failing powers of the states.
+
+[Footnote 1: Message of President Harding to Congress, December 6,
+1921.]
+
+
+
+
+X
+
+IS THE FEDERAL CORPORATION TAX CONSTITUTIONAL?[1]
+
+[Footnote 1: Since this chapter was first published in 1909 as an
+article in the _Outlook_ magazine the specific question propounded in
+its title has been settled by the Supreme Court (_Flint v. Stone Tracy
+Co._, 220 U.S., 107). The paper is here reproduced, however, in the
+belief that its discussion of the principles of our dual system of
+Government is as pertinent now as it was before.]
+
+
+The most noteworthy enactment of the sixty-first Congress from a legal
+point of view, to say nothing of its economic and political
+significance, was the Corporation Tax Act. That Act, forming §38 of the
+Tariff Law, provides--
+
+     That every corporation ... organized for profit and having a
+     capital stock represented by shares ... shall be subject to
+     pay annually a special excise tax with respect to the carrying
+     on or doing business by such corporation ... equivalent to one
+     per centum upon the entire net income over and above five
+     thousand dollars received by it from all sources, etc.
+
+The act goes on to require the corporations to make periodical reports
+concerning their business and affairs, and confers on the Commissioner
+of Internal Revenue a visitorial power to examine and compel further
+returns.
+
+The genesis of the act is interesting. The growing demand for more
+efficient regulation of the corporations, so pronounced during President
+Roosevelt's Administration, had foreshadowed such legislation. It
+remained, however, for President Taft to take the initiative and mould
+the shape which the legislation was to take.
+
+In the course of the Senate debate on the new Tariff Act it had become
+apparent that an influential party in Congress, backed by strong
+sympathy outside, was bent upon passing a general income tax act. The
+previous Income Tax Law had been pronounced unconstitutional by the
+Supreme Court as violating the provision of the Constitution that all
+direct taxes must be apportioned among the states in proportion to
+population.[1] That decision, however, had been reached by a bare
+majority of five to four. It had overruled previous decisions and
+overturned doctrines that had been acquiesced in almost from the
+foundation of the Government. A strong party was in favor of enacting
+another income tax law and bringing the question again before the Court
+in the hope that the Court as then constituted might be induced to
+overrule or materially modify the doctrine of the Pollock case. The
+President and his advisers viewed such a proposal with disfavor. To
+their minds the proper way to establish the right of Congress to levy an
+income tax was by an amendment to the Constitution, not by an assault
+upon the Supreme Court. Accordingly on June 16, 1909, the President
+transmitted a message to Congress[2] recommending a constitutional
+amendment, and proposing, in order to meet the present need for more
+revenue, an excise tax on corporations. The proposal, coupled as it was
+with a suggestion that such an act might be made to serve for purposes
+of federal supervision and control as well as revenue, met with favor
+and was enacted into law.
+
+[Footnote 1: _Pollock vs. Farmers' Loan & Trust Co._, 157 U.S., 429.]
+
+[Footnote 2: _Congressional Record_, June 16, 1909, p. 3450.]
+
+President Taft, himself an eminent constitutional lawyer, in his message
+recommending the law expressed full confidence in its constitutionality.
+The same view was taken by able lawyers who surrounded him in the
+capacity of advisers. The act is understood to have been drafted by Mr.
+Wickersham, the Attorney General, and vouched for by Senator Elihu Root
+and others of scarcely less authority in the domain of constitutional
+law.
+
+Against opinions from such sources one takes the field with diffidence.
+I venture, however, to outline briefly some reasons for doubting the
+constitutionality of the act.
+
+At the outset it is essential to determine the exact nature of the tax.
+Obviously it is not a tax upon income _as income_. If it were, it would
+be obnoxious to the decision in the Pollock case as imposing a direct
+tax without apportionment among the states. The language of the act, as
+well as the declarations of its sponsors, clearly indicate that it is
+intended, not as a direct tax on property, but as an excise tax on
+privilege. The phraseology of the act itself is--"A special excise tax
+with respect to the carrying on or doing business by such corporation,"
+etc. Undoubtedly Congress has power to impose an excise tax upon
+occupation or business. This was expressly decided, in the case of the
+businesses of refining petroleum and refining sugar, by the Spreckels
+case,[1] referred to in President Taft's message. The message says:
+
+     The decision of the Supreme Court in the case of Spreckels
+     Sugar Refining Company against McClain (192 U.S., 397) seems
+     clearly to establish the principle that such a tax as this is
+     an excise tax upon privilege and not a direct tax on property,
+     and is within the federal power without apportionment
+     according to population.
+
+[Footnote 1: _Spreckels Sugar Refining Co. vs. McClain_, 192 U.S., 397.]
+
+What, then, is the privilege with respect to which the tax is imposed?
+Is it, like the tax involved in the Spreckels case, the privilege of
+doing the various kinds of business (manufacturing, mercantile, and the
+rest) in which the corporations subject to the operation of the law are
+engaged? Obviously not. No kind or kinds of business are specified in
+the act. The tax falls not only on corporations doing every conceivable
+kind of business, but also on the corporation that does no specific
+business whatever--the corporation which, in the language of an eminent
+judge, is merely "an incorporated gentleman of leisure."[1] Moreover, if
+the tax were merely upon the privilege of doing business, it would seem
+to be obnoxious to the cardinal principle of just taxation that taxes
+should be uniform. In other words, if the privilege of doing a
+business--say conducting a department store--were the thing taxed and
+the only thing taxed, the rule of uniformity would seem to require that
+a corporation and a copartnership conducting similar stores on opposite
+corners of the street should both be taxed. Nothing inconsistent with
+this view will be found in the Spreckels case. The party to that suit
+was, to be sure, a corporation, but the act under which the tax was
+imposed applied to individuals, firms, and corporations alike.
+
+[Footnote 1: Vann, J., in _People ex rel. vs. Roberts_, 154 N.Y., 1.]
+
+It must be concluded, therefore, that the tax is not upon the privilege
+of doing the businesses in which the various corporations in the land
+are engaged, but is rather a _tax upon the privilege of doing business
+in a corporate capacity_, or, in other words, upon the exercise of the
+corporate franchise. That this is so appears very clearly from the
+message of President Taft. He says:
+
+     This is an excise tax upon the privilege of doing business as
+     an artificial entity and of freedom from a general partnership
+     liability enjoyed by those who own the stock.
+
+Assuming, then, that this is the real nature of the tax, is it
+constitutional?
+
+Unquestionably Congress may tax corporations organized under federal
+laws upon their franchises; any sovereignty may tax the creatures of its
+creation for the privilege of exercising their franchises; but how about
+corporations chartered by the states and doing purely an intrastate
+business? A state confers on John Doe and his associates the privilege
+or franchise of doing business in a corporate capacity. Can Congress
+impose a tax on the exercise of that privilege or franchise? The power
+to tax involves the power to destroy.[1] If Congress can impose a tax of
+one per cent., it can impose a tax of ten per cent. or fifty per cent.,
+and thus impair or destroy altogether the value of corporate charters
+for business purposes. Does Congress possess such a power? The
+Constitution puts no express limitation on the right of Congress to levy
+excises except that they shall be "uniform throughout the United
+States." But there are certain implied limitations inherent in our dual
+system of government. The sovereignty and independence of the separate
+states within their spheres are as complete as are the sovereignty and
+independence of the General Government within its sphere.[2] Neither may
+interfere with or encroach upon the other.
+
+[Footnote 1: _McCulloch vs. Maryland_, 4 Wheat., 316.]
+
+[Footnote 2: _The Collector vs. Day_, 11 Wall., 113, 124.]
+
+The right to grant corporate charters for ordinary business purposes is
+an attribute of sovereignty belonging to the states, not to the General
+Government. The United States is a government of enumerated powers. The
+Constitution nowhere expressly confers upon Congress the right to grant
+corporate charters, and it is well settled that this right exists only
+in the limited class of cases where the granting of charters becomes
+incidental to some power expressly conferred on Congress, e.g., the
+power to establish a uniform currency, or the power to regulate
+interstate commerce. On the other hand, the right of the separate states
+to grant charters of incorporation is unquestionable. By the Tenth
+Amendment of the Constitution it is expressly provided: "The powers not
+delegated to the United States by the Constitution nor prohibited by it
+to the states are reserved to the states respectively or to the people."
+The Supreme Court long ago said: "A state may grant acts of
+incorporation for the attainment of those objects which are essential to
+the interests of society. _This power is incident to sovereignty._"[1]
+
+[Footnote 1: _Briscoe v. Bank of Kentucky_, 11 Peters, 257, 317.]
+
+The power to grant the franchise of corporate capacity being therefore
+inherent in the sovereignty of the states, will not a tax imposed by
+Congress upon the exercise of the franchise constitute an interference
+with the power? If so the tax is unconstitutional.
+
+The Supreme Court has repeatedly held, that the National Government
+"cannot exercise its power of taxation so as to destroy the state
+governments or embarrass their lawful action."[1] In the case of
+_California vs. Central Pacific R.R. Co._[2] the question was whether
+franchises granted to the Central Pacific Railroad Company by the United
+States were legitimate subjects of taxation by the State of California.
+The Supreme Court, in language frequently quoted in subsequent cases,
+discusses the nature and origin of franchises, concluding that a
+franchise is "a right, privilege, or power of public concern" existing
+and exercised by legislative authority. After enumerating various kinds
+of franchises, the Court remarks: "No persons can make themselves a body
+corporate and politic without legislative authority. Corporate capacity
+is a franchise." The Court continues:
+
+     In view of this description of the nature of a franchise, how
+     can it be possible that a franchise granted by Congress can be
+     subject to taxation by a state without the consent of
+     Congress? Taxation is a burden and may be laid so heavily as
+     to destroy the thing taxed or render it valueless. As Chief
+     Justice Marshall said in _McCulloch v. Maryland_, "The power
+     to tax involves the power to destroy."... It seems to us
+     almost absurd to contend that a power given to a person or
+     corporation by the United States may be subjected to taxation
+     by a state. The power conferred emanates from and is a portion
+     of the power of the government that confers it. To tax it is
+     not only derogatory to the dignity but subversive of the
+     powers of the government, and repugnant to its paramount
+     sovereignty.
+
+[Footnote 1: _Railroad Company v. Peniston_, 18 Wall., 5, 30.]
+
+[Footnote 2: 127 U.S., 1.]
+
+It is true that the Court was here discussing the right of a state to
+tax franchises granted by the United States, and not the converse of
+that question. The reasoning of the Court would seem, however, to apply
+with equal force to the right of the United States to tax a franchise
+granted by a state acting within the scope of its sovereign authority.
+
+Patent rights and copyrights are special privileges or franchises
+granted by the sovereign or government, and under the United States
+Constitution the right to grant patents and copyrights is expressly
+conferred on Congress. It has been held repeatedly that patent rights
+and copyrights are not taxable by the states[1]. As said by the New York
+Court of Appeals in a case involving the power of the state to tax
+copyrights:[2]
+
+     To concede a right to tax them would be to concede a power to
+     impede or burden the operation of the laws enacted by Congress
+     to carry into execution a power vested in the National
+     Government by the Constitution.
+
+[Footnote 1: _People ex rel. Edison, &c., Co., v. Assessors_, 156 N.Y.,
+417; _People ex rel. v. Roberts_, 159 N.Y., 70; _In Re Sheffield_, 64
+Fed. Rep., 833; _Commonwealth v. Westinghouse, &c., Co._, 151 Pa., 265.]
+
+[Footnote 2: 159 N.Y., p. 75.]
+
+Apparently the same rule would be applicable were the granting of patent
+rights, like the granting of ordinary corporate franchises, a
+prerogative reserved under our system of government to the states
+instead of being expressly conferred on the United States. By parity of
+reasoning, the Federal Government in that case would have no power to
+tax them.
+
+It is familiar law, reiterated over and over again by the Supreme Court,
+that Congress cannot tax the means or instrumentalities employed by the
+states in exercising their powers and functions, any more than a state
+can tax the instrumentalities similarly employed by the General
+Government. Thus, it has been held that Congress cannot tax a municipal
+corporation (being a portion of the sovereign power of the state) upon
+its municipal revenues[1]; that Congress cannot impose a tax upon the
+salary of a judicial officer of a state[2]; that Congress cannot tax a
+bond given in pursuance of a state law to secure a liquor license.[3]
+
+[Footnote 1: _United States vs. Railroad Co._, 17 Wall., 322.]
+
+[Footnote 2: _Collector v. Day_, 11 Wall., 113.]
+
+[Footnote 3: _Ambrosini v. United States_, 185 U.S., 1.]
+
+In the light of these decisions it is not apparent how Congress can tax
+the franchises of those state corporations (and they are many and
+important) which perform some public or quasi-public function. A state,
+to carry out its purposes of internal improvement, charters an
+intrastate railway or ferry company with power to charge tolls and
+exercise the right of eminent domain. Is not the grant of corporate
+existence and privileges to such a corporation one of the means or
+instrumentalities employed by the state for carrying out its legitimate
+functions, and is not a tax by the Federal Government upon the exercise
+by such a corporation of its corporate powers an interference with such
+means or instrumentalities?
+
+In any discussion of the right of Congress to tax the agencies of or
+franchises granted by a state, the distinction must be borne in mind
+between a tax upon _property_ acquired by means of the franchise from
+the state and a tax upon the exercise of the franchise itself. The
+former tax may be perfectly valid where the latter would be
+unconstitutional. Thus, the Supreme Court has upheld a tax by a state
+upon the real and personal property (as distinct from the franchises) of
+a railway company chartered by Congress for private gain, while
+conceding that the state could not tax the franchises, because to do so
+would be a direct obstruction to federal powers.[1]
+
+[Footnote 1: _Union Pacific Railroad Company vs. Peniston_, 18 Wall.,
+5.]
+
+It remains to notice briefly one or two Supreme Court decisions which
+are relied upon by the sponsors of the new tax law. Reference has
+already been made to the decision in the Spreckels case[1] which upheld
+the validity of the tax imposed by the War Revenue Act of 1898 upon the
+gross receipts of corporations engaged in the businesses of refining
+petroleum and refining sugar. The Court held the tax to be an excise tax
+"in respect of the carrying on or doing the business of refining sugar,"
+and such it obviously was. It was not a tax upon the privilege or
+franchise of doing business in a corporate capacity, like the tax now
+under debate. On the contrary, the act expressly applied to "every
+person, firm, corporation, or company carrying on or doing the business
+of refining sugar...." The case, therefore, has no bearing on the point
+we are discussing. Had the act applied only to corporations, a different
+question would have been involved.
+
+[Footnote 1: _Spreckels Sugar Refining Co. vs. McClain_. 192 U.S., 397.]
+
+The case of _Veazie Bank vs. Fenno_,[1] upholding the statute which
+taxed out of existence the circulation of the state banks, has
+frequently been cited as an authority sustaining the right of Congress
+to levy a tax upon a franchise or privilege granted by a state. It is
+true that in that case the eminent counsel for the bank (Messrs. Reverdy
+Johnson and Caleb Cushing) argued unsuccessfully "that the act imposing
+the tax impaired a franchise granted by the state, and that Congress had
+no power to pass any law which could do that;"[2] and that two justices
+dissented on that ground. The conclusive answer to this argument, was,
+however, that the power of the states to grant the particular right or
+privilege in question was subordinate to powers expressly conferred on
+Congress by the Constitution; that Congress was given power under the
+Constitution to provide a currency for the whole country, and the act in
+question was legislation appropriate to that end. The case does not
+hold that Congress has any general power to tax franchises or privileges
+granted by a state.
+
+[Footnote 1: 8 Wall., 533.]
+
+[Footnote 2: See 8 Wall., p. 535.]
+
+The scope of this chapter does not admit of further reference to the
+decisions. It is strongly urged, however, that none of them, rightly
+construed, will be found to sustain the right of the General Government
+to impose a tax upon the exercise of franchises granted by a state in
+the exercise of its independent sovereignty, and that such a decision
+would mark a new departure in our jurisprudence.
+
+In the debates in Congress over the bill many good lawyers appear to
+have assumed, somewhat too hastily, that the tax in question was an
+excise tax on business or occupation like that involved in the Spreckels
+case, and that the only constitutional question, therefore, was one of
+classification under the provision of the Constitution that excises
+shall be uniform throughout the United States. No less eminent a
+constitutional lawyer than Senator Bailey of Texas, in a colloquy with
+the junior Senator from New York, put the matter thus:[1]
+
+     Mr. Root: May I ask the Senator from Texas if I am right in
+     inferring from the statement which he has just made that he
+     does not seriously question the constitutional power of the
+     Congress to impose this tax on corporations?
+
+     Mr. Bailey: Mr. President, I answer the Senator frankly that I
+     do not.... I think the rule was and is that Congress can levy
+     any tax it pleases except an export tax. Of course a direct
+     tax must be apportioned and an indirect tax must be uniform.
+     But the uniformity rule simply requires that wherever the
+     subject of taxation is found, the tax shall operate equally
+     upon it.
+
+     I believe that Congress can tax all red-headed men engaged in
+     a given line of business if it pleases.... I have no doubt if
+     the tax fell upon every red-headed man in Massachusetts the
+     same as in Mississippi or Texas and all other states, the law
+     imposing such a tax would be perfectly valid.
+
+[Footnote 1: _Congressional Record_ for July 6, 1909, pp. 4251 to 4252.]
+
+The difficulty with this reasoning is that it overlooks the fact that
+the privilege of being red-headed is not a franchise granted by a
+sovereign state. From the viewpoint of constitutional law it may well be
+that Congress can tax a privilege conferred by the gods where it would
+be powerless to tax a franchise granted by the Legislature of New
+Jersey.
+
+
+
+
+XI
+
+THE CORPORATION TAX DECISION
+
+
+The immediate consequences of the decision of the United States Supreme
+Court[1] affirming the constitutionality of the federal corporation tax
+are so slight that its profound significance is likely to be overlooked.
+Until it was merged with the general income tax the exaction was not
+burdensome and proved easy of collection. The thing upon which it
+fell--the privilege of doing business in a corporate capacity--is an
+abstraction which makes little appeal to the sympathies or the moral
+sense. The public, more concerned with present conditions than with the
+passing of a theory, is indifferent.
+
+[Footnote 1: _Flint v. Stone Tracy Co._, 220 U.S., 107]
+
+Thus it has sometimes been with the turning points in the affairs of
+nations. They came quietly and without observation, and it remained for
+the historians to mark the actual parting of the ways.
+
+The Supreme Court holds, and in its opinion reiterates many times, that
+the tax is upon the _privilege of doing business in a corporate
+capacity_.
+
+Right here is the crux of the matter. Corporate capacity is not a right
+granted by the National Government. It is something which Congress can
+neither give nor take away. In the division of powers which marked the
+creation of our dual government the power to confer corporate capacity
+was reserved to the states. The decision, therefore, comes to this:
+Congress can by taxation burden the exercise of a privilege which only a
+state can grant. And the power to tax, it must be remembered, involves
+the power to destroy. This seems a long step from the theory of the men
+who founded the Republic.
+
+Nearly fifty years ago the Supreme Court stated the theory as follows:
+
+     The states are, and they must ever be, co-existent with the
+     National Government. Neither may destroy the other. Hence the
+     Federal Constitution must receive a practical construction.
+     Its limitations and its implied prohibitions must not be
+     extended so far as to destroy the necessary powers of the
+     States, or prevent their efficient exercise.[1]
+
+[Footnote 1: _Railroad Co. v. Peniston_, 18 Wall., 5.]
+
+The court buttresses its decision by the argument _ex necessitate_--that
+to hold otherwise would open the way for men to withdraw their business
+activities from the reach of federal taxation and thus cripple the
+National Government. The Court says:
+
+     The inquiry in this connection is: How far do the implied
+     limitations upon the taxing power of the United States over
+     objects which would otherwise be legitimate subjects of
+     federal taxation, withdraw them from the reach of the Federal
+     Government in raising revenue, because they are pursued under
+     franchises which are the creation of the states?... Let it be
+     supposed that a group of individuals, as partners, were
+     carrying on a business upon which Congress concluded to lay an
+     excise tax. If it be true that the forming of a state
+     corporation would defeat this purpose, by taking the necessary
+     steps required by the state law to create a corporation and
+     carrying on the business under rights granted by a state
+     statute, the federal tax would become invalid and that source
+     of national revenue be destroyed, except as to the business in
+     the hands of individuals or partnerships. It cannot be
+     supposed that it was intended that it should be within the
+     power of individuals acting under state authority thus to
+     impair and limit the exertion of authority which may be
+     essential to national existence.
+
+This argument will not bear scrutiny. It apparently loses sight of the
+vital distinction between a tax on the mere doing of business and a tax
+on the privilege of doing that business in a corporate capacity. These
+are two very different things. The right of Congress to tax the doing of
+business was not disputed. It had been expressly upheld in the
+well-known case of _Spreckels Sugar Refining Co. v. McClain_,[1] which
+involved a tax on the business of refining sugar, whether done by a
+corporation or by individuals. The tax under consideration, however,
+goes further and fastens upon something new--something which in the case
+of individuals or partnerships has no existence at all--which comes into
+being only by the exercise of the sovereign power of a state. The
+opponents of the tax, far from attempting to narrow the existing field
+of federal taxation, were in fact resisting an encroachment by Congress
+on an entirely new field, created by, and theretofore reserved
+exclusively to, the separate states. It was conceded that Congress could
+tax a business when done by individuals and could tax the same business
+when done by a corporation. The inquiry was: Does the act of a state in
+clothing the individuals with corporate capacity create a new subject
+matter for taxation by the General Government? That was the real
+question before the Court, and the decision answers it in the
+affirmative.
+
+[Footnote 1: 192 U.S., 397.]
+
+Other illustrations of the same apparent confusion of thought are to be
+found in the opinion. For example, it is said (citing various cases
+involving a tax on business where the party taxed was a corporation):
+
+     We think it is the result of the cases heretofore decided in
+     this Court, that such _business activities_, though exercised
+     because of state-created franchises, are not beyond the taxing
+     power of the United States.
+
+Here again the Court seems to lose sight of the distinction between a
+tax on "business activities" and a tax on the privilege of conducting
+such activities in a corporate capacity.
+
+It is futile, however, to quarrel with the logic of the opinion. The
+question is closed and the Court, by affirming the judgments appealed
+from, has committed itself to the theory that the Federal Government
+may, by taxation, burden the exercise of a privilege which only a state
+can confer. With the expediency of that theory as applied to present-day
+political conditions we are not now concerned. The object of this
+chapter is to point out that the decision marks a distinct departure
+from the earlier doctrine that the two sovereignties, federal and state,
+are upon an equality within their respective spheres.
+
+In view of the centralizing forces which are tending to transform these
+sovereign states into mere political subdivisions of a nation, the
+decision is of great significance. Moreover, in a very practical way it
+touches the right of each state under the compact evidenced by the
+Federal Constitution to manage its internal affairs free from compulsion
+or interference by the other states. To illustrate: In some parts of the
+country the anti-corporation feeling runs high. Many men if given their
+way would tax the larger corporations out of existence. Under this
+decision the way is open whenever a majority can be secured in Congress.
+An increase in the tax rate is all that would be necessary. Make the
+rate ten per cent. or twenty per cent. instead of one per cent. and the
+thing is accomplished.
+
+New York may deem it good policy to encourage the carrying on of
+industry in a corporate form. Texas may take a different view and
+conclude that the solution of the trust problem lies in suppressing
+certain classes of corporations altogether. Under this decision it lies
+within the power of Texas and her associates if sufficiently numerous to
+impose their view on New York and make it impossible for her domestic
+industries to be carried on profitably in a corporate form. And yet the
+possibility of impressing the will of one state or group of states upon
+another state with respect to her internal affairs is the very thing
+which the founders of the republic sought most carefully to avoid. Had
+it been understood in 1787 that the grant of taxing powers to the
+General Government involved such a curtailment of state independence,
+few states, in all probability, would have been ready to ratify the
+Constitution.
+
+
+
+
+XII
+
+THE FEDERAL GOVERNMENT AND THE TRUSTS
+
+
+The curbing of monopolies and combinations in restraint of trade was no
+part of the functions of the Federal Government as planned by the
+framers of the Constitution. To their minds such matters, under the dual
+system of government which they were establishing, belonged to the
+states. The Constitution was designed to limit the National Government
+to functions absolutely needed for the national welfare. All other
+powers were "reserved to the states respectively or to the people."
+
+As time went on, however, and industries expanded it was seen that the
+power of no single state was adequate to control concerns operating in
+many states at the same time. The need of action by the General
+Government became manifest. Power in Congress to legislate on the
+subject, albeit somewhat indirectly, was found in the Commerce Clause of
+the Constitution, and in the year 1890 the Sherman Anti-Trust Act was
+enacted.
+
+Few statutes have aroused more discussion or been the subject of more
+perplexity and misunderstanding. President Taft's remark, made after the
+decisions of the Supreme Court in the Standard Oil and Tobacco Trust
+cases,[1] that "the business community now knows or ought to know where
+it stands," was received with incredulity approaching derision. Yet from
+a lawyer's point of view (and it must be borne in mind that the
+President was a lawyer and is now Chief Justice of the Court) the
+statement cannot be controverted. The decisions in the Standard Oil and
+Tobacco cases did in fact dispel whatever uncertainty remained as to
+what the Sherman Act means.
+
+[Footnote 1: _Standard Oil Co. v. United States_, 221 U.S., 1.
+
+_United States v. American Tobacco Co._, id., 106.]
+
+The Sherman Act[1] declares unlawful every contract, combination, or
+conspiracy in restraint of interstate trade, and every attempt to
+monopolize interstate trade. The legal uncertainties that have arisen in
+its enforcement have not been with respect to the meaning of the terms
+"restraint of trade" and "monopoly," although the popular impression is
+to the contrary. In 1890, when the statute was passed, contracts in
+restraint of trade and monopolies were already unlawful at common law,
+and these terms, by a long series of decisions both here and in England,
+had been defined as definitely as the nature of the subject matter
+permitted. While incapable (like the term "fraud") of precise definition
+covering all forms which the ingenuity of man might devise, nevertheless
+their meaning and scope were well within the understanding of any man of
+reasonable intelligence. Whatever legal uncertainties have arisen have
+been chiefly owing to two questions: first, What is _interstate_ trade
+within the meaning of the act? and second, Did the act enlarge the
+common-law rule as to what restraints were unlawful?
+
+[Footnote 1: "An Act to protect trade and commerce against unlawful
+restraints and monopolies," approved July 2, 1890.]
+
+The act was nearly shipwrecked at the outset on the first of these
+questions. In the famous Knight case,[1] the first case under the
+Sherman Act to reach the Supreme Court, it was held that the
+transactions by which the American Sugar Refining Company obtained
+control of the Philadelphia refineries and secured a virtual monopoly
+could not be reached under the act because they bore no direct relation
+to interstate commerce. The effect of this decision naturally was to
+cast doubt upon the efficacy of the statute and encourage the trust
+builders. Perhaps the case was rightly decided in view of the peculiar
+form in which the issues were presented by the pleadings. In the light
+of later decisions, however, it is safe to assert that the Court would
+now find little difficulty in applying the remedies provided by the
+Sherman Act to a similar state of facts, properly presented. While no
+prudent lawyer would care to attempt a comprehensive definition of what
+constitutes interstate commerce, it may at least be said that the
+tendency of the courts has been and is toward a constant broadening of
+the term to meet the facts of present-day business.
+
+[Footnote 1: _United States v. E.C. Knight Company_, 156 U.S., 1.]
+
+The other question--Did the Sherman Act change the common-law rule as to
+what restraints and monopolies are forbidden?--has been even more
+troublesome. The lawyers in Congress who framed the law believed that it
+did not. This is the testimony of Senator Hoar in his Autobiography, and
+as he was a member of the Senate Judiciary Committee which reported the
+act in its present form, and claims to have drawn it himself, his
+testimony is entitled to belief. The Supreme Court, however, in this
+particular went further than was expected. In the Trans-Missouri
+Freight Association case,[1] which reached the Supreme Court two years
+after the Knight case, that tribunal decided by a five-to-four majority
+that the words "_every_ contract ... in restraint of trade" extended the
+operation of the law beyond the technical common-law meaning of the
+terms employed so as in fact to include all contracts in restraint of
+interstate trade without exception or limitation. This theory was
+strongly combated by the minority of the court, speaking through Justice
+(afterwards Chief Justice) White, and was denounced by many eminent
+lawyers, notably the late James C. Carter, then leader of the New York
+Bar, who predicted that sooner or later it must be abandoned as
+untenable. Their protests were well founded. The theory, carried to its
+logical conclusion, would have prohibited a great variety of
+transactions theretofore deemed reasonable and proper, and would have
+brought large business to a standstill. As a matter of fact, it was
+never carried to its logical conclusion, and six years later it was
+expressly repudiated by Justice Brewer; one of the five, in the course
+of his concurring opinion in the Northern Securities case.[2] Justice
+Brewer said that while he believed the Trans-Missouri case had been
+rightly decided he also believed that in some respects the reasons given
+for the judgment could not be sustained.
+
+     Instead of holding that the Anti-Trust Act included all
+     contracts, reasonable or unreasonable, in restraint of
+     interstate trade, the ruling should have been that the
+     contracts there presented were unreasonable restraints of
+     interstate trade, and as such within the scope of the Act....
+     Whenever a departure from common-law rules and definitions is
+     claimed, the purpose to make the departure should be clearly
+     shown. Such a purpose does not appear and such a departure was
+     not intended.
+
+[Footnote 1: _United States v. Trans-Missouri Association_, 166 U.S.,
+290.]
+
+[Footnote 2: _Northern Securities Company v. United States_, 193 U.S.,
+197.]
+
+Nevertheless, the troublesome question remained, to plague lawyers and
+the community generally, until it was finally put at rest and the
+statute once more planted on the firm ground of common-law rule and
+definition by the decisions in the Standard Oil and Tobacco cases.
+
+What, then, is this common-law rule which President Taft found so clear?
+No one has discussed it more lucidly than did the youthful Circuit Judge
+Taft himself in delivering the opinion of the Circuit Court of Appeals
+in the Addyston Pipe & Steel Co. case,[1] an opinion in which his two
+associates on the bench, the late Justices Harlan and Lurton, concurred.
+The rule may be briefly stated as follows:
+
+Every contract or combination whose primary purpose and effect is to fix
+prices, limit production, or otherwise restrain trade is unlawful,
+provided the restraint be direct, material, and substantial.
+
+Where, however, the restraint of trade is not direct, but merely
+ancillary or collateral to some lawful contract or transaction, it is
+not unlawful, provided it is _reasonable_, that is to say, not broader
+than is required for the protection of the party in whose favor the
+restraint is imposed.
+
+[Footnote 1: _United States v. Addyston Pipe & Steel Co._, 85 Fed. Rep.,
+271.]
+
+A familiar illustration is the sale of a business and its goodwill,
+accompanied by a covenant on the part of the vendor not to compete. Such
+a covenant is collateral to the sale, and if not broader than is
+reasonably required for the protection of the vendee it will be upheld,
+although a similar agreement, standing alone and not collateral to a
+sale or other lawful transaction, would be in direct restraint of trade
+and unlawful.
+
+So much for the alleged uncertainty of the law. Candid men must agree
+with President Taft that in the light of the Supreme Court decisions it
+is reasonably clear what the Sherman Law means. But the fact that "the
+business community now knows or ought to know where it stands" with
+respect to the law does not greatly help the business situation. The
+real difficulty lies, not in the uncertainty of the law, but in the fact
+that the law does not fit actual present-day conditions. This is partly
+because many of the trusts were organized with full knowledge that they
+involved a violation of law but in the belief that the law could not or
+would not be effectively enforced. The realization that this belief was
+mistaken has thrown a good many people into a state of very genuine
+bewilderment, but it is an uncertainty, not as to what is firm ground,
+but as to how to get out of a bog, once having gotten in. For the most
+part, however, the general feeling of insecurity is due not so much to
+having knowingly overstepped the law, as to a change in economic
+conditions. The spirit of the time is one of coöperation and
+combination. It is manifested in the churches and colleges as well as in
+the marketplace. In the industrial arena, the tendency has been
+intensified by the invention of new machines and the resulting
+aggregations of fixed capital in forms designed for particular uses and
+incapable of diversion into other channels. Such rules of the common or
+customary law as were the outgrowth of an era of mobile capital and free
+competition no longer fit the conditions under which we are living.
+
+In a conflict between economic forces and legal enactment there can
+finally be but one outcome. The law must sooner or later adapt itself to
+life conditions. The real problem to-day is--how shall this adaptation
+be accomplished; how can statutes be framed which shall check abuses
+without falling under the wheels of social progress? Right here a swarm
+of half-informed theorizers are rushing in where trained economists fear
+to tread. It is difficult and dangerous ground, but there is at least
+one measure of legal reform--take away the right of one corporation to
+hold stock in another--which might be urged with confidence were it not
+for the existence of sundry oppressive and conflicting state laws.
+
+The abolition by law of the holding-company device is no new suggestion.
+It was strongly urged years ago by the late Edward B. Whitney. It was
+the keystone of the famous "Seven Sisters" statutes,[1] enacted with
+loud acclaim in New Jersey at the behest of Governor Woodrow Wilson (but
+subsequently repealed and thrown into the discard). Such a measure would
+be more effective and far-reaching than the public supposes. Nearly all
+the so-called trusts have been organized and are being held together in
+whole or in part, by the holding-company device. In many cases this has
+been done merely as an innocent measure of convenience. The device,
+however, is a perversion of the corporate machine to uses not
+contemplated by its inventors and fraught with danger. It is too
+powerful a weapon in the hands of those alive to its possibilities,
+enabling a small group of men with a relatively insignificant investment
+of capital to control a country-wide industry. Take the simplest
+possible illustration: The industry of manufacturing a particular
+commodity is carried on by a number of corporations scattered throughout
+the country with an aggregate capitalization of, say, $10,000,000. A, B,
+and C form a holding company to acquire a bare majority of the stock of
+each corporation, say $5,100,000 in the aggregate. They dispose of 49
+per cent. of the holding company's stock to the public, retaining a
+working majority. At one step they have secured absolute control of a
+$10,000,000 industry with an investment of little more than one-quarter
+of that amount, and by pursuing the same process further they can reduce
+the investment necessary for controlling the industry almost to the
+vanishing point.
+
+[Footnote 1: Laws of New Jersey of 1913, chaps. 13-19.]
+
+It is needless to enlarge on the possible abuses of the holding-company
+device. They are coming to light more and more. The remedy, however, is
+not so simple as it seems at first blush. A summary abolition of the
+holding-company device would result in great injury and hardship to
+industry. In the present condition of the corporation laws of certain of
+the states, the right of large corporations to operate through local
+subsidiary corporations is a practical necessity. Otherwise they would
+be subjected to well-nigh intolerable exactions and interference. It has
+been the policy in some states in dealing with foreign corporations to
+attempt to impose, under the guise of fees for the privilege of doing
+business in the state, a tax on all their property and business wherever
+situated. Some of the attempts have been nullified by the Supreme Court
+as violative of the prohibition of the Fourteenth Amendment against
+taking property without due process of law, but these decisions have
+not wholly remedied the evil or checked the ingenuity of state
+legislators. In some jurisdictions great corporations seem to be
+regarded as fair game for which there is no closed season.
+
+Right here the scheme of federal incorporation brought forward during
+President Taft's administration has many attractions to offer. It would
+do away with the principal excuse for the holding-company device, and
+pave the way for its abolition. It should satisfy the general public
+because it would clothe the Government with enormously increased powers
+of regulation and control; it should be attractive to the corporations
+because it would afford relief from many of the intolerable
+restrictions, not always fair or intelligent, imposed by state
+legislatures. Under present conditions the right of a corporation of one
+state to do business in another (other than business of an interstate
+character) rests merely upon comity and may be granted or refused upon
+such terms as interest or prejudice may dictate. The right of a federal
+corporation to do business in the several states, on the other hand,
+rests upon the powers conferred on Congress by the Constitution and is
+not subject to the whims of state lawmakers. Such a corporation is not
+"foreign" in the states into which its activity extends and state laws
+aimed at foreign corporations will not hit it. Moreover a corporation
+with a federal charter can always take its controversies into the
+federal courts (except when Congress expressly forbids)[1]--a right of
+extreme practical value where anti-corporation feeling or local
+prejudice is strong.
+
+[Footnote 1: The Act of Jan. 28, 1915, took away this right in the case
+of railroad companies incorporated under federal charter (38 Stat.
+804).]
+
+The scheme of federal incorporation presents some constitutional
+questions. As pointed out in a previous chapter, the Constitution
+nowhere expressly confers on Congress the right to grant corporate
+charters. Under Chief Justice Marshall's doctrine of "Implied Powers,"
+however, it has become well settled that Congress has implied power to
+charter a corporation whenever that is an appropriate means of
+exercising one of the powers expressly conferred, for example, the power
+to regulate interstate commerce. The most serious constitutional
+question appears to be whether Congress can authorize such a corporation
+to manufacture, the process of manufacturing not being an activity of an
+interstate character. In any event, the difficulty could be surmounted
+by a constitutional amendment. In these days of facile amendment such a
+thing seems quite within the range of possibility.
+
+The scheme of federal incorporation is by no means new. In the
+Convention of 1787 which framed the Constitution, Mr. Madison advocated
+giving Congress the power to grant charters of incorporation. The
+proposition, however, did not find favor, Mr. King suggesting that it
+might foster the creation of mercantile monopolies.[1]
+
+[Footnote 1: See Farrand, "Records of the Federal Convention," Vol. II,
+pp. 615-616, 620.]
+
+This objection would scarcely be urged to-day, when the country-wide
+operations of the so-called "trusts" have given them a national
+character and made their control by federal power a practical necessity.
+
+
+
+
+XIII
+
+WHAT OF THE FUTURE?
+
+
+In the preceding pages we have observed from various viewpoints the
+impressive phenomenon of federal encroachment upon state power. It must
+have become obvious to the most casual reader that the tide is running
+swiftly and has already carried far. Hamilton was mistaken when he
+predicted in the _Federalist_[1] that the National Government would
+never encroach upon the state authorities.
+
+[Footnote 1: _Federalist_, Numbers XVII, XXXI.]
+
+What then of the future? Is the Constitution hopelessly out of date? Are
+the states to be submerged and virtually obliterated in the drift toward
+centralization? No thoughtful patriot can view such a possibility
+without the gravest misgivings. The integrity of the states was a
+cardinal principle of our governmental scheme. Abandon that and we are
+adrift from the moorings which to the minds of statesmen of past
+generations constituted the safety of the republic.
+
+No mere appeal to precedents and governmental theory will check the
+current. The Americans are a practical people, moving forward with
+conscious power toward the attainment of their aims, along the lines
+which seem to them most direct. They are more interested in results than
+in methods or theories. Experience has demonstrated that federal control
+often spells uniformity and efficiency where state control had meant
+divisions and weakness. They favor federal control because it gets
+results.
+
+There is another aspect of the matter, however. The burden of federal
+bureaucracy is beginning to be felt by the average man. He is being
+regulated more and more, in his meats and drinks, his morals and the
+activities of his daily life, from Washington. If he will only stop and
+think he must realize that no one central authority can supervise the
+daily lives of a hundred million people, scattered over half a
+continent, without becoming top-heavy. He must realize, too, that, even
+if such a centralization of power and responsibility were humanly
+possible, our National Government is unsuited for the task. The
+electorate is too numerous and heterogeneous; its interests and needs
+are too diverse. Shall the conduct of citizens of Mississippi be
+prescribed by vote of congressmen from New York, or supervised at the
+expense of New York taxpayers? Will an educational system suitable for
+Massachusetts necessarily fit the young of Georgia? Such suggestions
+carry their own answer. In the very nature of things there is bound to
+be a reaction against centralization sooner or later. The real question
+is whether it will come in time to save the present constitutional
+scheme.
+
+The makers of the Constitution never intended that the people of one
+state should regulate, or pay for supervising, the conduct of citizens
+of another state. They made a division of governmental powers between
+nation and states along broad and obvious lines. To the Federal
+Government were entrusted matters of a strictly national
+character--foreign relations, interstate commerce, fiscal and monetary
+system, post office, patents and copyrights. Everything else was
+reserved, to the states or the people. Here was a scheme at once
+explicit and elastic. Explicit as to the nature of the functions to be
+performed by the National Government; elastic enough to permit the
+exercise of all other powers reasonably incidental to the powers
+expressly granted. The Constitution is not, and never was intended to
+be, a strait-jacket.
+
+Proofs abound of the adequacy of the constitutional scheme to deal with
+changing conditions. For example, when the Constitution was adopted,
+railroads, the most powerful economic force in our present civilization,
+were unknown. Nevertheless, the Constitution contains adequate provision
+for dealing with the railroads. They are instruments of interstate
+commerce and may be controlled by the Federal Government under the
+express grant of power to regulate such commerce. Similar considerations
+apply in the case of those nationwide industrial combinations popularly
+known as "trusts." Their activities are largely in the field of
+interstate commerce and are subject to control as such by the Federal
+Government. Theoretically, only such activities of the railroads and
+trusts as are of an interstate character fall within the federal
+jurisdiction. Everything else lies within the jurisdiction of the
+states. However, a practical people will not long permit matters which
+are essentially single and entire in their nature (for example, railroad
+classifications and rates) to be split up merely for purposes of legal
+jurisdiction and control. In such matters, therefore, some measure of
+federal encroachment is inevitable in order that industry and progress
+shall not be hampered. The encroachment, however, is more apparent than
+real. The industries are national in scope, and all the activities of
+each are more or less interwoven and interdependent. Hence state
+regulation of the intrastate activities may sometimes be overruled as an
+interference with federal regulation of the interstate commerce. There
+is nothing in this which involves any real violation of the
+Constitution. It is merely an application of Marshall's doctrine of
+implied powers.
+
+Social welfare legislation presents a very different problem. Some of
+the most dangerous assaults upon the Constitution to-day are being made
+in that field. The leaven of socialistic ideas is working.
+Representative government is becoming more paternalistic. Legislation
+dealing with conduct and social and economic conditions is being
+demanded by public sentiment in constantly increasing measure. Such
+legislation for the most part affects state police power and lies
+clearly outside the scope of the powers conferred by the Constitution on
+the National Government. Moreover, "the insulated chambers afforded by
+the several states" (to borrow a phrase of Justice Oliver Wendell
+Holmes) are ideal fields for social experiment. If an experiment
+succeed, other states will follow suit. If it prove disastrous, the
+damage is localized. The nation as a whole remains unharmed. The
+sponsors for such legislation, however, are seldom content to deal with
+the states. Reform was ever impatient. The state method seems too slow,
+and the difficulty of securing uniformity too formidable. Moreover, it
+often happens that some states are indifferent to the reform proposed or
+even actively hostile. Accordingly, recourse is had to Congress, and
+Congress looks for a way to meet the popular demand. There being no
+direct way, and public sentiment being insistent, Congressmen find
+themselves under the painful necessity of circumventing the Constitution
+they have sworn to uphold. The desired legislation is enacted under the
+guise of an act to regulate commerce or raise revenue, and the task of
+upholding the Constitution is passed to the Supreme Court.
+
+Such subterfuges, far from arousing public condemnation, are praised by
+the unthinking as far-sighted statesmanship. It is popular nowadays to
+apply the term "forward-looking" to people who would make the National
+Government an agency for social-welfare work, and to characterize as
+"lacking in vision" anyone who interposes a constitutional principle in
+the path of a social reform. Friends of progress sometimes forget that
+the real forward-looking man is he who can see the pitfall ahead as well
+as the rainbow; the man of true vision is one whose view of the stars is
+steadied by keeping his feet firmly on the ground.
+
+It cannot be reiterated too often that, under our political system,
+legislation in the nature of police regulation (except in so far as it
+affects commerce or foreign relations) is the province of the states,
+not of the National Government. This is not merely sound constitutional
+law; it is good sense as well. Regulations salutary for Scandinavian
+immigrants of the northwest may not fit the Creoles of Louisiana. In the
+long run the police power will be exercised most advantageously for all
+concerned by local authority.
+
+The present tendency toward centralization cannot go on indefinitely. A
+point must be reached sooner or later when an over-centralized
+government becomes intolerable and breaks down of its own weight. As an
+eminent authority has put it: "If we did not have states we should
+speedily have to create them."[1] The states thus created, however,
+would not be the same. They would be mere governmental subdivisions,
+without the independence, the historic background, the traditions, or
+the sentiment of the present states. These influences, hitherto so
+potent in our national life, would have been lost.
+
+[Footnote 1: Address of Supreme Court Justice Charles E. Hughes before
+New York State Bar Association, January 14, 1916.]
+
+In a memorable address delivered in the year 1906 before the
+Pennsylvania Society in New York, Elihu Root, then Secretary of State in
+President Roosevelt's Cabinet, discussed the encroachments of federal
+power and expressed the view that the only way in which the states could
+maintain their power and authority was by awakening to a realization of
+their own duties to the country at large. He said:
+
+     The Governmental control which they (the people) deem just and
+     necessary they will have. It may be that such control would
+     better be exercised in particular instances by the governments
+     of the states, but the people will have the control they need
+     either from the states or from the National Government; and if
+     the states fail to furnish it in due measure, sooner or later
+     constructions of the Constitution will be found to vest the
+     power where it will be exercised--in the National Government.
+     The true and only way to preserve state authority is to be
+     found in the awakened conscience of the states, their
+     broadened views and higher standard of responsibility to the
+     general public; in effective legislation by the states, in
+     conformity to the general moral sense of the country; and in
+     the vigorous exercise for the general public good of that
+     state authority which is to be preserved.
+
+Those words, spoken fifteen years ago, were prophetic. Moreover, they
+are as true to-day as when they were uttered.
+
+Will the people see these things in time? Americans with pride in their
+country's past and confidence in her future dare not say No. The
+awakening may be slow. Currents of popular will are not readily turned.
+It is hard to make the people think. But if leaders and teachers do
+their part American intelligence and prudence will assert themselves,
+and the slogan of an awakened public sentiment may yet be: "Back to the
+Constitution!"
+
+
+
+
+APPENDIX
+
+CONSTITUTION OF THE UNITED STATES OF AMERICA
+
+
+WE THE PEOPLE of the United States, in Order to form a more perfect
+Union, establish Justice, insure domestic Tranquility, provide for the
+common defence, promote the general Welfare, and secure the Blessings of
+Liberty to ourselves and our Posterity, do ordain and establish this
+CONSTITUTION for the United States of America.
+
+
+ARTICLE I.
+
+SECTION 1. All legislative Powers herein granted shall be vested in a
+Congress of the United States, which shall consist of a Senate and House
+of Representatives.
+
+SECTION 2. The House of Representatives shall be composed of Members
+chosen every second Year by the People of the several States, and the
+Electors in each State shall have the Qualifications requisite for
+Electors of the most numerous Branch of the State Legislature.
+
+No Person shall be a Representative who shall not have attained to the
+Age of twenty-five Years, and been seven Years a Citizen of the United
+States, and who shall not, when elected, be an Inhabitant of that State
+in which he shall be chosen.
+
+Representatives and direct Taxes shall be apportioned among the several
+States which may be included within this Union, according to their
+respective Numbers which shall be determined by adding to the whole
+Number of free Persons, including those bound to Service for a Term of
+Years, and excluding Indians not taxed, three-fifths of all other
+Persons. The actual Enumeration shall be made within three Years after
+the first Meeting of the Congress of the United States, and within every
+subsequent Term of ten Years, in such Manner as they shall by Law
+direct. The Number of Representatives shall not exceed one for every
+thirty Thousand, but each State shall have at Least one Representative;
+and until such enumeration shall be made, the State of New Hampshire
+shall be entitled to chuse three, Massachusetts eight, Rhode Island and
+Providence Plantations one, Connecticut five, New York six, New Jersey
+four, Pennsylvania eight, Delaware one, Maryland six, Virginia ten,
+North Carolina five, South Carolina five, and Georgia three.
+
+When vacancies happen in the Representation from any State, the
+Executive Authority thereof shall issue Writs of Election to fill such
+Vacancies.
+
+The House of Representatives shall chuse their Speaker and other
+Officers; and shall have the sole Power of Impeachment.
+
+SECTION 3. The Senate of the United States shall be composed of two
+Senators from each State, chosen by the Legislature thereof, for six
+Years; and each Senator shall have one Vote.
+
+Immediately after they shall be assembled in Consequence of the first
+Election, they shall be divided as equally as may be into three Classes.
+The Seats of the Senators of the first Class shall be vacated at the
+Expiration of the second Year, of the second Class at the Expiration of
+the fourth Year, and of the third Class at the Expiration of the sixth
+Year, so that one third may be chosen every second Year; and if
+Vacancies happen by Resignation, or otherwise, during the Recess of the
+Legislature of any State, the Executive thereof may make temporary
+Appointments until the next Meeting of the Legislature, which shall then
+fill such Vacancies.
+
+No Person shall be a Senator who shall not have attained to the Age of
+thirty Years, and been nine Years a Citizen of the United States, and
+who shall not, when elected, be an Inhabitant of that State for which he
+shall be chosen.
+
+The Vice President of the United States shall be President of the
+Senate, but shall have no Vote, unless they be equally divided.
+
+The Senate shall chuse their other Officers, and also a President pro
+tempore, in the Absence of the Vice President, or when he shall exercise
+the Office of President of the United States.
+
+The Senate shall have the sole Power to try all Impeachments. When
+sitting for that Purpose, they shall be on Oath or Affirmation. When the
+President of the United States is tried, the Chief Justice shall
+preside: And no Person shall be convicted without the Concurrence of two
+thirds of the Members present.
+
+Judgment in Cases of Impeachment shall not extend further than to
+removal from Office, and disqualification to hold and enjoy any Office
+of honor, Trust or Profit under the United States: but the Party
+convicted shall nevertheless be liable and subject to Indictment,
+Trial, Judgment and Punishment, according to Law.
+
+SECTION 4. The Times, Places and Manner of holding Elections for
+Senators and Representatives, shall be prescribed in each State by the
+Legislature thereof; but the Congress may at any time by Law make or
+alter such Regulations, except as to the Places of chusing Senators.
+
+The Congress shall assemble at least once in every Year, and such
+Meeting shall be on the first Monday in December, unless they shall by
+Law appoint a different Day.
+
+SECTION 5. Each House shall be the Judge of the Elections, Returns and
+Qualifications of its own Members, and a Majority of each shall
+constitute a Quorum to do Business; but a smaller Number may adjourn
+from day to day, and may be authorized to compel the Attendance of
+absent Members, in such Manner, and under such Penalties as each House
+may provide.
+
+Each House may determine the Rules of its Proceedings, punish its
+Members for disorderly Behavior, and, with the Concurrence of two
+thirds, expel a Member.
+
+Each House shall keep a Journal of its Proceedings, and from time to
+time publish the same, excepting such Parts as may in their Judgment
+require Secrecy; and the Yeas and Nays of the Members of either House on
+any question shall, at the Desire of one fifth of those Present, be
+entered on the Journal.
+
+Neither House, during the Session of Congress, shall, without the
+Consent of the other, adjourn for more than three days, nor to any other
+Place than that in which the two Houses shall be sitting.
+
+SECTION 6. The Senators and Representatives shall receive a
+Compensation for their Services, to be ascertained by Law, and paid out
+of the Treasury of the United States. They shall in all Cases, except
+Treason, Felony and Breach of the Peace, be privileged from Arrest
+during their Attendance at the Session of their respective Houses, and
+in going to and returning from the same; and for any Speech or Debate in
+either House, they shall not be questioned in any other Place.
+
+No Senator or Representative shall, during the Time for which he was
+elected, be appointed to any civil Office under the Authority of the
+United States, which shall have been created, or the Emoluments whereof
+shall have been encreased during such time; and no Person holding any
+Office under the United States, shall be a Member of either House during
+his Continuance in Office.
+
+SECTION 7. All Bills for raising Revenue shall originate in the House of
+Representatives; but the Senate may propose or concur with Amendments as
+on other Bills.
+
+Every Bill which shall have passed the House of Representatives and the
+Senate, shall, before it become a Law, be presented to the President of
+the United States; If he approve he shall sign it, but if not he shall
+return it, with his Objections to that House in which it shall have
+originated, who shall enter the Objections at large on their Journal,
+and proceed to reconsider it. If after such Reconsideration two thirds
+of that House shall agree to pass the Bill, it shall be sent, together
+with the Objections, to the other House, by which it shall likewise be
+reconsidered, and if approved by two thirds of that House, it shall
+become a Law. But in all such Cases the Votes of both Houses shall be
+determined by Yeas and Nays, and the Names of the Persons voting for
+and against the Bill shall be entered on the Journal of each House
+respectively. If any Bill shall not be returned by the President within
+ten Days (Sundays excepted) after it shall have been presented to him,
+the Same shall be a Law, in like Manner as if he had signed it, unless
+the Congress by their Adjournment prevent its Return, in which Case it
+shall not be a Law.
+
+Every Order, Resolution, or Vote to which the Concurrence of the Senate
+and House of Representatives may be necessary (except on a question of
+Adjournment) shall be presented to the President of the United States;
+and before the Same shall take Effect, shall be approved by him, or
+being disapproved by him, shall be repassed by two thirds of the Senate
+and House of Representatives, according to the Rules and Limitations
+prescribed in the Case of a Bill.
+
+SECTION 8. The Congress shall have Power To lay and collect Taxes,
+Duties, Imposts and Excises, to pay the Debts and provide for the common
+Defence and general Welfare of the United States; but all Duties,
+Imposts and Excises shall be uniform throughout the United States;
+
+To borrow Money on the credit of the United States;
+
+To regulate Commerce with foreign Nations, and among the several States,
+and with the Indian Tribes;
+
+To establish an uniform Rule of Naturalization, and uniform Laws on the
+subject of Bankruptcies throughout the United States;
+
+To coin Money, regulate the Value thereof, and of foreign Coin, and fix
+the Standard of Weights and Measures;
+
+To provide for the Punishment of counterfeiting the Securities and
+current Coin of the United States;
+
+To establish Post Offices and post Roads;
+
+To promote the Progress of Science and useful Arts, by securing for
+limited Times to Authors and Inventors the exclusive Right to their
+respective Writings and Discoveries;
+
+To constitute Tribunals inferior to the supreme Court;
+
+To define and punish Piracies and Felonies committed on the high Seas,
+and Offences against the Law of Nations;
+
+To declare War, grant Letters of Marque and Reprisal, and make Rules
+concerning Captures on Land and Water;
+
+To raise and support Armies, but no Appropriation of Money to that Use
+shall be for a longer Term than two Years;
+
+To provide and maintain a Navy;
+
+To make Rules for the Government and Regulation of the land and naval
+Forces;
+
+To provide for calling forth the Militia to execute the Laws of the
+Union, suppress Insurrections and repel Invasions;
+
+To provide for organizing, arming, and disciplining, the Militia, and
+for governing such Part of them as may be employed in the Service of the
+United States, reserving to the States respectively, the Appointment of
+the Officers, and the Authority of training the Militia according to the
+discipline prescribed by Congress;
+
+To exercise exclusive Legislation in all Cases whatsoever, over such
+District (not exceeding ten Miles square) as may, by Cession of
+particular States, and the Acceptance of Congress, become the Seat of
+the Government of the United States, and to exercise like Authority over
+all Places purchased by the Consent of the Legislature of the State in
+which the Same shall be, for the Erection of Forts, Magazines, Arsenals,
+dock-Yards, and other needful Buildings;--And
+
+To make all Laws which shall be necessary and proper for carrying into
+Execution the foregoing Powers, and all other Powers vested by this
+Constitution in the Government of the United States, or in any
+Department or Officer thereof.
+
+SECTION 9. The Migration or Importation of such Persons as any of the
+States now existing shall think proper to admit, shall not be prohibited
+by the Congress prior to the Year one thousand eight hundred and eight,
+but a Tax or duty may be imposed on such Importation, not exceeding ten
+dollars for each Person.
+
+The Privilege of the Writ of Habeas Corpus shall not be suspended,
+unless when in Cases of Rebellion or Invasion the public Safety may
+require it.
+
+No Bill of Attainder or ex post facto Law shall be passed.
+
+No Capitation, or other direct, tax shall be laid, unless in Proportion
+to the Census or Enumeration herein before directed to be taken.
+
+No Tax or Duty shall be laid on Articles exported from any State.
+
+No Preference shall be given by any Regulation of Commerce or Revenue to
+the Ports of one State over those of another: nor shall Vessels bound
+to, or from, one State, be obliged to enter, clear, or pay Duties in
+another.
+
+No Money shall be drawn from the Treasury, but in Consequence of
+Appropriations made by Law; and a regular Statement and Account of the
+Receipts and Expenditures of all public Money shall be published from
+time to time.
+
+No Title of Nobility shall be granted by the United States: And no
+Person holding any Office of Profit or Trust under them, shall, without
+the Consent of the Congress, accept of any present, Emolument, Office,
+or Title, of any kind whatever, from any King, Prince, or foreign State.
+
+SECTION 10. No State shall enter into any Treaty, Alliance, or
+Confederation; grant Letters of Marque and Reprisal; coin Money; emit
+Bills of Credit; make any Thing but gold and silver Coin a Tender in
+Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law
+impairing the Obligation of Contracts, or grant any Title of Nobility.
+
+No State shall, without the Consent of the Congress, lay any Imposts or
+Duties on Imports or Exports, except what may be absolutely necessary
+for executing its inspection Laws: and the net Produce of all Duties and
+Imposts, laid by any State on Imports or Exports, shall be for the Use
+of the Treasury of the United States; and all such Laws shall be subject
+to the Revision and Controul of the Congress.
+
+No State shall, without the Consent of Congress, lay any Duty of
+Tonnage, keep Troops, or Ships of War in time of Peace, enter into any
+Agreement or Compact with another State, or with a foreign Power, or
+engage in War, unless actually invaded, or in such imminent Danger as
+will not admit of delay.
+
+
+ARTICLE II.
+
+SECTION 1. The executive Power shall be vested in a President of the
+United States of America. He shall hold his Office during the Term of
+four Years, and, together with the Vice President, chosen for the same
+Term, be elected, as follows
+
+Each State shall appoint, in such Manner as the Legislature thereof may
+direct, a Number of Electors, equal to the whole Number of Senators and
+Representatives to which the State may be entitled in the Congress: but
+no Senator or Representative, or Person holding an Office of Trust or
+Profit under the United States, shall be appointed an Elector.
+
+The electors shall meet in their respective States, and vote by ballot
+for two Persons, of whom one at least shall not be an Inhabitant of the
+same State with themselves. And they shall make a List of all the
+Persons voted for, and of the Number of Votes for each; which List they
+shall sign and certify, and transmit sealed to the Seat of the
+Government of the United States, directed to the President of the
+Senate. The President of the Senate shall, in the Presence of the Senate
+and House of Representatives, open all the Certificates, and the Votes
+shall then be counted. The Person having the greatest Number of Votes
+shall be the President, if such Number be a Majority of the whole Number
+of Electors appointed; and if there be more than one who have such
+Majority, and have an equal Number of Votes, then the House of
+Representatives shall immediately chuse by Ballot one of them for
+President; and if no Person have a Majority, then from the five highest
+on the List the said House shall in like Manner chuse the President. But
+in chusing the President, the Votes shall be taken by States, the
+Representation from each State having one Vote; A quorum for this
+Purpose shall consist of a Member or Members from two thirds of the
+States, and a Majority of all the States shall be necessary to a Choice.
+In every Case, after the Choice of the President, the Person having the
+greatest Number of Votes of the Electors shall be the Vice President.
+But if there should remain two or more who have equal Votes, the Senate
+shall chuse from them by Ballot the Vice President.
+
+The Congress may determine the Time of chusing the Electors, and the Day
+on which they shall give their Votes; which Day shall be the same
+throughout the United States.
+
+No Person except a natural born Citizen, or a Citizen of the United
+States, at the time of the Adoption of this Constitution, shall be
+eligible to the Office of President; neither shall any Person be
+eligible to that Office who shall not have attained to the Age of thirty
+five Years, and been fourteen Years a Resident within the United States.
+
+In Case of the Removal of the President from Office, or of his Death,
+Resignation, or Inability to discharge the Powers and Duties of the said
+Office, the same shall devolve on the Vice President, and the Congress
+may by Law provide for the Case of Removal, Death, Resignation, or
+Inability, both of the President and Vice President, declaring what
+Officer shall then act as President, and such Officer shall act
+accordingly, until the Disability be removed, or a President shall be
+elected.
+
+The President shall, at stated Times, receive for his Services, a
+Compensation, which shall neither be encreased nor diminished during the
+Period for which he shall have been elected, and he shall not receive
+within that Period any other Emolument from the United States, or any of
+them.
+
+Before he enter on the Execution of his Office, he shall take the
+following Oath or Affirmation:--"I do solemnly swear (or affirm) that I
+will faithfully execute the Office of President of the United States,
+and will to the best of my Ability, preserve, protect and defend the
+Constitution of the United States."
+
+SECTION 2. The President shall be Commander in Chief of the Army and
+Navy of the United States, and of the Militia of the several States,
+when called into the actual Service of the United States; he may require
+the Opinion, in writing, of the principal Officer in each of the
+executive Departments, upon any Subject relating to the Duties of their
+respective Offices, and he shall have Power to grant Reprieves and
+Pardons for Offences against the United States, except in Cases of
+Impeachment.
+
+He shall have Power, by and with the Advice and Consent of the Senate,
+to make Treaties, provided two thirds of the Senators present concur;
+and he shall nominate, and by and with the Advice and Consent of the
+Senate, shall appoint Ambassadors, other public Ministers and Consuls,
+Judges of the supreme Court, and all other Officers of the United
+States, whose Appointments are not herein otherwise provided for, and
+which shall be established by Law: but the Congress may by Law vest the
+Appointment of such inferior Officers, as they think proper, in the
+President alone, in the Courts of Law, or in the Heads of Departments.
+
+The President shall have Power to fill up all Vacancies that may happen
+during the Recess of the Senate, by granting Commissions which shall
+expire at the End of their next Session.
+
+SECTION 3. He shall from time to time give to the Congress Information
+of the State of the Union, and recommend to their Consideration such
+Measures as he shall judge necessary and expedient; he may, on
+extraordinary Occasions, convene both Houses, or either of them, and in
+Case of Disagreement between them, with Respect to the Time of
+Adjournment, he may adjourn them to such Time as he shall think proper;
+he shall receive Ambassadors and other public Ministers; he shall take
+Care that the Laws be faithfully executed, and shall Commission all the
+Officers of the United States.
+
+SECTION 4. The President, Vice President and all civil Officers of the
+United States, shall be removed from Office on Impeachment for, and
+Conviction of, Treason, Bribery, or other high Crimes and Misdemeanors.
+
+
+ARTICLE III.
+
+SECTION 1. The judicial Power of the United States, shall be vested in
+one supreme Court, and in such inferior Courts as the Congress may from
+time to time ordain and establish. The Judges, both of the supreme and
+inferior Courts, shall hold their Offices during good Behaviour, and
+shall, at stated Times, receive for their Services, a Compensation,
+which shall not be diminished during their Continuance in Office.
+
+SECTION 2. The judicial Power shall extend to all Cases, in Law and
+Equity, arising under this Constitution, the Laws of the United States,
+and Treaties made, or which shall be made, under their Authority;--to
+all Cases affecting Ambassadors, other public Ministers and Consuls;--to
+all Cases of admiralty and maritime Jurisdiction;--to Controversies to
+which the United States shall be a Party;--to Controversies between two
+or more States;--between a State and Citizens of another
+State;--between Citizens of different States,--between Citizens of the
+same State claiming Lands under Grants of different States, and between
+a State, or the Citizens thereof, and foreign States, Citizens or
+Subjects.
+
+In all Cases affecting Ambassadors, other public Ministers and Consuls,
+and those in which a State shall be Party, the supreme Court shall have
+original Jurisdiction. In all the other Cases before mentioned, the
+supreme Court shall have appellate Jurisdiction, both as to Law and
+Fact, with such Exceptions, and under such Regulations as the Congress
+shall make.
+
+The Trial of all Crimes, except in Cases of Impeachment, shall be by
+Jury; and such Trial shall be held in the State where the said Crimes
+shall have been committed; but when not committed within any State, the
+Trial shall be at such Place or Places as the Congress may by Law have
+directed.
+
+SECTION 3. Treason against the United States, shall consist only in
+levying War against them, or in adhering to their Enemies, giving them
+Aid and Comfort. No Person shall be convicted of Treason unless on the
+Testimony of two Witnesses to the same overt Act, or on Confession in
+open Court.
+
+The Congress shall have Power to declare the Punishment of Treason, but
+no Attainder of Treason shall work Corruption of Blood, or Forfeiture
+except during the Life of the Person attainted.
+
+
+ARTICLE IV.
+
+SECTION 1. Full Faith and Credit shall be given in each State to the
+public Acts, Records, and judicial Proceedings of every other State.
+And the Congress may by general Laws prescribe the Manner in which such
+Acts, Records and Proceedings shall be proved, and the Effect thereof.
+
+SECTION 2. The Citizens of each State shall be entitled to all
+Privileges and Immunities of Citizens in the several States.
+
+A person charged in any State with Treason, Felony, or other Crime, who
+shall flee from Justice, and be found in another State, shall on Demand
+of the executive Authority of the State from which he fled, be delivered
+up, to be removed to the State having Jurisdiction of the Crime.
+
+No Person held to Service or Labour in one State, under the Laws
+thereof, escaping into another, shall, in Consequence of any Law or
+Regulation therein, be discharged from such Service or Labour, but shall
+be delivered up on Claim of the Party to whom such Service or Labour may
+be due.
+
+SECTION 3. New States may be admitted by the Congress into this Union;
+but no new State shall be formed or erected within the Jurisdiction of
+any other State; nor any State be formed by the Junction of two or more
+States, or Parts of States, without the Consent of the Legislatures of
+the States concerned as well as of the Congress.
+
+The Congress shall have Power to dispose of and make all needful Rules
+and Regulations respecting the Territory or other Property belonging to
+the United States; and nothing in this Constitution shall be so
+construed as to Prejudice any Claims of the United States, or of any
+particular State.
+
+SECTION 4. The United States shall guarantee to every State in this
+Union a Republican Form of Government, and shall protect each of them
+against Invasion; and on Application of the Legislature, or of the
+Executive (when the Legislature cannot be convened) against domestic
+Violence.
+
+
+ARTICLE V.
+
+The Congress, whenever two thirds of both Houses shall deem it
+necessary, shall propose Amendments to this Constitution, or, on the
+Application of the Legislatures of two thirds of the several States,
+shall call a Convention for proposing Amendments, which, in either Case,
+shall be valid to all Intents and Purposes, as Part of this
+Constitution, when ratified by the Legislatures of three fourths of the
+several States, or by Conventions in three fourths thereof, as the one
+or the other Mode of Ratification may be proposed by the Congress;
+Provided that no Amendment which may be made prior to the Year One
+thousand eight hundred and eight shall in any Manner affect the first
+and fourth Clauses in the Ninth Section of the first Article; and that
+no State, without its Consent, shall be deprived of its equal Suffrage
+in the Senate.
+
+
+ARTICLE VI.
+
+All Debts contracted and Engagements entered into, before the Adoption
+of this Constitution, shall be as valid against the United States under
+this Constitution, as under the Confederation.
+
+This Constitution, and the Laws of the United States which shall be made
+in Pursuance thereof; and all Treaties made, or which shall be made,
+under the Authority of the United States, shall be the supreme Law of
+the Land; and the Judges in every State shall be bound thereby, any
+Thing in the Constitution or Laws of any State to the Contrary
+notwithstanding.
+
+The Senators and Representatives before mentioned, and the Members of
+the several State Legislatures, and all executive and judicial Officers,
+both of the United States and of the several States, shall be bound by
+Oath or Affirmation, to support this Constitution; but no religious Test
+shall ever be required as a Qualification to any Office or public Trust
+under the United States.
+
+
+ARTICLE VII.
+
+The Ratification of the Conventions of nine States shall be sufficient
+for the Establishment of this Constitution between the States so
+ratifying the Same.
+
+Done in Convention by the Unanimous Consent of the States present the
+Seventeenth Day of September in the Year of our Lord one thousand seven
+hundred and Eighty seven, and of the Independence of the United States
+of America the Twelfth IN WITNESS whereof We have hereunto subscribed
+our Names.
+
+G'o: WASHINGTON----
+_Presidt. and deputy from Virginia_
+
+_New Hampshire_      { JOHN LANGDON
+                     { NICHOLAS GILMAN
+
+_Massachusetts_      { NATHANIEL GORHAM
+                     { RUFUS KING
+
+_Connecticut_        { WM. SAML. JOHNSON
+                     { ROGER SHERMAN
+
+_New York_             ALEXANDER HAMILTON
+
+                     { WIL: LIVINGSTON
+_New Jersey_         { DAVID BREARLEY
+                     { WM. PATERSON
+                     { JONA: DAYTON
+
+                     { B. FRANKLIN
+                     { THOMAS MIFFLIN
+                     { ROBT. MORRIS
+_Pennsylvania_       { GEO. CLYMER
+                     { THOS. FITZSIMONS
+                     { JARED INGERSOLL
+                     { JAMES WILSON
+                     { GOUV MORRIS
+
+                     { GEO: READ
+                     { GUNNING BEDFORD Jun
+_Delaware_           { JOHN DICKINSON
+                     { RICHARD BASSETT
+                     { JACO: BROOM
+
+                     { JAMES McHENRY
+_Maryland_           { DAN OF ST THOS JENIFER
+                     { DANL. CARROLL
+
+_Virginia_           { JOHN BLAIR--
+                     { JAMES MADISON JR.
+
+                     { WM. BLOUNT
+_North Carolina_     { RICHD. DOBBS SPAIGHT
+                     { HU WILLIAMSON
+
+                     { J. RUTLEDGE
+_South Carolina_     { CHARLES COTESWORTH PINCKNEY
+                     { CHARLES PINCKNEY
+                     { PIERCE BUTLER
+
+_Georgia_            { WILLIAM FEW
+                     { ABR. BALDWIN
+
+_Attest_ WILLIAM JACKSON _Secretary_
+
+
+
+
+AMENDMENTS
+
+
+[ARTICLE I.]
+
+Congress shall make no law respecting an establishment of religion, or
+prohibiting the free exercise thereof; or abridging the freedom of
+speech, or of the press; or the right of the people peaceably to
+assemble, and to petition the Government for a redress of grievances.
+
+
+[ARTICLE II.]
+
+A well regulated Militia, being necessary to the security of a free
+State, the right of the people to keep and bear Arms, shall not be
+infringed.
+
+
+[ARTICLE III.]
+
+No Soldier shall, in time of peace be quartered in any house, without
+the consent of the Owner, nor in time of war, but in a manner to be
+prescribed by law.
+
+
+[ARTICLE IV.]
+
+The right of the people to be secure in their persons, houses, papers,
+and effects, against unreasonable searches and seizures, shall not be
+violated, and no Warrants shall issue, but upon probable cause,
+supported by Oath or affirmation, and particularly describing the place
+to be searched, and the persons or things to be seized.
+
+
+[ARTICLE V.]
+
+No person shall be held to answer for a capital, or otherwise infamous
+crime, unless on a presentment or indictment of a Grand Jury, except in
+cases arising in the land or naval forces, or in the Militia, when in
+actual service in time of War or public danger; nor shall any person be
+subject for the same offence to be twice put in jeopardy of life or
+limb; nor shall be compelled in any Criminal Case to be a witness
+against himself, nor be deprived of life, liberty, or property, without
+due process of law; nor shall private property be taken for public use,
+without just compensation.
+
+
+[ARTICLE VI.]
+
+In all criminal prosecutions, the accused shall enjoy the right to a
+speedy and public trial, by an impartial jury of the State and district
+wherein the crime shall have been committed, which district shall have
+been previously ascertained by law, and to be informed of the nature and
+cause of the accusation; to be confronted with the witnesses against
+him; to have compulsory process for obtaining Witnesses in his favor,
+and to have the Assistance of Counsel for his defence.
+
+
+[ARTICLE VII.]
+
+In suits at common law, where the value in controversy shall exceed
+twenty dollars, the right of trial by jury shall be preserved, and no
+fact tried by a jury shall be otherwise re-examined in any Court of the
+United States, than according to the rules of the common law.
+
+
+[ARTICLE VIII.]
+
+Excessive bail shall not be required, nor excessive fines imposed, nor
+cruel and unusual punishments inflicted.
+
+
+[ARTICLE IX.]
+
+The enumeration in the Constitution, of certain rights, shall not be
+construed to deny or disparage others retained by the people.
+
+
+[ARTICLE X.]
+
+The powers not delegated to the United States by the Constitution, nor
+prohibited by it to the States, are reserved to the States respectively,
+or to the people.
+
+
+[ARTICLE XI.]
+
+The Judicial power of the United States shall not be construed to extend
+to any suit in law or equity, commenced or prosecuted against one of the
+United States by Citizens of another State, or by Citizens or Subjects
+of any Foreign State.
+
+
+[ARTICLE XII.]
+
+The Electors shall meet in their respective states, and vote by ballot
+for President and Vice-President, one of whom, at least, shall not be an
+inhabitant of the same state with themselves; they shall name in their
+ballots the person voted for as President, and in distinct ballots the
+person voted for as Vice-President, and they shall make distinct lists
+of all persons voted for as President, and of all persons voted for as
+Vice-President, and of the number of votes for each, which lists they
+shall sign and certify, and transmit sealed to the seat of the
+government of the United States, directed to the President of the
+Senate;--The President of the Senate shall, in the presence of the
+Senate and House of Representatives, open all the certificates and the
+votes shall then be counted;--The person having the greatest number of
+votes for President, shall be the President, if such number be a
+majority of the whole number of Electors appointed; and if no person
+have such majority, then from the persons having the highest numbers not
+exceeding three on the list of those voted for as President, the House
+of Representatives shall choose immediately, by ballot, the President.
+But in choosing the President, the votes shall be taken by states, the
+representation from each state having one vote; a quorum for this
+purpose shall consist of a member or members from two-thirds of the
+states, and a majority of all the states shall be necessary to a choice.
+And if the House of Representatives shall not choose a President
+whenever the right of choice shall devolve upon them, before the fourth
+day of March next following, then the Vice-President shall act as
+President, as in the case of the death or other constitutional
+disability of the President. The person having the greatest number of
+votes as Vice-President, shall be the Vice-President, if such number be
+a majority of the whole number of Electors appointed, and if no person
+have a majority, then from the two highest numbers on the list, the
+Senate shall choose the Vice-President; a quorum for the purpose shall
+consist of two-thirds of the whole number of Senators, and a majority of
+the whole number shall be necessary to a choice. But no person
+constitutionally ineligible to the office of President shall be eligible
+to that of Vice-President of the United States.
+
+
+[ARTICLE XIII.]
+
+SECTION 1. Neither slavery nor involuntary servitude, except as a
+punishment for crime whereof the party shall have been duly convicted,
+shall exist within the United States, or any place subject to their
+jurisdiction.
+
+SECTION 2. Congress shall have power to enforce this article by
+appropriate legislation.
+
+
+[ARTICLE XIV.]
+
+SECTION 1. All persons born or naturalized in the United States, and
+subject to the jurisdiction thereof, are citizens of the United States
+and of the State wherein they reside. No State shall make or enforce any
+law which shall abridge the privileges or immunities of citizens of the
+United States; nor shall any State deprive any person of life, liberty,
+or property, without due process of law; nor deny to any person within
+its jurisdiction the equal protection of the laws.
+
+SECTION 2. Representatives shall be apportioned among the several States
+according to their respective numbers, counting the whole number of
+persons in each State, excluding Indians not taxed. But when the right
+to vote at any election for the choice of electors for President and
+Vice-President of the United States, Representatives in Congress, the
+Executive and Judicial officers of a State, or the members of the
+Legislature thereof, is denied to any of the male inhabitants of such
+State, being twenty-one years of age, and citizens of the United States,
+or in any way abridged, except for participation in rebellion, or other
+crime, the basis of representation therein shall be reduced in the
+proportion which the number of such male citizens shall bear to the
+whole number of male citizens twenty-one years of age in such State.
+
+SECTION 3. No person shall be a Senator or Representative in Congress,
+or elector of President and Vice-President, or hold any office, civil or
+military, under the United States, or under any State, who, having
+previously taken an oath, as a member of Congress, or as an officer of
+the United States, or as a member of any State legislature, or as an
+executive or judicial officer of any State, to support the Constitution
+of the United States, shall have engaged in insurrection or rebellion
+against the same, or given aid or comfort to the enemies thereof. But
+Congress may by a vote of two-thirds of each House, remove such
+disability.
+
+SECTION 4. The validity of the public debt of the United States,
+authorized by law, including debts incurred for payment of pensions and
+bounties for services in suppressing insurrection or rebellion, shall
+not be questioned. But neither the United States nor any State shall
+assume or pay any debt or obligation incurred in aid of insurrection or
+rebellion against the United States, or any claim for the loss or
+emancipation of any slave; but all such debts, obligations and claims
+shall be held illegal and void.
+
+SECTION 5. The Congress shall have power to enforce, by appropriate
+legislation, the provisions of this article.
+
+
+[ARTICLE XV.]
+
+SECTION 1. The right of citizens of the United States to vote shall not
+be denied or abridged by the United States or by any State on account of
+race, color, or previous condition of servitude.
+
+SECTION 2. The Congress shall have power to enforce this article by
+appropriate legislation.
+
+
+[ARTICLE XVI.]
+
+The Congress shall have power to lay and collect taxes on incomes, from
+whatever source derived, without apportionment among the several States,
+and without regard to any census or enumeration.
+
+
+[ARTICLE XVII.]
+
+The Senate of the United States shall be composed of two Senators from
+each State, elected by the people thereof, for six years; and each
+Senator shall have one vote. The electors in each State shall have the
+qualifications requisite for electors of the most numerous branch of the
+state legislatures.
+
+When vacancies happen in the representation of any State in the Senate,
+the executive authority of such State shall issue writs of election to
+fill such vacancies: Provided, That the legislature of any State may
+empower the executive thereof to make temporary appointment until the
+people fill the vacancies by election as the legislature may direct.
+
+This amendment shall not be so construed as to affect the election or
+term of any Senator chosen before it becomes valid as part of the
+Constitution.
+
+
+[ARTICLE XVIII.]
+
+SECTION 1. After one year from the ratification of this article the
+manufacture, sale, or transportation of intoxicating liquors within, the
+importation thereof into, or the exportation thereof from the United
+States and all territory subject to the jurisdiction thereof for
+beverage purposes is hereby prohibited.
+
+SEC. 2. The Congress and the several States shall have concurrent power
+to enforce this article by appropriate legislation.
+
+SEC. 3. This article shall be inoperative unless it shall have been
+ratified as an amendment to the Constitution by the legislatures of the
+several States, as provided in the Constitution, within seven years from
+the date of the submission hereof to the States by the Congress.
+
+
+[ARTICLE XIX.]
+
+The right of citizens of the United States to vote shall not be denied
+or abridged by the United States or by any State on account of sex.
+
+Congress shall have power to enforce this article by appropriate
+legislation.
+
+
+
+
+
+End of Project Gutenberg's Our Changing Constitution, by Charles Pierson
+
+*** END OF THE PROJECT GUTENBERG EBOOK 14104 ***
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+Project Gutenberg (https://www.gutenberg.org) public repository for
+eBook #14104 (https://www.gutenberg.org/ebooks/14104)
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+The Project Gutenberg EBook of Our Changing Constitution, by Charles Pierson
+
+This eBook is for the use of anyone anywhere at no cost and with
+almost no restrictions whatsoever.  You may copy it, give it away or
+re-use it under the terms of the Project Gutenberg License included
+with this eBook or online at www.gutenberg.org
+
+
+Title: Our Changing Constitution
+
+Author: Charles Pierson
+
+Release Date: November 20, 2004 [EBook #14104]
+
+Language: English
+
+Character set encoding: ISO-8859-1
+
+*** START OF THIS PROJECT GUTENBERG EBOOK OUR CHANGING CONSTITUTION ***
+
+
+
+
+Produced by John Hagerson, Kevin Handy, Linda Cantoni, and the PG
+Online Distributed Proofreading Team.
+
+
+
+
+
+
+OUR CHANGING CONSTITUTION
+
+BY
+
+CHARLES W. PIERSON
+
+
+[Illustration: decorative anchor]
+
+
+GARDEN CITY NEW YORK
+
+DOUBLEDAY, PAGE & COMPANY
+
+1922
+
+
+COPYRIGHT, 1922, BY DOUBLEDAY, PAGE & COMPANY
+
+ALL RIGHTS RESERVED, INCLUDING THAT OF TRANSLATION INTO FOREIGN
+LANGUAGES, INCLUDING THE SCANDINAVIAN
+
+PRINTED IN THE UNITED STATES AT THE COUNTRY LIFE PRESS, GARDEN CITY,
+N.Y.
+
+
+
+
+PREFACE
+
+
+Citizens of the United States are wont to think of their form of
+government, a political system based on a written constitution, as
+something fixed and stable. In reality, it is undergoing a profound
+change. The idea which constituted its most distinctive feature, and in
+the belief of many represents America's most valuable contribution to
+the science of government, is being forgotten. Formed to be "an
+indestructible Union composed of indestructible states," our dual system
+is losing its duality. The states are fading out of the picture.
+
+The aim of this volume is to point out the change and discuss some of
+its aspects. A few chapters have already appeared in print. "Our
+Changing Constitution" and "Is the Federal Corporation Tax
+Constitutional?" were published in the _Outlook_. "The Corporation Tax
+Decision" appeared in the _Yale Law Journal_. "Can Congress Tax the
+Income from State and Municipal Bonds?" was printed in the New York
+_Evening Post_. All of these have been more or less revised and some new
+matter has been added.
+
+
+
+
+CONTENTS
+
+
+I. THE SALIENT FEATURE OF THE CONSTITUTION 1
+
+The American Constitution, its origin and contents. Wherein its novelty
+and greatness lay. Importance of maintaining the equilibrium established
+between national and state power. View of John Fiske.
+
+II. THE SUPREME COURT OF THE UNITED STATES 3
+
+Place of the Court in the constitutional scheme. Its most important
+function. Personnel of the Court. Its power moral rather than physical.
+Its chief weapon the power to declare legislative acts unconstitutional.
+Limitations on this power--political questions; necessity of an actual
+controversy; abuses of legislative power. Erroneous popular impressions.
+Impairment of the constitutional conscience.
+
+III. OUR CHANGING CONSTITUTION 18
+
+Change in popular attitude toward the Constitution. Causes of the change
+(growth of national consciousness, wars, foreign relations, influence of
+later immigrants and their descendants, desire to obtain federal
+appropriations, economic development, railroads, free trade among the
+states). Methods by which change has been put into effect
+(constitutional amendment, treaties, federal legislation under cover of
+power to regulate commerce and lay taxes). Attitude of the Supreme
+Court. Differences of opinion in the Court.
+
+IV. THE EIGHTEENTH OR PROHIBITION AMENDMENT 35
+
+History and radical character of amendment. Efforts to defeat it in the
+courts. Unusual course taken by Supreme Court. Discussion of its true
+place in the development of American constitutional law. Less a point of
+departure than a spectacular manifestation of a change already under
+way. Effect of the change on the principle of local self-government.
+
+V. THE NINETEENTH OR WOMAN SUFFRAGE AMENDMENT 49
+
+Attitude of the Constitution toward question of suffrage qualifications.
+Effect of Civil War amendments. Growth of woman suffrage movement and
+adoption of Suffrage Amendment. How far the amendment constitutes a
+federal encroachment on state power. Effect of woman suffrage on
+questions of governmental theory.
+
+VI. CONGRESS VERSUS THE SUPREME COURT--THE CHILD LABOR LAWS 59
+
+The child labor question. Philanthropic and commercial aspects. Attempt
+of Congress to legislate under power to regulate commerce. Decision of
+Supreme Court holding law unconstitutional. The decision explained.
+Reënactment of law by Congress under cover of power to lay taxes.
+Arguments for and against constitutionality of new enactment.
+
+VII. STATE RIGHTS AND THE SUPREME COURT 69
+
+The Supreme Court at first a bulwark of national power; to-day the
+defender of the states. Explanation of this apparent change. Attitude of
+the Court in the first period. The period of Chief Justice Marshall. The
+period of Chief Justice Taney. The Reconstruction Period. Attitude of
+the Court to-day. Reasons why the Court is unable to prevent federal
+encroachment. Attitude of Hamilton and Marshall toward state rights
+misunderstood.
+
+VIII. THE FEDERAL TAXING POWER AND THE INCOME TAX AMENDMENT 85
+
+America's embarrassing position if the late war had come before adoption
+of Income Tax Amendment. Limitations of federal taxing power under the
+Constitution. Meaning of "uniformity." Apportionment of "direct taxes."
+The Supreme Court decision in the Income Tax cases in 1894 a reversal of
+long settled ideas. The Income Tax Amendment an example of recall of
+judicial decisions. Implied limitations on federal taxing power
+(compensation of federal judges, due process clause of the Constitution,
+no power to tax property or governmental activities of the states).
+
+IX. CAN CONGRESS TAX THE INCOME FROM STATE AND MUNICIPAL BONDS? 97
+
+No express prohibition of such taxation; it lies in an implied
+limitation inherent in our dual system of government. Discussion of
+doctrine and its development by the Supreme Court. Effect of the Income
+Tax Amendment. Present dissatisfaction with doctrine and efforts to
+abolish it.
+
+X. IS THE FEDERAL CORPORATION TAX CONSTITUTIONAL? 106
+
+Nature of the tax. An interference with state power to grant corporate
+franchises. Nature of our dual government and Supreme Court decisions on
+the subject discussed. The debate in Congress.
+
+XI. THE CORPORATION TAX DECISION 122
+
+Importance of the decision likely to be overlooked. Criticism of the
+Court's arguments. Effects of the decision.
+
+XII. THE FEDERAL GOVERNMENT AND THE TRUSTS 129
+
+Origin and history of Sherman Act. Its meaning now clear. Earlier
+uncertainties owing chiefly to two questions--What is interstate trade
+and Does the act enlarge the common-law rule as to what restraints were
+unlawful? How these questions have been settled. Statement of the
+common-law rule. Incompatibility between the law and present economic
+conditions. Suggestions for legal reform. The holding company device,
+its abuses and the possibility of abolishing it. Advantages of the
+scheme of federal incorporation.
+
+XIII. WHAT OF THE FUTURE? 143
+
+Rapid progress and present extent of federal encroachment on state
+power. Growth of federal bureaucracy. A reaction against centralization
+inevitable sooner or later. Adequacy of Constitution to deal with
+changing conditions. The railroads and the trusts. Dangerous assaults
+upon Constitution in field of social welfare legislation. Exercise of
+police power a matter for local authority. Elihu Root's view. Outlook
+for the future.
+
+APPENDIX 153
+
+
+
+
+OUR CHANGING CONSTITUTION
+
+
+
+
+I
+
+THE SALIENT FEATURE OF THE CONSTITUTION
+
+
+Few documents known to history have received as much praise as the
+United States Constitution. Gladstone called it "the most wonderful work
+ever struck off at a given time by the brain and purpose of man." The
+casual reader of the Constitution will be at a loss to account for such
+adulation. It will seem to him a businesslike document, outlining a
+scheme of government in terse and well-chosen phrases, but he is apt to
+look in vain for any earmarks of special inspiration. To understand the
+true greatness of the instrument something more is required than a mere
+reading of its provisions.
+
+The Constitution was the work of a convention of delegates from the
+states, who met in Philadelphia in May, 1787, and labored together for
+nearly four months. They included a large part of the best character
+and intellect of the country. George Washington presided over their
+deliberations. The delegates had not been called together for the
+purpose of organizing a new government. Their instructions were limited
+to revising and proposing improvements in the Articles of the existing
+Confederation, whose inefficiency and weakness, now that the cohesive
+power of common danger in the war of the Revolution was gone, had become
+a byword. This task, however, was decided to be hopeless, and with great
+boldness the convention proceeded to disregard instructions and prepare
+a wholly new Constitution constructed on a plan radically different from
+that of the Articles of Confederation. The contents of the Constitution,
+as finally drafted and submitted for ratification, may be described in
+few words. It created a legislative department consisting of a Senate
+and a House of Representatives, an executive department headed by a
+President, and a judicial department headed by a Supreme Court, and
+prescribed in general terms the qualifications, powers, and functions of
+each. It provided for the admission of new states into the Union and
+that the United States should guarantee to every state a republican form
+of government. It declared that the Constitution and the laws of the
+United States made in pursuance thereof, and treaties, should be the
+supreme law of the land. It provided a method for its own amendment.
+Save for a few other brief clauses, that was all. There was no
+proclamation of Democracy; no trumpet blast about the rights of man such
+as had sounded in the Declaration of Independence. On the contrary, the
+instrument expressly recognized human slavery, though in discreet and
+euphemistic phrases.
+
+Wherein, then, did the novelty and greatness of the Constitution lie?
+Its novelty lay in the duality of the form of government which it
+created--a nation dealing directly with its citizens and yet composed of
+sovereign states--and in its system of checks and balances. The world
+had seen confederations of states. It was familiar with nations
+subdivided into provinces or other administrative units. It had known
+experiments in pure democracy. The constitutional scheme was none of
+these. It was something new, and its novel features were relied upon as
+a protection from the evils which had developed under the other plans.
+The greatness of the Constitution lay in its nice adjustment of the
+powers of government, notably the division of powers which it effected
+between the National Government and the states. The powers conferred on
+the National Government were clearly set forth. All were of a strictly
+national character. They covered the field of foreign relations,
+interstate and foreign commerce, fiscal and monetary system, post office
+and post roads, patents and copyrights, and jurisdiction over certain
+specified crimes. All other powers were reserved to the states or the
+people. In other words, the theory was (to quote Bryce's "The American
+Commonwealth") "local government for local affairs; general government
+for general affairs only."
+
+The Constitution as it left the hands of its framers was not entirely
+satisfactory to anybody. Owing to the discordant interests and mutual
+jealousies of the states, it was of necessity an instrument of many
+compromises. One of the great compromises was that by which the small
+states were given as many senators as the large. Another is embalmed in
+the provisions recognizing slavery and permitting slaves to count in the
+apportionment of representatives. (The number of a state's
+representatives was to be determined "by adding to the whole number of
+free persons ... three-fifths of all other persons.") Another was the
+provision that direct taxes should be apportioned among the states
+according to population. With all its compromises, however, the
+Constitution embodied a great governmental principle, full of hope for
+the future of the country, and the state conventions to which it was
+submitted for ratification were wise enough to accept what was offered.
+Ratification by certain of the states was facilitated by the publication
+of that remarkable series of papers afterward known as the "Federalist."
+These were the work of Alexander Hamilton, James Madison, and John Jay,
+and first appeared in New York newspapers.
+
+One of the objections to the new Constitution in the minds of many
+people was the absence of a "bill of rights" containing those provisions
+for the protection of individual liberty and property (e.g., trial by
+jury, freedom of speech, protection from unreasonable searches and
+seizures) which had come down from the early charters of English
+liberties. In deference to this sentiment a series of ten brief
+amendments were proposed and speedily ratified. Another amendment (No.
+XI) was soon afterward adopted for the purpose of doing away with the
+effect of a Supreme Court decision. Thereafter, save for a change in
+the manner of electing the President and Vice-president, the
+Constitution was not again amended until after the close of the Civil
+War, when Amendments XIII, XIV, and XV, having for their primary object
+the protection of the newly enfranchised Negroes, were adopted. The
+Constitution was not again amended until the last decade, when the
+Income Tax Amendment, the amendment providing for the election of
+Senators by popular vote, the Prohibition Amendment, and the Woman
+Suffrage Amendment were adopted in rapid succession. Some of these will
+be discussed in later chapters.
+
+It is interesting to note that two of the amendments (No. XI, designed
+to prevent suits against a state without its permission by citizens of
+another state, and No. XVI, paving the way for the Income Tax) were
+called forth by unpopular decisions of the Supreme Court, and virtually
+amounted to a recall of those decisions by the people. These instances
+demonstrate the possibility of a recall of judicial decisions by
+constitutional methods, and tend to refute impatient reformers who
+preach the necessity of a more summary procedure. Such questions,
+however, lie outside the scope of this book. We emphasize here the fact
+that the great achievement of the Constitution was the creation of a
+dual system of government and the apportionment of its powers. That was
+what made it "one of the longest reaches of constructive statesmanship
+ever known in the world."[1] It offered the most promising solution yet
+devised for the problem of building a nation without tearing down local
+self-government.
+
+[Footnote 1: Fiske: "The Critical Period of American History," p. 301.]
+
+John Fiske, the historian, writing of the importance of preserving the
+constitutional equilibrium between nation and states, said:[1]
+
+     If the day should ever arrive (which God forbid!) when the
+     people of the different parts of our country shall allow their
+     local affairs to be administered by prefects sent from
+     Washington, and when the self-government of the states shall
+     have been so far lost as that of the departments of France, or
+     even so far as that of the counties of England--on that day
+     the progressive political career of the American people will
+     have come to an end, and the hopes that have been built upon
+     it for the future happiness and prosperity of mankind will be
+     wrecked forever.
+
+[Footnote 1: Id., p. 238.]
+
+If allowance be made for certain extravagances of statement, these words
+will serve as a fitting introduction to the discussions which follow.
+
+
+
+
+II
+
+THE SUPREME COURT OF THE UNITED STATES
+
+
+The Constitution effected an apportionment of the powers of government
+between nation and states. The maintenance of the equilibrium thus
+established was especially committed to the Supreme Court. This novel
+office, the most important of all its great functions, makes the Court
+one of the most vital factors of the entire governmental scheme and
+gives it a unique preëminence among the judicial tribunals of the world.
+
+How the office has been performed, and whether the constitutional
+equilibrium is actually being maintained, are the questions to be
+considered in this book. Before taking them up, however, it will be
+useful to glance briefly at the Court itself and inquire how it is
+equipped for its difficult task.
+
+The United States Supreme Court at present is composed of nine judges.
+The number originally was six. It now holds its sessions at the Capitol
+in Washington, in the old Senate Chamber which once echoed with the
+eloquence of the Webster-Hayne debate. The judges are nominated by the
+President, and their appointment, like that of ambassadors, must be
+confirmed by the Senate. The makers of the Constitution took the utmost
+care to insure the independence of the Court. Its members hold office
+during good behavior, that is to say for life. They cannot be removed
+except by impeachment for misconduct. Only one attempt has ever been
+made to impeach a judge of the Supreme Court[1] and that attempt failed.
+Still further to insure their freedom from legislative control, the
+Constitution provides that the compensation of the judges shall not be
+diminished during their continuance in office.[2]
+
+[Footnote 1: Justice Samuel Chase of Maryland in 1804-5.]
+
+[Footnote 2: It is interesting to observe that this Court, safeguarded
+against popular clamor and composed of judges appointed for life, has
+consistently shown itself more progressive and more responsive to modern
+ideas than have most of the state Supreme Courts whose members are
+elected directly by the people and for limited terms only.]
+
+From the time of John Jay, the first Chief Justice, down to the present
+day the men appointed to membership in the Court have, for the most
+part, been lawyers of the highest character and standing, many of whom
+had already won distinction in other branches of the public service.
+The present Chief Justice (Taft) is an ex-President of the United
+States. Among the other members of the Court are a former Secretary of
+State of the United States (Justice Day); two former Attorneys General
+of the United States (Justices McKenna and McReynolds); a former Chief
+Justice of Massachusetts (Justice Oliver Wendell Holmes, the
+distinguished son and namesake of an illustrious father); a former Chief
+Justice of Wyoming (Justice Van Devanter); and a former Chancellor of
+New Jersey (Justice Pitney).
+
+It is well that the personnel of the Court has been such as to command
+respect and deference, for in actual power the judiciary is by far the
+weakest of the three coördinate departments (legislative, executive,
+judicial) among which the functions of government were distributed by
+the Constitution. The power of the purse is vested in Congress: it alone
+can levy taxes and make appropriations. The Executive is
+Commander-in-Chief of the Army and Navy and wields the appointing power.
+The Supreme Court controls neither purse nor sword nor appointments to
+office. Its power is moral rather than physical. It has no adequate
+means of enforcing its decrees without the coöperation of other
+branches of the Government.
+
+That coöperation has not always been forthcoming. In the year 1802,
+Congress, at the instigation of President Jefferson, the inveterate
+enemy of Chief Justice Marshall, suspended the sessions of the Court for
+more than a year by abolishing the August term. In 1832, when the State
+of Georgia defied the decree of the Court in a case involving the status
+of the Cherokee Indians, the other departments of the Federal Government
+gave no aid and President Andrew Jackson is reported to have remarked:
+"John Marshall has made the decision, now let him execute it." In 1868,
+Congress, in order to forestall decision in a case pending before the
+Court, hastily repealed the statute on which the jurisdiction of the
+Court depended.[1] Such instances, however, have been rare. The
+law-abiding instinct is strong in the American people, and for the most
+part the decisions of the Supreme Court have been received with respect
+and unquestioning obedience.
+
+[Footnote 1: See _ex parte McCardle_, 6 Wall. (Supreme Court Reports),
+318; 7 _id._, 506.]
+
+The chief weapon in the arsenal of the Court is the power to declare
+legislative acts void on the ground that they overstep limits
+established by the people in the Constitution. This power has been
+frequently exercised. It is stated that the congressional statutes thus
+nullified have not numbered more than thirty, while at least a thousand
+state laws have been nullified.[1]
+
+[Footnote 1: Brief of Solicitor General James M. Beck in the Child Labor
+Tax cases. It is to be borne in mind that there are forty-eight state
+legislatures and only one Congress.]
+
+The assumption of this power in the Court to declare statutes
+unconstitutional has been bitterly assailed, and is still denounced in
+some quarters, as judicial usurpation originated by John Marshall.
+
+On the historical side this objection is not well founded. Various state
+courts had exercised the power to declare statutes unconstitutional
+before the Supreme Court came into existence.[1] The framers of the
+Constitution clearly intended that such a power should be exercised by
+the Supreme Court.[2] Moreover, a somewhat similar power appears to have
+been exercised long before in England,[3] though it gave place later to
+the present doctrine of the legal omnipotence of Parliament.
+
+[Footnote 1: See Bryce: "The American Commonwealth," Vol. I, p. 250.]
+
+[Footnote 2: See e.g., "Federalist," No. LXXVIII.]
+
+[Footnote 3: See opinion of Lord Coke in Bonham's Case, 8 Coke's
+Reports, 118, decided in 1610.]
+
+On the side of reason and logic, the argument in favor of the power
+formulated more than a century ago by Chief Justice Marshall has never
+been adequately answered and is generally accepted as final. He said:[1]
+
+     The powers of the legislature are defined and limited; and
+     that those limits may not be mistaken or forgotten, the
+     Constitution is written. To what purpose are powers limited,
+     and to what purpose is that limitation committed to writing,
+     if these limits may, at any time, be passed by those intended
+     to be restrained?... The Constitution is either a superior
+     paramount law, unchangeable by ordinary means, or it is on a
+     level with ordinary legislative acts, and, like other acts, is
+     alterable when the legislature shall please to alter it. If
+     the former part of the alternative be true, then a legislative
+     act, contrary to the Constitution, is not law: if the latter
+     part be true, then written constitutions are absurd attempts,
+     on the part of the people, to limit a power in its own nature
+     illimitable.
+
+[Footnote 1: _Marbury v. Madison_, 1 Cranch, 176.]
+
+It would seem at first blush that the power in the Court to declare
+legislative acts unconstitutional affords a complete safeguard against
+congressional encroachment on the prerogatives of the states. Such is
+not the fact, however. The veto power of the Court by no means covers
+the entire field of legislative activity. In the Convention which
+framed the Constitution, attempts were made to give to the judiciary, in
+conjunction with the executive, complete power of revision over
+legislative acts, but all such propositions were voted down.[1] As
+matters stand, there may be violations of the Constitution by Congress
+(or for that matter by the executive) of which the Court can take no
+cognizance.
+
+[Footnote 1: See e.g., Farrand: "Records of the Federal Convention,"
+Vol. I, pp. 138 et seq.; Vol. II, p. 298.]
+
+For one thing, the Court cannot deal with questions of a political
+character. The function of the Court is judicial only. Upon this ground
+it was decided that the question which of two rival governments in the
+State of Rhode Island was the legitimate one was for the determination
+of the political department of government rather than the courts;[1]
+that the question, whether the adoption by a state of the initiative and
+referendum violated the provision of the Federal Constitution
+guaranteeing to every state a republican form of government, was
+political and therefore beyond the jurisdiction of the Court.[2] In 1867
+a sovereign state sought to enjoin the President of the United States
+from enforcing an act of Congress alleged to be unconstitutional. The
+Supreme Court, without determining the constitutionality of the act,
+declined to interfere with the exercise of the President's political
+discretion.[3] In the famous Dred Scott case[4] the effort of the
+Supreme Court to settle a political question accomplished nothing save
+to impair the influence and prestige of the Court.
+
+[Footnote 1: _Luther v. Borden_, 7 Howard, 1.]
+
+[Footnote 2: _Pacific Telephone Co. v. Oregon_, 223 U.S., 118.]
+
+[Footnote 3: _State of Mississippi v. Andrew Johnson_, 4 Wall., 475.]
+
+[Footnote 4: _Dred Scott v. Sandford_, 19 Howard, 393.]
+
+The power of the Court to declare legislative acts unconstitutional is
+subject to another important limitation. The judicial power is limited
+by the Constitution to actual cases and controversies between opposing
+parties. The Court cannot decide moot questions or act as an adviser for
+other departments of the government. A striking illustration is found in
+the so-called Muskrat case.[1] Congress having legislated concerning the
+distribution of property of the Cherokee Indians, and doubts having
+arisen as to the constitutional validity of the legislation, Congress
+passed another act empowering one David Muskrat and other Cherokee
+citizens to file suit, naming the United States as defendant, to settle
+the question. The Supreme Court declined to take jurisdiction and
+dismissed the suit, holding that it was not a case or controversy
+between opposing parties within the meaning of the Constitution.
+
+[Footnote 1: _Muskrat v. United States_, 219 U.S., 346.]
+
+Still another limitation is encountered in cases involving abuse of
+legislative power rather than lack of power. If Congress passes an act
+within one of the powers expressly conferred upon it by the
+Constitution, for example the power to lay taxes or the power to
+regulate interstate commerce, the Supreme Court cannot interfere though
+the incidental effect and ulterior purpose of the legislation may be to
+intrude upon the field of state power. We shall have occasion to refer
+to this limitation more than once in later chapters.
+
+An impression is abroad that the Supreme Court has plenary power to
+preserve the Constitution. Hence the tendency of groups to demand, and
+of legislators to enact, any kind of a law without regard to its
+constitutional aspect, leaving that to be taken care of by the Court.
+
+Any such impression is erroneous and unfortunate. It puts upon the Court
+a burden beyond its real powers. It undermines the sense of
+responsibility which should exist among the elected representatives of
+the people. It impairs what someone has called the constitutional
+conscience, and weakens the vigilance of the people in preserving their
+liberties. Men and women need to be reminded that the duty of upholding
+the Constitution does not devolve upon the Supreme Court alone. It rests
+upon all departments of government and, in the last analysis, upon the
+people themselves.
+
+
+
+
+III
+
+OUR CHANGING CONSTITUTION
+
+
+In a celebrated case[1] decided a few years ago the Supreme Court of the
+United States said:
+
+     The Constitution is a written instrument. As such its meaning
+     does not alter. That which it meant when adopted it means now.
+     Being a grant of powers to a government its language is
+     general, and as changes come in social and political life it
+     embraces in its grasp all new conditions which are within the
+     scope of the powers in terms conferred. In other words, while
+     the powers granted do not change, they apply from generation
+     to generation to all things to which they are in their nature
+     applicable. This in no manner abridges the fact of its
+     changeless nature and meaning. Those things which are within
+     its grants of power, as those grants were understood when
+     made, are still within them, and those things not within them
+     remain still excluded....
+
+     To determine the extent of the grants of power we must,
+     therefore, place ourselves in the position of the men who
+     framed and adopted the Constitution, and inquire what they
+     must have understood to be the meaning and scope of those
+     grants.
+
+[Footnote 1: _South Carolina v. United States_, 199 U.S., 437.]
+
+Thus speaks the voice whose word is law.
+
+Viewed in the sense intended--as the formulation of a legal rule for the
+interpretation and construction of a written instrument--the statement
+compels assent. As a statement of historical and political fact,
+however, it would not be accepted so readily. An acute critic of our
+institutions has said that the Constitution "has changed in the spirit
+with which men regard it, and therefore in its own spirit."[1] Men
+realize that the words of the Constitution, like the words of Holy Writ,
+have not always meant the same thing to those who regulate their conduct
+by its precepts; that the system of government which those words embody
+has in reality changed, is changing to-day.
+
+[Footnote 1: Bryce: "The American Commonwealth," Vol. I, p. 400.]
+
+The makers of the Constitution represented the people of distinct and
+independent states, jealous of their rights and of each other but
+nevertheless impelled by experience of danger lately past and sense of
+other perils impending to substitute for their loose and ill-working
+confederation a more effective union. The most formidable obstacle,
+apart from mutual jealousies, was a fear of loss of liberties, state and
+individual, through encroachment of the central power. The instrument,
+drawn with this fear uppermost, was designed to limit the National
+Government to "the irreducible minimum of functions absolutely needed
+for the national welfare."[1] To this end the powers granted were
+specifically enumerated. All other powers were by express enactment[2]
+"reserved to the States respectively, or to the people."
+
+[Footnote 1: Bryce, "The American Commonwealth," Vol. I, p. 324.]
+
+[Footnote 2: Tenth Amendment.]
+
+The strength of the popular sentiment against any encroachment of
+federal power was speedily demonstrated in a striking and dramatic way.
+Under the grant of power to determine controversies "between a state and
+citizens of another state"[1] the Supreme Court in 1793 proceeded to
+entertain a suit by one Chisholm, a citizen of South Carolina, against
+the State of Georgia.[2] It had not been supposed that the grant of
+power contemplated such a suit against a state without its consent. The
+decision aroused an indescribable state of popular fury, not only in
+Georgia but throughout the Union, and led to the adoption of a
+constitutional amendment[3] prohibiting such suits in future.
+
+[Footnote 1: Art. III, Sec. 2.]
+
+[Footnote 2: See 2 Dallas, 419.]
+
+[Footnote 3: Eleventh Amendment.]
+
+There is a long step between such an attitude toward the Constitution
+and the viewpoint which finds in it authority for the enactment by
+Congress of White Slave and Child Labor laws. Obviously there has been a
+profound change in what the Constitution means to its adherents. It will
+be interesting to consider briefly what has caused the change of view,
+and how it has been put into effect.
+
+To one searching for causes the most striking phenomenon is the growth
+of a national consciousness. At the outset it was practically
+non-existent. To-day its power has astonished enemy and friend alike.
+Its growth has been due to both pressure from without and developments
+within. Our foreign wars, especially the war with Germany, have drawn
+the people together and enhanced the importance of interests purely
+national. Some of our other foreign relations have brought into relief
+the advantages of a strong central government as well as certain
+inconveniences of our system as it left the hands of the framers.
+Witness the embarrassment toward Italy growing out of lack of federal
+jurisdiction in respect of the New Orleans riots, and the ever-present
+danger to our relations with Japan from acts of the sovereign State of
+California which the Federal Government is powerless to control. Among
+developments from within was the Civil War, with its triumph for the
+idea of national supremacy and an indissoluble union. Another, which has
+hardly received the attention it deserves, has been the influence of the
+large element of our population composed of immigrants since the
+Revolution and their descendants. The state sovereignty doctrine was not
+a mere political dogma but had its roots in history. It was an
+expression of the pride of the inhabitants of the Thirteen Colonies in
+their respective commonwealths. To them it stood for patriotism and
+traditions. These feelings the later immigrant neither shared nor
+understood. When he gave up his Old World allegiance and emigrated he
+came to America, not to New York or Massachusetts. To him the nation was
+everything, the state merely an administrative subdivision of the
+nation.
+
+Another cause has been the desire to obtain aid in local matters from
+the national treasury. This has proved an exceedingly potent and
+insidious influence, leading state officials to surrender voluntarily
+state prerogatives in exchange for appropriations of federal money.
+Notable examples of this influence may be found in the field of river
+and harbor improvements, the creation of various new bureaus in the
+Department of Commerce, the enormous extension of the activities of the
+Agricultural Department and the Bureau of Education. The temptation in
+this direction is particularly strong among the less prosperous states,
+for it means the expenditure in those states of federal moneys raised
+chiefly from the taxpayers in wealthier states.
+
+The most potent influence of all, however, has been the matter of
+internal economic development, stimulated by free trade among the
+states. This development has gone on apace with little regard for state
+lines. The invention of railways drew the different sections of the
+country together in a common growth, and tended to make the barriers
+interposed by state lines and state laws seem artificial and cumbersome.
+In fact, they sometimes came to be regarded as intolerable and
+destructive of progress. The spectacle of men clamoring for federal
+control of their industries to escape the burdens of a diversified state
+interference has been a frequent phenomenon of recent years.[1]
+
+[Footnote 1: See e.g. the efforts of the life insurance interests: _N.Y.
+Life Ins. Co. v. Deer Lodge County_, 231 U.S., 495.]
+
+The foregoing enumeration by no means covers all the forces which have
+been at work. In recent years a strong tendency toward centralization
+and combination has developed, a tendency pervading all the interests
+and activities of men. Moreover, new views have arisen concerning the
+functions and scope of government, views challenging the _laissez faire_
+doctrines of earlier days and demanding a greater measure of
+governmental interference with the affairs of the individual. These
+tendencies, however, are not peculiar to America and lie outside the
+scope of the present discussion.
+
+In considering the methods by which the change of spirit toward the
+Constitution has been put into effect, one is struck by the
+comparatively small part played by the only method contemplated by the
+framers, viz., constitutional amendment. This method is entirely
+practicable and fairly expeditious provided a sufficient number favor
+the change proposed. In the one hundred years prior to the recent Income
+Tax Amendment, however, only three amendments were enacted (Numbers
+XIII, XIV, and XV), all of them dealing primarily with the abolition of
+slavery and the civil rights of the Negro. The only one which need be
+noticed here is Number XIV, which substituted a federal test of
+citizenship for state tests and provided that no state should "deprive
+any person of life, liberty, or property, without due process of law;
+nor deny to any person within its jurisdiction the equal protection of
+the laws." There was nothing new in these prohibitions. In substance
+they are as old as Magna Charta and were already embodied in most if not
+all of the state constitutions. The novelty lay in bringing the
+question, whether a state had in fact denied due process of law to an
+individual or corporation, within the jurisdiction of the federal
+courts. From a legal viewpoint this was a change of great importance. To
+the general student of constitutional government, however, it is less
+significant than others presently to be mentioned.
+
+Right here it may be proper to notice a new theory of construction of
+the Constitution, not yet accepted but strenuously urged and containing
+enormous potentialities. This is the "doctrine of sovereign and inherent
+power," i.e., the doctrine that powers of national scope for whose
+exercise no express warrant is found in the Constitution are
+nevertheless to be implied as inherent in the very fact of sovereignty.
+This is a very different thing from the famous doctrine of implied
+powers developed by Chief Justice Marshall--that all powers will be
+implied which are suitable for carrying into effect any power expressly
+granted. It is a favorite theory of what may be termed the Roosevelt
+school. They consider that it is rendered necessary by the discovery of
+fields suitable for legislative cultivation, lying outside the domain of
+state power but not within the scope of any express grant of power to
+the nation. As practical men they abhor the existence of such a
+constitutional no man's land as nature abhors a vacuum.
+
+During the presidency of Mr. Roosevelt a determined effort was made by
+the representatives of the Administration[1] to secure the recognition
+by the Supreme Court of the doctrine of sovereign and inherent power. It
+was claimed in the brief filed by the Attorney General and Solicitor
+General that the doctrine had already been applied by the Court in the
+Legal Tender cases.[2] The effort failed, however, the Court declaring
+that any such power, if necessary to the nation, must be conferred
+through constitutional amendment by the people, to whom all powers not
+granted had been expressly reserved by the Tenth Amendment.
+
+[Footnote 1: In _Kansas v. Colorado_, 206 U.S., 46.]
+
+[Footnote 2: Bryce makes a statement to the same effect. "The American
+Commonwealth," Vol. I, p. 383.]
+
+A method by which the federal power and jurisdiction have been much
+extended has been the occupation by Congress, through legislation of an
+exclusive character, of fields where the states had exercised a
+concurrent jurisdiction. A familiar example is found in federal
+bankruptcy laws. Another and striking example is the so-called "Carmack
+Amendment" of the federal Interstate Commerce law. The question of
+liability for loss or damage to goods in the hands of railways and other
+carriers had been a fruitful field for state legislatures and state
+courts. The Carmack Amendment brushed away at a single stroke whole
+systems of state statutes and judicial decisions (in so far as they
+affected traffic across state lines) and substituted a uniform system
+under the control of the federal courts.
+
+The federal power has also been extended at the expense of the states
+through the use of the treaty-making prerogative. The subjects upon
+which Congress may legislate are limited by specific enumeration. The
+treaty-making power, however, is not thus limited. Treaties may cover
+any subject. It follows that while the Federal Government has no power
+(for example) to regulate the descent of real property in the various
+states the treaty-making power permits it, by treaties with foreign
+nations, to destroy the alienage laws of the states.[1] Another very
+recent example is afforded by the Migratory Bird Treaty with Great
+Britain.[2] One will search the Constitution in vain for any grant of
+power to the Federal Government to enact game laws. Nevertheless, under
+this treaty, many state game laws have been practically annulled.
+
+[Footnote 1: _Hauenstein v. Lynham_, 100 U.S., 483.]
+
+[Footnote 2: Sustained by the Supreme Court in _Missouri v. Holland_,
+252 U.S., 416.]
+
+But the most far-reaching method by which federal power under the
+Constitution has been extended has been the adaptation--some will say
+the perversion--by Congress of old grants of power to new ends. Under
+the spur of public sentiment Congress has discovered new legislative
+possibilities in familiar clauses of the Constitution as one discovers
+new beauties in a familiar landscape. The clause offering the greatest
+possibilities has been the so-called Commerce Clause, which grants to
+Congress power "to regulate commerce with foreign nations, and among the
+several states."[1] Under this grant of power Congress has enacted, and
+the courts have upheld, a great mass of social and economic legislation
+having to do only remotely with commerce. For example, the Sherman Act
+and other anti-trust legislation, ostensibly mere regulations of
+commerce, but actually designed for the control and suppression of
+trusts and monopolies; the federal Pure Food and Drugs Act, designed to
+prevent the adulteration or mis-branding of foods and drugs and check
+the abuses of the patent-medicine industry;[2] the act for the
+suppression of lotteries, making it a crime against the United States to
+carry or send lottery tickets or advertisements across state lines;[3]
+an act to prevent the importation of prize-fight films.[4] These are
+only a few among many similar statutes which might be mentioned. In all
+of them the motive is clear. There is no concealment about it. Their
+primary object is to suppress or regulate the trusts, lotteries,
+patent-medicine frauds. The regulation of commerce is merely a matter of
+words and legal form.
+
+[Footnote 1: Art. I, Sec. 8.]
+
+[Footnote 2: _Hipolite Egg Company v. United States_, 220 U.S., 45.]
+
+[Footnote 3: _Champion v. Ames_, 188 U.S., 321.]
+
+[Footnote 4: _Weber v. Freed_, 239 U.S., 325.]
+
+Especially noteworthy is the rapidly expanding body of social
+legislation--federal Employers' Liability Act, Hours of Service acts,
+Child Labor Law, White Slave Act and the like, all drawn with an eye to
+the commerce clause but designed to accomplish objects quite distinct
+from the regulation of commerce.
+
+As already said, the Commerce Clause has been found most available for
+purposes of such legislation. Other clauses have, however, served their
+turn. For example, the grant of power to lay taxes was utilized to
+destroy an extensive industry obnoxious to the dairy interests--the
+manufacture of oleomargarine artificially colored to look like
+butter.[1] Also to invade the police power of the States in respect of
+the regulation of the sale and use of narcotic drugs.[2] Also to check
+speculation and extortion in the sale of theatre tickets![3] The power
+to borrow money and create fiscal agencies was utilized to facilitate
+the making of loans upon farm security at low rates of interest through
+the incorporation of Federal land banks or Joint Stock land banks.[4]
+
+[Footnote 1: _McCray v. United States_, 195 U.S., 27.]
+
+[Footnote 2: Narcotic Drug Act. Held constitutional in _United States v.
+Doremus_, 249 U.S., 86; _Webb v. United States_, 249 U.S., 96.]
+
+[Footnote 3: Revenue Act of 1921, Title VIII, subdivisions 2 and 3.]
+
+[Footnote 4: _Smith v. Kansas City Title Co._, 255 U.S., 180.]
+
+It would be an insult to intelligence to claim that legislation such as
+this, wearing the form of revenue measure or regulation of commerce but
+in reality enacted with a different motive, does not involve an enormous
+extension of the national power beyond what the makers of the
+Constitution supposed they were conferring or intended to confer. What,
+then, of the declaration by the Supreme Court with which we began, that
+"to determine the extent of the grants of power we must place ourselves
+in the position of the men who framed and adopted the Constitution, and
+inquire what they must have understood to be the meaning and scope of
+these grants." The answer must be that the Court itself has not always
+adhered strictly to this test. The Court has taken the position that
+when power exists under the Constitution to legislate upon a given
+subject--say interstate commerce or taxation--it is not for the
+judiciary to seek to correct abuses by Congress of that power, or to
+question Congressional motives. As said in the decision sustaining the
+constitutionality of the oleomargarine law:[1]
+
+     The judiciary is without authority to avoid an act of Congress
+     lawfully exerting the taxing power, even in a case where to
+     the judicial mind it seems that Congress had, in putting such
+     power in motion, abused its lawful authority by levying a tax
+     which was unwise or oppressive, or the result of the
+     enforcement of which might be to indirectly affect subjects
+     not within the powers delegated to Congress, nor can the
+     judiciary inquire into the motive or purpose of Congress in
+     adopting a statute levying an excise tax within its
+     constitutional power.
+
+[Footnote 1: _McCray v. United States_, 195 U.S., 27.]
+
+The Court, however, has had great difficulty with these cases and
+developed sharp differences of opinion. For example, the case upholding
+the anti-lottery statute as a valid exercise of the power to regulate
+commerce[1] was twice ordered for reargument and finally decided by a
+bare majority of 5 to 4. The Child Labor Law of 1916 was declared
+unconstitutional[2] and the Narcotic Drug Act was sustained[3] by a
+similar vote, 5 to 4. In the Narcotic Drug case the four dissenting
+justices, speaking through Chief Justice White, characterized portions
+of the statute as "beyond the constitutional power of Congress to enact
+... a mere attempt by Congress to exert a power not delegated, that is,
+the reserved police power of the states." In the Lottery case the
+dissenting opinion of the four, written by Chief Justice Fuller,
+concludes:
+
+     I regard this decision as inconsistent with the views of the
+     framers of the Constitution, and of Marshall, its great
+     expounder. Our form of government may remain notwithstanding
+     legislation or decision, but, as long ago observed, it is with
+     governments, as with religions, the form may survive the
+     substance of the faith.
+
+[Footnote 1: _Champion v. Ames_, 188 U.S., 321.]
+
+[Footnote 2: _Hammer v. Dagenhart_, 247 U.S., 251.]
+
+[Footnote 3: _United States v. Doremus_, 249 U.S., 86.]
+
+Whatever view one may hold to-day as to the question of expediency, no
+thoughtful mind can escape the conclusion that, in a very real and
+practical sense, the Constitution has changed. In a way change is
+inevitable to adapt it to the conditions of the new age. There is
+danger, however, that in the process of change something may be lost;
+that present-day impatience to obtain desired results by the shortest
+and most effective method may lead to the sacrifice of a principle of
+vital importance.
+
+The men who framed the Constitution were well advised when they sought
+to preserve the integrity of the states as a barrier against the
+aggressions and tyranny of the majority acting through a centralized
+power. The words "state sovereignty" acquired an odious significance in
+the days of our civil struggle, but the idea for which they stand is
+nevertheless a precious one and represents what is probably America's
+most valuable contribution to the science of government.
+
+We shall do well not to forget the words of that staunch upholder of
+national power and authority, Salmon P. Chase, speaking as Chief Justice
+of the Supreme Court in a famous case growing out of the Civil War:[1]
+
+     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.
+
+[Footnote 1: _Texas v. White_, 7 Wall., 700.]
+
+
+
+
+IV
+
+THE EIGHTEENTH AMENDMENT
+
+
+Could Washington, Madison, and the other framers of the Federal
+Constitution revisit the earth in this year of grace 1922, it is likely
+that nothing would bewilder them more than the recent Prohibition
+Amendment. Railways, steamships, the telegraph, the telephone,
+automobiles, flying machines, submarines--all these developments of
+science, unknown in their day, would fill them with amazement and
+admiration. They would marvel at the story of the rise and downfall of
+the German Empire; at the growth and present greatness of the Republic
+they themselves had founded. None of these things, however, would seem
+to them to involve any essential change in the beliefs and purposes of
+men as they had known them. The Prohibition Amendment, on the contrary,
+would evidence to their minds the breaking down of a principle of
+government which they had deemed axiomatic, the abandonment of a purpose
+which they had supposed immutable. As students of the science of
+government they would realize that the most fundamental change which can
+overtake a free people is a change in their frame of mind, for to that
+everything else must sooner or later conform.
+
+The amendment was proposed by Congress in 1917 and proclaimed as having
+been ratified in 1919.[1]
+
+[Footnote 1: 40 Stat. 1050, 1941.]
+
+The comparative ease and dispatch with which it was put through argue
+alike the skill and vigor of its sponsors and the strength of the
+sentiment behind them. Legal warfare over the amendment did not end,
+however, with its ratification by the legislatures of the requisite
+number of states. Passions had been aroused. Vast property interests
+were menaced. Moreover, in the minds of students of government the
+amendment stirred misgivings which were quite independent of the
+sentimental and material considerations involved. Eminent counsel were
+retained and a determined effort was made to defeat or nullify the
+amendment in the courts. To this end suits were begun in various
+jurisdictions to test its validity and enjoin the enforcement of the
+Volstead Act, which sought to carry it into effect. Two sovereign
+states (Rhode Island and New Jersey) joined in the attack and through
+their respective Attorneys General brought original suits in the United
+States Supreme Court to have the amendment declared invalid. Seven test
+cases were argued together in the Supreme Court, five days in all being
+devoted to the argument. It will be of interest to note some of the
+reasons advanced against the validity of the amendment, as they are
+summarized in the official report.[1]
+
+[Footnote 1: National Prohibition cases, 253 U.S., 350.]
+
+The Attorney General of the State of Rhode Island argued[1] that:
+
+     The amendment is an invasion of the sovereignty of the
+     complaining state and her people, not contemplated by the
+     amending clause of the Constitution. The amending power ... is
+     not a substantive power but a precautionary safeguard inserted
+     incidentally to insure the ends set forth in that instrument
+     against errors and oversights committed in its formation.
+     Amendments, as the term indeed implies, are to be limited to
+     the correction of such errors....
+
+     It is "This Constitution" that may be amended. "This
+     Constitution" is not a code of transient laws but a framework
+     of government and an embodiment of fundamental principles. By
+     an amendment, the identity or purpose of the instrument is
+     not to be changed; its defects may be cured, but "This
+     Constitution" must remain. It would be the greatest absurdity
+     to contend that there was a purpose to create a limited
+     government and at the same time to confer upon that government
+     a power to do away with its own limitations.
+
+[Footnote 1: Id., pp. 354-356.]
+
+The Attorney General of the State of New Jersey:[1]
+
+     attacked the amendment as an invasion of state sovereignty not
+     authorized by the amending clause and as not, properly
+     speaking, an amendment, but legislation, revolutionary in
+     character.
+
+[Footnote 1: 253 U.S., pp. 356-357.]
+
+The eminent Chicago lawyer, Levy Mayer, and ex-Solicitor General William
+Marshall Bullitt, contended,[1] among other things, that
+
+     the power of "amendment" contained in Art. V does not
+     authorize the invasion of the sovereign powers expressly
+     reserved to the states and the people by the Ninth and Tenth
+     Amendments, except with the consent of _all_ the states....
+
+     If amendment under Art. V were unlimited, three-fourths of the
+     legislatures would have it in their power to establish a state
+     religion and prohibit free exercise of other religious
+     beliefs; to quarter a standing army in the houses of citizens;
+     to do away with trial by jury and republican form of
+     government; to repeal the provision for a president; and to
+     abolish this court and with it the whole judicial power
+     vested by the Constitution.
+
+[Footnote 1: Id., pp. 357-361.]
+
+Elihu Root, preëminent as a constitutional lawyer, appeared as counsel
+in one of the test cases. His main contention was summarized in his
+brief as follows:[1]
+
+     (a) That the authority to amend the Constitution is a
+     continuance of the constitution-making power and as such is a
+     power quite different and altogether distinct from the
+     law-making power under the Constitution.
+
+     (b) That a grant of the one power does not include or imply a
+     grant of the other.
+
+     (c) That the natural and ordinary meaning of the words used in
+     Article V of the Constitution [the article providing for
+     amendment] limits the power granted to the function of
+     constitution-making as distinguished from ordinary law-making.
+
+     (d) That the purposes of the grant imply the same limitation.
+
+     (e) That other parts of the Constitution--notably Article
+     I--express the same limitation.
+
+     (f) That the existence of authority under Article V to enact
+     ordinary laws regulating the conduct of private citizens under
+     color of amendment, would be so in conflict with the
+     fundamental principles and spirit of the Constitution that
+     such a construction is not permissible.
+
+[Footnote 1: For the Reporter's Summary see 253 U.S., pp. 361-367.]
+
+There were other arguments of a more technical character. Article V of
+the Constitution provides that the Congress shall propose amendments
+"whenever two-thirds of both Houses shall deem it necessary." It was
+urged that this required the affirmative vote of two-thirds of the
+entire membership of both Houses, and that two-thirds of a quorum was
+not sufficient. It was also urged that the proposal was fatally
+defective because it did not on its face declare that both Houses deemed
+the amendment necessary. It was also argued that the amendment had not
+been effectively ratified in certain of the states where it had been
+approved by the state legislature (notably Ohio) because under the
+constitutions of those states it was subject to a referendum to the
+people before becoming effective. The Supreme Court of Ohio had so
+decided[1] and a referendum had actually been held in that state,
+resulting in a rejection of the amendment by popular vote. Various
+arguments were also advanced based on the puzzling phraseology of
+Section 2 of the amendment that "the Congress and the several States
+shall have _concurrent power_ to enforce this article by appropriate
+legislation." The eminent constitutional lawyer, W.D. Guthrie, addressed
+himself particularly to this phase of the controversy.[2] It was urged
+with much force that the effect of these words was to save the rights of
+the states, in respect of intrastate matters, by requiring their
+concurrence in any legislation of Congress regulating such matters.
+
+[Footnote 1: See _Hawke v. Smith_, 253 U.S., 221.]
+
+[Footnote 2: 253 U.S., pp. 368-380.]
+
+All the arguments advanced were alike unavailing. The nine members of
+the Supreme Court were unanimous in sustaining the validity of the
+amendment, holding that it "by lawful proposal and ratification, has
+become a part of the Constitution, and must be respected and given
+effect the same as other provisions of that instrument."[1] The Court,
+however, adopted the very unusual course of deciding the various cases
+before it (affirming four, reversing one, and dismissing the original
+bills filed by the states of Rhode Island and New Jersey) without any
+written opinion. Speaking through Mr. Justice Van Devanter, the Court
+merely announced its conclusions. This was an unprecedented procedure in
+a case involving constitutional questions of such importance. It drew
+criticism from some of the members of the Court itself. Chief Justice
+White said:[2]
+
+     I profoundly regret that in a case of this magnitude,
+     affecting as it does an amendment to the Constitution dealing
+     with the powers and duties of the national and state
+     governments, and intimately concerning the welfare of the
+     whole people, the court has deemed it proper to state only
+     ultimate conclusions without an exposition of the reasoning by
+     which they have been reached.
+
+and proceeded to announce the reasons which had actuated him personally.
+Justice McKenna said:[3]
+
+     The court declares conclusions only, without giving any
+     reasons for them. The instance may be wise--establishing a
+     precedent now, hereafter wisely to be imitated. It will
+     undoubtedly decrease the literature of the court if it does
+     not increase lucidity.
+
+[Footnote 1: Id., p. 386.]
+
+[Footnote 2: Id., p. 388.]
+
+[Footnote 3: 253 U.S., p. 393.]
+
+Perhaps a hint as to the reasons actuating the majority of the Court may
+be found in the brief concurring memorandum of Mr. Justice McReynolds.
+He said:[1]
+
+     I do not dissent from the disposition of these causes as
+     ordered by the Court, but confine my concurrence to that. It
+     is impossible now to say with fair certainty what construction
+     should be given to the Eighteenth Amendment. Because of the
+     bewilderment which it creates, a multitude of questions will
+     inevitably arise and demand solution here. In the
+     circumstances, I prefer to remain free to consider these
+     questions when they arrive.
+
+[Footnote 1: Id., p. 392.]
+
+Justices McKenna and Clarke dissented from portions of the decision
+dealing with the question of the proper construction of the grant of
+"concurrent power" to Congress and the States, and wrote opinions
+setting forth the grounds of their dissent. Both Justices, however,
+concurred in affirming the validity of the amendment.
+
+Thus the legal battle was fought and lost. The amendment had withstood
+attack and men's minds settled back to the practical question of its
+enforcement.
+
+Upon that question, however difficult and interesting, we do not here
+enter. Our present concern is to ascertain as nearly as may be the true
+place of the amendment in the development of American constitutional
+law.
+
+That it affords startling evidence of a radical departure from the views
+of the founders of the Republic is beyond question. Such a blow at the
+prerogatives of the states, such a step toward centralization, would
+have been thought impossible by the men of 1787. It would be a mistake,
+however, to view the departure as having originated with this amendment.
+Rather is the amendment to be regarded as merely a spectacular
+manifestation of a change which was already well under way.
+
+In the early days of the Republic the dominating purpose was the
+protection of state prerogatives, so far as that was compatible with the
+common safety. The first eleven amendments of the Federal Constitution
+were all limitations upon federal power. Not until the people of the
+various states had been drawn together and taught to think in terms of
+the nation by a great Civil War was there any amendment which enlarged
+the powers of the National Government. The three post-war amendments
+(Nos. XIII, XIV, and XV) marked a distinct expansion of federal power
+but one that seemed to find its justification, as it found its origin,
+in the necessity for effectuating the purposes of the war and protecting
+the newly enfranchised Negroes.
+
+A long period of seeming inactivity, more than forty years, elapsed
+before another constitutional amendment was adopted.[1] The inaction,
+however, was apparent rather than real. As matter of fact, a change was
+all the time going on. In a very real sense the Constitution was being
+altered almost from year to year. That the alterations did not take the
+shape of formal written amendments was largely due to the tradition of
+constitutional immobility. The idea had grown up that the machinery of
+amendment provided by the Fathers was so slow and cumbersome that it was
+impossible as a practical matter to secure a change by that method
+except under stress of war or great popular excitement. That idea is now
+exploded. We of to-day know better, having seen the Income Tax Amendment
+(No. XVI), the Election of Senators by Popular Vote Amendment (No.
+XVII), the Prohibition Amendment (No. XVIII), and the Woman Suffrage
+Amendment (No. XIX) go through within a period of seven years. For
+generations, however, the tradition of constitutional immobility held
+sway and the forces of change worked through channels that seemed easier
+and less obstructed.
+
+[Footnote 1: No. XVI, the Income Tax Amendment, ratified in 1913.]
+
+The principal channel has been congressional legislation. Congress has
+found ways of reaching by indirection objects which could not be
+approached directly. Under the express grants of power contained in the
+Constitution statutes have been enacted which were really designed to
+accomplish some ulterior object. A striking example is found in the
+child labor laws, discussed more at length in a subsequent chapter.
+Congress at first sought to regulate child labor by a statute enacted
+ostensibly as a regulation of commerce under the Commerce Clause of the
+Constitution. The Supreme Court held the Act unconstitutional as
+exceeding the commerce power of Congress and invading the powers
+reserved to the states.[1] Thereupon Congress practically reënacted it,
+coupled with a provision for a prohibitive tax on the profits of
+concerns employing child labor, as part of a revenue act enacted under
+the constitutional grant of power to lay taxes.[2]
+
+[Footnote 1: _Hammer v. Dagenhart_, 247 U.S., 251.]
+
+[Footnote 2: Revenue Act of 1918, Title XII.]
+
+The assumption by the National Government of jurisdiction over the
+manufacture and sale of intoxicating liquors is no more of an
+encroachment on the prerogatives of the states than is its assumption of
+jurisdiction over child labor and the use of narcotic drugs. We come
+back, therefore, to the proposition that the Prohibition Amendment is to
+be regarded less as a departure in American fundamental law than as a
+spectacular manifestation of a change already well under way.
+
+The change, however much students of our institutions may deplore it, is
+not difficult to explain. The earlier solicitude for state rights was in
+a sense accidental. It was based on sentiment and mutual jealousies
+among the colonies rather than on any fundamental differences in race,
+beliefs, or material interests. The traditions behind it, while strong,
+were of comparatively recent growth. When they entered the Union the
+colonies were still new and undeveloped. As men died and their sons
+succeeded them prejudices gradually yielded and sentiment changed.
+Moreover, various other forces--immigration, free trade among the
+states, the growth of railways and other nationwide industries, foreign
+wars--have been at work to obliterate state lines.
+
+Advocates of the old order see in the change a breaking down of the
+principle of local self-government. To their minds the danger of
+majority tyranny, made possible by a centralization of power in a
+republic of such vast extent and varied interests, outweighs all the
+advantages of national uniformity and efficiency. Advocates of the new
+order think otherwise. They argue, moreover, that the states have become
+too great and populous to serve as units for purposes of home rule;
+that their boundaries are for the most part artificial and correspond to
+no real distinctions in the ordinary life of men. They assert that the
+instinct for local self-government remains as strong as it ever was, and
+instance the resentment of New York City over interference from Albany.
+
+The average man gives little thought to the constitutional aspect of the
+controversy. His interest in the prohibition movement is focused on
+other features which seem to him of more immediate concern. And yet, did
+he but realize it, the constitutional aspect transcends all the others
+in its importance for the future welfare and happiness of himself, his
+children, and his country.
+
+
+
+
+V
+
+THE NINETEENTH AMENDMENT
+
+
+A prudent man touches the question of woman suffrage gingerly. Many
+fingers have been burnt in that fire and its embers are not yet dead.
+Some mention of the Nineteenth Amendment seems necessary, however, in
+any discussion of federal encroachment on state power, and it may be
+possible to approach the suffrage movement from the standpoint of
+constitutional law without getting upon controversial ground.
+
+The United States Constitution as originally adopted did not prescribe
+who should be entitled to vote. That matter was left entirely in the
+hands of the states. The Constitution provided[1] that, for the election
+of members of the House of Representatives, "the electors in each state
+shall have the qualifications requisite for electors of the most
+numerous branch of the state legislature." It was further provided that
+Senators should be chosen by the legislatures of the states[2] and that
+the President and Vice-president should be chosen by presidential
+electors appointed in such manner as the state legislatures might
+direct.[3] These were the only elective federal officials.
+
+[Footnote 1: Article I, Section 2.]
+
+[Footnote 2: Article I, Section 3.]
+
+[Footnote 3: Article II, Section 1.]
+
+While the states were thus left in full control, it does not follow that
+the matter was deemed wholly outside the proper scope of national
+authority. No argument is necessary to demonstrate that the regulation
+of the suffrage in national elections is or may be a matter of national
+concern. The question of prescribing the qualifications of voters in
+such elections was much debated in the Convention which framed the
+Constitution.[1] Some members were in favor of prescribing a property
+qualification and limiting the suffrage to freeholders. It was finally
+decided, however, to accept the qualifications prescribed by state law.
+In adopting this plan the Convention followed the line of least
+resistance. The qualifications of voters in the various states
+differed.[2] Most states required a property qualification, but some
+did not. It was felt that to attempt to impose a uniform rule on all the
+states would arouse opposition and create one more obstacle to be
+overcome in the formidable task of getting the Constitution ratified.
+
+[Footnote 1: See e.g., Farrand, "Records of the Federal Convention,"
+Vol. II, p. 201 et seq.]
+
+[Footnote 2: For a statement of the qualifications in the various states
+see _Minor v. Happersett_, 21 Wall., 162.]
+
+There the matter rested, with suffrage qualifications regulated entirely
+by state law, until after the Civil War. Meanwhile, the states had been
+abolishing property tests, and universal male suffrage had been written
+into state constitutions. The cry for woman suffrage had begun, but as
+yet it was only a still small voice, inaudible to legislators.
+
+After the Civil War the problem of protecting the emancipated slaves had
+to be dealt with, and three constitutional amendments (Nos. XIII, XIV,
+and XV) were adopted with that end primarily in view. Number XIII,
+ratified in 1865, formally abolished slavery. Number XIV, ratified in
+1868, extended citizenship to all persons born in the United States and
+provided (among other things) that no state should abridge the
+privileges or immunities of citizens of the United States. Number XV,
+ratified in 1870, provided that "the right of citizens of the United
+States to vote shall not be denied or abridged by the United States or
+by any State on account of race, color, or previous condition of
+servitude." Here was the entering wedge of federal interference. The
+amendments did not purport to deal with woman suffrage, but the pioneers
+of the suffrage movement thought they discovered in them a means of
+advancing their cause and lost no time in putting the matter to the
+test. Susan B. Anthony voted at Rochester, N.Y., in an election for a
+representative in Congress, claiming that the restriction of voting to
+males by the constitution and laws of New York was void as a violation
+of the Fourteenth Amendment providing that "no state shall make or
+enforce any law which shall abridge the privileges or immunities of
+citizens of the United States." She was indicted for voting unlawfully,
+and on her trial before Justice Hunt of the United States Supreme Court,
+sitting at Circuit, the Court directed the jury to find a verdict of
+guilty and imposed a fine of $100 and costs.[1]
+
+[Footnote 1: _United States v. Anthony_, 11 Blatchford, 200.]
+
+Mrs. Virginia Minor raised a similar question in the courts of Missouri.
+The Missouri constitution limited the right to vote to male citizens.
+Mrs. Minor applied for registration as a voter, and on being refused
+brought suit against the Registrar of Voters on the ground that this
+clause of the Missouri constitution was in violation of the Fourteenth
+Amendment. The Missouri state courts decided against her, and the case
+was taken to the Supreme Court of the United States where the decision
+of the state courts was affirmed.[1] The Supreme Court held in effect
+that while Mrs. Minor was a citizen that fact alone did not make her a
+voter; that suffrage was not coextensive with citizenship, either when
+the Constitution was adopted or at the date of the Fourteenth Amendment,
+and was not one of the "privileges and immunities" guaranteed by that
+amendment.
+
+[Footnote 1: _Minor v. Happersett_, 21 Wall., 162.]
+
+A similar decision was rendered in the matter of Mrs. Myra Bradwell's
+application for a license to practise law in Illinois.[1] The Supreme
+Court held that the right to practise law in the state courts was not a
+privilege or immunity of a citizen of the United States within the
+meaning of the Fourteenth Amendment, and affirmed the decision of the
+Illinois Court denying Mrs. Bradwell's application.
+
+[Footnote 1: _Bradwell v. Illinois_, 16 Wall., 130.]
+
+The failure of these attempts to turn the Fourteenth Amendment to the
+advantage of the woman suffrage movement in no wise checked the
+movement or discouraged its leaders. They redoubled their efforts among
+the separate states, and worked to such good purpose that the opposition
+presently began to take on the aspect of a forlorn hope. "Votes for
+Women" became an accomplished fact in many states, and appeared on the
+verge of accomplishment in most of the others. Some states, however,
+were still holding out when the leaders of the movement, impatient of
+further delay and determined to coerce the recalcitrants, took the
+matter into the national arena and procured the proposal and
+ratification of an amendment to the Federal Constitution. The amendment
+provides:
+
+     The right of citizens of the United States to vote shall not
+     be denied or abridged by the United States or by any state on
+     account of sex.
+
+In other words, it adopts verbatim the phraseology of the Fifteenth
+Amendment, merely substituting the word "sex" for the words "race,
+color, or previous condition of servitude."
+
+So much for the historical background of the so-called Susan B. Anthony
+Amendment. It remains to consider just how far the amendment
+constitutes an encroachment by the Federal Government on the powers of
+the states.
+
+In so far as it affects the qualifications of voters at national
+elections (i.e., for president, senators, representatives) the
+encroachment is more apparent than real. As has already been pointed
+out, this is essentially a national question, and the Constitution
+adopted the suffrage qualifications prescribed by state law, not as a
+matter of principle, but for reasons of expediency and convenience.
+
+In so far, however, as the amendment imposes woman suffrage on the
+states in elections of state and local officials the situation is
+entirely different. That staunch advocate of national power, Alexander
+Hamilton, said in the _Federalist_:[1]
+
+     Suppose an article had been introduced into the Constitution,
+     empowering the United States to regulate the elections for the
+     particular states, would any man have hesitated to condemn it,
+     both as an unwarrantable transposition of power, and as a
+     premeditated engine for the destruction of the state
+     governments?
+
+[Footnote 1: _Federalist_ LIX.]
+
+What Hamilton scouted as impossible has been accomplished in the
+Nineteenth Amendment. It in effect strikes out the word "male" from the
+suffrage provisions of state constitutions. It overrides state policy
+and interferes with the right of states to manage their own affairs.
+From the theoretical standpoint a more serious inroad on state
+prerogatives would be hard to find. Control of the suffrage is one of
+the fundamental rights of a free state. It belonged to the North
+American states before their union, and was not surrendered to the
+National Government when the union was effected. Moreover, the
+encroachment has a very practical side. To confer the suffrage on the
+educated women of Connecticut was one thing; to confer it on the Negro
+women of Alabama was quite a different matter, involving different
+considerations. The amendment took no heed of such differences but
+imposed a uniform rule on all the states, regardless of local prejudices
+or conditions.
+
+It is true that a somewhat similar encroachment on state power had been
+made by the Fifteenth Amendment, designed to enfranchise the Negroes.
+That amendment, however, had its origin in conditions growing out of the
+Civil War, and claimed its justification in the necessity for protecting
+the freed slaves against hostile state action. It was avowedly an
+emergency measure, and the success with which it has been nullified in
+some quarters testifies to the unwisdom of forcing such measures upon
+reluctant states.
+
+The conditions surrounding the adoption of the Nineteenth Amendment were
+altogether different. Few people take seriously the alleged analogy
+between the women and the slaves. The constitutional method--action
+through the separate states--was being pursued with signal success. The
+states were rapidly falling in line. Most of them had already granted
+woman suffrage or were ready to grant it. There was no overmastering
+need for coercing the states that were not yet ready. An impartial
+student of the period will be apt to conclude that the Nineteenth
+Amendment was the product of impatience rather than necessity.
+
+Someone may ask, "What effect will the granting of votes to women have
+on the problem of preserving the constitutional equilibrium?" The
+ultimate power lies with the voters, and the women with votes now equal
+or outnumber the men. What is the reaction of women voters likely to be
+toward questions of political theory?
+
+Ours is a governmental scheme of extreme complexity. As with animal
+organisms so with political systems, the higher they rise in the scale
+of development the more complicated they tend to become. An absolute
+monarchy is simplicity itself compared with our dual system. To maintain
+the proper adjustment of such a machine requires intelligence of a high
+order. The machine will not run itself and male tinkers have abundantly
+demonstrated that it is not fool-proof. But something more is required
+than mere intelligence. There must be, at least among the leaders, an
+instinct for governmental problems as distinguished from those of a
+merely social or personal character; an ability to recognize and a
+willingness to conform to underlying principles.
+
+How will the women voters meet this test? Granting (what few will
+dispute) that their intelligence at least equals that of the men, will
+they be as likely as men to look beyond the immediate social welfare
+problem to the governmental principle at stake? Will an abstract
+proposition hold its own in their minds against a concrete appeal?
+
+We do not attempt to answer these questions, but they contain food for
+thought.
+
+
+
+
+VI
+
+CONGRESS _versus_ THE SUPREME COURT--THE CHILD LABOR LAWS
+
+
+The present Federal Revenue Act is noteworthy in more aspects than its
+complexity and the disproportionate burden cast on possessors of great
+wealth. To students of our form of government it is particularly
+interesting because of provisions[1] purporting to impose a tax on
+employers of child labor, for these represent an attempt by Congress to
+nullify a decision of the Supreme Court and grasp a power belonging to
+the states. The story of these provisions throws a flood of light on a
+method by which our Constitution is being changed.
+
+[Footnote 1: Revenue Act of 1921, Title XII.]
+
+The evils of child labor have long engaged the attention of
+philanthropists and lawmakers. In comparatively recent years child labor
+laws are said to have been enacted in every state of the Union. These
+statutes, however, lacked uniformity. Some of them were not stringent
+enough to satisfy modern sentiment. Moreover, commercial considerations
+entered into the reckoning. Industries in states where the laws were
+stringent were found to be at a disadvantage in comparison with like
+industries in states where the laws were lax, and this came to be
+regarded as a species of unfair competition. The advantages of
+uniformity and standardization seemed obvious from both the
+philanthropic and the commercial viewpoints, and Congress determined to
+take a hand in the matter.
+
+No well-informed person supposed for a moment that the regulation of
+child labor was one of the functions of the General Government as those
+functions were planned by the makers of the Constitution. The United
+States Supreme Court had declared over and over again that such matters
+were the province of the states; that "speaking generally, the police
+power is reserved to the states and there is no grant thereof to
+Congress in the Constitution."[1] For some years, however, Congress had
+been finding ways to legislate indirectly upon matters which it had no
+power to approach directly. Under the grant of power in the Constitution
+"to regulate commerce with foreign nations and among the several
+States,"[2] Congress had enacted laws purporting to regulate commerce
+but in reality designed for the suppression or regulation of some other
+form of activity. These enactments had for the most part been sustained
+as constitutional by the Supreme Court (though with misgivings and sharp
+differences of opinion), the Court holding that it could not pass on the
+motives for congressional action. The enactment of a law regulating
+child labor seemed therefore but another step along a trail already
+blazed, and Congress determined to take that step.
+
+[Footnote 1: _Keller v. United States_, 213 U.S., 138.]
+
+[Footnote 2: Art. I, Sec. 8.]
+
+The statute enacted by Congress[1] prohibited transportation in
+interstate commerce of goods made at a factory in which, within thirty
+days prior to their removal therefrom, children under the age of
+fourteen years had been employed or permitted to work, or children
+between the ages of fourteen and sixteen had been employed or permitted
+to work more than eight hours in any day, or more than six days in any
+week, or after the hour of 7 P.M. or before the hour of 6 A.M. The
+constitutionality of the act was at once challenged and suit brought to
+test the question. The Supreme Court held, by a vote of five to
+four,[2] that Congress had overstepped its power. The previous decisions
+which had upheld somewhat similar inroads on the police power of the
+states were distinguished and the act was declared unconstitutional.
+
+[Footnote 1: Act of September 1, 1916, 39 Stat., 675.]
+
+[Footnote 2: _Hammer v. Dagenhart_, 247 U.S., 251.]
+
+The distinction drawn by the majority of the Court between this and
+previous decisions was a narrow one and its validity has been questioned
+by some writers. It has nowhere been more clearly explained than in an
+address delivered before a body of lawyers by a former member of the
+Court.[1] Mr. Hughes said:
+
+     There has been in late years a series of cases sustaining the
+     regulation of interstate commerce, although the rules
+     established by Congress had the quality of police regulation.
+     This has been decided with respect to the interstate
+     transportation of lottery tickets, of impure food and drugs,
+     of misbranded articles, of intoxicating liquors, and of women
+     for the purpose of debauchery. It was held to be within the
+     power of Congress to keep "the channels of interstate commerce
+     free from immoral and injurious uses." But the Court in this
+     most recent decision has pointed out that in each of these
+     cases "the use of interstate commerce was necessary to the
+     accomplishment of harmful results." The Court, finding this
+     element to be wanting in the Child Labor Case, denied the
+     validity of the act of Congress. The Court found that the
+     goods shipped were of themselves harmless. They were permitted
+     to be freely shipped after thirty days from the time of
+     removal from the factory. The labor of production, it was
+     said, had been performed before transportation began and thus
+     before the goods became the subject of interstate commerce.
+
+     The fundamental proposition thus established is that the power
+     over interstate commerce is not an absolute power of
+     prohibition, but only one of regulation, and that the prior
+     decisions in which prohibitory rules had been sustained rested
+     upon the character of the particular subjects there involved.
+     It was held that the authority over interstate commerce was to
+     regulate such commerce and not to give Congress the power to
+     control the states in the exercise of their police power over
+     local trade and manufacture.
+
+[Footnote 1: Charles E. Hughes, President's Address, Printed in Year
+Book of New York State Bar Association, Vol. XLII, p. 227 et seq.]
+
+Congress did not receive this decision of the Supreme Court
+submissively. On the contrary, plans were laid to nullify it. The effort
+to legislate on child labor under cover of the power to regulate
+commerce having failed, recourse was had to the constitutional grant of
+power to lay taxes. Within six months after the decision of the Supreme
+Court declaring the act unconstitutional was announced, another statute
+similar in purpose and effect was enacted as part of a Federal Revenue
+Act.[1] This act provided for an additional tax of ten per cent. of the
+net profits received from the sale or distribution of the product of any
+establishment in which children under the age of fourteen years had been
+employed or permitted to work or children between the ages of fourteen
+and sixteen had been employed or permitted to work more than eight hours
+in any day or more than six days in any week or after the hour of 7 P.M.
+or before the hour of 6 A.M. during any portion of the taxable year. In
+other words, the law which had been declared void was substantially
+reënacted, with the substitution of a prohibitive tax for the clause
+prohibiting transportation in interstate commerce.
+
+[Footnote 1: Revenue Act of 1918, Title XII.]
+
+There was no pretense that this act was enacted for the purpose of
+raising revenue. The revenue feature was merely legislative camouflage.
+To quote the words of Justice Holmes in a recent case,[1] "Congress gave
+it the appearance of a taxing measure in order to give it a coating of
+constitutionality."
+
+[Footnote 1: _United States v. Jin Fuey Moy_, 241 U.S., 394.]
+
+The debate in the Senate was highly illuminating.[1] Its sponsors
+admitted that the measure was not expected or intended to produce
+revenue but was designed to regulate child labor and nullify the
+decision of the Supreme Court. Senators learned in the law conceded that
+if this purpose and effect were declared on the face of the act, or were
+necessarily inferable from its provisions, it must inevitably be
+declared unconstitutional. Reliance was placed, however, on the facts
+that the act was entitled "A bill to raise revenue," and that its
+provisions did not necessarily, on their face, belie this label. It was
+argued that the Supreme Court would be bound, under its own previous
+rulings, to treat the act as if it were what it purported on its face to
+be--a revenue measure--and to ignore common knowledge and senatorial
+admissions to the contrary. The measure passed the Senate by a
+substantial majority and was enacted as part of the revenue bill then
+under consideration, from which it has been carried forward into the
+present revenue law.
+
+[Footnote 1: See "Congressional Record" of December 18, 1918.]
+
+There the matter stands at this writing. A District Court judge has
+declared the new act unconstitutional but the question has not yet been
+passed upon by the Supreme Court.
+
+It would be venturesome to attempt to predict what the Supreme Court
+will do about it. Many constitutional lawyers seem to think that
+Congress has succeeded in its attempt and that the act will be
+sustained. Certainly there are strong precedents pointing that way.
+Three in particular will be relied upon--the Veazie Bank case, the
+Oleomargarine case and the Narcotic Drug Act case.
+
+In the Veazie Bank case[1] the Supreme Court upheld the validity of a
+so-called tax law whose purpose and effect were to suppress the
+circulation of notes of the state banks. In the Oleomargarine case[2]
+the Court upheld a tax whose purpose and effect were to suppress the
+manufacture and sale of oleomargarine artificially colored to look like
+butter. In the Narcotic Drug case[3] the Court upheld a tax imposed by
+the so-called Harrison Act[4] whose purpose was to regulate the sale and
+use of narcotic drugs. In each of these cases there could be no doubt in
+the mind of any intelligent man as to the motive for the enactment. The
+Court has uniformly maintained, however, that
+
+     when Congress acts within the limits of its constitutional
+     authority, it is not the province of the judicial branch of
+     the Government to question its motives.[5]
+
+[Footnote 1: _Veazie Bank v. Fenno_, 8 Wall., 533, decided in 1870.]
+
+[Footnote 2: _McCray v. United States_, 195 U.S., 27, decided in 1904.]
+
+[Footnote 3: _United States v. Doremus_, 249 U.S., 86, decided in 1919.]
+
+[Footnote 4: 38 Stat., 785.]
+
+[Footnote 5: _Smith v. Kansas City Title Company_, 255 U.S., 180, 210.]
+
+
+In the Narcotic Drug Act case[1] the Court held
+
+     While Congress may not exert authority which is wholly
+     reserved to the states, the power conferred by the
+     Constitution to levy excise taxes, uniform throughout the
+     United States, is to be exercised at the discretion of
+     Congress; and, where the provisions of the law enacted have
+     some reasonable relation to this power, the fact that they may
+     have been impelled by a motive, or may accomplish a purpose,
+     other than the raising of revenue, cannot invalidate them; nor
+     can the fact that they affect the conduct of a business which
+     is subject to regulation by the state police power.
+
+[Footnote 1: _United States v. Doremus_, 249 U.S., 86.]
+
+It is true that, while the Supreme Court may not question congressional
+motives, it cannot escape the obligation to construe a statute in the
+light of its true nature and effect. The Court has said:[1]
+
+     The direct and necessary result of a statute must be taken
+     into consideration when deciding as to its validity, even if
+     that result is not in so many words either enacted or
+     distinctly provided for. In whatever language a statute may be
+     framed, its purpose must be determined by its natural and
+     reasonable effect.
+
+[Footnote 1: _Collins v. New Hampshire_, 171 U.S., 30.]
+
+As already indicated, however, the nature and effect of a statute must
+ordinarily be determined from the form and contents of the act itself,
+rather than from outside sources, and the measure under consideration
+purports to be a revenue act.
+
+In the light of the decisions and principles of interpretation to which
+reference has been made, the case against the constitutionality of the
+act may seem well-nigh hopeless. The fact remains, however, that
+Congress has not met the fundamental objection raised by the Supreme
+Court. The Court declared the former act unconstitutional, not only
+because it transcended the power of Congress under the particular
+provision of the Constitution then invoked, viz., the Commerce Clause,
+but also on the broad ground of state rights, because it "exerts a power
+as to a purely local matter to which the federal authority does not
+extend." It is difficult to see how this objection is obviated by
+reënacting the act as a revenue measure. Under the circumstances perhaps
+the apprehensive foes of federal encroachment should withhold their
+lamentations until the Supreme Court has spoken again.[1]
+
+[Footnote 1: Since this chapter was put into print the Court has spoken.
+In _Bailey v. The Drexel Furniture Co._ (decided May 15, 1922) the Child
+Labor Tax Law was pronounced unconstitutional. The Court, while
+conceding that it must interpret the intent and meaning of Congress from
+the language of the act, held that the act on its face is an attempt to
+regulate matters of state concern by the use of a so-called tax as a
+penalty. The opinion of the Court, written by Chief Justice Taft, is an
+emphatic assertion of the duty and function of the Court to preserve the
+constitutional equilibrium between nation and states.]
+
+
+
+
+VII
+
+STATE RIGHTS AND THE SUPREME COURT
+
+
+A century ago the United States Supreme Court was the bulwark of
+national power against the assaults and pretensions of the states.
+To-day it is the defender of the states against the encroachments of
+national power. Let no one suppose, however, that this is because the
+Court itself has faced about. On our revolving planet a ship may be
+sailing toward the sun at sunrise and away from the sun in the afternoon
+without having changed its course. The Supreme Court has been the most
+consistent factor in our governmental scheme. While there have been
+differences of viewpoint between liberal constructionists and strict
+constructionists among its members, the Court on the whole has steered a
+fairly straight course. What has really altered is the environment in
+which the Court moves. The earth has been turning on its axis. The frame
+of mind of the people who compose states and nation has changed.
+
+At the outset (to cling for a moment to our nautical metaphor) the Court
+was obliged to put forth on an unknown sea. Its sailing orders under the
+new Constitution were unique. Precedents, those charts and lighthouses
+of the judicial mariner, were lacking. Progress was tentative and
+groping. Little wonder therefore that at first the business of the Court
+was meager and membership in its body seemed less attractive than
+membership in the judiciary of a state. Robert Hanson Harrison, one of
+President Washington's original appointees to the Supreme bench,
+declined to serve, preferring to accept a state judicial office. John
+Rutledge, another of the original appointees, resigned after a few
+months, preferring the position of Chancellor of his native state to
+which he had been chosen. John Jay, the first Chief Justice, resigned to
+become Governor of New York, and later declined a reappointment as Chief
+Justice in words indicating entire lack of faith in the powers and
+future of the Court.
+
+Nevertheless, the first period of the Court was by no means barren of
+achievement. A beginning was made. The supremacy of the national
+authority under the new Constitution was asserted. So stoutly indeed was
+it maintained in the memorable case of _Chisholm v. Georgia_,[1] that
+the country was thrown into a ferment. The Court had entertained a suit
+against a sovereign state by a private citizen of another state and
+rendered a decision in favor of the private citizen. The legislature of
+the sovereign state concerned (Georgia) responded by a statute
+denouncing the penalty of death against anyone who should presume to
+enforce any process upon the judgment within its jurisdiction. The
+matter was taken up in Congress and resulted in the proposal, and
+subsequent ratification by the states, of a constitutional amendment
+designed to prevent such actions in future.[2] It has been the fashion
+to speak of this incident as a striking example of the recall of
+judicial decisions. Such indeed it was. The decision did not suit the
+popular frame of mind and was promptly overruled in the method
+prescribed by the Constitution. It went a long way, however, toward
+establishing the Supreme Court as a power to be reckoned with on the
+side of national supremacy and authority.
+
+[Footnote 1: 2 Dallas, 419, decided in 1793.]
+
+[Footnote 2: Amendment XI.]
+
+Three years later the Court again took occasion to assert the national
+supremacy in no uncertain fashion. The case was _Ware v. Hylton_[1] and
+the Court laid down the proposition that a treaty of the Federal
+Government (in this case the treaty of peace with Great Britain)
+nullified previous state laws dealing with the subject matter. It is an
+interesting circumstance that one of the counsel on the losing side in
+this case was John Marshall of Virginia, and that this was the only case
+he ever argued before the tribunal through which he was destined to play
+so momentous a part in history.
+
+[Footnote 1: 3 Dallas, 199, decided in 1796.]
+
+In the annals of the Supreme Court and the development of American
+constitutional law the name of John Marshall stands preëminent. He was
+appointed Chief Justice by President John Adams, and took his seat on
+the Bench at the beginning of the new century (February 4, 1801). He was
+without judicial experience, but his record in other fields of activity
+and his well-known Federalist principles pointed him out as a man to be
+reckoned with and explain the aversion with which he was viewed by
+Thomas Jefferson, the incoming President. The breach between the
+President and the Chief Justice was widened by some of the early
+decisions of the latter upholding the supremacy of the National
+Government and the powers of the Supreme Court, notably the famous case
+of _Marbury v. Madison_,[1] in which was asserted the power of the Court
+to declare an act of Congress void as in conflict with the Constitution.
+Some years elapsed, however, before a case was decided which squarely
+involved a conflict between the powers of the Federal Government and the
+powers of a state. The issue came up in the case of _United States v.
+Judge Peters_.[2] This case involved a conflict of jurisdiction between
+the federal courts and the authorities of the State of Pennsylvania over
+the distribution of some prize money. Marshall's decision was a strong
+assertion of the federal jurisdiction and power. The Governor of
+Pennsylvania, under sanction of the state legislature, called out the
+state militia to resist enforcement of the judgment of the Court.
+Matters were tense for a time and bloodshed seemed imminent but the
+state finally backed down.
+
+[Footnote 1: 1 Cranch, 137.]
+
+[Footnote 2: 5 Cranch, 115, decided in 1809.]
+
+In the following year (1810) came the case of _Fletcher v. Peck_,[1] in
+which for the first time a statute of a state was held by the Supreme
+Court to be void as repugnant to the Federal Constitution. The State of
+Georgia had sought by statute to destroy rights in lands acquired under
+a previous act. It was held that the statute was unconstitutional as
+impairing the obligation of contracts within the meaning of the
+Constitution.
+
+[Footnote 1: 6 Cranch, 87.]
+
+In _Martin v. Hunter's Lessee_[1] was asserted the right of the Federal
+Supreme Court to overrule the judgment of a state court on questions
+arising under the Federal Constitution. The State of Virginia had denied
+that right and the Supreme Court reversed the judgment of the Virginia
+Court of Appeals.
+
+[Footnote 1: 1 Wheat., 304 (1816.)]
+
+In _McCulloch v. State of Maryland_,[1] a case involving an attempt by
+the State of Maryland to tax the Bank of the United States, Marshall's
+doctrine of implied powers was elaborated, and the judgment of the state
+court upholding the tax was reversed.
+
+[Footnote 1: 4 Wheat., 316 (1819).]
+
+In the _Dartmouth College case_[1] the doctrine of the inviolability of
+contracts against attack by state legislation was further developed. An
+act of the state legislature of New Hampshire had sought to alter the
+charter of Dartmouth College, and the New Hampshire courts had upheld
+the legislature. The Supreme Court reversed the state court and declared
+the statute unconstitutional under the clause of the Constitution which
+declares that no state shall make any law impairing the obligation of
+contracts.
+
+[Footnote 1: _Dartmouth College v. Woodward_, 4 Wheat., 518 (1819).]
+
+In the great case of _Gibbons v. Ogden_[1] the Court asserted the
+paramount jurisdiction of the National Government over interstate
+commerce. This was one of the most important and far-reaching of all
+Marshall's decisions. An injunction had been granted by Chancellor Kent
+and unanimously sustained by the Court of Errors of New York,
+restraining Gibbons from navigating the Hudson River by steamboats
+licensed by Congress for the coasting trade on the ground that he was
+thereby infringing the exclusive right, granted by the legislature of
+New York, to Robert R. Livingston and Robert Fulton to navigate the
+waters of the state with vessels moved by steam. The Supreme Court
+reversed the state courts and held the New York legislation void as an
+interference with the right of Congress, under the Constitution, to
+regulate interstate commerce.
+
+[Footnote 1: 9 Wheat., 1 (1824).]
+
+These were only a few of that series of great decisions which stand out
+like mountain peaks on the horizon of our national life. Marshall's
+judgments transformed a governmental experiment into something assured
+and permanent. They confirmed the national supremacy and made the
+Constitution workable.
+
+Marshall is known to history for his work in vindicating the national
+power under the Constitution. That was the need in his day and he met it
+with superlative wisdom and skill. It would be a mistake, however, to
+suppose that he favored federal encroachment upon the powers reserved to
+the states. On the contrary, he rendered decisions in favor of state
+rights which would be notable were they not overshadowed by the greater
+fame of the decisions which went to the building of the nation.
+
+With the passing of Marshall and the accession of Taney as Chief Justice
+a new chapter opened in the history of the Court. The Federalists had
+become extinct. Andrew Jackson had come into power and it had fallen to
+his lot to fill a majority of the seats upon the bench by appointments
+to vacancies. The result was at once apparent. Two cases[1] involving
+important constitutional questions, which had been argued during
+Marshall's lifetime but assigned for reargument on account of a division
+in the Court, were now decided contrary to Marshall's known views and in
+favor of a strict construction of national powers. Justice Story,
+Marshall's longtime associate on the bench, dissented strongly in both
+cases, lamenting the loss of Marshall's leadership and the change in the
+viewpoint of the Court.
+
+[Footnote 1: _Mayor of New York v. Miln_, 11 Peters, 102; _Briscoe v.
+Bank of Kentucky_, 11 Peters, 257, decided in 1837.]
+
+It would serve no useful purpose to enter upon a detailed consideration
+of the various decisions upon constitutional questions made during the
+twenty-eight years of Taney's Chief Justiceship. They were marked by
+great diversity of views among the members of the Court. In some of
+them, notably the famous Passenger cases,[1] the Court fell into a state
+reminiscent of the confusion of tongues that arose at the building of
+the Tower of Babel. The scope of certain of Marshall's decisions was
+limited.[2] Upon the whole, however, the structure of constitutional law
+which Marshall had reared was not torn down or greatly impaired. The
+national supremacy was upheld. Taney and his associates were for the
+most part patriotic men and eminent lawyers, proud of the Court and its
+history and anxious to add to its prestige. It is regrettable that the
+merits of some of them have been so obscured and their memory so clouded
+by a well-meaning but unfortunate excursion into the field of political
+passions. In the Dred Scott case[3] they thought to quiet agitation and
+contribute to the peace of their country by passing judgment upon
+certain angrily mooted questions of a political character. The effort
+was a failure and brought upon their heads, and upon Chief Justice Taney
+in particular, an avalanche of misrepresentation and obloquy.
+
+[Footnote 1: 7 Howard, 283 (1849).]
+
+[Footnote 2: Not always for the worse: vide the Charles River Bridge
+case, 11 Peters, 420, imposing salutary restrictions on the doctrine of
+the Dartmouth College case.]
+
+[Footnote 3: _Dred Scott v. Sandford_, 19 Howard, 393 (1857).]
+
+The suppression of the Great Rebellion brought an enormous increase in
+the national power and in the popular will to national power. State
+rights did not loom large in the popular or the legislative mind in
+reconstruction days. Taney was dead. The Supreme Court had been
+practically reconstituted by appointments made by President Lincoln and
+his immediate successors and it seems to have been anticipated that the
+new Court would take the view of national powers prevailing in Congress
+and the country at large. In this the popular expectation was doomed to
+disappointment. The Court displayed an unexpected solicitude for the
+rights of the states and firmness against federal encroachment. Chief
+Justice Salmon P. Chase, who had been President Lincoln's war Secretary
+of the Treasury, went so far as to pronounce unconstitutional some of
+his own official acts performed under the stress of war.
+
+In the great case of _State of Texas v. White_[1] the rights of Texas as
+a sovereign state were asserted, though Texas had joined in the
+Rebellion and was not represented in the national legislature.
+
+[Footnote 1: 7 Wall., 700 (1869).]
+
+In _The Collector v. Day_[1] it was held that Congress had no power to
+tax the salary of a state official.
+
+[Footnote 1: 11 Wall., 113 (1871).]
+
+In the Slaughter House cases[1] an act of the Legislature of Louisiana,
+granting to a corporation created by it exclusive rights to maintain
+slaughter houses for the City of New Orleans and other territory, was
+upheld, as a valid exercise of state police power, against claims that
+the legislation violated rights secured under the newly adopted
+amendments to the Federal Constitution (Amendments XIII, XIV, XV). The
+opinion of the Court delivered by a Northern judge (Miller of Iowa)
+stands as one of the bulwarks of state authority.
+
+[Footnote 1: 16 Wall., 36 (1873).]
+
+In a series of later cases various reconstruction acts of Congress
+involving encroachments upon state rights were either held
+unconstitutional or radically limited in their effect. For example, the
+decision in _United States v. Cruikshank_[1] greatly limited the effect
+of the so-called Federal Enforcement Act. The decision in _United States
+v. Harris_[2] declared unconstitutional portions of an act of Congress
+designed for the suppression of activities of the Ku-Klux variety. In
+the so-called Civil Rights cases[3] certain provisions of the federal
+Civil Rights Act, passed in furtherance of the purposes of the new
+constitutional amendments and designed to secure to persons of color
+equal enjoyment of the privileges of inns, public conveyances, theatres,
+etc., were held unconstitutional as an encroachment on the rights of the
+states.
+
+[Footnote 1: 92 U.S., 542 (1875).]
+
+[Footnote 2: 106 U.S., 629.]
+
+[Footnote 3: 109 U.S., 3.]
+
+These are but a few of the many decisions of the Supreme Court in the
+reconstruction period upholding the rights of the states against
+attempted federal encroachment arising from the conditions of the Civil
+War. The nation owes a debt of gratitude to the men who composed the
+Court at this time for their courage and firmness in the face of popular
+clamor and passion.
+
+The solicitude of the Court for the rights of the states did not end
+with the reconstruction period. It has continued down to the present
+day. In the Income Tax cases[1] the Court held that a tax upon income
+from bonds of a state municipal corporation was repugnant to the
+Constitution as a tax upon the borrowing power of the state.
+
+[Footnote 1: _Pollock v. Farmers Loan & Trust Co._, 157 U.S., 429
+(1895).]
+
+In _Keller v. United States_[1] the Court declared unconstitutional, as
+an encroachment on the police power of the states, an act of Congress
+making it a felony to harbor alien prostitutes, the Court declaring that
+"speaking generally, the police power is reserved to the states and
+there is no grant thereof to Congress in the Constitution."
+
+[Footnote 1: 213 U.S., 138 (1909).]
+
+In the Child Labor case[1] the Court held the federal Child Labor Law
+of 1916 unconstitutional as invading the police power reserved to the
+states. The Court said:
+
+     This Court has no more important function than that which
+     devolves upon it the obligation to preserve inviolate the
+     constitutional limitations upon the exercise of authority,
+     federal and state, to the end that each may continue to
+     discharge, harmoniously with the other, the duties entrusted
+     to it by the Constitution.[2]
+
+[Footnote 1: _Hammer v. Dagenhart_, 247 U.S., 251 (1918).]
+
+[Footnote 2: An even stronger assertion of state rights is found in the
+Child Labor Tax Case (_Bailey v. The Drexel Furniture Co._) decided May
+15, 1922, after this chapter had been put into print.]
+
+How is it then, someone may ask, if the Supreme Court is so zealous in
+defense of the rights of the states, that those rights are being
+encroached upon more and more by the National Government? The answer
+must be that there has been a change in the popular frame of mind. The
+desire for uniformity, standardization, efficiency, has outgrown the
+earlier fears of a centralization of power. Congress has found ways,
+under the constitutional grants of power to lay taxes and regulate
+interstate commerce, to legislate in furtherance of the popular demands.
+The Court is not strong enough (no governmental agency which could be
+devised would be strong enough) to hold back the flood or permanently
+thwart the popular will. In a government of the people everything has to
+yield sooner or later to the deliberate wish of the majority.
+
+Some profess to view the recent encroachments of federal power as a
+triumph of the principles advocated by Alexander Hamilton and John
+Marshall over the principles of Thomas Jefferson. Such a claim does
+Hamilton and Marshall an injustice. While they both stood for a strong
+National Government, neither of them contemplated any encroachment by
+that government on the principle of local self-government in local
+matters or the police power of the states.
+
+Marshall in one of his most powerful and far-reaching pronouncements in
+support of the national supremacy[1] speaks of
+
+     that immense mass of legislation, which embraces everything
+     within the territory of a state not surrendered to the General
+     Government;... inspection laws, quarantine laws, health laws
+     of every description ... are component parts of this mass.
+
+[Footnote 1: _Gibbons v. Ogden_, 9 Wheat., 1, 203, 208.]
+
+Later in the same opinion he refers to
+
+     the acknowledged power of a state to regulate its police, its
+     domestic trade, and to govern its own citizens.
+
+     ... The power of regulating their own purely internal affairs
+     whether of trading or police.
+
+Hamilton devotes an entire number of the _Federalist_[1] to combatting
+the idea that the rights of the states are in danger of being invaded by
+the General Government. In another place[2] he returns to the idea
+
+     that there is greater probability of encroachments by the
+     members upon the federal head, than by the federal head upon
+     the members
+
+and concludes that it is to be hoped that the people
+
+     will always take care to preserve the constitutional
+     equilibrium between the general and the state governments.
+
+[Footnote 1: _Federalist_, Number XVII.]
+
+[Footnote 2: Id., Number XXXI.]
+
+That hope has failed of realization. The "constitutional equilibrium" of
+which Hamilton wrote is not being preserved. Some will say that this is
+an age of progress and we are improving upon Hamilton. Others, however,
+think we are forgetting the wisdom of the Fathers.
+
+
+
+
+VIII
+
+THE FEDERAL TAXING POWER AND THE INCOME TAX AMENDMENT
+
+
+Had the World War come five years earlier the United States would have
+been much handicapped and embarrassed in financing its share of the
+struggle. One of the chief sources of national revenue during and since
+the war, the income tax, would not have been available. The federal
+income tax had been declared unconstitutional by the Supreme Court in
+1895, and it was not until eighteen years later that the obstacle
+pointed out by that decision was removed through the adoption of an
+amendment to the Constitution. The Sixteenth or Income Tax Amendment was
+proposed by Congress to the legislatures of the several states in 1909
+and took effect, having been ratified by three-fourths of the states, in
+1913. Declared by its sponsors at the outset to be intended merely as a
+recourse in case of emergency, the tax authorized by the amendment was
+at once put into operation and there seems to be little likelihood that
+it will ever be abandoned.
+
+Without the constitutional amendment no general income tax would be
+practicable. And yet the amendment conferred no new power of taxation on
+the National Government. To explain this seeming paradox it will be
+necessary to consider briefly the scope and limitations of the federal
+taxing power.
+
+One of the chief defects, perhaps the most vital defect of all, in the
+Confederation which carried through the Revolutionary War and preceded
+the Union, was its inability to raise revenue directly by taxation. The
+Confederation was obliged to call upon the several states to furnish
+their respective contributions or quotas, and requisitions upon the
+states encountered delays and sometimes were ignored altogether. There
+were no effective means of compulsion.
+
+With these facts before them the founders of the Union determined that
+the new government should not be wrecked upon this rock at any rate, and
+therefore insisted, against great opposition, in conferring upon it
+powers of taxation which were practically unlimited in their reach. The
+Constitution was made to provide that[1]
+
+     the Congress shall have power to lay and collect taxes,
+     duties, imposts and excises, to pay the debts and provide for
+     the common defense and general welfare of the United States.
+
+[Footnote 1: Const., Art. I, Sec. 8, Clause 1.]
+
+The only tax which Congress was expressly forbidden to lay was a tax on
+exports.[1] It was, however, provided that indirect taxes (duties,
+imposts, and excises) should be uniform throughout the United States,[2]
+and that direct taxes should be apportioned among the states according
+to population.[3] The last mentioned provision was a concession to the
+fears of the wealthier states lest their citizens be taxed unduly for
+the benefit of the poorer states, and represented one of the great
+compromises by which the ratification of the Constitution as a whole was
+secured.
+
+[Footnote 1: Const., Art. I, Sec. 9, Clause 5.]
+
+[Footnote 2: Id., Art. I, Sec. 8, Clause 1.]
+
+[Footnote 3: Id., Art. I, Sec. 2, Clause 3. Sec. 9, Clause 4.]
+
+The Constitution nowhere specified just what taxes were to be deemed
+"direct" (Madison in his notes of the Constitutional Convention records:
+"Mr. King asked what was the precise meaning of direct taxation? No one
+answd.")[1] or what kind of uniformity was intended by the provision
+that indirect taxes should be uniform, and more than a century was to
+elapse before either of these fundamental questions was finally
+settled. The answer to the latter question (that the term "uniform"
+refers purely to a geographical uniformity and is synonymous with the
+expression "to operate generally throughout the United States") was
+given by the Supreme Court in the year 1900 in the celebrated case of
+_Knowlton v. Moore_,[2] and met with general approval. The answer to the
+question of what constitutes a direct tax within the meaning of the
+Constitution, given by the Supreme Court in 1895 in the Income Tax
+cases,[3] met with a different reception. The decision upset
+long-settled ideas, disarranged the federal taxing system, aroused
+popular resentment, and ultimately led to the enactment of the Sixteenth
+Amendment.
+
+[Footnote 1: Farrand, "Records of the Federal Convention," Vol. II, p.
+350.]
+
+[Footnote 2: 178 U.S., 41.]
+
+[Footnote 3: _Pollock v. Farmers Loan & Trust Co._, 157 U.S., 429.]
+
+The question had arisen early in the life of the Republic in the case of
+_Hylton v. United States_, decided in 1796.[1] This litigation involved
+the validity of a tax on carriages which had been imposed by Congress
+without apportionment among the states. Alexander Hamilton argued the
+case before the Supreme Court in support of the tax. The Court adopted
+his view and sustained the tax, holding that it was a tax on consumption
+and therefore a species of excise or duty. The Justices who wrote
+opinions expressed doubt whether anything but poll taxes and taxes on
+land were "direct" within the meaning of the Constitution. That point,
+however, was not necessarily involved and was not decided, though later
+generations came to assume that it had been decided.
+
+[Footnote 1: 3 Dallas, 171.]
+
+The tax on carriages was soon repealed and many years elapsed before the
+question came up again. After the Civil War broke out, however, the need
+of revenue became acute and various statutes taxing income without
+apportionment among the states were enacted by Congress. These met with
+general acquiescence. It was felt that they were emergency measures
+necessitated by the war, and they were in fact abandoned as soon as
+practicable after the war. A well-known lawyer, however (William M.
+Springer of Illinois), did not acquiesce and refused to pay his income
+tax, on the ground that it was a direct tax not levied in accordance
+with the Constitution. In the action brought to test the question[1] it
+appeared that the income on which Mr. Springer had been taxed was
+derived in part from the practice of his profession as an attorney. To
+this extent it was clearly an excise or duty, i.e., an indirect tax. As
+it was incumbent upon Mr. Springer, by reason of the form of the action,
+to demonstrate that the tax was void _in toto_ the Court could not do
+otherwise than decide against him. In rendering its decision, however,
+the Court took occasion to discuss the question as to what were direct
+taxes within the meaning of the Constitution, and expressed the view
+that the term included only capitation or poll taxes, and taxes on real
+estate. There the matter rested until the year 1894 when Congress
+enacted another income tax law. This time the argument from necessity
+was lacking. The country was in a state of profound peace. Opposition to
+the tax among the moneyed interests was widespread. Test suits were
+brought and after most elaborate and exhaustive argument and reargument
+the Hylton and Springer cases were distinguished and the act was held
+unconstitutional.[2] The decision was by a closely divided Court (five
+to four), the majority finally holding that "direct taxes" within the
+meaning of the Constitution included taxes on personal property and the
+income of personal property, as well as taxes on real estate and the
+rents or income of real estate. This conclusion was fatal to the act. It
+was conceded that the tax, in so far as it affected income derived from
+a business or profession, was an indirect tax and therefore valid
+without apportionment among the states, but the provisions for taxing
+the income of real and personal property were held to be an essential
+part of the taxing scheme invalidating the whole statute.
+
+[Footnote 1: _Springer v. United States_, 102 U.S., 586.]
+
+[Footnote 2: _Pollock v. Farmers Loan & Trust Co._, 157 U.S., 429; same
+case on rehearing, 158 U.S., 601.]
+
+This momentous decision was almost as unpopular with Congress and the
+general public as the decision in _Chisholm v. Georgia_ had been a
+hundred years earlier. Many legislators were in favor of enacting
+another income tax law forthwith and endeavoring to coerce the Court,
+through the force of legislative and popular opinion, to overrule its
+decision. Calmer counsels prevailed, however, and plans were initiated
+to get over the difficulty by a constitutional amendment. Meanwhile,
+steps were taken to eke out the national revenue by various excise
+taxes, notably the so-called Federal Corporation Tax. This novel tax,
+which was thought by many to involve a very serious encroachment by the
+Federal Government on the powers of the states, will be discussed more
+at length in later chapters.[1]
+
+[Footnote 1: See Chapters X and XI, infra.]
+
+The constitutional amendment as proposed by Congress and ratified by the
+states provided:
+
+"The Congress shall have power to lay and collect taxes on incomes, from
+whatever source derived, without apportionment among the several states,
+and without regard to any census or enumeration."
+
+Thus far we have dealt only with such limitations upon the federal
+taxing power as are expressly imposed by the Constitution. As has been
+seen, the only express limitations are that direct taxes shall be
+apportioned among the states, that indirect taxes shall be uniform, and
+that exports shall not be taxed at all. There are, however, certain
+other limitations which we proceed to notice briefly.
+
+The Constitution provides[1] that the compensation of federal judges
+"shall not be diminished during their continuance in office." There is a
+similar provision as to the compensation of the President.[2] No attempt
+seems to have been made to tax the compensation of federal judges prior
+to 1862. A statute of that year subjected the salaries of all civil
+officers of the United States to an income tax and was construed by the
+revenue officers as including the compensation of the President and the
+judges. Chief Justice Taney, the head of the judiciary, wrote the
+Secretary of the Treasury a letter[3] protesting against the tax as a
+virtual diminution of judicial compensation in violation of the
+constitutional provision. No heed was paid to the protest at the time
+but some years later, upon the strength of an opinion by Attorney
+General Hoar, the tax on the compensation of the President and the
+judges was discontinued and the amounts theretofore collected were
+refunded. There the matter rested until after the Income Tax Amendment,
+when Congress again sought to impose a tax upon the income of the
+President and the judges. A federal judge of a Kentucky district
+contested the tax and the question came up before the Supreme Court for
+final decision. On behalf of the revenue department it was urged that a
+general income tax, operating alike on all classes, did not involve any
+violation of the constitutional provision. It was also contended that
+such a tax was expressly authorized by the Sixteenth Amendment giving
+Congress power to tax incomes "from whatever source derived." The Court
+in an exhaustive opinion[4] overruled both these contentions and held
+the tax to be a violation of the Constitution.
+
+[Footnote 1: Art. 3, Sec. 1.]
+
+[Footnote 2: Art. 2, Sec. 1, Clause 6.]
+
+[Footnote 3: See 157 U.S., 701.]
+
+[Footnote 4: _Evans v. Gore_, 253 U.S., 245.]
+
+It has often been asserted that a limitation of the federal taxing power
+is found in the "due process" clause of the Fifth Amendment of the
+Constitution, providing that no person shall "be deprived of life,
+liberty, or property without due process of law." This amendment relates
+to the powers of the General Government. A similar limitation on the
+powers of the states is found in the Fourteenth Amendment. Taxing laws
+have frequently been attacked in the courts on the ground that, by
+reason of some inequality or injustice in their provisions, the taxpayer
+was deprived of his property without due process of law. In cases
+involving state laws such objections have sometimes been sustained.[1]
+There seems, however, to have been no case in which a federal taxing law
+was declared invalid on this ground, and the Supreme Court has recently
+remarked that it is "well settled that such clause (viz., the due
+process clause of the Fifth Amendment) is not a limitation upon the
+taxing power conferred upon Congress by the Constitution."[2]
+Nevertheless, it is believed that if a federal tax were clearly imposed
+for other than a public use, or were imposed on tangible property lying
+outside the national jurisdiction, or were so arbitrary and without
+basis for classification as to amount to confiscation, relief might be
+obtained under the due process clause of the Fifth Amendment.
+
+[Footnote 1: See, e.g., _Union Tank Line Co. v. Wright_, 249 U.S., 275.]
+
+[Footnote 2: _Brushaber v. Union Pacific R.R._, 240 U.S., 24.]
+
+By far the most important and interesting of the implied limitations of
+the federal taxing power remains to be noticed. That is the limitation
+which prohibits the National Government from burdening by taxation the
+property or revenues or obligations of a state, or the emoluments of a
+state official, or anything connected with the exercise by a state of
+one of its governmental functions. In other words, while the National
+Government may tax income from bonds issued by England or France or
+their cities, it is powerless to tax the income from bonds of Rhode
+Island or the smallest of its towns.
+
+This implied limitation, nowhere categorically expressed but enunciated
+in a series of decisions of the Supreme Court, has not always met with
+acquiescence from the executive and legislative branches of the
+Government. In fact, Congress is now engaged in an effort to do away
+with it, at least in so far as concerns the right to tax the income from
+state and municipal bonds. To-day, however, it still stands as one of
+the most striking and unique characteristics of our governmental system.
+It will be discussed more at length in the next chapter.
+
+
+
+
+IX
+
+CAN CONGRESS TAX THE INCOME FROM STATE AND MUNICIPAL BONDS?
+
+
+That is a question which is agitating a good many people just now.
+Congress from time to time has seemed disposed to try it, in spite of
+misgivings as to the constitutionality of such legislation.[1] A recent
+Revenue Bill contained provisions taxing the income of future issues of
+such obligations, and a motion for the elimination of those provisions
+was defeated in the House 132 to 61. Meanwhile, protests were pouring in
+from state and municipal officers assailing the justice and expediency
+of such a tax.
+
+[Footnote 1: See, e.g., H. Report No. 767, 65th Cong., 2d Sess.,
+accompanying House Revenue Bill of 1918 as reported by Mr. Kitchin from
+the Committee on Ways and Means, page 89.]
+
+It is not the purpose of this chapter to discuss the questions of
+justice and expediency (as to which there is much to be said on both
+sides) but rather to deal with the strictly legal aspects of the matter
+and indicate briefly why such a tax cannot be laid without a change in
+our fundamental law.
+
+Let it be said at the outset that no express provision of the United
+States Constitution forbids. On the contrary, that instrument confers on
+Congress the power to lay taxes without any restriction or limitation
+save that exports shall not be taxed, that duties, imposts, and excises
+shall be uniform throughout the United States, and that direct taxes
+must be apportioned among the states in proportion to population. The
+obstacle lies rather in an implied limitation inherent in our dual
+system of government and formulated in decisions of the Supreme Court.
+
+The founders of this republic established a form of government wherein
+the states, though subordinate to the Federal Government in all matters
+within its jurisdiction, nevertheless remained distinct bodies politic,
+each one supreme in its own sphere. In the famous phrase of Salmon P.
+Chase, pronouncing judgment as Chief Justice of the Supreme Court[1]:
+
+     The Constitution in all its provisions looks to an
+     indestructible Union, composed of indestructible states.
+
+[Footnote 1: _Texas v. White_, 7 Wall., 700, 725.]
+
+In a later case[1] another eminent justice (Samuel Nelson of New York)
+put the matter thus:
+
+     The General Government, and the states, although both exist
+     within the same territorial limits, are separate and distinct
+     sovereignties, acting separately and independently of each
+     other, within their respective spheres. The former, in its
+     appropriate sphere, is supreme; but the states within the
+     limits of their powers not granted, or, in the language of the
+     10th Amendment, "reserved", are as independent of the General
+     Government as that government within its sphere is independent
+     of the states.
+
+[Footnote 1: _The Collector v. Day_, 11 Wall., 113, 124.]
+
+It follows that the two governments, national and state, must each
+exercise its powers so as not to interfere with the free and full
+exercise by the other of its powers. To do otherwise would be contrary
+to the fundamental compact embodied in the Constitution--in other words,
+it would be _unconstitutional_.
+
+This proposition was affirmed at an early day by Chief Justice John
+Marshall in the great case of _McCulloch vs. The State of Maryland_,[1]
+which involved the attempt of a state to tax the operations of a
+national bank. That case is one of the landmarks of American
+constitutional law. While it did not expressly decide that the Federal
+Government could not tax a state instrumentality but only the converse,
+i.e., that a state could not tax an instrumentality of the nation, the
+Court has held in many subsequent decisions that the proposition
+enunciated by the great Chief Justice works both ways. For example, it
+has declared that a state cannot tax the obligations of the United
+States because such a tax operates upon the power of the Federal
+Government to borrow money[2] and conversely, that Congress cannot tax
+the obligations of a state for the same reason;[3] that a state cannot
+tax the emoluments of an official of the United States[4] and
+conversely, that the United States cannot tax the salary of a state
+official;[5] that a state cannot impose a tax on the property or
+revenues of the United States[6] and conversely, that Congress cannot
+tax the property or revenues of a state or a municipality thereof.[7]
+
+[Footnote 1: 4 Wheaton, 316.]
+
+[Footnote 2: _Weston v. City of Charleston_, 2 Pet., 449.]
+
+[Footnote 3: _Mercantile Bank v. New York_, 121 U.S., 138, 162.]
+
+[Footnote 4: _Dobbins v. Commissioner of Erie County_, 16 Pet., 435.]
+
+[Footnote 5: _Collector v. Day_, 11 Wall., 113.]
+
+[Footnote 6: _Van Brocklin v. Tennessee_, 117 U.S., 151.]
+
+[Footnote 7: _United States v. Railroad Co._, 17 Wall., 322.]
+
+The Supreme Court has said (and many times reiterated in substance) that
+the National Government "cannot exercise its power of taxation so as to
+destroy the state governments, or embarrass their lawful action."[1] One
+of the most distinguished writers on American Constitutional law
+(Thomas M. Cooley, Chief Justice of the Supreme Court of Michigan and
+afterward Chairman of the federal Interstate Commerce Commission) has
+said:
+
+     There is nothing in the Constitution which can be made to
+     admit of any interference by Congress with the secure
+     existence of any state authority within its lawful bounds. And
+     any such interference by the indirect means of taxation is
+     quite as much beyond the power of the national legislature as
+     if the interference were direct and extreme.[2]
+
+[Footnote 1: _Railroad Co. v. Peniston_, 18 Wall., 5, 30.]
+
+[Footnote 2: _Cooley's Constitutional Limitations_, 7th Ed., 684.]
+
+The question as to the right of Congress to levy an income tax on
+municipal securities came up squarely in the famous Income Tax Cases[1]
+involving the constitutionality of the Income Tax Law of 1804. While the
+Supreme Court was sharply divided as to the constitutionality of other
+features of the law, it was unanimous as to the lack of authority in the
+United States to tax the interest on municipal bonds.
+
+[Footnote 1: _Pollock v. Farmers Loan & Trust Co._, 157 U.S., 429; same
+case on rehearing, 158 U.S., 601.]
+
+The decision in those cases is the law to-day (except in so far as it
+has been changed by the recent Sixteenth Amendment) with one possible
+limitation. It has been held that state agencies and instrumentalities,
+in order to be exempt from national taxation, must be of a strictly
+governmental character; the exemption does not extend to agencies and
+instrumentalities used by the state in carrying on an ordinary private
+business. This was decided in the South Carolina Dispensary case.[1] The
+State of South Carolina had taken over the business of selling liquor
+and the case involved a federal tax upon such business. The Court, while
+reaffirming the general doctrine, nevertheless upheld the tax on the
+ground that the business was not of a strictly governmental character.
+This decision suggests the possibility that if an attempt were made to
+tax state and municipal bonds the Court might draw a distinction based
+on the purpose for which the bonds were issued, and hold that only such
+as were issued for strictly governmental purposes were exempt.
+
+[Footnote 1: _South Carolina v. United States_, 199 U.S., 437, decided
+in 1905.]
+
+It remains to consider the effect of the Sixteenth Amendment.
+
+After the Supreme Court had held the Income Tax Law of 1894
+unconstitutional on the ground that it was a direct tax and had not been
+apportioned among the states in proportion to population the Sixteenth
+Amendment to the Constitution was proposed and ratified. This amendment
+provides that
+
+     the Congress shall have power to lay and collect taxes on
+     incomes, from whatever source derived, without apportionment
+     among the several states, and without regard to any census or
+     enumeration.
+
+When the amendment was submitted to the states for approval some lawyers
+apprehended that the words "incomes from whatever source derived" might
+open the door to the taxation by the Government of income from state and
+municipal bonds. Charles E. Hughes, then Governor of New York, sent a
+special message to the Legislature opposing ratification of the
+amendment on this ground.
+
+Other lawyers, notably Senator Elihu Root, took a different view of the
+scope of the amendment, holding that it would not enlarge the taxing
+power but merely remove the obstacle found by the Supreme Court to the
+Income Tax Law of 1894, i.e., the necessity of apportionment among the
+states in proportion to population. This latter view has now been
+confirmed by the Supreme Court. In a case involving a tax on income from
+exports the Court said:[1]
+
+     The Sixteenth Amendment ... does not extend the taxing power
+     to new or excepted subjects, but merely removes all occasion,
+     which otherwise might exist, for an apportionment among the
+     states of taxes laid on income, whether it be derived from one
+     source or another....
+
+[Footnote 1: _Peck v. Lowe_, 247 U.S., 165.]
+
+In a case decided a little earlier[1] the Court, speaking through Chief
+Justice White, had said:
+
+     By the previous ruling (i.e., in _Brushaber v. Union Pacific
+     Railway Co._, 240 U.S., 1) it was settled that the provisions
+     of the Sixteenth Amendment conferred no new power of
+     taxation....
+
+[Footnote 1: _Stanton v. Baltic Mining Co._, 240 U.S., 103, 112.]
+
+From what has been said it will be evident that the doctrine of
+exemption of state and municipal bonds from federal taxation is firmly
+embedded in our law and has not been affected by the Sixteenth
+Amendment.
+
+Whether it is a doctrine suited to present-day conditions is a question
+outside the scope of this paper.
+
+The fear of federal encroachment, so strong in the minds of the makers
+of our Constitution, has become little more than a tradition. To many it
+doubtless will seem that any rule of law which operates to prevent the
+nation, in the great exigency of war, from taxing a portion of the
+property of its citizens is pernicious and should be changed.
+
+If this be the view of a sufficient number the change can and will be
+made. Lawyers think, however, that it will have to be done by the
+orderly method of constitutional amendment, not by passing taxing
+statutes which a reluctant Court will be obliged to declare
+unconstitutional.
+
+Just now the tide of popular sentiment is setting strongly toward such a
+change. It was advocated in a recent Presidential message.[1] The
+immunity enjoyed by state bond issues is coming to be regarded less as a
+safeguard of state rights than as a means whereby the rich escape
+federal income surtaxes. One is tempted to predict that the next formal
+amendment of the Constitution will deal with this subject. If so,
+another inroad will have been made by the General Government on the
+failing powers of the states.
+
+[Footnote 1: Message of President Harding to Congress, December 6,
+1921.]
+
+
+
+
+X
+
+IS THE FEDERAL CORPORATION TAX CONSTITUTIONAL?[1]
+
+[Footnote 1: Since this chapter was first published in 1909 as an
+article in the _Outlook_ magazine the specific question propounded in
+its title has been settled by the Supreme Court (_Flint v. Stone Tracy
+Co._, 220 U.S., 107). The paper is here reproduced, however, in the
+belief that its discussion of the principles of our dual system of
+Government is as pertinent now as it was before.]
+
+
+The most noteworthy enactment of the sixty-first Congress from a legal
+point of view, to say nothing of its economic and political
+significance, was the Corporation Tax Act. That Act, forming §38 of the
+Tariff Law, provides--
+
+     That every corporation ... organized for profit and having a
+     capital stock represented by shares ... shall be subject to
+     pay annually a special excise tax with respect to the carrying
+     on or doing business by such corporation ... equivalent to one
+     per centum upon the entire net income over and above five
+     thousand dollars received by it from all sources, etc.
+
+The act goes on to require the corporations to make periodical reports
+concerning their business and affairs, and confers on the Commissioner
+of Internal Revenue a visitorial power to examine and compel further
+returns.
+
+The genesis of the act is interesting. The growing demand for more
+efficient regulation of the corporations, so pronounced during President
+Roosevelt's Administration, had foreshadowed such legislation. It
+remained, however, for President Taft to take the initiative and mould
+the shape which the legislation was to take.
+
+In the course of the Senate debate on the new Tariff Act it had become
+apparent that an influential party in Congress, backed by strong
+sympathy outside, was bent upon passing a general income tax act. The
+previous Income Tax Law had been pronounced unconstitutional by the
+Supreme Court as violating the provision of the Constitution that all
+direct taxes must be apportioned among the states in proportion to
+population.[1] That decision, however, had been reached by a bare
+majority of five to four. It had overruled previous decisions and
+overturned doctrines that had been acquiesced in almost from the
+foundation of the Government. A strong party was in favor of enacting
+another income tax law and bringing the question again before the Court
+in the hope that the Court as then constituted might be induced to
+overrule or materially modify the doctrine of the Pollock case. The
+President and his advisers viewed such a proposal with disfavor. To
+their minds the proper way to establish the right of Congress to levy an
+income tax was by an amendment to the Constitution, not by an assault
+upon the Supreme Court. Accordingly on June 16, 1909, the President
+transmitted a message to Congress[2] recommending a constitutional
+amendment, and proposing, in order to meet the present need for more
+revenue, an excise tax on corporations. The proposal, coupled as it was
+with a suggestion that such an act might be made to serve for purposes
+of federal supervision and control as well as revenue, met with favor
+and was enacted into law.
+
+[Footnote 1: _Pollock vs. Farmers' Loan & Trust Co._, 157 U.S., 429.]
+
+[Footnote 2: _Congressional Record_, June 16, 1909, p. 3450.]
+
+President Taft, himself an eminent constitutional lawyer, in his message
+recommending the law expressed full confidence in its constitutionality.
+The same view was taken by able lawyers who surrounded him in the
+capacity of advisers. The act is understood to have been drafted by Mr.
+Wickersham, the Attorney General, and vouched for by Senator Elihu Root
+and others of scarcely less authority in the domain of constitutional
+law.
+
+Against opinions from such sources one takes the field with diffidence.
+I venture, however, to outline briefly some reasons for doubting the
+constitutionality of the act.
+
+At the outset it is essential to determine the exact nature of the tax.
+Obviously it is not a tax upon income _as income_. If it were, it would
+be obnoxious to the decision in the Pollock case as imposing a direct
+tax without apportionment among the states. The language of the act, as
+well as the declarations of its sponsors, clearly indicate that it is
+intended, not as a direct tax on property, but as an excise tax on
+privilege. The phraseology of the act itself is--"A special excise tax
+with respect to the carrying on or doing business by such corporation,"
+etc. Undoubtedly Congress has power to impose an excise tax upon
+occupation or business. This was expressly decided, in the case of the
+businesses of refining petroleum and refining sugar, by the Spreckels
+case,[1] referred to in President Taft's message. The message says:
+
+     The decision of the Supreme Court in the case of Spreckels
+     Sugar Refining Company against McClain (192 U.S., 397) seems
+     clearly to establish the principle that such a tax as this is
+     an excise tax upon privilege and not a direct tax on property,
+     and is within the federal power without apportionment
+     according to population.
+
+[Footnote 1: _Spreckels Sugar Refining Co. vs. McClain_, 192 U.S., 397.]
+
+What, then, is the privilege with respect to which the tax is imposed?
+Is it, like the tax involved in the Spreckels case, the privilege of
+doing the various kinds of business (manufacturing, mercantile, and the
+rest) in which the corporations subject to the operation of the law are
+engaged? Obviously not. No kind or kinds of business are specified in
+the act. The tax falls not only on corporations doing every conceivable
+kind of business, but also on the corporation that does no specific
+business whatever--the corporation which, in the language of an eminent
+judge, is merely "an incorporated gentleman of leisure."[1] Moreover, if
+the tax were merely upon the privilege of doing business, it would seem
+to be obnoxious to the cardinal principle of just taxation that taxes
+should be uniform. In other words, if the privilege of doing a
+business--say conducting a department store--were the thing taxed and
+the only thing taxed, the rule of uniformity would seem to require that
+a corporation and a copartnership conducting similar stores on opposite
+corners of the street should both be taxed. Nothing inconsistent with
+this view will be found in the Spreckels case. The party to that suit
+was, to be sure, a corporation, but the act under which the tax was
+imposed applied to individuals, firms, and corporations alike.
+
+[Footnote 1: Vann, J., in _People ex rel. vs. Roberts_, 154 N.Y., 1.]
+
+It must be concluded, therefore, that the tax is not upon the privilege
+of doing the businesses in which the various corporations in the land
+are engaged, but is rather a _tax upon the privilege of doing business
+in a corporate capacity_, or, in other words, upon the exercise of the
+corporate franchise. That this is so appears very clearly from the
+message of President Taft. He says:
+
+     This is an excise tax upon the privilege of doing business as
+     an artificial entity and of freedom from a general partnership
+     liability enjoyed by those who own the stock.
+
+Assuming, then, that this is the real nature of the tax, is it
+constitutional?
+
+Unquestionably Congress may tax corporations organized under federal
+laws upon their franchises; any sovereignty may tax the creatures of its
+creation for the privilege of exercising their franchises; but how about
+corporations chartered by the states and doing purely an intrastate
+business? A state confers on John Doe and his associates the privilege
+or franchise of doing business in a corporate capacity. Can Congress
+impose a tax on the exercise of that privilege or franchise? The power
+to tax involves the power to destroy.[1] If Congress can impose a tax of
+one per cent., it can impose a tax of ten per cent. or fifty per cent.,
+and thus impair or destroy altogether the value of corporate charters
+for business purposes. Does Congress possess such a power? The
+Constitution puts no express limitation on the right of Congress to levy
+excises except that they shall be "uniform throughout the United
+States." But there are certain implied limitations inherent in our dual
+system of government. The sovereignty and independence of the separate
+states within their spheres are as complete as are the sovereignty and
+independence of the General Government within its sphere.[2] Neither may
+interfere with or encroach upon the other.
+
+[Footnote 1: _McCulloch vs. Maryland_, 4 Wheat., 316.]
+
+[Footnote 2: _The Collector vs. Day_, 11 Wall., 113, 124.]
+
+The right to grant corporate charters for ordinary business purposes is
+an attribute of sovereignty belonging to the states, not to the General
+Government. The United States is a government of enumerated powers. The
+Constitution nowhere expressly confers upon Congress the right to grant
+corporate charters, and it is well settled that this right exists only
+in the limited class of cases where the granting of charters becomes
+incidental to some power expressly conferred on Congress, e.g., the
+power to establish a uniform currency, or the power to regulate
+interstate commerce. On the other hand, the right of the separate states
+to grant charters of incorporation is unquestionable. By the Tenth
+Amendment of the Constitution it is expressly provided: "The powers not
+delegated to the United States by the Constitution nor prohibited by it
+to the states are reserved to the states respectively or to the people."
+The Supreme Court long ago said: "A state may grant acts of
+incorporation for the attainment of those objects which are essential to
+the interests of society. _This power is incident to sovereignty._"[1]
+
+[Footnote 1: _Briscoe v. Bank of Kentucky_, 11 Peters, 257, 317.]
+
+The power to grant the franchise of corporate capacity being therefore
+inherent in the sovereignty of the states, will not a tax imposed by
+Congress upon the exercise of the franchise constitute an interference
+with the power? If so the tax is unconstitutional.
+
+The Supreme Court has repeatedly held, that the National Government
+"cannot exercise its power of taxation so as to destroy the state
+governments or embarrass their lawful action."[1] In the case of
+_California vs. Central Pacific R.R. Co._[2] the question was whether
+franchises granted to the Central Pacific Railroad Company by the United
+States were legitimate subjects of taxation by the State of California.
+The Supreme Court, in language frequently quoted in subsequent cases,
+discusses the nature and origin of franchises, concluding that a
+franchise is "a right, privilege, or power of public concern" existing
+and exercised by legislative authority. After enumerating various kinds
+of franchises, the Court remarks: "No persons can make themselves a body
+corporate and politic without legislative authority. Corporate capacity
+is a franchise." The Court continues:
+
+     In view of this description of the nature of a franchise, how
+     can it be possible that a franchise granted by Congress can be
+     subject to taxation by a state without the consent of
+     Congress? Taxation is a burden and may be laid so heavily as
+     to destroy the thing taxed or render it valueless. As Chief
+     Justice Marshall said in _McCulloch v. Maryland_, "The power
+     to tax involves the power to destroy."... It seems to us
+     almost absurd to contend that a power given to a person or
+     corporation by the United States may be subjected to taxation
+     by a state. The power conferred emanates from and is a portion
+     of the power of the government that confers it. To tax it is
+     not only derogatory to the dignity but subversive of the
+     powers of the government, and repugnant to its paramount
+     sovereignty.
+
+[Footnote 1: _Railroad Company v. Peniston_, 18 Wall., 5, 30.]
+
+[Footnote 2: 127 U.S., 1.]
+
+It is true that the Court was here discussing the right of a state to
+tax franchises granted by the United States, and not the converse of
+that question. The reasoning of the Court would seem, however, to apply
+with equal force to the right of the United States to tax a franchise
+granted by a state acting within the scope of its sovereign authority.
+
+Patent rights and copyrights are special privileges or franchises
+granted by the sovereign or government, and under the United States
+Constitution the right to grant patents and copyrights is expressly
+conferred on Congress. It has been held repeatedly that patent rights
+and copyrights are not taxable by the states[1]. As said by the New York
+Court of Appeals in a case involving the power of the state to tax
+copyrights:[2]
+
+     To concede a right to tax them would be to concede a power to
+     impede or burden the operation of the laws enacted by Congress
+     to carry into execution a power vested in the National
+     Government by the Constitution.
+
+[Footnote 1: _People ex rel. Edison, &c., Co., v. Assessors_, 156 N.Y.,
+417; _People ex rel. v. Roberts_, 159 N.Y., 70; _In Re Sheffield_, 64
+Fed. Rep., 833; _Commonwealth v. Westinghouse, &c., Co._, 151 Pa., 265.]
+
+[Footnote 2: 159 N.Y., p. 75.]
+
+Apparently the same rule would be applicable were the granting of patent
+rights, like the granting of ordinary corporate franchises, a
+prerogative reserved under our system of government to the states
+instead of being expressly conferred on the United States. By parity of
+reasoning, the Federal Government in that case would have no power to
+tax them.
+
+It is familiar law, reiterated over and over again by the Supreme Court,
+that Congress cannot tax the means or instrumentalities employed by the
+states in exercising their powers and functions, any more than a state
+can tax the instrumentalities similarly employed by the General
+Government. Thus, it has been held that Congress cannot tax a municipal
+corporation (being a portion of the sovereign power of the state) upon
+its municipal revenues[1]; that Congress cannot impose a tax upon the
+salary of a judicial officer of a state[2]; that Congress cannot tax a
+bond given in pursuance of a state law to secure a liquor license.[3]
+
+[Footnote 1: _United States vs. Railroad Co._, 17 Wall., 322.]
+
+[Footnote 2: _Collector v. Day_, 11 Wall., 113.]
+
+[Footnote 3: _Ambrosini v. United States_, 185 U.S., 1.]
+
+In the light of these decisions it is not apparent how Congress can tax
+the franchises of those state corporations (and they are many and
+important) which perform some public or quasi-public function. A state,
+to carry out its purposes of internal improvement, charters an
+intrastate railway or ferry company with power to charge tolls and
+exercise the right of eminent domain. Is not the grant of corporate
+existence and privileges to such a corporation one of the means or
+instrumentalities employed by the state for carrying out its legitimate
+functions, and is not a tax by the Federal Government upon the exercise
+by such a corporation of its corporate powers an interference with such
+means or instrumentalities?
+
+In any discussion of the right of Congress to tax the agencies of or
+franchises granted by a state, the distinction must be borne in mind
+between a tax upon _property_ acquired by means of the franchise from
+the state and a tax upon the exercise of the franchise itself. The
+former tax may be perfectly valid where the latter would be
+unconstitutional. Thus, the Supreme Court has upheld a tax by a state
+upon the real and personal property (as distinct from the franchises) of
+a railway company chartered by Congress for private gain, while
+conceding that the state could not tax the franchises, because to do so
+would be a direct obstruction to federal powers.[1]
+
+[Footnote 1: _Union Pacific Railroad Company vs. Peniston_, 18 Wall.,
+5.]
+
+It remains to notice briefly one or two Supreme Court decisions which
+are relied upon by the sponsors of the new tax law. Reference has
+already been made to the decision in the Spreckels case[1] which upheld
+the validity of the tax imposed by the War Revenue Act of 1898 upon the
+gross receipts of corporations engaged in the businesses of refining
+petroleum and refining sugar. The Court held the tax to be an excise tax
+"in respect of the carrying on or doing the business of refining sugar,"
+and such it obviously was. It was not a tax upon the privilege or
+franchise of doing business in a corporate capacity, like the tax now
+under debate. On the contrary, the act expressly applied to "every
+person, firm, corporation, or company carrying on or doing the business
+of refining sugar...." The case, therefore, has no bearing on the point
+we are discussing. Had the act applied only to corporations, a different
+question would have been involved.
+
+[Footnote 1: _Spreckels Sugar Refining Co. vs. McClain_. 192 U.S., 397.]
+
+The case of _Veazie Bank vs. Fenno_,[1] upholding the statute which
+taxed out of existence the circulation of the state banks, has
+frequently been cited as an authority sustaining the right of Congress
+to levy a tax upon a franchise or privilege granted by a state. It is
+true that in that case the eminent counsel for the bank (Messrs. Reverdy
+Johnson and Caleb Cushing) argued unsuccessfully "that the act imposing
+the tax impaired a franchise granted by the state, and that Congress had
+no power to pass any law which could do that;"[2] and that two justices
+dissented on that ground. The conclusive answer to this argument, was,
+however, that the power of the states to grant the particular right or
+privilege in question was subordinate to powers expressly conferred on
+Congress by the Constitution; that Congress was given power under the
+Constitution to provide a currency for the whole country, and the act in
+question was legislation appropriate to that end. The case does not
+hold that Congress has any general power to tax franchises or privileges
+granted by a state.
+
+[Footnote 1: 8 Wall., 533.]
+
+[Footnote 2: See 8 Wall., p. 535.]
+
+The scope of this chapter does not admit of further reference to the
+decisions. It is strongly urged, however, that none of them, rightly
+construed, will be found to sustain the right of the General Government
+to impose a tax upon the exercise of franchises granted by a state in
+the exercise of its independent sovereignty, and that such a decision
+would mark a new departure in our jurisprudence.
+
+In the debates in Congress over the bill many good lawyers appear to
+have assumed, somewhat too hastily, that the tax in question was an
+excise tax on business or occupation like that involved in the Spreckels
+case, and that the only constitutional question, therefore, was one of
+classification under the provision of the Constitution that excises
+shall be uniform throughout the United States. No less eminent a
+constitutional lawyer than Senator Bailey of Texas, in a colloquy with
+the junior Senator from New York, put the matter thus:[1]
+
+     Mr. Root: May I ask the Senator from Texas if I am right in
+     inferring from the statement which he has just made that he
+     does not seriously question the constitutional power of the
+     Congress to impose this tax on corporations?
+
+     Mr. Bailey: Mr. President, I answer the Senator frankly that I
+     do not.... I think the rule was and is that Congress can levy
+     any tax it pleases except an export tax. Of course a direct
+     tax must be apportioned and an indirect tax must be uniform.
+     But the uniformity rule simply requires that wherever the
+     subject of taxation is found, the tax shall operate equally
+     upon it.
+
+     I believe that Congress can tax all red-headed men engaged in
+     a given line of business if it pleases.... I have no doubt if
+     the tax fell upon every red-headed man in Massachusetts the
+     same as in Mississippi or Texas and all other states, the law
+     imposing such a tax would be perfectly valid.
+
+[Footnote 1: _Congressional Record_ for July 6, 1909, pp. 4251 to 4252.]
+
+The difficulty with this reasoning is that it overlooks the fact that
+the privilege of being red-headed is not a franchise granted by a
+sovereign state. From the viewpoint of constitutional law it may well be
+that Congress can tax a privilege conferred by the gods where it would
+be powerless to tax a franchise granted by the Legislature of New
+Jersey.
+
+
+
+
+XI
+
+THE CORPORATION TAX DECISION
+
+
+The immediate consequences of the decision of the United States Supreme
+Court[1] affirming the constitutionality of the federal corporation tax
+are so slight that its profound significance is likely to be overlooked.
+Until it was merged with the general income tax the exaction was not
+burdensome and proved easy of collection. The thing upon which it
+fell--the privilege of doing business in a corporate capacity--is an
+abstraction which makes little appeal to the sympathies or the moral
+sense. The public, more concerned with present conditions than with the
+passing of a theory, is indifferent.
+
+[Footnote 1: _Flint v. Stone Tracy Co._, 220 U.S., 107]
+
+Thus it has sometimes been with the turning points in the affairs of
+nations. They came quietly and without observation, and it remained for
+the historians to mark the actual parting of the ways.
+
+The Supreme Court holds, and in its opinion reiterates many times, that
+the tax is upon the _privilege of doing business in a corporate
+capacity_.
+
+Right here is the crux of the matter. Corporate capacity is not a right
+granted by the National Government. It is something which Congress can
+neither give nor take away. In the division of powers which marked the
+creation of our dual government the power to confer corporate capacity
+was reserved to the states. The decision, therefore, comes to this:
+Congress can by taxation burden the exercise of a privilege which only a
+state can grant. And the power to tax, it must be remembered, involves
+the power to destroy. This seems a long step from the theory of the men
+who founded the Republic.
+
+Nearly fifty years ago the Supreme Court stated the theory as follows:
+
+     The states are, and they must ever be, co-existent with the
+     National Government. Neither may destroy the other. Hence the
+     Federal Constitution must receive a practical construction.
+     Its limitations and its implied prohibitions must not be
+     extended so far as to destroy the necessary powers of the
+     States, or prevent their efficient exercise.[1]
+
+[Footnote 1: _Railroad Co. v. Peniston_, 18 Wall., 5.]
+
+The court buttresses its decision by the argument _ex necessitate_--that
+to hold otherwise would open the way for men to withdraw their business
+activities from the reach of federal taxation and thus cripple the
+National Government. The Court says:
+
+     The inquiry in this connection is: How far do the implied
+     limitations upon the taxing power of the United States over
+     objects which would otherwise be legitimate subjects of
+     federal taxation, withdraw them from the reach of the Federal
+     Government in raising revenue, because they are pursued under
+     franchises which are the creation of the states?... Let it be
+     supposed that a group of individuals, as partners, were
+     carrying on a business upon which Congress concluded to lay an
+     excise tax. If it be true that the forming of a state
+     corporation would defeat this purpose, by taking the necessary
+     steps required by the state law to create a corporation and
+     carrying on the business under rights granted by a state
+     statute, the federal tax would become invalid and that source
+     of national revenue be destroyed, except as to the business in
+     the hands of individuals or partnerships. It cannot be
+     supposed that it was intended that it should be within the
+     power of individuals acting under state authority thus to
+     impair and limit the exertion of authority which may be
+     essential to national existence.
+
+This argument will not bear scrutiny. It apparently loses sight of the
+vital distinction between a tax on the mere doing of business and a tax
+on the privilege of doing that business in a corporate capacity. These
+are two very different things. The right of Congress to tax the doing of
+business was not disputed. It had been expressly upheld in the
+well-known case of _Spreckels Sugar Refining Co. v. McClain_,[1] which
+involved a tax on the business of refining sugar, whether done by a
+corporation or by individuals. The tax under consideration, however,
+goes further and fastens upon something new--something which in the case
+of individuals or partnerships has no existence at all--which comes into
+being only by the exercise of the sovereign power of a state. The
+opponents of the tax, far from attempting to narrow the existing field
+of federal taxation, were in fact resisting an encroachment by Congress
+on an entirely new field, created by, and theretofore reserved
+exclusively to, the separate states. It was conceded that Congress could
+tax a business when done by individuals and could tax the same business
+when done by a corporation. The inquiry was: Does the act of a state in
+clothing the individuals with corporate capacity create a new subject
+matter for taxation by the General Government? That was the real
+question before the Court, and the decision answers it in the
+affirmative.
+
+[Footnote 1: 192 U.S., 397.]
+
+Other illustrations of the same apparent confusion of thought are to be
+found in the opinion. For example, it is said (citing various cases
+involving a tax on business where the party taxed was a corporation):
+
+     We think it is the result of the cases heretofore decided in
+     this Court, that such _business activities_, though exercised
+     because of state-created franchises, are not beyond the taxing
+     power of the United States.
+
+Here again the Court seems to lose sight of the distinction between a
+tax on "business activities" and a tax on the privilege of conducting
+such activities in a corporate capacity.
+
+It is futile, however, to quarrel with the logic of the opinion. The
+question is closed and the Court, by affirming the judgments appealed
+from, has committed itself to the theory that the Federal Government
+may, by taxation, burden the exercise of a privilege which only a state
+can confer. With the expediency of that theory as applied to present-day
+political conditions we are not now concerned. The object of this
+chapter is to point out that the decision marks a distinct departure
+from the earlier doctrine that the two sovereignties, federal and state,
+are upon an equality within their respective spheres.
+
+In view of the centralizing forces which are tending to transform these
+sovereign states into mere political subdivisions of a nation, the
+decision is of great significance. Moreover, in a very practical way it
+touches the right of each state under the compact evidenced by the
+Federal Constitution to manage its internal affairs free from compulsion
+or interference by the other states. To illustrate: In some parts of the
+country the anti-corporation feeling runs high. Many men if given their
+way would tax the larger corporations out of existence. Under this
+decision the way is open whenever a majority can be secured in Congress.
+An increase in the tax rate is all that would be necessary. Make the
+rate ten per cent. or twenty per cent. instead of one per cent. and the
+thing is accomplished.
+
+New York may deem it good policy to encourage the carrying on of
+industry in a corporate form. Texas may take a different view and
+conclude that the solution of the trust problem lies in suppressing
+certain classes of corporations altogether. Under this decision it lies
+within the power of Texas and her associates if sufficiently numerous to
+impose their view on New York and make it impossible for her domestic
+industries to be carried on profitably in a corporate form. And yet the
+possibility of impressing the will of one state or group of states upon
+another state with respect to her internal affairs is the very thing
+which the founders of the republic sought most carefully to avoid. Had
+it been understood in 1787 that the grant of taxing powers to the
+General Government involved such a curtailment of state independence,
+few states, in all probability, would have been ready to ratify the
+Constitution.
+
+
+
+
+XII
+
+THE FEDERAL GOVERNMENT AND THE TRUSTS
+
+
+The curbing of monopolies and combinations in restraint of trade was no
+part of the functions of the Federal Government as planned by the
+framers of the Constitution. To their minds such matters, under the dual
+system of government which they were establishing, belonged to the
+states. The Constitution was designed to limit the National Government
+to functions absolutely needed for the national welfare. All other
+powers were "reserved to the states respectively or to the people."
+
+As time went on, however, and industries expanded it was seen that the
+power of no single state was adequate to control concerns operating in
+many states at the same time. The need of action by the General
+Government became manifest. Power in Congress to legislate on the
+subject, albeit somewhat indirectly, was found in the Commerce Clause of
+the Constitution, and in the year 1890 the Sherman Anti-Trust Act was
+enacted.
+
+Few statutes have aroused more discussion or been the subject of more
+perplexity and misunderstanding. President Taft's remark, made after the
+decisions of the Supreme Court in the Standard Oil and Tobacco Trust
+cases,[1] that "the business community now knows or ought to know where
+it stands," was received with incredulity approaching derision. Yet from
+a lawyer's point of view (and it must be borne in mind that the
+President was a lawyer and is now Chief Justice of the Court) the
+statement cannot be controverted. The decisions in the Standard Oil and
+Tobacco cases did in fact dispel whatever uncertainty remained as to
+what the Sherman Act means.
+
+[Footnote 1: _Standard Oil Co. v. United States_, 221 U.S., 1.
+
+_United States v. American Tobacco Co._, id., 106.]
+
+The Sherman Act[1] declares unlawful every contract, combination, or
+conspiracy in restraint of interstate trade, and every attempt to
+monopolize interstate trade. The legal uncertainties that have arisen in
+its enforcement have not been with respect to the meaning of the terms
+"restraint of trade" and "monopoly," although the popular impression is
+to the contrary. In 1890, when the statute was passed, contracts in
+restraint of trade and monopolies were already unlawful at common law,
+and these terms, by a long series of decisions both here and in England,
+had been defined as definitely as the nature of the subject matter
+permitted. While incapable (like the term "fraud") of precise definition
+covering all forms which the ingenuity of man might devise, nevertheless
+their meaning and scope were well within the understanding of any man of
+reasonable intelligence. Whatever legal uncertainties have arisen have
+been chiefly owing to two questions: first, What is _interstate_ trade
+within the meaning of the act? and second, Did the act enlarge the
+common-law rule as to what restraints were unlawful?
+
+[Footnote 1: "An Act to protect trade and commerce against unlawful
+restraints and monopolies," approved July 2, 1890.]
+
+The act was nearly shipwrecked at the outset on the first of these
+questions. In the famous Knight case,[1] the first case under the
+Sherman Act to reach the Supreme Court, it was held that the
+transactions by which the American Sugar Refining Company obtained
+control of the Philadelphia refineries and secured a virtual monopoly
+could not be reached under the act because they bore no direct relation
+to interstate commerce. The effect of this decision naturally was to
+cast doubt upon the efficacy of the statute and encourage the trust
+builders. Perhaps the case was rightly decided in view of the peculiar
+form in which the issues were presented by the pleadings. In the light
+of later decisions, however, it is safe to assert that the Court would
+now find little difficulty in applying the remedies provided by the
+Sherman Act to a similar state of facts, properly presented. While no
+prudent lawyer would care to attempt a comprehensive definition of what
+constitutes interstate commerce, it may at least be said that the
+tendency of the courts has been and is toward a constant broadening of
+the term to meet the facts of present-day business.
+
+[Footnote 1: _United States v. E.C. Knight Company_, 156 U.S., 1.]
+
+The other question--Did the Sherman Act change the common-law rule as to
+what restraints and monopolies are forbidden?--has been even more
+troublesome. The lawyers in Congress who framed the law believed that it
+did not. This is the testimony of Senator Hoar in his Autobiography, and
+as he was a member of the Senate Judiciary Committee which reported the
+act in its present form, and claims to have drawn it himself, his
+testimony is entitled to belief. The Supreme Court, however, in this
+particular went further than was expected. In the Trans-Missouri
+Freight Association case,[1] which reached the Supreme Court two years
+after the Knight case, that tribunal decided by a five-to-four majority
+that the words "_every_ contract ... in restraint of trade" extended the
+operation of the law beyond the technical common-law meaning of the
+terms employed so as in fact to include all contracts in restraint of
+interstate trade without exception or limitation. This theory was
+strongly combated by the minority of the court, speaking through Justice
+(afterwards Chief Justice) White, and was denounced by many eminent
+lawyers, notably the late James C. Carter, then leader of the New York
+Bar, who predicted that sooner or later it must be abandoned as
+untenable. Their protests were well founded. The theory, carried to its
+logical conclusion, would have prohibited a great variety of
+transactions theretofore deemed reasonable and proper, and would have
+brought large business to a standstill. As a matter of fact, it was
+never carried to its logical conclusion, and six years later it was
+expressly repudiated by Justice Brewer; one of the five, in the course
+of his concurring opinion in the Northern Securities case.[2] Justice
+Brewer said that while he believed the Trans-Missouri case had been
+rightly decided he also believed that in some respects the reasons given
+for the judgment could not be sustained.
+
+     Instead of holding that the Anti-Trust Act included all
+     contracts, reasonable or unreasonable, in restraint of
+     interstate trade, the ruling should have been that the
+     contracts there presented were unreasonable restraints of
+     interstate trade, and as such within the scope of the Act....
+     Whenever a departure from common-law rules and definitions is
+     claimed, the purpose to make the departure should be clearly
+     shown. Such a purpose does not appear and such a departure was
+     not intended.
+
+[Footnote 1: _United States v. Trans-Missouri Association_, 166 U.S.,
+290.]
+
+[Footnote 2: _Northern Securities Company v. United States_, 193 U.S.,
+197.]
+
+Nevertheless, the troublesome question remained, to plague lawyers and
+the community generally, until it was finally put at rest and the
+statute once more planted on the firm ground of common-law rule and
+definition by the decisions in the Standard Oil and Tobacco cases.
+
+What, then, is this common-law rule which President Taft found so clear?
+No one has discussed it more lucidly than did the youthful Circuit Judge
+Taft himself in delivering the opinion of the Circuit Court of Appeals
+in the Addyston Pipe & Steel Co. case,[1] an opinion in which his two
+associates on the bench, the late Justices Harlan and Lurton, concurred.
+The rule may be briefly stated as follows:
+
+Every contract or combination whose primary purpose and effect is to fix
+prices, limit production, or otherwise restrain trade is unlawful,
+provided the restraint be direct, material, and substantial.
+
+Where, however, the restraint of trade is not direct, but merely
+ancillary or collateral to some lawful contract or transaction, it is
+not unlawful, provided it is _reasonable_, that is to say, not broader
+than is required for the protection of the party in whose favor the
+restraint is imposed.
+
+[Footnote 1: _United States v. Addyston Pipe & Steel Co._, 85 Fed. Rep.,
+271.]
+
+A familiar illustration is the sale of a business and its goodwill,
+accompanied by a covenant on the part of the vendor not to compete. Such
+a covenant is collateral to the sale, and if not broader than is
+reasonably required for the protection of the vendee it will be upheld,
+although a similar agreement, standing alone and not collateral to a
+sale or other lawful transaction, would be in direct restraint of trade
+and unlawful.
+
+So much for the alleged uncertainty of the law. Candid men must agree
+with President Taft that in the light of the Supreme Court decisions it
+is reasonably clear what the Sherman Law means. But the fact that "the
+business community now knows or ought to know where it stands" with
+respect to the law does not greatly help the business situation. The
+real difficulty lies, not in the uncertainty of the law, but in the fact
+that the law does not fit actual present-day conditions. This is partly
+because many of the trusts were organized with full knowledge that they
+involved a violation of law but in the belief that the law could not or
+would not be effectively enforced. The realization that this belief was
+mistaken has thrown a good many people into a state of very genuine
+bewilderment, but it is an uncertainty, not as to what is firm ground,
+but as to how to get out of a bog, once having gotten in. For the most
+part, however, the general feeling of insecurity is due not so much to
+having knowingly overstepped the law, as to a change in economic
+conditions. The spirit of the time is one of coöperation and
+combination. It is manifested in the churches and colleges as well as in
+the marketplace. In the industrial arena, the tendency has been
+intensified by the invention of new machines and the resulting
+aggregations of fixed capital in forms designed for particular uses and
+incapable of diversion into other channels. Such rules of the common or
+customary law as were the outgrowth of an era of mobile capital and free
+competition no longer fit the conditions under which we are living.
+
+In a conflict between economic forces and legal enactment there can
+finally be but one outcome. The law must sooner or later adapt itself to
+life conditions. The real problem to-day is--how shall this adaptation
+be accomplished; how can statutes be framed which shall check abuses
+without falling under the wheels of social progress? Right here a swarm
+of half-informed theorizers are rushing in where trained economists fear
+to tread. It is difficult and dangerous ground, but there is at least
+one measure of legal reform--take away the right of one corporation to
+hold stock in another--which might be urged with confidence were it not
+for the existence of sundry oppressive and conflicting state laws.
+
+The abolition by law of the holding-company device is no new suggestion.
+It was strongly urged years ago by the late Edward B. Whitney. It was
+the keystone of the famous "Seven Sisters" statutes,[1] enacted with
+loud acclaim in New Jersey at the behest of Governor Woodrow Wilson (but
+subsequently repealed and thrown into the discard). Such a measure would
+be more effective and far-reaching than the public supposes. Nearly all
+the so-called trusts have been organized and are being held together in
+whole or in part, by the holding-company device. In many cases this has
+been done merely as an innocent measure of convenience. The device,
+however, is a perversion of the corporate machine to uses not
+contemplated by its inventors and fraught with danger. It is too
+powerful a weapon in the hands of those alive to its possibilities,
+enabling a small group of men with a relatively insignificant investment
+of capital to control a country-wide industry. Take the simplest
+possible illustration: The industry of manufacturing a particular
+commodity is carried on by a number of corporations scattered throughout
+the country with an aggregate capitalization of, say, $10,000,000. A, B,
+and C form a holding company to acquire a bare majority of the stock of
+each corporation, say $5,100,000 in the aggregate. They dispose of 49
+per cent. of the holding company's stock to the public, retaining a
+working majority. At one step they have secured absolute control of a
+$10,000,000 industry with an investment of little more than one-quarter
+of that amount, and by pursuing the same process further they can reduce
+the investment necessary for controlling the industry almost to the
+vanishing point.
+
+[Footnote 1: Laws of New Jersey of 1913, chaps. 13-19.]
+
+It is needless to enlarge on the possible abuses of the holding-company
+device. They are coming to light more and more. The remedy, however, is
+not so simple as it seems at first blush. A summary abolition of the
+holding-company device would result in great injury and hardship to
+industry. In the present condition of the corporation laws of certain of
+the states, the right of large corporations to operate through local
+subsidiary corporations is a practical necessity. Otherwise they would
+be subjected to well-nigh intolerable exactions and interference. It has
+been the policy in some states in dealing with foreign corporations to
+attempt to impose, under the guise of fees for the privilege of doing
+business in the state, a tax on all their property and business wherever
+situated. Some of the attempts have been nullified by the Supreme Court
+as violative of the prohibition of the Fourteenth Amendment against
+taking property without due process of law, but these decisions have
+not wholly remedied the evil or checked the ingenuity of state
+legislators. In some jurisdictions great corporations seem to be
+regarded as fair game for which there is no closed season.
+
+Right here the scheme of federal incorporation brought forward during
+President Taft's administration has many attractions to offer. It would
+do away with the principal excuse for the holding-company device, and
+pave the way for its abolition. It should satisfy the general public
+because it would clothe the Government with enormously increased powers
+of regulation and control; it should be attractive to the corporations
+because it would afford relief from many of the intolerable
+restrictions, not always fair or intelligent, imposed by state
+legislatures. Under present conditions the right of a corporation of one
+state to do business in another (other than business of an interstate
+character) rests merely upon comity and may be granted or refused upon
+such terms as interest or prejudice may dictate. The right of a federal
+corporation to do business in the several states, on the other hand,
+rests upon the powers conferred on Congress by the Constitution and is
+not subject to the whims of state lawmakers. Such a corporation is not
+"foreign" in the states into which its activity extends and state laws
+aimed at foreign corporations will not hit it. Moreover a corporation
+with a federal charter can always take its controversies into the
+federal courts (except when Congress expressly forbids)[1]--a right of
+extreme practical value where anti-corporation feeling or local
+prejudice is strong.
+
+[Footnote 1: The Act of Jan. 28, 1915, took away this right in the case
+of railroad companies incorporated under federal charter (38 Stat.
+804).]
+
+The scheme of federal incorporation presents some constitutional
+questions. As pointed out in a previous chapter, the Constitution
+nowhere expressly confers on Congress the right to grant corporate
+charters. Under Chief Justice Marshall's doctrine of "Implied Powers,"
+however, it has become well settled that Congress has implied power to
+charter a corporation whenever that is an appropriate means of
+exercising one of the powers expressly conferred, for example, the power
+to regulate interstate commerce. The most serious constitutional
+question appears to be whether Congress can authorize such a corporation
+to manufacture, the process of manufacturing not being an activity of an
+interstate character. In any event, the difficulty could be surmounted
+by a constitutional amendment. In these days of facile amendment such a
+thing seems quite within the range of possibility.
+
+The scheme of federal incorporation is by no means new. In the
+Convention of 1787 which framed the Constitution, Mr. Madison advocated
+giving Congress the power to grant charters of incorporation. The
+proposition, however, did not find favor, Mr. King suggesting that it
+might foster the creation of mercantile monopolies.[1]
+
+[Footnote 1: See Farrand, "Records of the Federal Convention," Vol. II,
+pp. 615-616, 620.]
+
+This objection would scarcely be urged to-day, when the country-wide
+operations of the so-called "trusts" have given them a national
+character and made their control by federal power a practical necessity.
+
+
+
+
+XIII
+
+WHAT OF THE FUTURE?
+
+
+In the preceding pages we have observed from various viewpoints the
+impressive phenomenon of federal encroachment upon state power. It must
+have become obvious to the most casual reader that the tide is running
+swiftly and has already carried far. Hamilton was mistaken when he
+predicted in the _Federalist_[1] that the National Government would
+never encroach upon the state authorities.
+
+[Footnote 1: _Federalist_, Numbers XVII, XXXI.]
+
+What then of the future? Is the Constitution hopelessly out of date? Are
+the states to be submerged and virtually obliterated in the drift toward
+centralization? No thoughtful patriot can view such a possibility
+without the gravest misgivings. The integrity of the states was a
+cardinal principle of our governmental scheme. Abandon that and we are
+adrift from the moorings which to the minds of statesmen of past
+generations constituted the safety of the republic.
+
+No mere appeal to precedents and governmental theory will check the
+current. The Americans are a practical people, moving forward with
+conscious power toward the attainment of their aims, along the lines
+which seem to them most direct. They are more interested in results than
+in methods or theories. Experience has demonstrated that federal control
+often spells uniformity and efficiency where state control had meant
+divisions and weakness. They favor federal control because it gets
+results.
+
+There is another aspect of the matter, however. The burden of federal
+bureaucracy is beginning to be felt by the average man. He is being
+regulated more and more, in his meats and drinks, his morals and the
+activities of his daily life, from Washington. If he will only stop and
+think he must realize that no one central authority can supervise the
+daily lives of a hundred million people, scattered over half a
+continent, without becoming top-heavy. He must realize, too, that, even
+if such a centralization of power and responsibility were humanly
+possible, our National Government is unsuited for the task. The
+electorate is too numerous and heterogeneous; its interests and needs
+are too diverse. Shall the conduct of citizens of Mississippi be
+prescribed by vote of congressmen from New York, or supervised at the
+expense of New York taxpayers? Will an educational system suitable for
+Massachusetts necessarily fit the young of Georgia? Such suggestions
+carry their own answer. In the very nature of things there is bound to
+be a reaction against centralization sooner or later. The real question
+is whether it will come in time to save the present constitutional
+scheme.
+
+The makers of the Constitution never intended that the people of one
+state should regulate, or pay for supervising, the conduct of citizens
+of another state. They made a division of governmental powers between
+nation and states along broad and obvious lines. To the Federal
+Government were entrusted matters of a strictly national
+character--foreign relations, interstate commerce, fiscal and monetary
+system, post office, patents and copyrights. Everything else was
+reserved, to the states or the people. Here was a scheme at once
+explicit and elastic. Explicit as to the nature of the functions to be
+performed by the National Government; elastic enough to permit the
+exercise of all other powers reasonably incidental to the powers
+expressly granted. The Constitution is not, and never was intended to
+be, a strait-jacket.
+
+Proofs abound of the adequacy of the constitutional scheme to deal with
+changing conditions. For example, when the Constitution was adopted,
+railroads, the most powerful economic force in our present civilization,
+were unknown. Nevertheless, the Constitution contains adequate provision
+for dealing with the railroads. They are instruments of interstate
+commerce and may be controlled by the Federal Government under the
+express grant of power to regulate such commerce. Similar considerations
+apply in the case of those nationwide industrial combinations popularly
+known as "trusts." Their activities are largely in the field of
+interstate commerce and are subject to control as such by the Federal
+Government. Theoretically, only such activities of the railroads and
+trusts as are of an interstate character fall within the federal
+jurisdiction. Everything else lies within the jurisdiction of the
+states. However, a practical people will not long permit matters which
+are essentially single and entire in their nature (for example, railroad
+classifications and rates) to be split up merely for purposes of legal
+jurisdiction and control. In such matters, therefore, some measure of
+federal encroachment is inevitable in order that industry and progress
+shall not be hampered. The encroachment, however, is more apparent than
+real. The industries are national in scope, and all the activities of
+each are more or less interwoven and interdependent. Hence state
+regulation of the intrastate activities may sometimes be overruled as an
+interference with federal regulation of the interstate commerce. There
+is nothing in this which involves any real violation of the
+Constitution. It is merely an application of Marshall's doctrine of
+implied powers.
+
+Social welfare legislation presents a very different problem. Some of
+the most dangerous assaults upon the Constitution to-day are being made
+in that field. The leaven of socialistic ideas is working.
+Representative government is becoming more paternalistic. Legislation
+dealing with conduct and social and economic conditions is being
+demanded by public sentiment in constantly increasing measure. Such
+legislation for the most part affects state police power and lies
+clearly outside the scope of the powers conferred by the Constitution on
+the National Government. Moreover, "the insulated chambers afforded by
+the several states" (to borrow a phrase of Justice Oliver Wendell
+Holmes) are ideal fields for social experiment. If an experiment
+succeed, other states will follow suit. If it prove disastrous, the
+damage is localized. The nation as a whole remains unharmed. The
+sponsors for such legislation, however, are seldom content to deal with
+the states. Reform was ever impatient. The state method seems too slow,
+and the difficulty of securing uniformity too formidable. Moreover, it
+often happens that some states are indifferent to the reform proposed or
+even actively hostile. Accordingly, recourse is had to Congress, and
+Congress looks for a way to meet the popular demand. There being no
+direct way, and public sentiment being insistent, Congressmen find
+themselves under the painful necessity of circumventing the Constitution
+they have sworn to uphold. The desired legislation is enacted under the
+guise of an act to regulate commerce or raise revenue, and the task of
+upholding the Constitution is passed to the Supreme Court.
+
+Such subterfuges, far from arousing public condemnation, are praised by
+the unthinking as far-sighted statesmanship. It is popular nowadays to
+apply the term "forward-looking" to people who would make the National
+Government an agency for social-welfare work, and to characterize as
+"lacking in vision" anyone who interposes a constitutional principle in
+the path of a social reform. Friends of progress sometimes forget that
+the real forward-looking man is he who can see the pitfall ahead as well
+as the rainbow; the man of true vision is one whose view of the stars is
+steadied by keeping his feet firmly on the ground.
+
+It cannot be reiterated too often that, under our political system,
+legislation in the nature of police regulation (except in so far as it
+affects commerce or foreign relations) is the province of the states,
+not of the National Government. This is not merely sound constitutional
+law; it is good sense as well. Regulations salutary for Scandinavian
+immigrants of the northwest may not fit the Creoles of Louisiana. In the
+long run the police power will be exercised most advantageously for all
+concerned by local authority.
+
+The present tendency toward centralization cannot go on indefinitely. A
+point must be reached sooner or later when an over-centralized
+government becomes intolerable and breaks down of its own weight. As an
+eminent authority has put it: "If we did not have states we should
+speedily have to create them."[1] The states thus created, however,
+would not be the same. They would be mere governmental subdivisions,
+without the independence, the historic background, the traditions, or
+the sentiment of the present states. These influences, hitherto so
+potent in our national life, would have been lost.
+
+[Footnote 1: Address of Supreme Court Justice Charles E. Hughes before
+New York State Bar Association, January 14, 1916.]
+
+In a memorable address delivered in the year 1906 before the
+Pennsylvania Society in New York, Elihu Root, then Secretary of State in
+President Roosevelt's Cabinet, discussed the encroachments of federal
+power and expressed the view that the only way in which the states could
+maintain their power and authority was by awakening to a realization of
+their own duties to the country at large. He said:
+
+     The Governmental control which they (the people) deem just and
+     necessary they will have. It may be that such control would
+     better be exercised in particular instances by the governments
+     of the states, but the people will have the control they need
+     either from the states or from the National Government; and if
+     the states fail to furnish it in due measure, sooner or later
+     constructions of the Constitution will be found to vest the
+     power where it will be exercised--in the National Government.
+     The true and only way to preserve state authority is to be
+     found in the awakened conscience of the states, their
+     broadened views and higher standard of responsibility to the
+     general public; in effective legislation by the states, in
+     conformity to the general moral sense of the country; and in
+     the vigorous exercise for the general public good of that
+     state authority which is to be preserved.
+
+Those words, spoken fifteen years ago, were prophetic. Moreover, they
+are as true to-day as when they were uttered.
+
+Will the people see these things in time? Americans with pride in their
+country's past and confidence in her future dare not say No. The
+awakening may be slow. Currents of popular will are not readily turned.
+It is hard to make the people think. But if leaders and teachers do
+their part American intelligence and prudence will assert themselves,
+and the slogan of an awakened public sentiment may yet be: "Back to the
+Constitution!"
+
+
+
+
+APPENDIX
+
+CONSTITUTION OF THE UNITED STATES OF AMERICA
+
+
+WE THE PEOPLE of the United States, in Order to form a more perfect
+Union, establish Justice, insure domestic Tranquility, provide for the
+common defence, promote the general Welfare, and secure the Blessings of
+Liberty to ourselves and our Posterity, do ordain and establish this
+CONSTITUTION for the United States of America.
+
+
+ARTICLE I.
+
+SECTION 1. All legislative Powers herein granted shall be vested in a
+Congress of the United States, which shall consist of a Senate and House
+of Representatives.
+
+SECTION 2. The House of Representatives shall be composed of Members
+chosen every second Year by the People of the several States, and the
+Electors in each State shall have the Qualifications requisite for
+Electors of the most numerous Branch of the State Legislature.
+
+No Person shall be a Representative who shall not have attained to the
+Age of twenty-five Years, and been seven Years a Citizen of the United
+States, and who shall not, when elected, be an Inhabitant of that State
+in which he shall be chosen.
+
+Representatives and direct Taxes shall be apportioned among the several
+States which may be included within this Union, according to their
+respective Numbers which shall be determined by adding to the whole
+Number of free Persons, including those bound to Service for a Term of
+Years, and excluding Indians not taxed, three-fifths of all other
+Persons. The actual Enumeration shall be made within three Years after
+the first Meeting of the Congress of the United States, and within every
+subsequent Term of ten Years, in such Manner as they shall by Law
+direct. The Number of Representatives shall not exceed one for every
+thirty Thousand, but each State shall have at Least one Representative;
+and until such enumeration shall be made, the State of New Hampshire
+shall be entitled to chuse three, Massachusetts eight, Rhode Island and
+Providence Plantations one, Connecticut five, New York six, New Jersey
+four, Pennsylvania eight, Delaware one, Maryland six, Virginia ten,
+North Carolina five, South Carolina five, and Georgia three.
+
+When vacancies happen in the Representation from any State, the
+Executive Authority thereof shall issue Writs of Election to fill such
+Vacancies.
+
+The House of Representatives shall chuse their Speaker and other
+Officers; and shall have the sole Power of Impeachment.
+
+SECTION 3. The Senate of the United States shall be composed of two
+Senators from each State, chosen by the Legislature thereof, for six
+Years; and each Senator shall have one Vote.
+
+Immediately after they shall be assembled in Consequence of the first
+Election, they shall be divided as equally as may be into three Classes.
+The Seats of the Senators of the first Class shall be vacated at the
+Expiration of the second Year, of the second Class at the Expiration of
+the fourth Year, and of the third Class at the Expiration of the sixth
+Year, so that one third may be chosen every second Year; and if
+Vacancies happen by Resignation, or otherwise, during the Recess of the
+Legislature of any State, the Executive thereof may make temporary
+Appointments until the next Meeting of the Legislature, which shall then
+fill such Vacancies.
+
+No Person shall be a Senator who shall not have attained to the Age of
+thirty Years, and been nine Years a Citizen of the United States, and
+who shall not, when elected, be an Inhabitant of that State for which he
+shall be chosen.
+
+The Vice President of the United States shall be President of the
+Senate, but shall have no Vote, unless they be equally divided.
+
+The Senate shall chuse their other Officers, and also a President pro
+tempore, in the Absence of the Vice President, or when he shall exercise
+the Office of President of the United States.
+
+The Senate shall have the sole Power to try all Impeachments. When
+sitting for that Purpose, they shall be on Oath or Affirmation. When the
+President of the United States is tried, the Chief Justice shall
+preside: And no Person shall be convicted without the Concurrence of two
+thirds of the Members present.
+
+Judgment in Cases of Impeachment shall not extend further than to
+removal from Office, and disqualification to hold and enjoy any Office
+of honor, Trust or Profit under the United States: but the Party
+convicted shall nevertheless be liable and subject to Indictment,
+Trial, Judgment and Punishment, according to Law.
+
+SECTION 4. The Times, Places and Manner of holding Elections for
+Senators and Representatives, shall be prescribed in each State by the
+Legislature thereof; but the Congress may at any time by Law make or
+alter such Regulations, except as to the Places of chusing Senators.
+
+The Congress shall assemble at least once in every Year, and such
+Meeting shall be on the first Monday in December, unless they shall by
+Law appoint a different Day.
+
+SECTION 5. Each House shall be the Judge of the Elections, Returns and
+Qualifications of its own Members, and a Majority of each shall
+constitute a Quorum to do Business; but a smaller Number may adjourn
+from day to day, and may be authorized to compel the Attendance of
+absent Members, in such Manner, and under such Penalties as each House
+may provide.
+
+Each House may determine the Rules of its Proceedings, punish its
+Members for disorderly Behavior, and, with the Concurrence of two
+thirds, expel a Member.
+
+Each House shall keep a Journal of its Proceedings, and from time to
+time publish the same, excepting such Parts as may in their Judgment
+require Secrecy; and the Yeas and Nays of the Members of either House on
+any question shall, at the Desire of one fifth of those Present, be
+entered on the Journal.
+
+Neither House, during the Session of Congress, shall, without the
+Consent of the other, adjourn for more than three days, nor to any other
+Place than that in which the two Houses shall be sitting.
+
+SECTION 6. The Senators and Representatives shall receive a
+Compensation for their Services, to be ascertained by Law, and paid out
+of the Treasury of the United States. They shall in all Cases, except
+Treason, Felony and Breach of the Peace, be privileged from Arrest
+during their Attendance at the Session of their respective Houses, and
+in going to and returning from the same; and for any Speech or Debate in
+either House, they shall not be questioned in any other Place.
+
+No Senator or Representative shall, during the Time for which he was
+elected, be appointed to any civil Office under the Authority of the
+United States, which shall have been created, or the Emoluments whereof
+shall have been encreased during such time; and no Person holding any
+Office under the United States, shall be a Member of either House during
+his Continuance in Office.
+
+SECTION 7. All Bills for raising Revenue shall originate in the House of
+Representatives; but the Senate may propose or concur with Amendments as
+on other Bills.
+
+Every Bill which shall have passed the House of Representatives and the
+Senate, shall, before it become a Law, be presented to the President of
+the United States; If he approve he shall sign it, but if not he shall
+return it, with his Objections to that House in which it shall have
+originated, who shall enter the Objections at large on their Journal,
+and proceed to reconsider it. If after such Reconsideration two thirds
+of that House shall agree to pass the Bill, it shall be sent, together
+with the Objections, to the other House, by which it shall likewise be
+reconsidered, and if approved by two thirds of that House, it shall
+become a Law. But in all such Cases the Votes of both Houses shall be
+determined by Yeas and Nays, and the Names of the Persons voting for
+and against the Bill shall be entered on the Journal of each House
+respectively. If any Bill shall not be returned by the President within
+ten Days (Sundays excepted) after it shall have been presented to him,
+the Same shall be a Law, in like Manner as if he had signed it, unless
+the Congress by their Adjournment prevent its Return, in which Case it
+shall not be a Law.
+
+Every Order, Resolution, or Vote to which the Concurrence of the Senate
+and House of Representatives may be necessary (except on a question of
+Adjournment) shall be presented to the President of the United States;
+and before the Same shall take Effect, shall be approved by him, or
+being disapproved by him, shall be repassed by two thirds of the Senate
+and House of Representatives, according to the Rules and Limitations
+prescribed in the Case of a Bill.
+
+SECTION 8. The Congress shall have Power To lay and collect Taxes,
+Duties, Imposts and Excises, to pay the Debts and provide for the common
+Defence and general Welfare of the United States; but all Duties,
+Imposts and Excises shall be uniform throughout the United States;
+
+To borrow Money on the credit of the United States;
+
+To regulate Commerce with foreign Nations, and among the several States,
+and with the Indian Tribes;
+
+To establish an uniform Rule of Naturalization, and uniform Laws on the
+subject of Bankruptcies throughout the United States;
+
+To coin Money, regulate the Value thereof, and of foreign Coin, and fix
+the Standard of Weights and Measures;
+
+To provide for the Punishment of counterfeiting the Securities and
+current Coin of the United States;
+
+To establish Post Offices and post Roads;
+
+To promote the Progress of Science and useful Arts, by securing for
+limited Times to Authors and Inventors the exclusive Right to their
+respective Writings and Discoveries;
+
+To constitute Tribunals inferior to the supreme Court;
+
+To define and punish Piracies and Felonies committed on the high Seas,
+and Offences against the Law of Nations;
+
+To declare War, grant Letters of Marque and Reprisal, and make Rules
+concerning Captures on Land and Water;
+
+To raise and support Armies, but no Appropriation of Money to that Use
+shall be for a longer Term than two Years;
+
+To provide and maintain a Navy;
+
+To make Rules for the Government and Regulation of the land and naval
+Forces;
+
+To provide for calling forth the Militia to execute the Laws of the
+Union, suppress Insurrections and repel Invasions;
+
+To provide for organizing, arming, and disciplining, the Militia, and
+for governing such Part of them as may be employed in the Service of the
+United States, reserving to the States respectively, the Appointment of
+the Officers, and the Authority of training the Militia according to the
+discipline prescribed by Congress;
+
+To exercise exclusive Legislation in all Cases whatsoever, over such
+District (not exceeding ten Miles square) as may, by Cession of
+particular States, and the Acceptance of Congress, become the Seat of
+the Government of the United States, and to exercise like Authority over
+all Places purchased by the Consent of the Legislature of the State in
+which the Same shall be, for the Erection of Forts, Magazines, Arsenals,
+dock-Yards, and other needful Buildings;--And
+
+To make all Laws which shall be necessary and proper for carrying into
+Execution the foregoing Powers, and all other Powers vested by this
+Constitution in the Government of the United States, or in any
+Department or Officer thereof.
+
+SECTION 9. The Migration or Importation of such Persons as any of the
+States now existing shall think proper to admit, shall not be prohibited
+by the Congress prior to the Year one thousand eight hundred and eight,
+but a Tax or duty may be imposed on such Importation, not exceeding ten
+dollars for each Person.
+
+The Privilege of the Writ of Habeas Corpus shall not be suspended,
+unless when in Cases of Rebellion or Invasion the public Safety may
+require it.
+
+No Bill of Attainder or ex post facto Law shall be passed.
+
+No Capitation, or other direct, tax shall be laid, unless in Proportion
+to the Census or Enumeration herein before directed to be taken.
+
+No Tax or Duty shall be laid on Articles exported from any State.
+
+No Preference shall be given by any Regulation of Commerce or Revenue to
+the Ports of one State over those of another: nor shall Vessels bound
+to, or from, one State, be obliged to enter, clear, or pay Duties in
+another.
+
+No Money shall be drawn from the Treasury, but in Consequence of
+Appropriations made by Law; and a regular Statement and Account of the
+Receipts and Expenditures of all public Money shall be published from
+time to time.
+
+No Title of Nobility shall be granted by the United States: And no
+Person holding any Office of Profit or Trust under them, shall, without
+the Consent of the Congress, accept of any present, Emolument, Office,
+or Title, of any kind whatever, from any King, Prince, or foreign State.
+
+SECTION 10. No State shall enter into any Treaty, Alliance, or
+Confederation; grant Letters of Marque and Reprisal; coin Money; emit
+Bills of Credit; make any Thing but gold and silver Coin a Tender in
+Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law
+impairing the Obligation of Contracts, or grant any Title of Nobility.
+
+No State shall, without the Consent of the Congress, lay any Imposts or
+Duties on Imports or Exports, except what may be absolutely necessary
+for executing its inspection Laws: and the net Produce of all Duties and
+Imposts, laid by any State on Imports or Exports, shall be for the Use
+of the Treasury of the United States; and all such Laws shall be subject
+to the Revision and Controul of the Congress.
+
+No State shall, without the Consent of Congress, lay any Duty of
+Tonnage, keep Troops, or Ships of War in time of Peace, enter into any
+Agreement or Compact with another State, or with a foreign Power, or
+engage in War, unless actually invaded, or in such imminent Danger as
+will not admit of delay.
+
+
+ARTICLE II.
+
+SECTION 1. The executive Power shall be vested in a President of the
+United States of America. He shall hold his Office during the Term of
+four Years, and, together with the Vice President, chosen for the same
+Term, be elected, as follows
+
+Each State shall appoint, in such Manner as the Legislature thereof may
+direct, a Number of Electors, equal to the whole Number of Senators and
+Representatives to which the State may be entitled in the Congress: but
+no Senator or Representative, or Person holding an Office of Trust or
+Profit under the United States, shall be appointed an Elector.
+
+The electors shall meet in their respective States, and vote by ballot
+for two Persons, of whom one at least shall not be an Inhabitant of the
+same State with themselves. And they shall make a List of all the
+Persons voted for, and of the Number of Votes for each; which List they
+shall sign and certify, and transmit sealed to the Seat of the
+Government of the United States, directed to the President of the
+Senate. The President of the Senate shall, in the Presence of the Senate
+and House of Representatives, open all the Certificates, and the Votes
+shall then be counted. The Person having the greatest Number of Votes
+shall be the President, if such Number be a Majority of the whole Number
+of Electors appointed; and if there be more than one who have such
+Majority, and have an equal Number of Votes, then the House of
+Representatives shall immediately chuse by Ballot one of them for
+President; and if no Person have a Majority, then from the five highest
+on the List the said House shall in like Manner chuse the President. But
+in chusing the President, the Votes shall be taken by States, the
+Representation from each State having one Vote; A quorum for this
+Purpose shall consist of a Member or Members from two thirds of the
+States, and a Majority of all the States shall be necessary to a Choice.
+In every Case, after the Choice of the President, the Person having the
+greatest Number of Votes of the Electors shall be the Vice President.
+But if there should remain two or more who have equal Votes, the Senate
+shall chuse from them by Ballot the Vice President.
+
+The Congress may determine the Time of chusing the Electors, and the Day
+on which they shall give their Votes; which Day shall be the same
+throughout the United States.
+
+No Person except a natural born Citizen, or a Citizen of the United
+States, at the time of the Adoption of this Constitution, shall be
+eligible to the Office of President; neither shall any Person be
+eligible to that Office who shall not have attained to the Age of thirty
+five Years, and been fourteen Years a Resident within the United States.
+
+In Case of the Removal of the President from Office, or of his Death,
+Resignation, or Inability to discharge the Powers and Duties of the said
+Office, the same shall devolve on the Vice President, and the Congress
+may by Law provide for the Case of Removal, Death, Resignation, or
+Inability, both of the President and Vice President, declaring what
+Officer shall then act as President, and such Officer shall act
+accordingly, until the Disability be removed, or a President shall be
+elected.
+
+The President shall, at stated Times, receive for his Services, a
+Compensation, which shall neither be encreased nor diminished during the
+Period for which he shall have been elected, and he shall not receive
+within that Period any other Emolument from the United States, or any of
+them.
+
+Before he enter on the Execution of his Office, he shall take the
+following Oath or Affirmation:--"I do solemnly swear (or affirm) that I
+will faithfully execute the Office of President of the United States,
+and will to the best of my Ability, preserve, protect and defend the
+Constitution of the United States."
+
+SECTION 2. The President shall be Commander in Chief of the Army and
+Navy of the United States, and of the Militia of the several States,
+when called into the actual Service of the United States; he may require
+the Opinion, in writing, of the principal Officer in each of the
+executive Departments, upon any Subject relating to the Duties of their
+respective Offices, and he shall have Power to grant Reprieves and
+Pardons for Offences against the United States, except in Cases of
+Impeachment.
+
+He shall have Power, by and with the Advice and Consent of the Senate,
+to make Treaties, provided two thirds of the Senators present concur;
+and he shall nominate, and by and with the Advice and Consent of the
+Senate, shall appoint Ambassadors, other public Ministers and Consuls,
+Judges of the supreme Court, and all other Officers of the United
+States, whose Appointments are not herein otherwise provided for, and
+which shall be established by Law: but the Congress may by Law vest the
+Appointment of such inferior Officers, as they think proper, in the
+President alone, in the Courts of Law, or in the Heads of Departments.
+
+The President shall have Power to fill up all Vacancies that may happen
+during the Recess of the Senate, by granting Commissions which shall
+expire at the End of their next Session.
+
+SECTION 3. He shall from time to time give to the Congress Information
+of the State of the Union, and recommend to their Consideration such
+Measures as he shall judge necessary and expedient; he may, on
+extraordinary Occasions, convene both Houses, or either of them, and in
+Case of Disagreement between them, with Respect to the Time of
+Adjournment, he may adjourn them to such Time as he shall think proper;
+he shall receive Ambassadors and other public Ministers; he shall take
+Care that the Laws be faithfully executed, and shall Commission all the
+Officers of the United States.
+
+SECTION 4. The President, Vice President and all civil Officers of the
+United States, shall be removed from Office on Impeachment for, and
+Conviction of, Treason, Bribery, or other high Crimes and Misdemeanors.
+
+
+ARTICLE III.
+
+SECTION 1. The judicial Power of the United States, shall be vested in
+one supreme Court, and in such inferior Courts as the Congress may from
+time to time ordain and establish. The Judges, both of the supreme and
+inferior Courts, shall hold their Offices during good Behaviour, and
+shall, at stated Times, receive for their Services, a Compensation,
+which shall not be diminished during their Continuance in Office.
+
+SECTION 2. The judicial Power shall extend to all Cases, in Law and
+Equity, arising under this Constitution, the Laws of the United States,
+and Treaties made, or which shall be made, under their Authority;--to
+all Cases affecting Ambassadors, other public Ministers and Consuls;--to
+all Cases of admiralty and maritime Jurisdiction;--to Controversies to
+which the United States shall be a Party;--to Controversies between two
+or more States;--between a State and Citizens of another
+State;--between Citizens of different States,--between Citizens of the
+same State claiming Lands under Grants of different States, and between
+a State, or the Citizens thereof, and foreign States, Citizens or
+Subjects.
+
+In all Cases affecting Ambassadors, other public Ministers and Consuls,
+and those in which a State shall be Party, the supreme Court shall have
+original Jurisdiction. In all the other Cases before mentioned, the
+supreme Court shall have appellate Jurisdiction, both as to Law and
+Fact, with such Exceptions, and under such Regulations as the Congress
+shall make.
+
+The Trial of all Crimes, except in Cases of Impeachment, shall be by
+Jury; and such Trial shall be held in the State where the said Crimes
+shall have been committed; but when not committed within any State, the
+Trial shall be at such Place or Places as the Congress may by Law have
+directed.
+
+SECTION 3. Treason against the United States, shall consist only in
+levying War against them, or in adhering to their Enemies, giving them
+Aid and Comfort. No Person shall be convicted of Treason unless on the
+Testimony of two Witnesses to the same overt Act, or on Confession in
+open Court.
+
+The Congress shall have Power to declare the Punishment of Treason, but
+no Attainder of Treason shall work Corruption of Blood, or Forfeiture
+except during the Life of the Person attainted.
+
+
+ARTICLE IV.
+
+SECTION 1. Full Faith and Credit shall be given in each State to the
+public Acts, Records, and judicial Proceedings of every other State.
+And the Congress may by general Laws prescribe the Manner in which such
+Acts, Records and Proceedings shall be proved, and the Effect thereof.
+
+SECTION 2. The Citizens of each State shall be entitled to all
+Privileges and Immunities of Citizens in the several States.
+
+A person charged in any State with Treason, Felony, or other Crime, who
+shall flee from Justice, and be found in another State, shall on Demand
+of the executive Authority of the State from which he fled, be delivered
+up, to be removed to the State having Jurisdiction of the Crime.
+
+No Person held to Service or Labour in one State, under the Laws
+thereof, escaping into another, shall, in Consequence of any Law or
+Regulation therein, be discharged from such Service or Labour, but shall
+be delivered up on Claim of the Party to whom such Service or Labour may
+be due.
+
+SECTION 3. New States may be admitted by the Congress into this Union;
+but no new State shall be formed or erected within the Jurisdiction of
+any other State; nor any State be formed by the Junction of two or more
+States, or Parts of States, without the Consent of the Legislatures of
+the States concerned as well as of the Congress.
+
+The Congress shall have Power to dispose of and make all needful Rules
+and Regulations respecting the Territory or other Property belonging to
+the United States; and nothing in this Constitution shall be so
+construed as to Prejudice any Claims of the United States, or of any
+particular State.
+
+SECTION 4. The United States shall guarantee to every State in this
+Union a Republican Form of Government, and shall protect each of them
+against Invasion; and on Application of the Legislature, or of the
+Executive (when the Legislature cannot be convened) against domestic
+Violence.
+
+
+ARTICLE V.
+
+The Congress, whenever two thirds of both Houses shall deem it
+necessary, shall propose Amendments to this Constitution, or, on the
+Application of the Legislatures of two thirds of the several States,
+shall call a Convention for proposing Amendments, which, in either Case,
+shall be valid to all Intents and Purposes, as Part of this
+Constitution, when ratified by the Legislatures of three fourths of the
+several States, or by Conventions in three fourths thereof, as the one
+or the other Mode of Ratification may be proposed by the Congress;
+Provided that no Amendment which may be made prior to the Year One
+thousand eight hundred and eight shall in any Manner affect the first
+and fourth Clauses in the Ninth Section of the first Article; and that
+no State, without its Consent, shall be deprived of its equal Suffrage
+in the Senate.
+
+
+ARTICLE VI.
+
+All Debts contracted and Engagements entered into, before the Adoption
+of this Constitution, shall be as valid against the United States under
+this Constitution, as under the Confederation.
+
+This Constitution, and the Laws of the United States which shall be made
+in Pursuance thereof; and all Treaties made, or which shall be made,
+under the Authority of the United States, shall be the supreme Law of
+the Land; and the Judges in every State shall be bound thereby, any
+Thing in the Constitution or Laws of any State to the Contrary
+notwithstanding.
+
+The Senators and Representatives before mentioned, and the Members of
+the several State Legislatures, and all executive and judicial Officers,
+both of the United States and of the several States, shall be bound by
+Oath or Affirmation, to support this Constitution; but no religious Test
+shall ever be required as a Qualification to any Office or public Trust
+under the United States.
+
+
+ARTICLE VII.
+
+The Ratification of the Conventions of nine States shall be sufficient
+for the Establishment of this Constitution between the States so
+ratifying the Same.
+
+Done in Convention by the Unanimous Consent of the States present the
+Seventeenth Day of September in the Year of our Lord one thousand seven
+hundred and Eighty seven, and of the Independence of the United States
+of America the Twelfth IN WITNESS whereof We have hereunto subscribed
+our Names.
+
+G'o: WASHINGTON----
+_Presidt. and deputy from Virginia_
+
+_New Hampshire_      { JOHN LANGDON
+                     { NICHOLAS GILMAN
+
+_Massachusetts_      { NATHANIEL GORHAM
+                     { RUFUS KING
+
+_Connecticut_        { WM. SAML. JOHNSON
+                     { ROGER SHERMAN
+
+_New York_             ALEXANDER HAMILTON
+
+                     { WIL: LIVINGSTON
+_New Jersey_         { DAVID BREARLEY
+                     { WM. PATERSON
+                     { JONA: DAYTON
+
+                     { B. FRANKLIN
+                     { THOMAS MIFFLIN
+                     { ROBT. MORRIS
+_Pennsylvania_       { GEO. CLYMER
+                     { THOS. FITZSIMONS
+                     { JARED INGERSOLL
+                     { JAMES WILSON
+                     { GOUV MORRIS
+
+                     { GEO: READ
+                     { GUNNING BEDFORD Jun
+_Delaware_           { JOHN DICKINSON
+                     { RICHARD BASSETT
+                     { JACO: BROOM
+
+                     { JAMES McHENRY
+_Maryland_           { DAN OF ST THOS JENIFER
+                     { DANL. CARROLL
+
+_Virginia_           { JOHN BLAIR--
+                     { JAMES MADISON JR.
+
+                     { WM. BLOUNT
+_North Carolina_     { RICHD. DOBBS SPAIGHT
+                     { HU WILLIAMSON
+
+                     { J. RUTLEDGE
+_South Carolina_     { CHARLES COTESWORTH PINCKNEY
+                     { CHARLES PINCKNEY
+                     { PIERCE BUTLER
+
+_Georgia_            { WILLIAM FEW
+                     { ABR. BALDWIN
+
+_Attest_ WILLIAM JACKSON _Secretary_
+
+
+
+
+AMENDMENTS
+
+
+[ARTICLE I.]
+
+Congress shall make no law respecting an establishment of religion, or
+prohibiting the free exercise thereof; or abridging the freedom of
+speech, or of the press; or the right of the people peaceably to
+assemble, and to petition the Government for a redress of grievances.
+
+
+[ARTICLE II.]
+
+A well regulated Militia, being necessary to the security of a free
+State, the right of the people to keep and bear Arms, shall not be
+infringed.
+
+
+[ARTICLE III.]
+
+No Soldier shall, in time of peace be quartered in any house, without
+the consent of the Owner, nor in time of war, but in a manner to be
+prescribed by law.
+
+
+[ARTICLE IV.]
+
+The right of the people to be secure in their persons, houses, papers,
+and effects, against unreasonable searches and seizures, shall not be
+violated, and no Warrants shall issue, but upon probable cause,
+supported by Oath or affirmation, and particularly describing the place
+to be searched, and the persons or things to be seized.
+
+
+[ARTICLE V.]
+
+No person shall be held to answer for a capital, or otherwise infamous
+crime, unless on a presentment or indictment of a Grand Jury, except in
+cases arising in the land or naval forces, or in the Militia, when in
+actual service in time of War or public danger; nor shall any person be
+subject for the same offence to be twice put in jeopardy of life or
+limb; nor shall be compelled in any Criminal Case to be a witness
+against himself, nor be deprived of life, liberty, or property, without
+due process of law; nor shall private property be taken for public use,
+without just compensation.
+
+
+[ARTICLE VI.]
+
+In all criminal prosecutions, the accused shall enjoy the right to a
+speedy and public trial, by an impartial jury of the State and district
+wherein the crime shall have been committed, which district shall have
+been previously ascertained by law, and to be informed of the nature and
+cause of the accusation; to be confronted with the witnesses against
+him; to have compulsory process for obtaining Witnesses in his favor,
+and to have the Assistance of Counsel for his defence.
+
+
+[ARTICLE VII.]
+
+In suits at common law, where the value in controversy shall exceed
+twenty dollars, the right of trial by jury shall be preserved, and no
+fact tried by a jury shall be otherwise re-examined in any Court of the
+United States, than according to the rules of the common law.
+
+
+[ARTICLE VIII.]
+
+Excessive bail shall not be required, nor excessive fines imposed, nor
+cruel and unusual punishments inflicted.
+
+
+[ARTICLE IX.]
+
+The enumeration in the Constitution, of certain rights, shall not be
+construed to deny or disparage others retained by the people.
+
+
+[ARTICLE X.]
+
+The powers not delegated to the United States by the Constitution, nor
+prohibited by it to the States, are reserved to the States respectively,
+or to the people.
+
+
+[ARTICLE XI.]
+
+The Judicial power of the United States shall not be construed to extend
+to any suit in law or equity, commenced or prosecuted against one of the
+United States by Citizens of another State, or by Citizens or Subjects
+of any Foreign State.
+
+
+[ARTICLE XII.]
+
+The Electors shall meet in their respective states, and vote by ballot
+for President and Vice-President, one of whom, at least, shall not be an
+inhabitant of the same state with themselves; they shall name in their
+ballots the person voted for as President, and in distinct ballots the
+person voted for as Vice-President, and they shall make distinct lists
+of all persons voted for as President, and of all persons voted for as
+Vice-President, and of the number of votes for each, which lists they
+shall sign and certify, and transmit sealed to the seat of the
+government of the United States, directed to the President of the
+Senate;--The President of the Senate shall, in the presence of the
+Senate and House of Representatives, open all the certificates and the
+votes shall then be counted;--The person having the greatest number of
+votes for President, shall be the President, if such number be a
+majority of the whole number of Electors appointed; and if no person
+have such majority, then from the persons having the highest numbers not
+exceeding three on the list of those voted for as President, the House
+of Representatives shall choose immediately, by ballot, the President.
+But in choosing the President, the votes shall be taken by states, the
+representation from each state having one vote; a quorum for this
+purpose shall consist of a member or members from two-thirds of the
+states, and a majority of all the states shall be necessary to a choice.
+And if the House of Representatives shall not choose a President
+whenever the right of choice shall devolve upon them, before the fourth
+day of March next following, then the Vice-President shall act as
+President, as in the case of the death or other constitutional
+disability of the President. The person having the greatest number of
+votes as Vice-President, shall be the Vice-President, if such number be
+a majority of the whole number of Electors appointed, and if no person
+have a majority, then from the two highest numbers on the list, the
+Senate shall choose the Vice-President; a quorum for the purpose shall
+consist of two-thirds of the whole number of Senators, and a majority of
+the whole number shall be necessary to a choice. But no person
+constitutionally ineligible to the office of President shall be eligible
+to that of Vice-President of the United States.
+
+
+[ARTICLE XIII.]
+
+SECTION 1. Neither slavery nor involuntary servitude, except as a
+punishment for crime whereof the party shall have been duly convicted,
+shall exist within the United States, or any place subject to their
+jurisdiction.
+
+SECTION 2. Congress shall have power to enforce this article by
+appropriate legislation.
+
+
+[ARTICLE XIV.]
+
+SECTION 1. All persons born or naturalized in the United States, and
+subject to the jurisdiction thereof, are citizens of the United States
+and of the State wherein they reside. No State shall make or enforce any
+law which shall abridge the privileges or immunities of citizens of the
+United States; nor shall any State deprive any person of life, liberty,
+or property, without due process of law; nor deny to any person within
+its jurisdiction the equal protection of the laws.
+
+SECTION 2. Representatives shall be apportioned among the several States
+according to their respective numbers, counting the whole number of
+persons in each State, excluding Indians not taxed. But when the right
+to vote at any election for the choice of electors for President and
+Vice-President of the United States, Representatives in Congress, the
+Executive and Judicial officers of a State, or the members of the
+Legislature thereof, is denied to any of the male inhabitants of such
+State, being twenty-one years of age, and citizens of the United States,
+or in any way abridged, except for participation in rebellion, or other
+crime, the basis of representation therein shall be reduced in the
+proportion which the number of such male citizens shall bear to the
+whole number of male citizens twenty-one years of age in such State.
+
+SECTION 3. No person shall be a Senator or Representative in Congress,
+or elector of President and Vice-President, or hold any office, civil or
+military, under the United States, or under any State, who, having
+previously taken an oath, as a member of Congress, or as an officer of
+the United States, or as a member of any State legislature, or as an
+executive or judicial officer of any State, to support the Constitution
+of the United States, shall have engaged in insurrection or rebellion
+against the same, or given aid or comfort to the enemies thereof. But
+Congress may by a vote of two-thirds of each House, remove such
+disability.
+
+SECTION 4. The validity of the public debt of the United States,
+authorized by law, including debts incurred for payment of pensions and
+bounties for services in suppressing insurrection or rebellion, shall
+not be questioned. But neither the United States nor any State shall
+assume or pay any debt or obligation incurred in aid of insurrection or
+rebellion against the United States, or any claim for the loss or
+emancipation of any slave; but all such debts, obligations and claims
+shall be held illegal and void.
+
+SECTION 5. The Congress shall have power to enforce, by appropriate
+legislation, the provisions of this article.
+
+
+[ARTICLE XV.]
+
+SECTION 1. The right of citizens of the United States to vote shall not
+be denied or abridged by the United States or by any State on account of
+race, color, or previous condition of servitude.
+
+SECTION 2. The Congress shall have power to enforce this article by
+appropriate legislation.
+
+
+[ARTICLE XVI.]
+
+The Congress shall have power to lay and collect taxes on incomes, from
+whatever source derived, without apportionment among the several States,
+and without regard to any census or enumeration.
+
+
+[ARTICLE XVII.]
+
+The Senate of the United States shall be composed of two Senators from
+each State, elected by the people thereof, for six years; and each
+Senator shall have one vote. The electors in each State shall have the
+qualifications requisite for electors of the most numerous branch of the
+state legislatures.
+
+When vacancies happen in the representation of any State in the Senate,
+the executive authority of such State shall issue writs of election to
+fill such vacancies: Provided, That the legislature of any State may
+empower the executive thereof to make temporary appointment until the
+people fill the vacancies by election as the legislature may direct.
+
+This amendment shall not be so construed as to affect the election or
+term of any Senator chosen before it becomes valid as part of the
+Constitution.
+
+
+[ARTICLE XVIII.]
+
+SECTION 1. After one year from the ratification of this article the
+manufacture, sale, or transportation of intoxicating liquors within, the
+importation thereof into, or the exportation thereof from the United
+States and all territory subject to the jurisdiction thereof for
+beverage purposes is hereby prohibited.
+
+SEC. 2. The Congress and the several States shall have concurrent power
+to enforce this article by appropriate legislation.
+
+SEC. 3. This article shall be inoperative unless it shall have been
+ratified as an amendment to the Constitution by the legislatures of the
+several States, as provided in the Constitution, within seven years from
+the date of the submission hereof to the States by the Congress.
+
+
+[ARTICLE XIX.]
+
+The right of citizens of the United States to vote shall not be denied
+or abridged by the United States or by any State on account of sex.
+
+Congress shall have power to enforce this article by appropriate
+legislation.
+
+
+
+
+
+End of Project Gutenberg's Our Changing Constitution, by Charles Pierson
+
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diff --git a/old/14104-8.zip b/old/14104-8.zip
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+The Project Gutenberg EBook of Our Changing Constitution, by Charles Pierson
+
+This eBook is for the use of anyone anywhere at no cost and with
+almost no restrictions whatsoever.  You may copy it, give it away or
+re-use it under the terms of the Project Gutenberg License included
+with this eBook or online at www.gutenberg.org
+
+
+Title: Our Changing Constitution
+
+Author: Charles Pierson
+
+Release Date: November 20, 2004 [EBook #14104]
+
+Language: English
+
+Character set encoding: ASCII
+
+*** START OF THIS PROJECT GUTENBERG EBOOK OUR CHANGING CONSTITUTION ***
+
+
+
+
+Produced by John Hagerson, Kevin Handy, Linda Cantoni, and the PG
+Online Distributed Proofreading Team.
+
+
+
+
+
+
+OUR CHANGING CONSTITUTION
+
+BY
+
+CHARLES W. PIERSON
+
+
+[Illustration: decorative anchor]
+
+
+GARDEN CITY NEW YORK
+
+DOUBLEDAY, PAGE & COMPANY
+
+1922
+
+
+COPYRIGHT, 1922, BY DOUBLEDAY, PAGE & COMPANY
+
+ALL RIGHTS RESERVED, INCLUDING THAT OF TRANSLATION INTO FOREIGN
+LANGUAGES, INCLUDING THE SCANDINAVIAN
+
+PRINTED IN THE UNITED STATES AT THE COUNTRY LIFE PRESS, GARDEN CITY,
+N.Y.
+
+
+
+
+PREFACE
+
+
+Citizens of the United States are wont to think of their form of
+government, a political system based on a written constitution, as
+something fixed and stable. In reality, it is undergoing a profound
+change. The idea which constituted its most distinctive feature, and in
+the belief of many represents America's most valuable contribution to
+the science of government, is being forgotten. Formed to be "an
+indestructible Union composed of indestructible states," our dual system
+is losing its duality. The states are fading out of the picture.
+
+The aim of this volume is to point out the change and discuss some of
+its aspects. A few chapters have already appeared in print. "Our
+Changing Constitution" and "Is the Federal Corporation Tax
+Constitutional?" were published in the _Outlook_. "The Corporation Tax
+Decision" appeared in the _Yale Law Journal_. "Can Congress Tax the
+Income from State and Municipal Bonds?" was printed in the New York
+_Evening Post_. All of these have been more or less revised and some new
+matter has been added.
+
+
+
+
+CONTENTS
+
+
+I. THE SALIENT FEATURE OF THE CONSTITUTION 1
+
+The American Constitution, its origin and contents. Wherein its novelty
+and greatness lay. Importance of maintaining the equilibrium established
+between national and state power. View of John Fiske.
+
+II. THE SUPREME COURT OF THE UNITED STATES 3
+
+Place of the Court in the constitutional scheme. Its most important
+function. Personnel of the Court. Its power moral rather than physical.
+Its chief weapon the power to declare legislative acts unconstitutional.
+Limitations on this power--political questions; necessity of an actual
+controversy; abuses of legislative power. Erroneous popular impressions.
+Impairment of the constitutional conscience.
+
+III. OUR CHANGING CONSTITUTION 18
+
+Change in popular attitude toward the Constitution. Causes of the change
+(growth of national consciousness, wars, foreign relations, influence of
+later immigrants and their descendants, desire to obtain federal
+appropriations, economic development, railroads, free trade among the
+states). Methods by which change has been put into effect
+(constitutional amendment, treaties, federal legislation under cover of
+power to regulate commerce and lay taxes). Attitude of the Supreme
+Court. Differences of opinion in the Court.
+
+IV. THE EIGHTEENTH OR PROHIBITION AMENDMENT 35
+
+History and radical character of amendment. Efforts to defeat it in the
+courts. Unusual course taken by Supreme Court. Discussion of its true
+place in the development of American constitutional law. Less a point of
+departure than a spectacular manifestation of a change already under
+way. Effect of the change on the principle of local self-government.
+
+V. THE NINETEENTH OR WOMAN SUFFRAGE AMENDMENT 49
+
+Attitude of the Constitution toward question of suffrage qualifications.
+Effect of Civil War amendments. Growth of woman suffrage movement and
+adoption of Suffrage Amendment. How far the amendment constitutes a
+federal encroachment on state power. Effect of woman suffrage on
+questions of governmental theory.
+
+VI. CONGRESS VERSUS THE SUPREME COURT--THE CHILD LABOR LAWS 59
+
+The child labor question. Philanthropic and commercial aspects. Attempt
+of Congress to legislate under power to regulate commerce. Decision of
+Supreme Court holding law unconstitutional. The decision explained.
+Reenactment of law by Congress under cover of power to lay taxes.
+Arguments for and against constitutionality of new enactment.
+
+VII. STATE RIGHTS AND THE SUPREME COURT 69
+
+The Supreme Court at first a bulwark of national power; to-day the
+defender of the states. Explanation of this apparent change. Attitude of
+the Court in the first period. The period of Chief Justice Marshall. The
+period of Chief Justice Taney. The Reconstruction Period. Attitude of
+the Court to-day. Reasons why the Court is unable to prevent federal
+encroachment. Attitude of Hamilton and Marshall toward state rights
+misunderstood.
+
+VIII. THE FEDERAL TAXING POWER AND THE INCOME TAX AMENDMENT 85
+
+America's embarrassing position if the late war had come before adoption
+of Income Tax Amendment. Limitations of federal taxing power under the
+Constitution. Meaning of "uniformity." Apportionment of "direct taxes."
+The Supreme Court decision in the Income Tax cases in 1894 a reversal of
+long settled ideas. The Income Tax Amendment an example of recall of
+judicial decisions. Implied limitations on federal taxing power
+(compensation of federal judges, due process clause of the Constitution,
+no power to tax property or governmental activities of the states).
+
+IX. CAN CONGRESS TAX THE INCOME FROM STATE AND MUNICIPAL BONDS? 97
+
+No express prohibition of such taxation; it lies in an implied
+limitation inherent in our dual system of government. Discussion of
+doctrine and its development by the Supreme Court. Effect of the Income
+Tax Amendment. Present dissatisfaction with doctrine and efforts to
+abolish it.
+
+X. IS THE FEDERAL CORPORATION TAX CONSTITUTIONAL? 106
+
+Nature of the tax. An interference with state power to grant corporate
+franchises. Nature of our dual government and Supreme Court decisions on
+the subject discussed. The debate in Congress.
+
+XI. THE CORPORATION TAX DECISION 122
+
+Importance of the decision likely to be overlooked. Criticism of the
+Court's arguments. Effects of the decision.
+
+XII. THE FEDERAL GOVERNMENT AND THE TRUSTS 129
+
+Origin and history of Sherman Act. Its meaning now clear. Earlier
+uncertainties owing chiefly to two questions--What is interstate trade
+and Does the act enlarge the common-law rule as to what restraints were
+unlawful? How these questions have been settled. Statement of the
+common-law rule. Incompatibility between the law and present economic
+conditions. Suggestions for legal reform. The holding company device,
+its abuses and the possibility of abolishing it. Advantages of the
+scheme of federal incorporation.
+
+XIII. WHAT OF THE FUTURE? 143
+
+Rapid progress and present extent of federal encroachment on state
+power. Growth of federal bureaucracy. A reaction against centralization
+inevitable sooner or later. Adequacy of Constitution to deal with
+changing conditions. The railroads and the trusts. Dangerous assaults
+upon Constitution in field of social welfare legislation. Exercise of
+police power a matter for local authority. Elihu Root's view. Outlook
+for the future.
+
+APPENDIX 153
+
+
+
+
+OUR CHANGING CONSTITUTION
+
+
+
+
+I
+
+THE SALIENT FEATURE OF THE CONSTITUTION
+
+
+Few documents known to history have received as much praise as the
+United States Constitution. Gladstone called it "the most wonderful work
+ever struck off at a given time by the brain and purpose of man." The
+casual reader of the Constitution will be at a loss to account for such
+adulation. It will seem to him a businesslike document, outlining a
+scheme of government in terse and well-chosen phrases, but he is apt to
+look in vain for any earmarks of special inspiration. To understand the
+true greatness of the instrument something more is required than a mere
+reading of its provisions.
+
+The Constitution was the work of a convention of delegates from the
+states, who met in Philadelphia in May, 1787, and labored together for
+nearly four months. They included a large part of the best character
+and intellect of the country. George Washington presided over their
+deliberations. The delegates had not been called together for the
+purpose of organizing a new government. Their instructions were limited
+to revising and proposing improvements in the Articles of the existing
+Confederation, whose inefficiency and weakness, now that the cohesive
+power of common danger in the war of the Revolution was gone, had become
+a byword. This task, however, was decided to be hopeless, and with great
+boldness the convention proceeded to disregard instructions and prepare
+a wholly new Constitution constructed on a plan radically different from
+that of the Articles of Confederation. The contents of the Constitution,
+as finally drafted and submitted for ratification, may be described in
+few words. It created a legislative department consisting of a Senate
+and a House of Representatives, an executive department headed by a
+President, and a judicial department headed by a Supreme Court, and
+prescribed in general terms the qualifications, powers, and functions of
+each. It provided for the admission of new states into the Union and
+that the United States should guarantee to every state a republican form
+of government. It declared that the Constitution and the laws of the
+United States made in pursuance thereof, and treaties, should be the
+supreme law of the land. It provided a method for its own amendment.
+Save for a few other brief clauses, that was all. There was no
+proclamation of Democracy; no trumpet blast about the rights of man such
+as had sounded in the Declaration of Independence. On the contrary, the
+instrument expressly recognized human slavery, though in discreet and
+euphemistic phrases.
+
+Wherein, then, did the novelty and greatness of the Constitution lie?
+Its novelty lay in the duality of the form of government which it
+created--a nation dealing directly with its citizens and yet composed of
+sovereign states--and in its system of checks and balances. The world
+had seen confederations of states. It was familiar with nations
+subdivided into provinces or other administrative units. It had known
+experiments in pure democracy. The constitutional scheme was none of
+these. It was something new, and its novel features were relied upon as
+a protection from the evils which had developed under the other plans.
+The greatness of the Constitution lay in its nice adjustment of the
+powers of government, notably the division of powers which it effected
+between the National Government and the states. The powers conferred on
+the National Government were clearly set forth. All were of a strictly
+national character. They covered the field of foreign relations,
+interstate and foreign commerce, fiscal and monetary system, post office
+and post roads, patents and copyrights, and jurisdiction over certain
+specified crimes. All other powers were reserved to the states or the
+people. In other words, the theory was (to quote Bryce's "The American
+Commonwealth") "local government for local affairs; general government
+for general affairs only."
+
+The Constitution as it left the hands of its framers was not entirely
+satisfactory to anybody. Owing to the discordant interests and mutual
+jealousies of the states, it was of necessity an instrument of many
+compromises. One of the great compromises was that by which the small
+states were given as many senators as the large. Another is embalmed in
+the provisions recognizing slavery and permitting slaves to count in the
+apportionment of representatives. (The number of a state's
+representatives was to be determined "by adding to the whole number of
+free persons ... three-fifths of all other persons.") Another was the
+provision that direct taxes should be apportioned among the states
+according to population. With all its compromises, however, the
+Constitution embodied a great governmental principle, full of hope for
+the future of the country, and the state conventions to which it was
+submitted for ratification were wise enough to accept what was offered.
+Ratification by certain of the states was facilitated by the publication
+of that remarkable series of papers afterward known as the "Federalist."
+These were the work of Alexander Hamilton, James Madison, and John Jay,
+and first appeared in New York newspapers.
+
+One of the objections to the new Constitution in the minds of many
+people was the absence of a "bill of rights" containing those provisions
+for the protection of individual liberty and property (e.g., trial by
+jury, freedom of speech, protection from unreasonable searches and
+seizures) which had come down from the early charters of English
+liberties. In deference to this sentiment a series of ten brief
+amendments were proposed and speedily ratified. Another amendment (No.
+XI) was soon afterward adopted for the purpose of doing away with the
+effect of a Supreme Court decision. Thereafter, save for a change in
+the manner of electing the President and Vice-president, the
+Constitution was not again amended until after the close of the Civil
+War, when Amendments XIII, XIV, and XV, having for their primary object
+the protection of the newly enfranchised Negroes, were adopted. The
+Constitution was not again amended until the last decade, when the
+Income Tax Amendment, the amendment providing for the election of
+Senators by popular vote, the Prohibition Amendment, and the Woman
+Suffrage Amendment were adopted in rapid succession. Some of these will
+be discussed in later chapters.
+
+It is interesting to note that two of the amendments (No. XI, designed
+to prevent suits against a state without its permission by citizens of
+another state, and No. XVI, paving the way for the Income Tax) were
+called forth by unpopular decisions of the Supreme Court, and virtually
+amounted to a recall of those decisions by the people. These instances
+demonstrate the possibility of a recall of judicial decisions by
+constitutional methods, and tend to refute impatient reformers who
+preach the necessity of a more summary procedure. Such questions,
+however, lie outside the scope of this book. We emphasize here the fact
+that the great achievement of the Constitution was the creation of a
+dual system of government and the apportionment of its powers. That was
+what made it "one of the longest reaches of constructive statesmanship
+ever known in the world."[1] It offered the most promising solution yet
+devised for the problem of building a nation without tearing down local
+self-government.
+
+[Footnote 1: Fiske: "The Critical Period of American History," p. 301.]
+
+John Fiske, the historian, writing of the importance of preserving the
+constitutional equilibrium between nation and states, said:[1]
+
+     If the day should ever arrive (which God forbid!) when the
+     people of the different parts of our country shall allow their
+     local affairs to be administered by prefects sent from
+     Washington, and when the self-government of the states shall
+     have been so far lost as that of the departments of France, or
+     even so far as that of the counties of England--on that day
+     the progressive political career of the American people will
+     have come to an end, and the hopes that have been built upon
+     it for the future happiness and prosperity of mankind will be
+     wrecked forever.
+
+[Footnote 1: Id., p. 238.]
+
+If allowance be made for certain extravagances of statement, these words
+will serve as a fitting introduction to the discussions which follow.
+
+
+
+
+II
+
+THE SUPREME COURT OF THE UNITED STATES
+
+
+The Constitution effected an apportionment of the powers of government
+between nation and states. The maintenance of the equilibrium thus
+established was especially committed to the Supreme Court. This novel
+office, the most important of all its great functions, makes the Court
+one of the most vital factors of the entire governmental scheme and
+gives it a unique preeminence among the judicial tribunals of the world.
+
+How the office has been performed, and whether the constitutional
+equilibrium is actually being maintained, are the questions to be
+considered in this book. Before taking them up, however, it will be
+useful to glance briefly at the Court itself and inquire how it is
+equipped for its difficult task.
+
+The United States Supreme Court at present is composed of nine judges.
+The number originally was six. It now holds its sessions at the Capitol
+in Washington, in the old Senate Chamber which once echoed with the
+eloquence of the Webster-Hayne debate. The judges are nominated by the
+President, and their appointment, like that of ambassadors, must be
+confirmed by the Senate. The makers of the Constitution took the utmost
+care to insure the independence of the Court. Its members hold office
+during good behavior, that is to say for life. They cannot be removed
+except by impeachment for misconduct. Only one attempt has ever been
+made to impeach a judge of the Supreme Court[1] and that attempt failed.
+Still further to insure their freedom from legislative control, the
+Constitution provides that the compensation of the judges shall not be
+diminished during their continuance in office.[2]
+
+[Footnote 1: Justice Samuel Chase of Maryland in 1804-5.]
+
+[Footnote 2: It is interesting to observe that this Court, safeguarded
+against popular clamor and composed of judges appointed for life, has
+consistently shown itself more progressive and more responsive to modern
+ideas than have most of the state Supreme Courts whose members are
+elected directly by the people and for limited terms only.]
+
+From the time of John Jay, the first Chief Justice, down to the present
+day the men appointed to membership in the Court have, for the most
+part, been lawyers of the highest character and standing, many of whom
+had already won distinction in other branches of the public service.
+The present Chief Justice (Taft) is an ex-President of the United
+States. Among the other members of the Court are a former Secretary of
+State of the United States (Justice Day); two former Attorneys General
+of the United States (Justices McKenna and McReynolds); a former Chief
+Justice of Massachusetts (Justice Oliver Wendell Holmes, the
+distinguished son and namesake of an illustrious father); a former Chief
+Justice of Wyoming (Justice Van Devanter); and a former Chancellor of
+New Jersey (Justice Pitney).
+
+It is well that the personnel of the Court has been such as to command
+respect and deference, for in actual power the judiciary is by far the
+weakest of the three cooerdinate departments (legislative, executive,
+judicial) among which the functions of government were distributed by
+the Constitution. The power of the purse is vested in Congress: it alone
+can levy taxes and make appropriations. The Executive is
+Commander-in-Chief of the Army and Navy and wields the appointing power.
+The Supreme Court controls neither purse nor sword nor appointments to
+office. Its power is moral rather than physical. It has no adequate
+means of enforcing its decrees without the cooeperation of other
+branches of the Government.
+
+That cooeperation has not always been forthcoming. In the year 1802,
+Congress, at the instigation of President Jefferson, the inveterate
+enemy of Chief Justice Marshall, suspended the sessions of the Court for
+more than a year by abolishing the August term. In 1832, when the State
+of Georgia defied the decree of the Court in a case involving the status
+of the Cherokee Indians, the other departments of the Federal Government
+gave no aid and President Andrew Jackson is reported to have remarked:
+"John Marshall has made the decision, now let him execute it." In 1868,
+Congress, in order to forestall decision in a case pending before the
+Court, hastily repealed the statute on which the jurisdiction of the
+Court depended.[1] Such instances, however, have been rare. The
+law-abiding instinct is strong in the American people, and for the most
+part the decisions of the Supreme Court have been received with respect
+and unquestioning obedience.
+
+[Footnote 1: See _ex parte McCardle_, 6 Wall. (Supreme Court Reports),
+318; 7 _id._, 506.]
+
+The chief weapon in the arsenal of the Court is the power to declare
+legislative acts void on the ground that they overstep limits
+established by the people in the Constitution. This power has been
+frequently exercised. It is stated that the congressional statutes thus
+nullified have not numbered more than thirty, while at least a thousand
+state laws have been nullified.[1]
+
+[Footnote 1: Brief of Solicitor General James M. Beck in the Child Labor
+Tax cases. It is to be borne in mind that there are forty-eight state
+legislatures and only one Congress.]
+
+The assumption of this power in the Court to declare statutes
+unconstitutional has been bitterly assailed, and is still denounced in
+some quarters, as judicial usurpation originated by John Marshall.
+
+On the historical side this objection is not well founded. Various state
+courts had exercised the power to declare statutes unconstitutional
+before the Supreme Court came into existence.[1] The framers of the
+Constitution clearly intended that such a power should be exercised by
+the Supreme Court.[2] Moreover, a somewhat similar power appears to have
+been exercised long before in England,[3] though it gave place later to
+the present doctrine of the legal omnipotence of Parliament.
+
+[Footnote 1: See Bryce: "The American Commonwealth," Vol. I, p. 250.]
+
+[Footnote 2: See e.g., "Federalist," No. LXXVIII.]
+
+[Footnote 3: See opinion of Lord Coke in Bonham's Case, 8 Coke's
+Reports, 118, decided in 1610.]
+
+On the side of reason and logic, the argument in favor of the power
+formulated more than a century ago by Chief Justice Marshall has never
+been adequately answered and is generally accepted as final. He said:[1]
+
+     The powers of the legislature are defined and limited; and
+     that those limits may not be mistaken or forgotten, the
+     Constitution is written. To what purpose are powers limited,
+     and to what purpose is that limitation committed to writing,
+     if these limits may, at any time, be passed by those intended
+     to be restrained?... The Constitution is either a superior
+     paramount law, unchangeable by ordinary means, or it is on a
+     level with ordinary legislative acts, and, like other acts, is
+     alterable when the legislature shall please to alter it. If
+     the former part of the alternative be true, then a legislative
+     act, contrary to the Constitution, is not law: if the latter
+     part be true, then written constitutions are absurd attempts,
+     on the part of the people, to limit a power in its own nature
+     illimitable.
+
+[Footnote 1: _Marbury v. Madison_, 1 Cranch, 176.]
+
+It would seem at first blush that the power in the Court to declare
+legislative acts unconstitutional affords a complete safeguard against
+congressional encroachment on the prerogatives of the states. Such is
+not the fact, however. The veto power of the Court by no means covers
+the entire field of legislative activity. In the Convention which
+framed the Constitution, attempts were made to give to the judiciary, in
+conjunction with the executive, complete power of revision over
+legislative acts, but all such propositions were voted down.[1] As
+matters stand, there may be violations of the Constitution by Congress
+(or for that matter by the executive) of which the Court can take no
+cognizance.
+
+[Footnote 1: See e.g., Farrand: "Records of the Federal Convention,"
+Vol. I, pp. 138 et seq.; Vol. II, p. 298.]
+
+For one thing, the Court cannot deal with questions of a political
+character. The function of the Court is judicial only. Upon this ground
+it was decided that the question which of two rival governments in the
+State of Rhode Island was the legitimate one was for the determination
+of the political department of government rather than the courts;[1]
+that the question, whether the adoption by a state of the initiative and
+referendum violated the provision of the Federal Constitution
+guaranteeing to every state a republican form of government, was
+political and therefore beyond the jurisdiction of the Court.[2] In 1867
+a sovereign state sought to enjoin the President of the United States
+from enforcing an act of Congress alleged to be unconstitutional. The
+Supreme Court, without determining the constitutionality of the act,
+declined to interfere with the exercise of the President's political
+discretion.[3] In the famous Dred Scott case[4] the effort of the
+Supreme Court to settle a political question accomplished nothing save
+to impair the influence and prestige of the Court.
+
+[Footnote 1: _Luther v. Borden_, 7 Howard, 1.]
+
+[Footnote 2: _Pacific Telephone Co. v. Oregon_, 223 U.S., 118.]
+
+[Footnote 3: _State of Mississippi v. Andrew Johnson_, 4 Wall., 475.]
+
+[Footnote 4: _Dred Scott v. Sandford_, 19 Howard, 393.]
+
+The power of the Court to declare legislative acts unconstitutional is
+subject to another important limitation. The judicial power is limited
+by the Constitution to actual cases and controversies between opposing
+parties. The Court cannot decide moot questions or act as an adviser for
+other departments of the government. A striking illustration is found in
+the so-called Muskrat case.[1] Congress having legislated concerning the
+distribution of property of the Cherokee Indians, and doubts having
+arisen as to the constitutional validity of the legislation, Congress
+passed another act empowering one David Muskrat and other Cherokee
+citizens to file suit, naming the United States as defendant, to settle
+the question. The Supreme Court declined to take jurisdiction and
+dismissed the suit, holding that it was not a case or controversy
+between opposing parties within the meaning of the Constitution.
+
+[Footnote 1: _Muskrat v. United States_, 219 U.S., 346.]
+
+Still another limitation is encountered in cases involving abuse of
+legislative power rather than lack of power. If Congress passes an act
+within one of the powers expressly conferred upon it by the
+Constitution, for example the power to lay taxes or the power to
+regulate interstate commerce, the Supreme Court cannot interfere though
+the incidental effect and ulterior purpose of the legislation may be to
+intrude upon the field of state power. We shall have occasion to refer
+to this limitation more than once in later chapters.
+
+An impression is abroad that the Supreme Court has plenary power to
+preserve the Constitution. Hence the tendency of groups to demand, and
+of legislators to enact, any kind of a law without regard to its
+constitutional aspect, leaving that to be taken care of by the Court.
+
+Any such impression is erroneous and unfortunate. It puts upon the Court
+a burden beyond its real powers. It undermines the sense of
+responsibility which should exist among the elected representatives of
+the people. It impairs what someone has called the constitutional
+conscience, and weakens the vigilance of the people in preserving their
+liberties. Men and women need to be reminded that the duty of upholding
+the Constitution does not devolve upon the Supreme Court alone. It rests
+upon all departments of government and, in the last analysis, upon the
+people themselves.
+
+
+
+
+III
+
+OUR CHANGING CONSTITUTION
+
+
+In a celebrated case[1] decided a few years ago the Supreme Court of the
+United States said:
+
+     The Constitution is a written instrument. As such its meaning
+     does not alter. That which it meant when adopted it means now.
+     Being a grant of powers to a government its language is
+     general, and as changes come in social and political life it
+     embraces in its grasp all new conditions which are within the
+     scope of the powers in terms conferred. In other words, while
+     the powers granted do not change, they apply from generation
+     to generation to all things to which they are in their nature
+     applicable. This in no manner abridges the fact of its
+     changeless nature and meaning. Those things which are within
+     its grants of power, as those grants were understood when
+     made, are still within them, and those things not within them
+     remain still excluded....
+
+     To determine the extent of the grants of power we must,
+     therefore, place ourselves in the position of the men who
+     framed and adopted the Constitution, and inquire what they
+     must have understood to be the meaning and scope of those
+     grants.
+
+[Footnote 1: _South Carolina v. United States_, 199 U.S., 437.]
+
+Thus speaks the voice whose word is law.
+
+Viewed in the sense intended--as the formulation of a legal rule for the
+interpretation and construction of a written instrument--the statement
+compels assent. As a statement of historical and political fact,
+however, it would not be accepted so readily. An acute critic of our
+institutions has said that the Constitution "has changed in the spirit
+with which men regard it, and therefore in its own spirit."[1] Men
+realize that the words of the Constitution, like the words of Holy Writ,
+have not always meant the same thing to those who regulate their conduct
+by its precepts; that the system of government which those words embody
+has in reality changed, is changing to-day.
+
+[Footnote 1: Bryce: "The American Commonwealth," Vol. I, p. 400.]
+
+The makers of the Constitution represented the people of distinct and
+independent states, jealous of their rights and of each other but
+nevertheless impelled by experience of danger lately past and sense of
+other perils impending to substitute for their loose and ill-working
+confederation a more effective union. The most formidable obstacle,
+apart from mutual jealousies, was a fear of loss of liberties, state and
+individual, through encroachment of the central power. The instrument,
+drawn with this fear uppermost, was designed to limit the National
+Government to "the irreducible minimum of functions absolutely needed
+for the national welfare."[1] To this end the powers granted were
+specifically enumerated. All other powers were by express enactment[2]
+"reserved to the States respectively, or to the people."
+
+[Footnote 1: Bryce, "The American Commonwealth," Vol. I, p. 324.]
+
+[Footnote 2: Tenth Amendment.]
+
+The strength of the popular sentiment against any encroachment of
+federal power was speedily demonstrated in a striking and dramatic way.
+Under the grant of power to determine controversies "between a state and
+citizens of another state"[1] the Supreme Court in 1793 proceeded to
+entertain a suit by one Chisholm, a citizen of South Carolina, against
+the State of Georgia.[2] It had not been supposed that the grant of
+power contemplated such a suit against a state without its consent. The
+decision aroused an indescribable state of popular fury, not only in
+Georgia but throughout the Union, and led to the adoption of a
+constitutional amendment[3] prohibiting such suits in future.
+
+[Footnote 1: Art. III, Sec. 2.]
+
+[Footnote 2: See 2 Dallas, 419.]
+
+[Footnote 3: Eleventh Amendment.]
+
+There is a long step between such an attitude toward the Constitution
+and the viewpoint which finds in it authority for the enactment by
+Congress of White Slave and Child Labor laws. Obviously there has been a
+profound change in what the Constitution means to its adherents. It will
+be interesting to consider briefly what has caused the change of view,
+and how it has been put into effect.
+
+To one searching for causes the most striking phenomenon is the growth
+of a national consciousness. At the outset it was practically
+non-existent. To-day its power has astonished enemy and friend alike.
+Its growth has been due to both pressure from without and developments
+within. Our foreign wars, especially the war with Germany, have drawn
+the people together and enhanced the importance of interests purely
+national. Some of our other foreign relations have brought into relief
+the advantages of a strong central government as well as certain
+inconveniences of our system as it left the hands of the framers.
+Witness the embarrassment toward Italy growing out of lack of federal
+jurisdiction in respect of the New Orleans riots, and the ever-present
+danger to our relations with Japan from acts of the sovereign State of
+California which the Federal Government is powerless to control. Among
+developments from within was the Civil War, with its triumph for the
+idea of national supremacy and an indissoluble union. Another, which has
+hardly received the attention it deserves, has been the influence of the
+large element of our population composed of immigrants since the
+Revolution and their descendants. The state sovereignty doctrine was not
+a mere political dogma but had its roots in history. It was an
+expression of the pride of the inhabitants of the Thirteen Colonies in
+their respective commonwealths. To them it stood for patriotism and
+traditions. These feelings the later immigrant neither shared nor
+understood. When he gave up his Old World allegiance and emigrated he
+came to America, not to New York or Massachusetts. To him the nation was
+everything, the state merely an administrative subdivision of the
+nation.
+
+Another cause has been the desire to obtain aid in local matters from
+the national treasury. This has proved an exceedingly potent and
+insidious influence, leading state officials to surrender voluntarily
+state prerogatives in exchange for appropriations of federal money.
+Notable examples of this influence may be found in the field of river
+and harbor improvements, the creation of various new bureaus in the
+Department of Commerce, the enormous extension of the activities of the
+Agricultural Department and the Bureau of Education. The temptation in
+this direction is particularly strong among the less prosperous states,
+for it means the expenditure in those states of federal moneys raised
+chiefly from the taxpayers in wealthier states.
+
+The most potent influence of all, however, has been the matter of
+internal economic development, stimulated by free trade among the
+states. This development has gone on apace with little regard for state
+lines. The invention of railways drew the different sections of the
+country together in a common growth, and tended to make the barriers
+interposed by state lines and state laws seem artificial and cumbersome.
+In fact, they sometimes came to be regarded as intolerable and
+destructive of progress. The spectacle of men clamoring for federal
+control of their industries to escape the burdens of a diversified state
+interference has been a frequent phenomenon of recent years.[1]
+
+[Footnote 1: See e.g. the efforts of the life insurance interests: _N.Y.
+Life Ins. Co. v. Deer Lodge County_, 231 U.S., 495.]
+
+The foregoing enumeration by no means covers all the forces which have
+been at work. In recent years a strong tendency toward centralization
+and combination has developed, a tendency pervading all the interests
+and activities of men. Moreover, new views have arisen concerning the
+functions and scope of government, views challenging the _laissez faire_
+doctrines of earlier days and demanding a greater measure of
+governmental interference with the affairs of the individual. These
+tendencies, however, are not peculiar to America and lie outside the
+scope of the present discussion.
+
+In considering the methods by which the change of spirit toward the
+Constitution has been put into effect, one is struck by the
+comparatively small part played by the only method contemplated by the
+framers, viz., constitutional amendment. This method is entirely
+practicable and fairly expeditious provided a sufficient number favor
+the change proposed. In the one hundred years prior to the recent Income
+Tax Amendment, however, only three amendments were enacted (Numbers
+XIII, XIV, and XV), all of them dealing primarily with the abolition of
+slavery and the civil rights of the Negro. The only one which need be
+noticed here is Number XIV, which substituted a federal test of
+citizenship for state tests and provided that no state should "deprive
+any person of life, liberty, or property, without due process of law;
+nor deny to any person within its jurisdiction the equal protection of
+the laws." There was nothing new in these prohibitions. In substance
+they are as old as Magna Charta and were already embodied in most if not
+all of the state constitutions. The novelty lay in bringing the
+question, whether a state had in fact denied due process of law to an
+individual or corporation, within the jurisdiction of the federal
+courts. From a legal viewpoint this was a change of great importance. To
+the general student of constitutional government, however, it is less
+significant than others presently to be mentioned.
+
+Right here it may be proper to notice a new theory of construction of
+the Constitution, not yet accepted but strenuously urged and containing
+enormous potentialities. This is the "doctrine of sovereign and inherent
+power," i.e., the doctrine that powers of national scope for whose
+exercise no express warrant is found in the Constitution are
+nevertheless to be implied as inherent in the very fact of sovereignty.
+This is a very different thing from the famous doctrine of implied
+powers developed by Chief Justice Marshall--that all powers will be
+implied which are suitable for carrying into effect any power expressly
+granted. It is a favorite theory of what may be termed the Roosevelt
+school. They consider that it is rendered necessary by the discovery of
+fields suitable for legislative cultivation, lying outside the domain of
+state power but not within the scope of any express grant of power to
+the nation. As practical men they abhor the existence of such a
+constitutional no man's land as nature abhors a vacuum.
+
+During the presidency of Mr. Roosevelt a determined effort was made by
+the representatives of the Administration[1] to secure the recognition
+by the Supreme Court of the doctrine of sovereign and inherent power. It
+was claimed in the brief filed by the Attorney General and Solicitor
+General that the doctrine had already been applied by the Court in the
+Legal Tender cases.[2] The effort failed, however, the Court declaring
+that any such power, if necessary to the nation, must be conferred
+through constitutional amendment by the people, to whom all powers not
+granted had been expressly reserved by the Tenth Amendment.
+
+[Footnote 1: In _Kansas v. Colorado_, 206 U.S., 46.]
+
+[Footnote 2: Bryce makes a statement to the same effect. "The American
+Commonwealth," Vol. I, p. 383.]
+
+A method by which the federal power and jurisdiction have been much
+extended has been the occupation by Congress, through legislation of an
+exclusive character, of fields where the states had exercised a
+concurrent jurisdiction. A familiar example is found in federal
+bankruptcy laws. Another and striking example is the so-called "Carmack
+Amendment" of the federal Interstate Commerce law. The question of
+liability for loss or damage to goods in the hands of railways and other
+carriers had been a fruitful field for state legislatures and state
+courts. The Carmack Amendment brushed away at a single stroke whole
+systems of state statutes and judicial decisions (in so far as they
+affected traffic across state lines) and substituted a uniform system
+under the control of the federal courts.
+
+The federal power has also been extended at the expense of the states
+through the use of the treaty-making prerogative. The subjects upon
+which Congress may legislate are limited by specific enumeration. The
+treaty-making power, however, is not thus limited. Treaties may cover
+any subject. It follows that while the Federal Government has no power
+(for example) to regulate the descent of real property in the various
+states the treaty-making power permits it, by treaties with foreign
+nations, to destroy the alienage laws of the states.[1] Another very
+recent example is afforded by the Migratory Bird Treaty with Great
+Britain.[2] One will search the Constitution in vain for any grant of
+power to the Federal Government to enact game laws. Nevertheless, under
+this treaty, many state game laws have been practically annulled.
+
+[Footnote 1: _Hauenstein v. Lynham_, 100 U.S., 483.]
+
+[Footnote 2: Sustained by the Supreme Court in _Missouri v. Holland_,
+252 U.S., 416.]
+
+But the most far-reaching method by which federal power under the
+Constitution has been extended has been the adaptation--some will say
+the perversion--by Congress of old grants of power to new ends. Under
+the spur of public sentiment Congress has discovered new legislative
+possibilities in familiar clauses of the Constitution as one discovers
+new beauties in a familiar landscape. The clause offering the greatest
+possibilities has been the so-called Commerce Clause, which grants to
+Congress power "to regulate commerce with foreign nations, and among the
+several states."[1] Under this grant of power Congress has enacted, and
+the courts have upheld, a great mass of social and economic legislation
+having to do only remotely with commerce. For example, the Sherman Act
+and other anti-trust legislation, ostensibly mere regulations of
+commerce, but actually designed for the control and suppression of
+trusts and monopolies; the federal Pure Food and Drugs Act, designed to
+prevent the adulteration or mis-branding of foods and drugs and check
+the abuses of the patent-medicine industry;[2] the act for the
+suppression of lotteries, making it a crime against the United States to
+carry or send lottery tickets or advertisements across state lines;[3]
+an act to prevent the importation of prize-fight films.[4] These are
+only a few among many similar statutes which might be mentioned. In all
+of them the motive is clear. There is no concealment about it. Their
+primary object is to suppress or regulate the trusts, lotteries,
+patent-medicine frauds. The regulation of commerce is merely a matter of
+words and legal form.
+
+[Footnote 1: Art. I, Sec. 8.]
+
+[Footnote 2: _Hipolite Egg Company v. United States_, 220 U.S., 45.]
+
+[Footnote 3: _Champion v. Ames_, 188 U.S., 321.]
+
+[Footnote 4: _Weber v. Freed_, 239 U.S., 325.]
+
+Especially noteworthy is the rapidly expanding body of social
+legislation--federal Employers' Liability Act, Hours of Service acts,
+Child Labor Law, White Slave Act and the like, all drawn with an eye to
+the commerce clause but designed to accomplish objects quite distinct
+from the regulation of commerce.
+
+As already said, the Commerce Clause has been found most available for
+purposes of such legislation. Other clauses have, however, served their
+turn. For example, the grant of power to lay taxes was utilized to
+destroy an extensive industry obnoxious to the dairy interests--the
+manufacture of oleomargarine artificially colored to look like
+butter.[1] Also to invade the police power of the States in respect of
+the regulation of the sale and use of narcotic drugs.[2] Also to check
+speculation and extortion in the sale of theatre tickets![3] The power
+to borrow money and create fiscal agencies was utilized to facilitate
+the making of loans upon farm security at low rates of interest through
+the incorporation of Federal land banks or Joint Stock land banks.[4]
+
+[Footnote 1: _McCray v. United States_, 195 U.S., 27.]
+
+[Footnote 2: Narcotic Drug Act. Held constitutional in _United States v.
+Doremus_, 249 U.S., 86; _Webb v. United States_, 249 U.S., 96.]
+
+[Footnote 3: Revenue Act of 1921, Title VIII, subdivisions 2 and 3.]
+
+[Footnote 4: _Smith v. Kansas City Title Co._, 255 U.S., 180.]
+
+It would be an insult to intelligence to claim that legislation such as
+this, wearing the form of revenue measure or regulation of commerce but
+in reality enacted with a different motive, does not involve an enormous
+extension of the national power beyond what the makers of the
+Constitution supposed they were conferring or intended to confer. What,
+then, of the declaration by the Supreme Court with which we began, that
+"to determine the extent of the grants of power we must place ourselves
+in the position of the men who framed and adopted the Constitution, and
+inquire what they must have understood to be the meaning and scope of
+these grants." The answer must be that the Court itself has not always
+adhered strictly to this test. The Court has taken the position that
+when power exists under the Constitution to legislate upon a given
+subject--say interstate commerce or taxation--it is not for the
+judiciary to seek to correct abuses by Congress of that power, or to
+question Congressional motives. As said in the decision sustaining the
+constitutionality of the oleomargarine law:[1]
+
+     The judiciary is without authority to avoid an act of Congress
+     lawfully exerting the taxing power, even in a case where to
+     the judicial mind it seems that Congress had, in putting such
+     power in motion, abused its lawful authority by levying a tax
+     which was unwise or oppressive, or the result of the
+     enforcement of which might be to indirectly affect subjects
+     not within the powers delegated to Congress, nor can the
+     judiciary inquire into the motive or purpose of Congress in
+     adopting a statute levying an excise tax within its
+     constitutional power.
+
+[Footnote 1: _McCray v. United States_, 195 U.S., 27.]
+
+The Court, however, has had great difficulty with these cases and
+developed sharp differences of opinion. For example, the case upholding
+the anti-lottery statute as a valid exercise of the power to regulate
+commerce[1] was twice ordered for reargument and finally decided by a
+bare majority of 5 to 4. The Child Labor Law of 1916 was declared
+unconstitutional[2] and the Narcotic Drug Act was sustained[3] by a
+similar vote, 5 to 4. In the Narcotic Drug case the four dissenting
+justices, speaking through Chief Justice White, characterized portions
+of the statute as "beyond the constitutional power of Congress to enact
+... a mere attempt by Congress to exert a power not delegated, that is,
+the reserved police power of the states." In the Lottery case the
+dissenting opinion of the four, written by Chief Justice Fuller,
+concludes:
+
+     I regard this decision as inconsistent with the views of the
+     framers of the Constitution, and of Marshall, its great
+     expounder. Our form of government may remain notwithstanding
+     legislation or decision, but, as long ago observed, it is with
+     governments, as with religions, the form may survive the
+     substance of the faith.
+
+[Footnote 1: _Champion v. Ames_, 188 U.S., 321.]
+
+[Footnote 2: _Hammer v. Dagenhart_, 247 U.S., 251.]
+
+[Footnote 3: _United States v. Doremus_, 249 U.S., 86.]
+
+Whatever view one may hold to-day as to the question of expediency, no
+thoughtful mind can escape the conclusion that, in a very real and
+practical sense, the Constitution has changed. In a way change is
+inevitable to adapt it to the conditions of the new age. There is
+danger, however, that in the process of change something may be lost;
+that present-day impatience to obtain desired results by the shortest
+and most effective method may lead to the sacrifice of a principle of
+vital importance.
+
+The men who framed the Constitution were well advised when they sought
+to preserve the integrity of the states as a barrier against the
+aggressions and tyranny of the majority acting through a centralized
+power. The words "state sovereignty" acquired an odious significance in
+the days of our civil struggle, but the idea for which they stand is
+nevertheless a precious one and represents what is probably America's
+most valuable contribution to the science of government.
+
+We shall do well not to forget the words of that staunch upholder of
+national power and authority, Salmon P. Chase, speaking as Chief Justice
+of the Supreme Court in a famous case growing out of the Civil War:[1]
+
+     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.
+
+[Footnote 1: _Texas v. White_, 7 Wall., 700.]
+
+
+
+
+IV
+
+THE EIGHTEENTH AMENDMENT
+
+
+Could Washington, Madison, and the other framers of the Federal
+Constitution revisit the earth in this year of grace 1922, it is likely
+that nothing would bewilder them more than the recent Prohibition
+Amendment. Railways, steamships, the telegraph, the telephone,
+automobiles, flying machines, submarines--all these developments of
+science, unknown in their day, would fill them with amazement and
+admiration. They would marvel at the story of the rise and downfall of
+the German Empire; at the growth and present greatness of the Republic
+they themselves had founded. None of these things, however, would seem
+to them to involve any essential change in the beliefs and purposes of
+men as they had known them. The Prohibition Amendment, on the contrary,
+would evidence to their minds the breaking down of a principle of
+government which they had deemed axiomatic, the abandonment of a purpose
+which they had supposed immutable. As students of the science of
+government they would realize that the most fundamental change which can
+overtake a free people is a change in their frame of mind, for to that
+everything else must sooner or later conform.
+
+The amendment was proposed by Congress in 1917 and proclaimed as having
+been ratified in 1919.[1]
+
+[Footnote 1: 40 Stat. 1050, 1941.]
+
+The comparative ease and dispatch with which it was put through argue
+alike the skill and vigor of its sponsors and the strength of the
+sentiment behind them. Legal warfare over the amendment did not end,
+however, with its ratification by the legislatures of the requisite
+number of states. Passions had been aroused. Vast property interests
+were menaced. Moreover, in the minds of students of government the
+amendment stirred misgivings which were quite independent of the
+sentimental and material considerations involved. Eminent counsel were
+retained and a determined effort was made to defeat or nullify the
+amendment in the courts. To this end suits were begun in various
+jurisdictions to test its validity and enjoin the enforcement of the
+Volstead Act, which sought to carry it into effect. Two sovereign
+states (Rhode Island and New Jersey) joined in the attack and through
+their respective Attorneys General brought original suits in the United
+States Supreme Court to have the amendment declared invalid. Seven test
+cases were argued together in the Supreme Court, five days in all being
+devoted to the argument. It will be of interest to note some of the
+reasons advanced against the validity of the amendment, as they are
+summarized in the official report.[1]
+
+[Footnote 1: National Prohibition cases, 253 U.S., 350.]
+
+The Attorney General of the State of Rhode Island argued[1] that:
+
+     The amendment is an invasion of the sovereignty of the
+     complaining state and her people, not contemplated by the
+     amending clause of the Constitution. The amending power ... is
+     not a substantive power but a precautionary safeguard inserted
+     incidentally to insure the ends set forth in that instrument
+     against errors and oversights committed in its formation.
+     Amendments, as the term indeed implies, are to be limited to
+     the correction of such errors....
+
+     It is "This Constitution" that may be amended. "This
+     Constitution" is not a code of transient laws but a framework
+     of government and an embodiment of fundamental principles. By
+     an amendment, the identity or purpose of the instrument is
+     not to be changed; its defects may be cured, but "This
+     Constitution" must remain. It would be the greatest absurdity
+     to contend that there was a purpose to create a limited
+     government and at the same time to confer upon that government
+     a power to do away with its own limitations.
+
+[Footnote 1: Id., pp. 354-356.]
+
+The Attorney General of the State of New Jersey:[1]
+
+     attacked the amendment as an invasion of state sovereignty not
+     authorized by the amending clause and as not, properly
+     speaking, an amendment, but legislation, revolutionary in
+     character.
+
+[Footnote 1: 253 U.S., pp. 356-357.]
+
+The eminent Chicago lawyer, Levy Mayer, and ex-Solicitor General William
+Marshall Bullitt, contended,[1] among other things, that
+
+     the power of "amendment" contained in Art. V does not
+     authorize the invasion of the sovereign powers expressly
+     reserved to the states and the people by the Ninth and Tenth
+     Amendments, except with the consent of _all_ the states....
+
+     If amendment under Art. V were unlimited, three-fourths of the
+     legislatures would have it in their power to establish a state
+     religion and prohibit free exercise of other religious
+     beliefs; to quarter a standing army in the houses of citizens;
+     to do away with trial by jury and republican form of
+     government; to repeal the provision for a president; and to
+     abolish this court and with it the whole judicial power
+     vested by the Constitution.
+
+[Footnote 1: Id., pp. 357-361.]
+
+Elihu Root, preeminent as a constitutional lawyer, appeared as counsel
+in one of the test cases. His main contention was summarized in his
+brief as follows:[1]
+
+     (a) That the authority to amend the Constitution is a
+     continuance of the constitution-making power and as such is a
+     power quite different and altogether distinct from the
+     law-making power under the Constitution.
+
+     (b) That a grant of the one power does not include or imply a
+     grant of the other.
+
+     (c) That the natural and ordinary meaning of the words used in
+     Article V of the Constitution [the article providing for
+     amendment] limits the power granted to the function of
+     constitution-making as distinguished from ordinary law-making.
+
+     (d) That the purposes of the grant imply the same limitation.
+
+     (e) That other parts of the Constitution--notably Article
+     I--express the same limitation.
+
+     (f) That the existence of authority under Article V to enact
+     ordinary laws regulating the conduct of private citizens under
+     color of amendment, would be so in conflict with the
+     fundamental principles and spirit of the Constitution that
+     such a construction is not permissible.
+
+[Footnote 1: For the Reporter's Summary see 253 U.S., pp. 361-367.]
+
+There were other arguments of a more technical character. Article V of
+the Constitution provides that the Congress shall propose amendments
+"whenever two-thirds of both Houses shall deem it necessary." It was
+urged that this required the affirmative vote of two-thirds of the
+entire membership of both Houses, and that two-thirds of a quorum was
+not sufficient. It was also urged that the proposal was fatally
+defective because it did not on its face declare that both Houses deemed
+the amendment necessary. It was also argued that the amendment had not
+been effectively ratified in certain of the states where it had been
+approved by the state legislature (notably Ohio) because under the
+constitutions of those states it was subject to a referendum to the
+people before becoming effective. The Supreme Court of Ohio had so
+decided[1] and a referendum had actually been held in that state,
+resulting in a rejection of the amendment by popular vote. Various
+arguments were also advanced based on the puzzling phraseology of
+Section 2 of the amendment that "the Congress and the several States
+shall have _concurrent power_ to enforce this article by appropriate
+legislation." The eminent constitutional lawyer, W.D. Guthrie, addressed
+himself particularly to this phase of the controversy.[2] It was urged
+with much force that the effect of these words was to save the rights of
+the states, in respect of intrastate matters, by requiring their
+concurrence in any legislation of Congress regulating such matters.
+
+[Footnote 1: See _Hawke v. Smith_, 253 U.S., 221.]
+
+[Footnote 2: 253 U.S., pp. 368-380.]
+
+All the arguments advanced were alike unavailing. The nine members of
+the Supreme Court were unanimous in sustaining the validity of the
+amendment, holding that it "by lawful proposal and ratification, has
+become a part of the Constitution, and must be respected and given
+effect the same as other provisions of that instrument."[1] The Court,
+however, adopted the very unusual course of deciding the various cases
+before it (affirming four, reversing one, and dismissing the original
+bills filed by the states of Rhode Island and New Jersey) without any
+written opinion. Speaking through Mr. Justice Van Devanter, the Court
+merely announced its conclusions. This was an unprecedented procedure in
+a case involving constitutional questions of such importance. It drew
+criticism from some of the members of the Court itself. Chief Justice
+White said:[2]
+
+     I profoundly regret that in a case of this magnitude,
+     affecting as it does an amendment to the Constitution dealing
+     with the powers and duties of the national and state
+     governments, and intimately concerning the welfare of the
+     whole people, the court has deemed it proper to state only
+     ultimate conclusions without an exposition of the reasoning by
+     which they have been reached.
+
+and proceeded to announce the reasons which had actuated him personally.
+Justice McKenna said:[3]
+
+     The court declares conclusions only, without giving any
+     reasons for them. The instance may be wise--establishing a
+     precedent now, hereafter wisely to be imitated. It will
+     undoubtedly decrease the literature of the court if it does
+     not increase lucidity.
+
+[Footnote 1: Id., p. 386.]
+
+[Footnote 2: Id., p. 388.]
+
+[Footnote 3: 253 U.S., p. 393.]
+
+Perhaps a hint as to the reasons actuating the majority of the Court may
+be found in the brief concurring memorandum of Mr. Justice McReynolds.
+He said:[1]
+
+     I do not dissent from the disposition of these causes as
+     ordered by the Court, but confine my concurrence to that. It
+     is impossible now to say with fair certainty what construction
+     should be given to the Eighteenth Amendment. Because of the
+     bewilderment which it creates, a multitude of questions will
+     inevitably arise and demand solution here. In the
+     circumstances, I prefer to remain free to consider these
+     questions when they arrive.
+
+[Footnote 1: Id., p. 392.]
+
+Justices McKenna and Clarke dissented from portions of the decision
+dealing with the question of the proper construction of the grant of
+"concurrent power" to Congress and the States, and wrote opinions
+setting forth the grounds of their dissent. Both Justices, however,
+concurred in affirming the validity of the amendment.
+
+Thus the legal battle was fought and lost. The amendment had withstood
+attack and men's minds settled back to the practical question of its
+enforcement.
+
+Upon that question, however difficult and interesting, we do not here
+enter. Our present concern is to ascertain as nearly as may be the true
+place of the amendment in the development of American constitutional
+law.
+
+That it affords startling evidence of a radical departure from the views
+of the founders of the Republic is beyond question. Such a blow at the
+prerogatives of the states, such a step toward centralization, would
+have been thought impossible by the men of 1787. It would be a mistake,
+however, to view the departure as having originated with this amendment.
+Rather is the amendment to be regarded as merely a spectacular
+manifestation of a change which was already well under way.
+
+In the early days of the Republic the dominating purpose was the
+protection of state prerogatives, so far as that was compatible with the
+common safety. The first eleven amendments of the Federal Constitution
+were all limitations upon federal power. Not until the people of the
+various states had been drawn together and taught to think in terms of
+the nation by a great Civil War was there any amendment which enlarged
+the powers of the National Government. The three post-war amendments
+(Nos. XIII, XIV, and XV) marked a distinct expansion of federal power
+but one that seemed to find its justification, as it found its origin,
+in the necessity for effectuating the purposes of the war and protecting
+the newly enfranchised Negroes.
+
+A long period of seeming inactivity, more than forty years, elapsed
+before another constitutional amendment was adopted.[1] The inaction,
+however, was apparent rather than real. As matter of fact, a change was
+all the time going on. In a very real sense the Constitution was being
+altered almost from year to year. That the alterations did not take the
+shape of formal written amendments was largely due to the tradition of
+constitutional immobility. The idea had grown up that the machinery of
+amendment provided by the Fathers was so slow and cumbersome that it was
+impossible as a practical matter to secure a change by that method
+except under stress of war or great popular excitement. That idea is now
+exploded. We of to-day know better, having seen the Income Tax Amendment
+(No. XVI), the Election of Senators by Popular Vote Amendment (No.
+XVII), the Prohibition Amendment (No. XVIII), and the Woman Suffrage
+Amendment (No. XIX) go through within a period of seven years. For
+generations, however, the tradition of constitutional immobility held
+sway and the forces of change worked through channels that seemed easier
+and less obstructed.
+
+[Footnote 1: No. XVI, the Income Tax Amendment, ratified in 1913.]
+
+The principal channel has been congressional legislation. Congress has
+found ways of reaching by indirection objects which could not be
+approached directly. Under the express grants of power contained in the
+Constitution statutes have been enacted which were really designed to
+accomplish some ulterior object. A striking example is found in the
+child labor laws, discussed more at length in a subsequent chapter.
+Congress at first sought to regulate child labor by a statute enacted
+ostensibly as a regulation of commerce under the Commerce Clause of the
+Constitution. The Supreme Court held the Act unconstitutional as
+exceeding the commerce power of Congress and invading the powers
+reserved to the states.[1] Thereupon Congress practically reenacted it,
+coupled with a provision for a prohibitive tax on the profits of
+concerns employing child labor, as part of a revenue act enacted under
+the constitutional grant of power to lay taxes.[2]
+
+[Footnote 1: _Hammer v. Dagenhart_, 247 U.S., 251.]
+
+[Footnote 2: Revenue Act of 1918, Title XII.]
+
+The assumption by the National Government of jurisdiction over the
+manufacture and sale of intoxicating liquors is no more of an
+encroachment on the prerogatives of the states than is its assumption of
+jurisdiction over child labor and the use of narcotic drugs. We come
+back, therefore, to the proposition that the Prohibition Amendment is to
+be regarded less as a departure in American fundamental law than as a
+spectacular manifestation of a change already well under way.
+
+The change, however much students of our institutions may deplore it, is
+not difficult to explain. The earlier solicitude for state rights was in
+a sense accidental. It was based on sentiment and mutual jealousies
+among the colonies rather than on any fundamental differences in race,
+beliefs, or material interests. The traditions behind it, while strong,
+were of comparatively recent growth. When they entered the Union the
+colonies were still new and undeveloped. As men died and their sons
+succeeded them prejudices gradually yielded and sentiment changed.
+Moreover, various other forces--immigration, free trade among the
+states, the growth of railways and other nationwide industries, foreign
+wars--have been at work to obliterate state lines.
+
+Advocates of the old order see in the change a breaking down of the
+principle of local self-government. To their minds the danger of
+majority tyranny, made possible by a centralization of power in a
+republic of such vast extent and varied interests, outweighs all the
+advantages of national uniformity and efficiency. Advocates of the new
+order think otherwise. They argue, moreover, that the states have become
+too great and populous to serve as units for purposes of home rule;
+that their boundaries are for the most part artificial and correspond to
+no real distinctions in the ordinary life of men. They assert that the
+instinct for local self-government remains as strong as it ever was, and
+instance the resentment of New York City over interference from Albany.
+
+The average man gives little thought to the constitutional aspect of the
+controversy. His interest in the prohibition movement is focused on
+other features which seem to him of more immediate concern. And yet, did
+he but realize it, the constitutional aspect transcends all the others
+in its importance for the future welfare and happiness of himself, his
+children, and his country.
+
+
+
+
+V
+
+THE NINETEENTH AMENDMENT
+
+
+A prudent man touches the question of woman suffrage gingerly. Many
+fingers have been burnt in that fire and its embers are not yet dead.
+Some mention of the Nineteenth Amendment seems necessary, however, in
+any discussion of federal encroachment on state power, and it may be
+possible to approach the suffrage movement from the standpoint of
+constitutional law without getting upon controversial ground.
+
+The United States Constitution as originally adopted did not prescribe
+who should be entitled to vote. That matter was left entirely in the
+hands of the states. The Constitution provided[1] that, for the election
+of members of the House of Representatives, "the electors in each state
+shall have the qualifications requisite for electors of the most
+numerous branch of the state legislature." It was further provided that
+Senators should be chosen by the legislatures of the states[2] and that
+the President and Vice-president should be chosen by presidential
+electors appointed in such manner as the state legislatures might
+direct.[3] These were the only elective federal officials.
+
+[Footnote 1: Article I, Section 2.]
+
+[Footnote 2: Article I, Section 3.]
+
+[Footnote 3: Article II, Section 1.]
+
+While the states were thus left in full control, it does not follow that
+the matter was deemed wholly outside the proper scope of national
+authority. No argument is necessary to demonstrate that the regulation
+of the suffrage in national elections is or may be a matter of national
+concern. The question of prescribing the qualifications of voters in
+such elections was much debated in the Convention which framed the
+Constitution.[1] Some members were in favor of prescribing a property
+qualification and limiting the suffrage to freeholders. It was finally
+decided, however, to accept the qualifications prescribed by state law.
+In adopting this plan the Convention followed the line of least
+resistance. The qualifications of voters in the various states
+differed.[2] Most states required a property qualification, but some
+did not. It was felt that to attempt to impose a uniform rule on all the
+states would arouse opposition and create one more obstacle to be
+overcome in the formidable task of getting the Constitution ratified.
+
+[Footnote 1: See e.g., Farrand, "Records of the Federal Convention,"
+Vol. II, p. 201 et seq.]
+
+[Footnote 2: For a statement of the qualifications in the various states
+see _Minor v. Happersett_, 21 Wall., 162.]
+
+There the matter rested, with suffrage qualifications regulated entirely
+by state law, until after the Civil War. Meanwhile, the states had been
+abolishing property tests, and universal male suffrage had been written
+into state constitutions. The cry for woman suffrage had begun, but as
+yet it was only a still small voice, inaudible to legislators.
+
+After the Civil War the problem of protecting the emancipated slaves had
+to be dealt with, and three constitutional amendments (Nos. XIII, XIV,
+and XV) were adopted with that end primarily in view. Number XIII,
+ratified in 1865, formally abolished slavery. Number XIV, ratified in
+1868, extended citizenship to all persons born in the United States and
+provided (among other things) that no state should abridge the
+privileges or immunities of citizens of the United States. Number XV,
+ratified in 1870, provided that "the right of citizens of the United
+States to vote shall not be denied or abridged by the United States or
+by any State on account of race, color, or previous condition of
+servitude." Here was the entering wedge of federal interference. The
+amendments did not purport to deal with woman suffrage, but the pioneers
+of the suffrage movement thought they discovered in them a means of
+advancing their cause and lost no time in putting the matter to the
+test. Susan B. Anthony voted at Rochester, N.Y., in an election for a
+representative in Congress, claiming that the restriction of voting to
+males by the constitution and laws of New York was void as a violation
+of the Fourteenth Amendment providing that "no state shall make or
+enforce any law which shall abridge the privileges or immunities of
+citizens of the United States." She was indicted for voting unlawfully,
+and on her trial before Justice Hunt of the United States Supreme Court,
+sitting at Circuit, the Court directed the jury to find a verdict of
+guilty and imposed a fine of $100 and costs.[1]
+
+[Footnote 1: _United States v. Anthony_, 11 Blatchford, 200.]
+
+Mrs. Virginia Minor raised a similar question in the courts of Missouri.
+The Missouri constitution limited the right to vote to male citizens.
+Mrs. Minor applied for registration as a voter, and on being refused
+brought suit against the Registrar of Voters on the ground that this
+clause of the Missouri constitution was in violation of the Fourteenth
+Amendment. The Missouri state courts decided against her, and the case
+was taken to the Supreme Court of the United States where the decision
+of the state courts was affirmed.[1] The Supreme Court held in effect
+that while Mrs. Minor was a citizen that fact alone did not make her a
+voter; that suffrage was not coextensive with citizenship, either when
+the Constitution was adopted or at the date of the Fourteenth Amendment,
+and was not one of the "privileges and immunities" guaranteed by that
+amendment.
+
+[Footnote 1: _Minor v. Happersett_, 21 Wall., 162.]
+
+A similar decision was rendered in the matter of Mrs. Myra Bradwell's
+application for a license to practise law in Illinois.[1] The Supreme
+Court held that the right to practise law in the state courts was not a
+privilege or immunity of a citizen of the United States within the
+meaning of the Fourteenth Amendment, and affirmed the decision of the
+Illinois Court denying Mrs. Bradwell's application.
+
+[Footnote 1: _Bradwell v. Illinois_, 16 Wall., 130.]
+
+The failure of these attempts to turn the Fourteenth Amendment to the
+advantage of the woman suffrage movement in no wise checked the
+movement or discouraged its leaders. They redoubled their efforts among
+the separate states, and worked to such good purpose that the opposition
+presently began to take on the aspect of a forlorn hope. "Votes for
+Women" became an accomplished fact in many states, and appeared on the
+verge of accomplishment in most of the others. Some states, however,
+were still holding out when the leaders of the movement, impatient of
+further delay and determined to coerce the recalcitrants, took the
+matter into the national arena and procured the proposal and
+ratification of an amendment to the Federal Constitution. The amendment
+provides:
+
+     The right of citizens of the United States to vote shall not
+     be denied or abridged by the United States or by any state on
+     account of sex.
+
+In other words, it adopts verbatim the phraseology of the Fifteenth
+Amendment, merely substituting the word "sex" for the words "race,
+color, or previous condition of servitude."
+
+So much for the historical background of the so-called Susan B. Anthony
+Amendment. It remains to consider just how far the amendment
+constitutes an encroachment by the Federal Government on the powers of
+the states.
+
+In so far as it affects the qualifications of voters at national
+elections (i.e., for president, senators, representatives) the
+encroachment is more apparent than real. As has already been pointed
+out, this is essentially a national question, and the Constitution
+adopted the suffrage qualifications prescribed by state law, not as a
+matter of principle, but for reasons of expediency and convenience.
+
+In so far, however, as the amendment imposes woman suffrage on the
+states in elections of state and local officials the situation is
+entirely different. That staunch advocate of national power, Alexander
+Hamilton, said in the _Federalist_:[1]
+
+     Suppose an article had been introduced into the Constitution,
+     empowering the United States to regulate the elections for the
+     particular states, would any man have hesitated to condemn it,
+     both as an unwarrantable transposition of power, and as a
+     premeditated engine for the destruction of the state
+     governments?
+
+[Footnote 1: _Federalist_ LIX.]
+
+What Hamilton scouted as impossible has been accomplished in the
+Nineteenth Amendment. It in effect strikes out the word "male" from the
+suffrage provisions of state constitutions. It overrides state policy
+and interferes with the right of states to manage their own affairs.
+From the theoretical standpoint a more serious inroad on state
+prerogatives would be hard to find. Control of the suffrage is one of
+the fundamental rights of a free state. It belonged to the North
+American states before their union, and was not surrendered to the
+National Government when the union was effected. Moreover, the
+encroachment has a very practical side. To confer the suffrage on the
+educated women of Connecticut was one thing; to confer it on the Negro
+women of Alabama was quite a different matter, involving different
+considerations. The amendment took no heed of such differences but
+imposed a uniform rule on all the states, regardless of local prejudices
+or conditions.
+
+It is true that a somewhat similar encroachment on state power had been
+made by the Fifteenth Amendment, designed to enfranchise the Negroes.
+That amendment, however, had its origin in conditions growing out of the
+Civil War, and claimed its justification in the necessity for protecting
+the freed slaves against hostile state action. It was avowedly an
+emergency measure, and the success with which it has been nullified in
+some quarters testifies to the unwisdom of forcing such measures upon
+reluctant states.
+
+The conditions surrounding the adoption of the Nineteenth Amendment were
+altogether different. Few people take seriously the alleged analogy
+between the women and the slaves. The constitutional method--action
+through the separate states--was being pursued with signal success. The
+states were rapidly falling in line. Most of them had already granted
+woman suffrage or were ready to grant it. There was no overmastering
+need for coercing the states that were not yet ready. An impartial
+student of the period will be apt to conclude that the Nineteenth
+Amendment was the product of impatience rather than necessity.
+
+Someone may ask, "What effect will the granting of votes to women have
+on the problem of preserving the constitutional equilibrium?" The
+ultimate power lies with the voters, and the women with votes now equal
+or outnumber the men. What is the reaction of women voters likely to be
+toward questions of political theory?
+
+Ours is a governmental scheme of extreme complexity. As with animal
+organisms so with political systems, the higher they rise in the scale
+of development the more complicated they tend to become. An absolute
+monarchy is simplicity itself compared with our dual system. To maintain
+the proper adjustment of such a machine requires intelligence of a high
+order. The machine will not run itself and male tinkers have abundantly
+demonstrated that it is not fool-proof. But something more is required
+than mere intelligence. There must be, at least among the leaders, an
+instinct for governmental problems as distinguished from those of a
+merely social or personal character; an ability to recognize and a
+willingness to conform to underlying principles.
+
+How will the women voters meet this test? Granting (what few will
+dispute) that their intelligence at least equals that of the men, will
+they be as likely as men to look beyond the immediate social welfare
+problem to the governmental principle at stake? Will an abstract
+proposition hold its own in their minds against a concrete appeal?
+
+We do not attempt to answer these questions, but they contain food for
+thought.
+
+
+
+
+VI
+
+CONGRESS _versus_ THE SUPREME COURT--THE CHILD LABOR LAWS
+
+
+The present Federal Revenue Act is noteworthy in more aspects than its
+complexity and the disproportionate burden cast on possessors of great
+wealth. To students of our form of government it is particularly
+interesting because of provisions[1] purporting to impose a tax on
+employers of child labor, for these represent an attempt by Congress to
+nullify a decision of the Supreme Court and grasp a power belonging to
+the states. The story of these provisions throws a flood of light on a
+method by which our Constitution is being changed.
+
+[Footnote 1: Revenue Act of 1921, Title XII.]
+
+The evils of child labor have long engaged the attention of
+philanthropists and lawmakers. In comparatively recent years child labor
+laws are said to have been enacted in every state of the Union. These
+statutes, however, lacked uniformity. Some of them were not stringent
+enough to satisfy modern sentiment. Moreover, commercial considerations
+entered into the reckoning. Industries in states where the laws were
+stringent were found to be at a disadvantage in comparison with like
+industries in states where the laws were lax, and this came to be
+regarded as a species of unfair competition. The advantages of
+uniformity and standardization seemed obvious from both the
+philanthropic and the commercial viewpoints, and Congress determined to
+take a hand in the matter.
+
+No well-informed person supposed for a moment that the regulation of
+child labor was one of the functions of the General Government as those
+functions were planned by the makers of the Constitution. The United
+States Supreme Court had declared over and over again that such matters
+were the province of the states; that "speaking generally, the police
+power is reserved to the states and there is no grant thereof to
+Congress in the Constitution."[1] For some years, however, Congress had
+been finding ways to legislate indirectly upon matters which it had no
+power to approach directly. Under the grant of power in the Constitution
+"to regulate commerce with foreign nations and among the several
+States,"[2] Congress had enacted laws purporting to regulate commerce
+but in reality designed for the suppression or regulation of some other
+form of activity. These enactments had for the most part been sustained
+as constitutional by the Supreme Court (though with misgivings and sharp
+differences of opinion), the Court holding that it could not pass on the
+motives for congressional action. The enactment of a law regulating
+child labor seemed therefore but another step along a trail already
+blazed, and Congress determined to take that step.
+
+[Footnote 1: _Keller v. United States_, 213 U.S., 138.]
+
+[Footnote 2: Art. I, Sec. 8.]
+
+The statute enacted by Congress[1] prohibited transportation in
+interstate commerce of goods made at a factory in which, within thirty
+days prior to their removal therefrom, children under the age of
+fourteen years had been employed or permitted to work, or children
+between the ages of fourteen and sixteen had been employed or permitted
+to work more than eight hours in any day, or more than six days in any
+week, or after the hour of 7 P.M. or before the hour of 6 A.M. The
+constitutionality of the act was at once challenged and suit brought to
+test the question. The Supreme Court held, by a vote of five to
+four,[2] that Congress had overstepped its power. The previous decisions
+which had upheld somewhat similar inroads on the police power of the
+states were distinguished and the act was declared unconstitutional.
+
+[Footnote 1: Act of September 1, 1916, 39 Stat., 675.]
+
+[Footnote 2: _Hammer v. Dagenhart_, 247 U.S., 251.]
+
+The distinction drawn by the majority of the Court between this and
+previous decisions was a narrow one and its validity has been questioned
+by some writers. It has nowhere been more clearly explained than in an
+address delivered before a body of lawyers by a former member of the
+Court.[1] Mr. Hughes said:
+
+     There has been in late years a series of cases sustaining the
+     regulation of interstate commerce, although the rules
+     established by Congress had the quality of police regulation.
+     This has been decided with respect to the interstate
+     transportation of lottery tickets, of impure food and drugs,
+     of misbranded articles, of intoxicating liquors, and of women
+     for the purpose of debauchery. It was held to be within the
+     power of Congress to keep "the channels of interstate commerce
+     free from immoral and injurious uses." But the Court in this
+     most recent decision has pointed out that in each of these
+     cases "the use of interstate commerce was necessary to the
+     accomplishment of harmful results." The Court, finding this
+     element to be wanting in the Child Labor Case, denied the
+     validity of the act of Congress. The Court found that the
+     goods shipped were of themselves harmless. They were permitted
+     to be freely shipped after thirty days from the time of
+     removal from the factory. The labor of production, it was
+     said, had been performed before transportation began and thus
+     before the goods became the subject of interstate commerce.
+
+     The fundamental proposition thus established is that the power
+     over interstate commerce is not an absolute power of
+     prohibition, but only one of regulation, and that the prior
+     decisions in which prohibitory rules had been sustained rested
+     upon the character of the particular subjects there involved.
+     It was held that the authority over interstate commerce was to
+     regulate such commerce and not to give Congress the power to
+     control the states in the exercise of their police power over
+     local trade and manufacture.
+
+[Footnote 1: Charles E. Hughes, President's Address, Printed in Year
+Book of New York State Bar Association, Vol. XLII, p. 227 et seq.]
+
+Congress did not receive this decision of the Supreme Court
+submissively. On the contrary, plans were laid to nullify it. The effort
+to legislate on child labor under cover of the power to regulate
+commerce having failed, recourse was had to the constitutional grant of
+power to lay taxes. Within six months after the decision of the Supreme
+Court declaring the act unconstitutional was announced, another statute
+similar in purpose and effect was enacted as part of a Federal Revenue
+Act.[1] This act provided for an additional tax of ten per cent. of the
+net profits received from the sale or distribution of the product of any
+establishment in which children under the age of fourteen years had been
+employed or permitted to work or children between the ages of fourteen
+and sixteen had been employed or permitted to work more than eight hours
+in any day or more than six days in any week or after the hour of 7 P.M.
+or before the hour of 6 A.M. during any portion of the taxable year. In
+other words, the law which had been declared void was substantially
+reenacted, with the substitution of a prohibitive tax for the clause
+prohibiting transportation in interstate commerce.
+
+[Footnote 1: Revenue Act of 1918, Title XII.]
+
+There was no pretense that this act was enacted for the purpose of
+raising revenue. The revenue feature was merely legislative camouflage.
+To quote the words of Justice Holmes in a recent case,[1] "Congress gave
+it the appearance of a taxing measure in order to give it a coating of
+constitutionality."
+
+[Footnote 1: _United States v. Jin Fuey Moy_, 241 U.S., 394.]
+
+The debate in the Senate was highly illuminating.[1] Its sponsors
+admitted that the measure was not expected or intended to produce
+revenue but was designed to regulate child labor and nullify the
+decision of the Supreme Court. Senators learned in the law conceded that
+if this purpose and effect were declared on the face of the act, or were
+necessarily inferable from its provisions, it must inevitably be
+declared unconstitutional. Reliance was placed, however, on the facts
+that the act was entitled "A bill to raise revenue," and that its
+provisions did not necessarily, on their face, belie this label. It was
+argued that the Supreme Court would be bound, under its own previous
+rulings, to treat the act as if it were what it purported on its face to
+be--a revenue measure--and to ignore common knowledge and senatorial
+admissions to the contrary. The measure passed the Senate by a
+substantial majority and was enacted as part of the revenue bill then
+under consideration, from which it has been carried forward into the
+present revenue law.
+
+[Footnote 1: See "Congressional Record" of December 18, 1918.]
+
+There the matter stands at this writing. A District Court judge has
+declared the new act unconstitutional but the question has not yet been
+passed upon by the Supreme Court.
+
+It would be venturesome to attempt to predict what the Supreme Court
+will do about it. Many constitutional lawyers seem to think that
+Congress has succeeded in its attempt and that the act will be
+sustained. Certainly there are strong precedents pointing that way.
+Three in particular will be relied upon--the Veazie Bank case, the
+Oleomargarine case and the Narcotic Drug Act case.
+
+In the Veazie Bank case[1] the Supreme Court upheld the validity of a
+so-called tax law whose purpose and effect were to suppress the
+circulation of notes of the state banks. In the Oleomargarine case[2]
+the Court upheld a tax whose purpose and effect were to suppress the
+manufacture and sale of oleomargarine artificially colored to look like
+butter. In the Narcotic Drug case[3] the Court upheld a tax imposed by
+the so-called Harrison Act[4] whose purpose was to regulate the sale and
+use of narcotic drugs. In each of these cases there could be no doubt in
+the mind of any intelligent man as to the motive for the enactment. The
+Court has uniformly maintained, however, that
+
+     when Congress acts within the limits of its constitutional
+     authority, it is not the province of the judicial branch of
+     the Government to question its motives.[5]
+
+[Footnote 1: _Veazie Bank v. Fenno_, 8 Wall., 533, decided in 1870.]
+
+[Footnote 2: _McCray v. United States_, 195 U.S., 27, decided in 1904.]
+
+[Footnote 3: _United States v. Doremus_, 249 U.S., 86, decided in 1919.]
+
+[Footnote 4: 38 Stat., 785.]
+
+[Footnote 5: _Smith v. Kansas City Title Company_, 255 U.S., 180, 210.]
+
+
+In the Narcotic Drug Act case[1] the Court held
+
+     While Congress may not exert authority which is wholly
+     reserved to the states, the power conferred by the
+     Constitution to levy excise taxes, uniform throughout the
+     United States, is to be exercised at the discretion of
+     Congress; and, where the provisions of the law enacted have
+     some reasonable relation to this power, the fact that they may
+     have been impelled by a motive, or may accomplish a purpose,
+     other than the raising of revenue, cannot invalidate them; nor
+     can the fact that they affect the conduct of a business which
+     is subject to regulation by the state police power.
+
+[Footnote 1: _United States v. Doremus_, 249 U.S., 86.]
+
+It is true that, while the Supreme Court may not question congressional
+motives, it cannot escape the obligation to construe a statute in the
+light of its true nature and effect. The Court has said:[1]
+
+     The direct and necessary result of a statute must be taken
+     into consideration when deciding as to its validity, even if
+     that result is not in so many words either enacted or
+     distinctly provided for. In whatever language a statute may be
+     framed, its purpose must be determined by its natural and
+     reasonable effect.
+
+[Footnote 1: _Collins v. New Hampshire_, 171 U.S., 30.]
+
+As already indicated, however, the nature and effect of a statute must
+ordinarily be determined from the form and contents of the act itself,
+rather than from outside sources, and the measure under consideration
+purports to be a revenue act.
+
+In the light of the decisions and principles of interpretation to which
+reference has been made, the case against the constitutionality of the
+act may seem well-nigh hopeless. The fact remains, however, that
+Congress has not met the fundamental objection raised by the Supreme
+Court. The Court declared the former act unconstitutional, not only
+because it transcended the power of Congress under the particular
+provision of the Constitution then invoked, viz., the Commerce Clause,
+but also on the broad ground of state rights, because it "exerts a power
+as to a purely local matter to which the federal authority does not
+extend." It is difficult to see how this objection is obviated by
+reenacting the act as a revenue measure. Under the circumstances perhaps
+the apprehensive foes of federal encroachment should withhold their
+lamentations until the Supreme Court has spoken again.[1]
+
+[Footnote 1: Since this chapter was put into print the Court has spoken.
+In _Bailey v. The Drexel Furniture Co._ (decided May 15, 1922) the Child
+Labor Tax Law was pronounced unconstitutional. The Court, while
+conceding that it must interpret the intent and meaning of Congress from
+the language of the act, held that the act on its face is an attempt to
+regulate matters of state concern by the use of a so-called tax as a
+penalty. The opinion of the Court, written by Chief Justice Taft, is an
+emphatic assertion of the duty and function of the Court to preserve the
+constitutional equilibrium between nation and states.]
+
+
+
+
+VII
+
+STATE RIGHTS AND THE SUPREME COURT
+
+
+A century ago the United States Supreme Court was the bulwark of
+national power against the assaults and pretensions of the states.
+To-day it is the defender of the states against the encroachments of
+national power. Let no one suppose, however, that this is because the
+Court itself has faced about. On our revolving planet a ship may be
+sailing toward the sun at sunrise and away from the sun in the afternoon
+without having changed its course. The Supreme Court has been the most
+consistent factor in our governmental scheme. While there have been
+differences of viewpoint between liberal constructionists and strict
+constructionists among its members, the Court on the whole has steered a
+fairly straight course. What has really altered is the environment in
+which the Court moves. The earth has been turning on its axis. The frame
+of mind of the people who compose states and nation has changed.
+
+At the outset (to cling for a moment to our nautical metaphor) the Court
+was obliged to put forth on an unknown sea. Its sailing orders under the
+new Constitution were unique. Precedents, those charts and lighthouses
+of the judicial mariner, were lacking. Progress was tentative and
+groping. Little wonder therefore that at first the business of the Court
+was meager and membership in its body seemed less attractive than
+membership in the judiciary of a state. Robert Hanson Harrison, one of
+President Washington's original appointees to the Supreme bench,
+declined to serve, preferring to accept a state judicial office. John
+Rutledge, another of the original appointees, resigned after a few
+months, preferring the position of Chancellor of his native state to
+which he had been chosen. John Jay, the first Chief Justice, resigned to
+become Governor of New York, and later declined a reappointment as Chief
+Justice in words indicating entire lack of faith in the powers and
+future of the Court.
+
+Nevertheless, the first period of the Court was by no means barren of
+achievement. A beginning was made. The supremacy of the national
+authority under the new Constitution was asserted. So stoutly indeed was
+it maintained in the memorable case of _Chisholm v. Georgia_,[1] that
+the country was thrown into a ferment. The Court had entertained a suit
+against a sovereign state by a private citizen of another state and
+rendered a decision in favor of the private citizen. The legislature of
+the sovereign state concerned (Georgia) responded by a statute
+denouncing the penalty of death against anyone who should presume to
+enforce any process upon the judgment within its jurisdiction. The
+matter was taken up in Congress and resulted in the proposal, and
+subsequent ratification by the states, of a constitutional amendment
+designed to prevent such actions in future.[2] It has been the fashion
+to speak of this incident as a striking example of the recall of
+judicial decisions. Such indeed it was. The decision did not suit the
+popular frame of mind and was promptly overruled in the method
+prescribed by the Constitution. It went a long way, however, toward
+establishing the Supreme Court as a power to be reckoned with on the
+side of national supremacy and authority.
+
+[Footnote 1: 2 Dallas, 419, decided in 1793.]
+
+[Footnote 2: Amendment XI.]
+
+Three years later the Court again took occasion to assert the national
+supremacy in no uncertain fashion. The case was _Ware v. Hylton_[1] and
+the Court laid down the proposition that a treaty of the Federal
+Government (in this case the treaty of peace with Great Britain)
+nullified previous state laws dealing with the subject matter. It is an
+interesting circumstance that one of the counsel on the losing side in
+this case was John Marshall of Virginia, and that this was the only case
+he ever argued before the tribunal through which he was destined to play
+so momentous a part in history.
+
+[Footnote 1: 3 Dallas, 199, decided in 1796.]
+
+In the annals of the Supreme Court and the development of American
+constitutional law the name of John Marshall stands preeminent. He was
+appointed Chief Justice by President John Adams, and took his seat on
+the Bench at the beginning of the new century (February 4, 1801). He was
+without judicial experience, but his record in other fields of activity
+and his well-known Federalist principles pointed him out as a man to be
+reckoned with and explain the aversion with which he was viewed by
+Thomas Jefferson, the incoming President. The breach between the
+President and the Chief Justice was widened by some of the early
+decisions of the latter upholding the supremacy of the National
+Government and the powers of the Supreme Court, notably the famous case
+of _Marbury v. Madison_,[1] in which was asserted the power of the Court
+to declare an act of Congress void as in conflict with the Constitution.
+Some years elapsed, however, before a case was decided which squarely
+involved a conflict between the powers of the Federal Government and the
+powers of a state. The issue came up in the case of _United States v.
+Judge Peters_.[2] This case involved a conflict of jurisdiction between
+the federal courts and the authorities of the State of Pennsylvania over
+the distribution of some prize money. Marshall's decision was a strong
+assertion of the federal jurisdiction and power. The Governor of
+Pennsylvania, under sanction of the state legislature, called out the
+state militia to resist enforcement of the judgment of the Court.
+Matters were tense for a time and bloodshed seemed imminent but the
+state finally backed down.
+
+[Footnote 1: 1 Cranch, 137.]
+
+[Footnote 2: 5 Cranch, 115, decided in 1809.]
+
+In the following year (1810) came the case of _Fletcher v. Peck_,[1] in
+which for the first time a statute of a state was held by the Supreme
+Court to be void as repugnant to the Federal Constitution. The State of
+Georgia had sought by statute to destroy rights in lands acquired under
+a previous act. It was held that the statute was unconstitutional as
+impairing the obligation of contracts within the meaning of the
+Constitution.
+
+[Footnote 1: 6 Cranch, 87.]
+
+In _Martin v. Hunter's Lessee_[1] was asserted the right of the Federal
+Supreme Court to overrule the judgment of a state court on questions
+arising under the Federal Constitution. The State of Virginia had denied
+that right and the Supreme Court reversed the judgment of the Virginia
+Court of Appeals.
+
+[Footnote 1: 1 Wheat., 304 (1816.)]
+
+In _McCulloch v. State of Maryland_,[1] a case involving an attempt by
+the State of Maryland to tax the Bank of the United States, Marshall's
+doctrine of implied powers was elaborated, and the judgment of the state
+court upholding the tax was reversed.
+
+[Footnote 1: 4 Wheat., 316 (1819).]
+
+In the _Dartmouth College case_[1] the doctrine of the inviolability of
+contracts against attack by state legislation was further developed. An
+act of the state legislature of New Hampshire had sought to alter the
+charter of Dartmouth College, and the New Hampshire courts had upheld
+the legislature. The Supreme Court reversed the state court and declared
+the statute unconstitutional under the clause of the Constitution which
+declares that no state shall make any law impairing the obligation of
+contracts.
+
+[Footnote 1: _Dartmouth College v. Woodward_, 4 Wheat., 518 (1819).]
+
+In the great case of _Gibbons v. Ogden_[1] the Court asserted the
+paramount jurisdiction of the National Government over interstate
+commerce. This was one of the most important and far-reaching of all
+Marshall's decisions. An injunction had been granted by Chancellor Kent
+and unanimously sustained by the Court of Errors of New York,
+restraining Gibbons from navigating the Hudson River by steamboats
+licensed by Congress for the coasting trade on the ground that he was
+thereby infringing the exclusive right, granted by the legislature of
+New York, to Robert R. Livingston and Robert Fulton to navigate the
+waters of the state with vessels moved by steam. The Supreme Court
+reversed the state courts and held the New York legislation void as an
+interference with the right of Congress, under the Constitution, to
+regulate interstate commerce.
+
+[Footnote 1: 9 Wheat., 1 (1824).]
+
+These were only a few of that series of great decisions which stand out
+like mountain peaks on the horizon of our national life. Marshall's
+judgments transformed a governmental experiment into something assured
+and permanent. They confirmed the national supremacy and made the
+Constitution workable.
+
+Marshall is known to history for his work in vindicating the national
+power under the Constitution. That was the need in his day and he met it
+with superlative wisdom and skill. It would be a mistake, however, to
+suppose that he favored federal encroachment upon the powers reserved to
+the states. On the contrary, he rendered decisions in favor of state
+rights which would be notable were they not overshadowed by the greater
+fame of the decisions which went to the building of the nation.
+
+With the passing of Marshall and the accession of Taney as Chief Justice
+a new chapter opened in the history of the Court. The Federalists had
+become extinct. Andrew Jackson had come into power and it had fallen to
+his lot to fill a majority of the seats upon the bench by appointments
+to vacancies. The result was at once apparent. Two cases[1] involving
+important constitutional questions, which had been argued during
+Marshall's lifetime but assigned for reargument on account of a division
+in the Court, were now decided contrary to Marshall's known views and in
+favor of a strict construction of national powers. Justice Story,
+Marshall's longtime associate on the bench, dissented strongly in both
+cases, lamenting the loss of Marshall's leadership and the change in the
+viewpoint of the Court.
+
+[Footnote 1: _Mayor of New York v. Miln_, 11 Peters, 102; _Briscoe v.
+Bank of Kentucky_, 11 Peters, 257, decided in 1837.]
+
+It would serve no useful purpose to enter upon a detailed consideration
+of the various decisions upon constitutional questions made during the
+twenty-eight years of Taney's Chief Justiceship. They were marked by
+great diversity of views among the members of the Court. In some of
+them, notably the famous Passenger cases,[1] the Court fell into a state
+reminiscent of the confusion of tongues that arose at the building of
+the Tower of Babel. The scope of certain of Marshall's decisions was
+limited.[2] Upon the whole, however, the structure of constitutional law
+which Marshall had reared was not torn down or greatly impaired. The
+national supremacy was upheld. Taney and his associates were for the
+most part patriotic men and eminent lawyers, proud of the Court and its
+history and anxious to add to its prestige. It is regrettable that the
+merits of some of them have been so obscured and their memory so clouded
+by a well-meaning but unfortunate excursion into the field of political
+passions. In the Dred Scott case[3] they thought to quiet agitation and
+contribute to the peace of their country by passing judgment upon
+certain angrily mooted questions of a political character. The effort
+was a failure and brought upon their heads, and upon Chief Justice Taney
+in particular, an avalanche of misrepresentation and obloquy.
+
+[Footnote 1: 7 Howard, 283 (1849).]
+
+[Footnote 2: Not always for the worse: vide the Charles River Bridge
+case, 11 Peters, 420, imposing salutary restrictions on the doctrine of
+the Dartmouth College case.]
+
+[Footnote 3: _Dred Scott v. Sandford_, 19 Howard, 393 (1857).]
+
+The suppression of the Great Rebellion brought an enormous increase in
+the national power and in the popular will to national power. State
+rights did not loom large in the popular or the legislative mind in
+reconstruction days. Taney was dead. The Supreme Court had been
+practically reconstituted by appointments made by President Lincoln and
+his immediate successors and it seems to have been anticipated that the
+new Court would take the view of national powers prevailing in Congress
+and the country at large. In this the popular expectation was doomed to
+disappointment. The Court displayed an unexpected solicitude for the
+rights of the states and firmness against federal encroachment. Chief
+Justice Salmon P. Chase, who had been President Lincoln's war Secretary
+of the Treasury, went so far as to pronounce unconstitutional some of
+his own official acts performed under the stress of war.
+
+In the great case of _State of Texas v. White_[1] the rights of Texas as
+a sovereign state were asserted, though Texas had joined in the
+Rebellion and was not represented in the national legislature.
+
+[Footnote 1: 7 Wall., 700 (1869).]
+
+In _The Collector v. Day_[1] it was held that Congress had no power to
+tax the salary of a state official.
+
+[Footnote 1: 11 Wall., 113 (1871).]
+
+In the Slaughter House cases[1] an act of the Legislature of Louisiana,
+granting to a corporation created by it exclusive rights to maintain
+slaughter houses for the City of New Orleans and other territory, was
+upheld, as a valid exercise of state police power, against claims that
+the legislation violated rights secured under the newly adopted
+amendments to the Federal Constitution (Amendments XIII, XIV, XV). The
+opinion of the Court delivered by a Northern judge (Miller of Iowa)
+stands as one of the bulwarks of state authority.
+
+[Footnote 1: 16 Wall., 36 (1873).]
+
+In a series of later cases various reconstruction acts of Congress
+involving encroachments upon state rights were either held
+unconstitutional or radically limited in their effect. For example, the
+decision in _United States v. Cruikshank_[1] greatly limited the effect
+of the so-called Federal Enforcement Act. The decision in _United States
+v. Harris_[2] declared unconstitutional portions of an act of Congress
+designed for the suppression of activities of the Ku-Klux variety. In
+the so-called Civil Rights cases[3] certain provisions of the federal
+Civil Rights Act, passed in furtherance of the purposes of the new
+constitutional amendments and designed to secure to persons of color
+equal enjoyment of the privileges of inns, public conveyances, theatres,
+etc., were held unconstitutional as an encroachment on the rights of the
+states.
+
+[Footnote 1: 92 U.S., 542 (1875).]
+
+[Footnote 2: 106 U.S., 629.]
+
+[Footnote 3: 109 U.S., 3.]
+
+These are but a few of the many decisions of the Supreme Court in the
+reconstruction period upholding the rights of the states against
+attempted federal encroachment arising from the conditions of the Civil
+War. The nation owes a debt of gratitude to the men who composed the
+Court at this time for their courage and firmness in the face of popular
+clamor and passion.
+
+The solicitude of the Court for the rights of the states did not end
+with the reconstruction period. It has continued down to the present
+day. In the Income Tax cases[1] the Court held that a tax upon income
+from bonds of a state municipal corporation was repugnant to the
+Constitution as a tax upon the borrowing power of the state.
+
+[Footnote 1: _Pollock v. Farmers Loan & Trust Co._, 157 U.S., 429
+(1895).]
+
+In _Keller v. United States_[1] the Court declared unconstitutional, as
+an encroachment on the police power of the states, an act of Congress
+making it a felony to harbor alien prostitutes, the Court declaring that
+"speaking generally, the police power is reserved to the states and
+there is no grant thereof to Congress in the Constitution."
+
+[Footnote 1: 213 U.S., 138 (1909).]
+
+In the Child Labor case[1] the Court held the federal Child Labor Law
+of 1916 unconstitutional as invading the police power reserved to the
+states. The Court said:
+
+     This Court has no more important function than that which
+     devolves upon it the obligation to preserve inviolate the
+     constitutional limitations upon the exercise of authority,
+     federal and state, to the end that each may continue to
+     discharge, harmoniously with the other, the duties entrusted
+     to it by the Constitution.[2]
+
+[Footnote 1: _Hammer v. Dagenhart_, 247 U.S., 251 (1918).]
+
+[Footnote 2: An even stronger assertion of state rights is found in the
+Child Labor Tax Case (_Bailey v. The Drexel Furniture Co._) decided May
+15, 1922, after this chapter had been put into print.]
+
+How is it then, someone may ask, if the Supreme Court is so zealous in
+defense of the rights of the states, that those rights are being
+encroached upon more and more by the National Government? The answer
+must be that there has been a change in the popular frame of mind. The
+desire for uniformity, standardization, efficiency, has outgrown the
+earlier fears of a centralization of power. Congress has found ways,
+under the constitutional grants of power to lay taxes and regulate
+interstate commerce, to legislate in furtherance of the popular demands.
+The Court is not strong enough (no governmental agency which could be
+devised would be strong enough) to hold back the flood or permanently
+thwart the popular will. In a government of the people everything has to
+yield sooner or later to the deliberate wish of the majority.
+
+Some profess to view the recent encroachments of federal power as a
+triumph of the principles advocated by Alexander Hamilton and John
+Marshall over the principles of Thomas Jefferson. Such a claim does
+Hamilton and Marshall an injustice. While they both stood for a strong
+National Government, neither of them contemplated any encroachment by
+that government on the principle of local self-government in local
+matters or the police power of the states.
+
+Marshall in one of his most powerful and far-reaching pronouncements in
+support of the national supremacy[1] speaks of
+
+     that immense mass of legislation, which embraces everything
+     within the territory of a state not surrendered to the General
+     Government;... inspection laws, quarantine laws, health laws
+     of every description ... are component parts of this mass.
+
+[Footnote 1: _Gibbons v. Ogden_, 9 Wheat., 1, 203, 208.]
+
+Later in the same opinion he refers to
+
+     the acknowledged power of a state to regulate its police, its
+     domestic trade, and to govern its own citizens.
+
+     ... The power of regulating their own purely internal affairs
+     whether of trading or police.
+
+Hamilton devotes an entire number of the _Federalist_[1] to combatting
+the idea that the rights of the states are in danger of being invaded by
+the General Government. In another place[2] he returns to the idea
+
+     that there is greater probability of encroachments by the
+     members upon the federal head, than by the federal head upon
+     the members
+
+and concludes that it is to be hoped that the people
+
+     will always take care to preserve the constitutional
+     equilibrium between the general and the state governments.
+
+[Footnote 1: _Federalist_, Number XVII.]
+
+[Footnote 2: Id., Number XXXI.]
+
+That hope has failed of realization. The "constitutional equilibrium" of
+which Hamilton wrote is not being preserved. Some will say that this is
+an age of progress and we are improving upon Hamilton. Others, however,
+think we are forgetting the wisdom of the Fathers.
+
+
+
+
+VIII
+
+THE FEDERAL TAXING POWER AND THE INCOME TAX AMENDMENT
+
+
+Had the World War come five years earlier the United States would have
+been much handicapped and embarrassed in financing its share of the
+struggle. One of the chief sources of national revenue during and since
+the war, the income tax, would not have been available. The federal
+income tax had been declared unconstitutional by the Supreme Court in
+1895, and it was not until eighteen years later that the obstacle
+pointed out by that decision was removed through the adoption of an
+amendment to the Constitution. The Sixteenth or Income Tax Amendment was
+proposed by Congress to the legislatures of the several states in 1909
+and took effect, having been ratified by three-fourths of the states, in
+1913. Declared by its sponsors at the outset to be intended merely as a
+recourse in case of emergency, the tax authorized by the amendment was
+at once put into operation and there seems to be little likelihood that
+it will ever be abandoned.
+
+Without the constitutional amendment no general income tax would be
+practicable. And yet the amendment conferred no new power of taxation on
+the National Government. To explain this seeming paradox it will be
+necessary to consider briefly the scope and limitations of the federal
+taxing power.
+
+One of the chief defects, perhaps the most vital defect of all, in the
+Confederation which carried through the Revolutionary War and preceded
+the Union, was its inability to raise revenue directly by taxation. The
+Confederation was obliged to call upon the several states to furnish
+their respective contributions or quotas, and requisitions upon the
+states encountered delays and sometimes were ignored altogether. There
+were no effective means of compulsion.
+
+With these facts before them the founders of the Union determined that
+the new government should not be wrecked upon this rock at any rate, and
+therefore insisted, against great opposition, in conferring upon it
+powers of taxation which were practically unlimited in their reach. The
+Constitution was made to provide that[1]
+
+     the Congress shall have power to lay and collect taxes,
+     duties, imposts and excises, to pay the debts and provide for
+     the common defense and general welfare of the United States.
+
+[Footnote 1: Const., Art. I, Sec. 8, Clause 1.]
+
+The only tax which Congress was expressly forbidden to lay was a tax on
+exports.[1] It was, however, provided that indirect taxes (duties,
+imposts, and excises) should be uniform throughout the United States,[2]
+and that direct taxes should be apportioned among the states according
+to population.[3] The last mentioned provision was a concession to the
+fears of the wealthier states lest their citizens be taxed unduly for
+the benefit of the poorer states, and represented one of the great
+compromises by which the ratification of the Constitution as a whole was
+secured.
+
+[Footnote 1: Const., Art. I, Sec. 9, Clause 5.]
+
+[Footnote 2: Id., Art. I, Sec. 8, Clause 1.]
+
+[Footnote 3: Id., Art. I, Sec. 2, Clause 3. Sec. 9, Clause 4.]
+
+The Constitution nowhere specified just what taxes were to be deemed
+"direct" (Madison in his notes of the Constitutional Convention records:
+"Mr. King asked what was the precise meaning of direct taxation? No one
+answd.")[1] or what kind of uniformity was intended by the provision
+that indirect taxes should be uniform, and more than a century was to
+elapse before either of these fundamental questions was finally
+settled. The answer to the latter question (that the term "uniform"
+refers purely to a geographical uniformity and is synonymous with the
+expression "to operate generally throughout the United States") was
+given by the Supreme Court in the year 1900 in the celebrated case of
+_Knowlton v. Moore_,[2] and met with general approval. The answer to the
+question of what constitutes a direct tax within the meaning of the
+Constitution, given by the Supreme Court in 1895 in the Income Tax
+cases,[3] met with a different reception. The decision upset
+long-settled ideas, disarranged the federal taxing system, aroused
+popular resentment, and ultimately led to the enactment of the Sixteenth
+Amendment.
+
+[Footnote 1: Farrand, "Records of the Federal Convention," Vol. II, p.
+350.]
+
+[Footnote 2: 178 U.S., 41.]
+
+[Footnote 3: _Pollock v. Farmers Loan & Trust Co._, 157 U.S., 429.]
+
+The question had arisen early in the life of the Republic in the case of
+_Hylton v. United States_, decided in 1796.[1] This litigation involved
+the validity of a tax on carriages which had been imposed by Congress
+without apportionment among the states. Alexander Hamilton argued the
+case before the Supreme Court in support of the tax. The Court adopted
+his view and sustained the tax, holding that it was a tax on consumption
+and therefore a species of excise or duty. The Justices who wrote
+opinions expressed doubt whether anything but poll taxes and taxes on
+land were "direct" within the meaning of the Constitution. That point,
+however, was not necessarily involved and was not decided, though later
+generations came to assume that it had been decided.
+
+[Footnote 1: 3 Dallas, 171.]
+
+The tax on carriages was soon repealed and many years elapsed before the
+question came up again. After the Civil War broke out, however, the need
+of revenue became acute and various statutes taxing income without
+apportionment among the states were enacted by Congress. These met with
+general acquiescence. It was felt that they were emergency measures
+necessitated by the war, and they were in fact abandoned as soon as
+practicable after the war. A well-known lawyer, however (William M.
+Springer of Illinois), did not acquiesce and refused to pay his income
+tax, on the ground that it was a direct tax not levied in accordance
+with the Constitution. In the action brought to test the question[1] it
+appeared that the income on which Mr. Springer had been taxed was
+derived in part from the practice of his profession as an attorney. To
+this extent it was clearly an excise or duty, i.e., an indirect tax. As
+it was incumbent upon Mr. Springer, by reason of the form of the action,
+to demonstrate that the tax was void _in toto_ the Court could not do
+otherwise than decide against him. In rendering its decision, however,
+the Court took occasion to discuss the question as to what were direct
+taxes within the meaning of the Constitution, and expressed the view
+that the term included only capitation or poll taxes, and taxes on real
+estate. There the matter rested until the year 1894 when Congress
+enacted another income tax law. This time the argument from necessity
+was lacking. The country was in a state of profound peace. Opposition to
+the tax among the moneyed interests was widespread. Test suits were
+brought and after most elaborate and exhaustive argument and reargument
+the Hylton and Springer cases were distinguished and the act was held
+unconstitutional.[2] The decision was by a closely divided Court (five
+to four), the majority finally holding that "direct taxes" within the
+meaning of the Constitution included taxes on personal property and the
+income of personal property, as well as taxes on real estate and the
+rents or income of real estate. This conclusion was fatal to the act. It
+was conceded that the tax, in so far as it affected income derived from
+a business or profession, was an indirect tax and therefore valid
+without apportionment among the states, but the provisions for taxing
+the income of real and personal property were held to be an essential
+part of the taxing scheme invalidating the whole statute.
+
+[Footnote 1: _Springer v. United States_, 102 U.S., 586.]
+
+[Footnote 2: _Pollock v. Farmers Loan & Trust Co._, 157 U.S., 429; same
+case on rehearing, 158 U.S., 601.]
+
+This momentous decision was almost as unpopular with Congress and the
+general public as the decision in _Chisholm v. Georgia_ had been a
+hundred years earlier. Many legislators were in favor of enacting
+another income tax law forthwith and endeavoring to coerce the Court,
+through the force of legislative and popular opinion, to overrule its
+decision. Calmer counsels prevailed, however, and plans were initiated
+to get over the difficulty by a constitutional amendment. Meanwhile,
+steps were taken to eke out the national revenue by various excise
+taxes, notably the so-called Federal Corporation Tax. This novel tax,
+which was thought by many to involve a very serious encroachment by the
+Federal Government on the powers of the states, will be discussed more
+at length in later chapters.[1]
+
+[Footnote 1: See Chapters X and XI, infra.]
+
+The constitutional amendment as proposed by Congress and ratified by the
+states provided:
+
+"The Congress shall have power to lay and collect taxes on incomes, from
+whatever source derived, without apportionment among the several states,
+and without regard to any census or enumeration."
+
+Thus far we have dealt only with such limitations upon the federal
+taxing power as are expressly imposed by the Constitution. As has been
+seen, the only express limitations are that direct taxes shall be
+apportioned among the states, that indirect taxes shall be uniform, and
+that exports shall not be taxed at all. There are, however, certain
+other limitations which we proceed to notice briefly.
+
+The Constitution provides[1] that the compensation of federal judges
+"shall not be diminished during their continuance in office." There is a
+similar provision as to the compensation of the President.[2] No attempt
+seems to have been made to tax the compensation of federal judges prior
+to 1862. A statute of that year subjected the salaries of all civil
+officers of the United States to an income tax and was construed by the
+revenue officers as including the compensation of the President and the
+judges. Chief Justice Taney, the head of the judiciary, wrote the
+Secretary of the Treasury a letter[3] protesting against the tax as a
+virtual diminution of judicial compensation in violation of the
+constitutional provision. No heed was paid to the protest at the time
+but some years later, upon the strength of an opinion by Attorney
+General Hoar, the tax on the compensation of the President and the
+judges was discontinued and the amounts theretofore collected were
+refunded. There the matter rested until after the Income Tax Amendment,
+when Congress again sought to impose a tax upon the income of the
+President and the judges. A federal judge of a Kentucky district
+contested the tax and the question came up before the Supreme Court for
+final decision. On behalf of the revenue department it was urged that a
+general income tax, operating alike on all classes, did not involve any
+violation of the constitutional provision. It was also contended that
+such a tax was expressly authorized by the Sixteenth Amendment giving
+Congress power to tax incomes "from whatever source derived." The Court
+in an exhaustive opinion[4] overruled both these contentions and held
+the tax to be a violation of the Constitution.
+
+[Footnote 1: Art. 3, Sec. 1.]
+
+[Footnote 2: Art. 2, Sec. 1, Clause 6.]
+
+[Footnote 3: See 157 U.S., 701.]
+
+[Footnote 4: _Evans v. Gore_, 253 U.S., 245.]
+
+It has often been asserted that a limitation of the federal taxing power
+is found in the "due process" clause of the Fifth Amendment of the
+Constitution, providing that no person shall "be deprived of life,
+liberty, or property without due process of law." This amendment relates
+to the powers of the General Government. A similar limitation on the
+powers of the states is found in the Fourteenth Amendment. Taxing laws
+have frequently been attacked in the courts on the ground that, by
+reason of some inequality or injustice in their provisions, the taxpayer
+was deprived of his property without due process of law. In cases
+involving state laws such objections have sometimes been sustained.[1]
+There seems, however, to have been no case in which a federal taxing law
+was declared invalid on this ground, and the Supreme Court has recently
+remarked that it is "well settled that such clause (viz., the due
+process clause of the Fifth Amendment) is not a limitation upon the
+taxing power conferred upon Congress by the Constitution."[2]
+Nevertheless, it is believed that if a federal tax were clearly imposed
+for other than a public use, or were imposed on tangible property lying
+outside the national jurisdiction, or were so arbitrary and without
+basis for classification as to amount to confiscation, relief might be
+obtained under the due process clause of the Fifth Amendment.
+
+[Footnote 1: See, e.g., _Union Tank Line Co. v. Wright_, 249 U.S., 275.]
+
+[Footnote 2: _Brushaber v. Union Pacific R.R._, 240 U.S., 24.]
+
+By far the most important and interesting of the implied limitations of
+the federal taxing power remains to be noticed. That is the limitation
+which prohibits the National Government from burdening by taxation the
+property or revenues or obligations of a state, or the emoluments of a
+state official, or anything connected with the exercise by a state of
+one of its governmental functions. In other words, while the National
+Government may tax income from bonds issued by England or France or
+their cities, it is powerless to tax the income from bonds of Rhode
+Island or the smallest of its towns.
+
+This implied limitation, nowhere categorically expressed but enunciated
+in a series of decisions of the Supreme Court, has not always met with
+acquiescence from the executive and legislative branches of the
+Government. In fact, Congress is now engaged in an effort to do away
+with it, at least in so far as concerns the right to tax the income from
+state and municipal bonds. To-day, however, it still stands as one of
+the most striking and unique characteristics of our governmental system.
+It will be discussed more at length in the next chapter.
+
+
+
+
+IX
+
+CAN CONGRESS TAX THE INCOME FROM STATE AND MUNICIPAL BONDS?
+
+
+That is a question which is agitating a good many people just now.
+Congress from time to time has seemed disposed to try it, in spite of
+misgivings as to the constitutionality of such legislation.[1] A recent
+Revenue Bill contained provisions taxing the income of future issues of
+such obligations, and a motion for the elimination of those provisions
+was defeated in the House 132 to 61. Meanwhile, protests were pouring in
+from state and municipal officers assailing the justice and expediency
+of such a tax.
+
+[Footnote 1: See, e.g., H. Report No. 767, 65th Cong., 2d Sess.,
+accompanying House Revenue Bill of 1918 as reported by Mr. Kitchin from
+the Committee on Ways and Means, page 89.]
+
+It is not the purpose of this chapter to discuss the questions of
+justice and expediency (as to which there is much to be said on both
+sides) but rather to deal with the strictly legal aspects of the matter
+and indicate briefly why such a tax cannot be laid without a change in
+our fundamental law.
+
+Let it be said at the outset that no express provision of the United
+States Constitution forbids. On the contrary, that instrument confers on
+Congress the power to lay taxes without any restriction or limitation
+save that exports shall not be taxed, that duties, imposts, and excises
+shall be uniform throughout the United States, and that direct taxes
+must be apportioned among the states in proportion to population. The
+obstacle lies rather in an implied limitation inherent in our dual
+system of government and formulated in decisions of the Supreme Court.
+
+The founders of this republic established a form of government wherein
+the states, though subordinate to the Federal Government in all matters
+within its jurisdiction, nevertheless remained distinct bodies politic,
+each one supreme in its own sphere. In the famous phrase of Salmon P.
+Chase, pronouncing judgment as Chief Justice of the Supreme Court[1]:
+
+     The Constitution in all its provisions looks to an
+     indestructible Union, composed of indestructible states.
+
+[Footnote 1: _Texas v. White_, 7 Wall., 700, 725.]
+
+In a later case[1] another eminent justice (Samuel Nelson of New York)
+put the matter thus:
+
+     The General Government, and the states, although both exist
+     within the same territorial limits, are separate and distinct
+     sovereignties, acting separately and independently of each
+     other, within their respective spheres. The former, in its
+     appropriate sphere, is supreme; but the states within the
+     limits of their powers not granted, or, in the language of the
+     10th Amendment, "reserved", are as independent of the General
+     Government as that government within its sphere is independent
+     of the states.
+
+[Footnote 1: _The Collector v. Day_, 11 Wall., 113, 124.]
+
+It follows that the two governments, national and state, must each
+exercise its powers so as not to interfere with the free and full
+exercise by the other of its powers. To do otherwise would be contrary
+to the fundamental compact embodied in the Constitution--in other words,
+it would be _unconstitutional_.
+
+This proposition was affirmed at an early day by Chief Justice John
+Marshall in the great case of _McCulloch vs. The State of Maryland_,[1]
+which involved the attempt of a state to tax the operations of a
+national bank. That case is one of the landmarks of American
+constitutional law. While it did not expressly decide that the Federal
+Government could not tax a state instrumentality but only the converse,
+i.e., that a state could not tax an instrumentality of the nation, the
+Court has held in many subsequent decisions that the proposition
+enunciated by the great Chief Justice works both ways. For example, it
+has declared that a state cannot tax the obligations of the United
+States because such a tax operates upon the power of the Federal
+Government to borrow money[2] and conversely, that Congress cannot tax
+the obligations of a state for the same reason;[3] that a state cannot
+tax the emoluments of an official of the United States[4] and
+conversely, that the United States cannot tax the salary of a state
+official;[5] that a state cannot impose a tax on the property or
+revenues of the United States[6] and conversely, that Congress cannot
+tax the property or revenues of a state or a municipality thereof.[7]
+
+[Footnote 1: 4 Wheaton, 316.]
+
+[Footnote 2: _Weston v. City of Charleston_, 2 Pet., 449.]
+
+[Footnote 3: _Mercantile Bank v. New York_, 121 U.S., 138, 162.]
+
+[Footnote 4: _Dobbins v. Commissioner of Erie County_, 16 Pet., 435.]
+
+[Footnote 5: _Collector v. Day_, 11 Wall., 113.]
+
+[Footnote 6: _Van Brocklin v. Tennessee_, 117 U.S., 151.]
+
+[Footnote 7: _United States v. Railroad Co._, 17 Wall., 322.]
+
+The Supreme Court has said (and many times reiterated in substance) that
+the National Government "cannot exercise its power of taxation so as to
+destroy the state governments, or embarrass their lawful action."[1] One
+of the most distinguished writers on American Constitutional law
+(Thomas M. Cooley, Chief Justice of the Supreme Court of Michigan and
+afterward Chairman of the federal Interstate Commerce Commission) has
+said:
+
+     There is nothing in the Constitution which can be made to
+     admit of any interference by Congress with the secure
+     existence of any state authority within its lawful bounds. And
+     any such interference by the indirect means of taxation is
+     quite as much beyond the power of the national legislature as
+     if the interference were direct and extreme.[2]
+
+[Footnote 1: _Railroad Co. v. Peniston_, 18 Wall., 5, 30.]
+
+[Footnote 2: _Cooley's Constitutional Limitations_, 7th Ed., 684.]
+
+The question as to the right of Congress to levy an income tax on
+municipal securities came up squarely in the famous Income Tax Cases[1]
+involving the constitutionality of the Income Tax Law of 1804. While the
+Supreme Court was sharply divided as to the constitutionality of other
+features of the law, it was unanimous as to the lack of authority in the
+United States to tax the interest on municipal bonds.
+
+[Footnote 1: _Pollock v. Farmers Loan & Trust Co._, 157 U.S., 429; same
+case on rehearing, 158 U.S., 601.]
+
+The decision in those cases is the law to-day (except in so far as it
+has been changed by the recent Sixteenth Amendment) with one possible
+limitation. It has been held that state agencies and instrumentalities,
+in order to be exempt from national taxation, must be of a strictly
+governmental character; the exemption does not extend to agencies and
+instrumentalities used by the state in carrying on an ordinary private
+business. This was decided in the South Carolina Dispensary case.[1] The
+State of South Carolina had taken over the business of selling liquor
+and the case involved a federal tax upon such business. The Court, while
+reaffirming the general doctrine, nevertheless upheld the tax on the
+ground that the business was not of a strictly governmental character.
+This decision suggests the possibility that if an attempt were made to
+tax state and municipal bonds the Court might draw a distinction based
+on the purpose for which the bonds were issued, and hold that only such
+as were issued for strictly governmental purposes were exempt.
+
+[Footnote 1: _South Carolina v. United States_, 199 U.S., 437, decided
+in 1905.]
+
+It remains to consider the effect of the Sixteenth Amendment.
+
+After the Supreme Court had held the Income Tax Law of 1894
+unconstitutional on the ground that it was a direct tax and had not been
+apportioned among the states in proportion to population the Sixteenth
+Amendment to the Constitution was proposed and ratified. This amendment
+provides that
+
+     the Congress shall have power to lay and collect taxes on
+     incomes, from whatever source derived, without apportionment
+     among the several states, and without regard to any census or
+     enumeration.
+
+When the amendment was submitted to the states for approval some lawyers
+apprehended that the words "incomes from whatever source derived" might
+open the door to the taxation by the Government of income from state and
+municipal bonds. Charles E. Hughes, then Governor of New York, sent a
+special message to the Legislature opposing ratification of the
+amendment on this ground.
+
+Other lawyers, notably Senator Elihu Root, took a different view of the
+scope of the amendment, holding that it would not enlarge the taxing
+power but merely remove the obstacle found by the Supreme Court to the
+Income Tax Law of 1894, i.e., the necessity of apportionment among the
+states in proportion to population. This latter view has now been
+confirmed by the Supreme Court. In a case involving a tax on income from
+exports the Court said:[1]
+
+     The Sixteenth Amendment ... does not extend the taxing power
+     to new or excepted subjects, but merely removes all occasion,
+     which otherwise might exist, for an apportionment among the
+     states of taxes laid on income, whether it be derived from one
+     source or another....
+
+[Footnote 1: _Peck v. Lowe_, 247 U.S., 165.]
+
+In a case decided a little earlier[1] the Court, speaking through Chief
+Justice White, had said:
+
+     By the previous ruling (i.e., in _Brushaber v. Union Pacific
+     Railway Co._, 240 U.S., 1) it was settled that the provisions
+     of the Sixteenth Amendment conferred no new power of
+     taxation....
+
+[Footnote 1: _Stanton v. Baltic Mining Co._, 240 U.S., 103, 112.]
+
+From what has been said it will be evident that the doctrine of
+exemption of state and municipal bonds from federal taxation is firmly
+embedded in our law and has not been affected by the Sixteenth
+Amendment.
+
+Whether it is a doctrine suited to present-day conditions is a question
+outside the scope of this paper.
+
+The fear of federal encroachment, so strong in the minds of the makers
+of our Constitution, has become little more than a tradition. To many it
+doubtless will seem that any rule of law which operates to prevent the
+nation, in the great exigency of war, from taxing a portion of the
+property of its citizens is pernicious and should be changed.
+
+If this be the view of a sufficient number the change can and will be
+made. Lawyers think, however, that it will have to be done by the
+orderly method of constitutional amendment, not by passing taxing
+statutes which a reluctant Court will be obliged to declare
+unconstitutional.
+
+Just now the tide of popular sentiment is setting strongly toward such a
+change. It was advocated in a recent Presidential message.[1] The
+immunity enjoyed by state bond issues is coming to be regarded less as a
+safeguard of state rights than as a means whereby the rich escape
+federal income surtaxes. One is tempted to predict that the next formal
+amendment of the Constitution will deal with this subject. If so,
+another inroad will have been made by the General Government on the
+failing powers of the states.
+
+[Footnote 1: Message of President Harding to Congress, December 6,
+1921.]
+
+
+
+
+X
+
+IS THE FEDERAL CORPORATION TAX CONSTITUTIONAL?[1]
+
+[Footnote 1: Since this chapter was first published in 1909 as an
+article in the _Outlook_ magazine the specific question propounded in
+its title has been settled by the Supreme Court (_Flint v. Stone Tracy
+Co._, 220 U.S., 107). The paper is here reproduced, however, in the
+belief that its discussion of the principles of our dual system of
+Government is as pertinent now as it was before.]
+
+
+The most noteworthy enactment of the sixty-first Congress from a legal
+point of view, to say nothing of its economic and political
+significance, was the Corporation Tax Act. That Act, forming Sec.38 of the
+Tariff Law, provides--
+
+     That every corporation ... organized for profit and having a
+     capital stock represented by shares ... shall be subject to
+     pay annually a special excise tax with respect to the carrying
+     on or doing business by such corporation ... equivalent to one
+     per centum upon the entire net income over and above five
+     thousand dollars received by it from all sources, etc.
+
+The act goes on to require the corporations to make periodical reports
+concerning their business and affairs, and confers on the Commissioner
+of Internal Revenue a visitorial power to examine and compel further
+returns.
+
+The genesis of the act is interesting. The growing demand for more
+efficient regulation of the corporations, so pronounced during President
+Roosevelt's Administration, had foreshadowed such legislation. It
+remained, however, for President Taft to take the initiative and mould
+the shape which the legislation was to take.
+
+In the course of the Senate debate on the new Tariff Act it had become
+apparent that an influential party in Congress, backed by strong
+sympathy outside, was bent upon passing a general income tax act. The
+previous Income Tax Law had been pronounced unconstitutional by the
+Supreme Court as violating the provision of the Constitution that all
+direct taxes must be apportioned among the states in proportion to
+population.[1] That decision, however, had been reached by a bare
+majority of five to four. It had overruled previous decisions and
+overturned doctrines that had been acquiesced in almost from the
+foundation of the Government. A strong party was in favor of enacting
+another income tax law and bringing the question again before the Court
+in the hope that the Court as then constituted might be induced to
+overrule or materially modify the doctrine of the Pollock case. The
+President and his advisers viewed such a proposal with disfavor. To
+their minds the proper way to establish the right of Congress to levy an
+income tax was by an amendment to the Constitution, not by an assault
+upon the Supreme Court. Accordingly on June 16, 1909, the President
+transmitted a message to Congress[2] recommending a constitutional
+amendment, and proposing, in order to meet the present need for more
+revenue, an excise tax on corporations. The proposal, coupled as it was
+with a suggestion that such an act might be made to serve for purposes
+of federal supervision and control as well as revenue, met with favor
+and was enacted into law.
+
+[Footnote 1: _Pollock vs. Farmers' Loan & Trust Co._, 157 U.S., 429.]
+
+[Footnote 2: _Congressional Record_, June 16, 1909, p. 3450.]
+
+President Taft, himself an eminent constitutional lawyer, in his message
+recommending the law expressed full confidence in its constitutionality.
+The same view was taken by able lawyers who surrounded him in the
+capacity of advisers. The act is understood to have been drafted by Mr.
+Wickersham, the Attorney General, and vouched for by Senator Elihu Root
+and others of scarcely less authority in the domain of constitutional
+law.
+
+Against opinions from such sources one takes the field with diffidence.
+I venture, however, to outline briefly some reasons for doubting the
+constitutionality of the act.
+
+At the outset it is essential to determine the exact nature of the tax.
+Obviously it is not a tax upon income _as income_. If it were, it would
+be obnoxious to the decision in the Pollock case as imposing a direct
+tax without apportionment among the states. The language of the act, as
+well as the declarations of its sponsors, clearly indicate that it is
+intended, not as a direct tax on property, but as an excise tax on
+privilege. The phraseology of the act itself is--"A special excise tax
+with respect to the carrying on or doing business by such corporation,"
+etc. Undoubtedly Congress has power to impose an excise tax upon
+occupation or business. This was expressly decided, in the case of the
+businesses of refining petroleum and refining sugar, by the Spreckels
+case,[1] referred to in President Taft's message. The message says:
+
+     The decision of the Supreme Court in the case of Spreckels
+     Sugar Refining Company against McClain (192 U.S., 397) seems
+     clearly to establish the principle that such a tax as this is
+     an excise tax upon privilege and not a direct tax on property,
+     and is within the federal power without apportionment
+     according to population.
+
+[Footnote 1: _Spreckels Sugar Refining Co. vs. McClain_, 192 U.S., 397.]
+
+What, then, is the privilege with respect to which the tax is imposed?
+Is it, like the tax involved in the Spreckels case, the privilege of
+doing the various kinds of business (manufacturing, mercantile, and the
+rest) in which the corporations subject to the operation of the law are
+engaged? Obviously not. No kind or kinds of business are specified in
+the act. The tax falls not only on corporations doing every conceivable
+kind of business, but also on the corporation that does no specific
+business whatever--the corporation which, in the language of an eminent
+judge, is merely "an incorporated gentleman of leisure."[1] Moreover, if
+the tax were merely upon the privilege of doing business, it would seem
+to be obnoxious to the cardinal principle of just taxation that taxes
+should be uniform. In other words, if the privilege of doing a
+business--say conducting a department store--were the thing taxed and
+the only thing taxed, the rule of uniformity would seem to require that
+a corporation and a copartnership conducting similar stores on opposite
+corners of the street should both be taxed. Nothing inconsistent with
+this view will be found in the Spreckels case. The party to that suit
+was, to be sure, a corporation, but the act under which the tax was
+imposed applied to individuals, firms, and corporations alike.
+
+[Footnote 1: Vann, J., in _People ex rel. vs. Roberts_, 154 N.Y., 1.]
+
+It must be concluded, therefore, that the tax is not upon the privilege
+of doing the businesses in which the various corporations in the land
+are engaged, but is rather a _tax upon the privilege of doing business
+in a corporate capacity_, or, in other words, upon the exercise of the
+corporate franchise. That this is so appears very clearly from the
+message of President Taft. He says:
+
+     This is an excise tax upon the privilege of doing business as
+     an artificial entity and of freedom from a general partnership
+     liability enjoyed by those who own the stock.
+
+Assuming, then, that this is the real nature of the tax, is it
+constitutional?
+
+Unquestionably Congress may tax corporations organized under federal
+laws upon their franchises; any sovereignty may tax the creatures of its
+creation for the privilege of exercising their franchises; but how about
+corporations chartered by the states and doing purely an intrastate
+business? A state confers on John Doe and his associates the privilege
+or franchise of doing business in a corporate capacity. Can Congress
+impose a tax on the exercise of that privilege or franchise? The power
+to tax involves the power to destroy.[1] If Congress can impose a tax of
+one per cent., it can impose a tax of ten per cent. or fifty per cent.,
+and thus impair or destroy altogether the value of corporate charters
+for business purposes. Does Congress possess such a power? The
+Constitution puts no express limitation on the right of Congress to levy
+excises except that they shall be "uniform throughout the United
+States." But there are certain implied limitations inherent in our dual
+system of government. The sovereignty and independence of the separate
+states within their spheres are as complete as are the sovereignty and
+independence of the General Government within its sphere.[2] Neither may
+interfere with or encroach upon the other.
+
+[Footnote 1: _McCulloch vs. Maryland_, 4 Wheat., 316.]
+
+[Footnote 2: _The Collector vs. Day_, 11 Wall., 113, 124.]
+
+The right to grant corporate charters for ordinary business purposes is
+an attribute of sovereignty belonging to the states, not to the General
+Government. The United States is a government of enumerated powers. The
+Constitution nowhere expressly confers upon Congress the right to grant
+corporate charters, and it is well settled that this right exists only
+in the limited class of cases where the granting of charters becomes
+incidental to some power expressly conferred on Congress, e.g., the
+power to establish a uniform currency, or the power to regulate
+interstate commerce. On the other hand, the right of the separate states
+to grant charters of incorporation is unquestionable. By the Tenth
+Amendment of the Constitution it is expressly provided: "The powers not
+delegated to the United States by the Constitution nor prohibited by it
+to the states are reserved to the states respectively or to the people."
+The Supreme Court long ago said: "A state may grant acts of
+incorporation for the attainment of those objects which are essential to
+the interests of society. _This power is incident to sovereignty._"[1]
+
+[Footnote 1: _Briscoe v. Bank of Kentucky_, 11 Peters, 257, 317.]
+
+The power to grant the franchise of corporate capacity being therefore
+inherent in the sovereignty of the states, will not a tax imposed by
+Congress upon the exercise of the franchise constitute an interference
+with the power? If so the tax is unconstitutional.
+
+The Supreme Court has repeatedly held, that the National Government
+"cannot exercise its power of taxation so as to destroy the state
+governments or embarrass their lawful action."[1] In the case of
+_California vs. Central Pacific R.R. Co._[2] the question was whether
+franchises granted to the Central Pacific Railroad Company by the United
+States were legitimate subjects of taxation by the State of California.
+The Supreme Court, in language frequently quoted in subsequent cases,
+discusses the nature and origin of franchises, concluding that a
+franchise is "a right, privilege, or power of public concern" existing
+and exercised by legislative authority. After enumerating various kinds
+of franchises, the Court remarks: "No persons can make themselves a body
+corporate and politic without legislative authority. Corporate capacity
+is a franchise." The Court continues:
+
+     In view of this description of the nature of a franchise, how
+     can it be possible that a franchise granted by Congress can be
+     subject to taxation by a state without the consent of
+     Congress? Taxation is a burden and may be laid so heavily as
+     to destroy the thing taxed or render it valueless. As Chief
+     Justice Marshall said in _McCulloch v. Maryland_, "The power
+     to tax involves the power to destroy."... It seems to us
+     almost absurd to contend that a power given to a person or
+     corporation by the United States may be subjected to taxation
+     by a state. The power conferred emanates from and is a portion
+     of the power of the government that confers it. To tax it is
+     not only derogatory to the dignity but subversive of the
+     powers of the government, and repugnant to its paramount
+     sovereignty.
+
+[Footnote 1: _Railroad Company v. Peniston_, 18 Wall., 5, 30.]
+
+[Footnote 2: 127 U.S., 1.]
+
+It is true that the Court was here discussing the right of a state to
+tax franchises granted by the United States, and not the converse of
+that question. The reasoning of the Court would seem, however, to apply
+with equal force to the right of the United States to tax a franchise
+granted by a state acting within the scope of its sovereign authority.
+
+Patent rights and copyrights are special privileges or franchises
+granted by the sovereign or government, and under the United States
+Constitution the right to grant patents and copyrights is expressly
+conferred on Congress. It has been held repeatedly that patent rights
+and copyrights are not taxable by the states[1]. As said by the New York
+Court of Appeals in a case involving the power of the state to tax
+copyrights:[2]
+
+     To concede a right to tax them would be to concede a power to
+     impede or burden the operation of the laws enacted by Congress
+     to carry into execution a power vested in the National
+     Government by the Constitution.
+
+[Footnote 1: _People ex rel. Edison, &c., Co., v. Assessors_, 156 N.Y.,
+417; _People ex rel. v. Roberts_, 159 N.Y., 70; _In Re Sheffield_, 64
+Fed. Rep., 833; _Commonwealth v. Westinghouse, &c., Co._, 151 Pa., 265.]
+
+[Footnote 2: 159 N.Y., p. 75.]
+
+Apparently the same rule would be applicable were the granting of patent
+rights, like the granting of ordinary corporate franchises, a
+prerogative reserved under our system of government to the states
+instead of being expressly conferred on the United States. By parity of
+reasoning, the Federal Government in that case would have no power to
+tax them.
+
+It is familiar law, reiterated over and over again by the Supreme Court,
+that Congress cannot tax the means or instrumentalities employed by the
+states in exercising their powers and functions, any more than a state
+can tax the instrumentalities similarly employed by the General
+Government. Thus, it has been held that Congress cannot tax a municipal
+corporation (being a portion of the sovereign power of the state) upon
+its municipal revenues[1]; that Congress cannot impose a tax upon the
+salary of a judicial officer of a state[2]; that Congress cannot tax a
+bond given in pursuance of a state law to secure a liquor license.[3]
+
+[Footnote 1: _United States vs. Railroad Co._, 17 Wall., 322.]
+
+[Footnote 2: _Collector v. Day_, 11 Wall., 113.]
+
+[Footnote 3: _Ambrosini v. United States_, 185 U.S., 1.]
+
+In the light of these decisions it is not apparent how Congress can tax
+the franchises of those state corporations (and they are many and
+important) which perform some public or quasi-public function. A state,
+to carry out its purposes of internal improvement, charters an
+intrastate railway or ferry company with power to charge tolls and
+exercise the right of eminent domain. Is not the grant of corporate
+existence and privileges to such a corporation one of the means or
+instrumentalities employed by the state for carrying out its legitimate
+functions, and is not a tax by the Federal Government upon the exercise
+by such a corporation of its corporate powers an interference with such
+means or instrumentalities?
+
+In any discussion of the right of Congress to tax the agencies of or
+franchises granted by a state, the distinction must be borne in mind
+between a tax upon _property_ acquired by means of the franchise from
+the state and a tax upon the exercise of the franchise itself. The
+former tax may be perfectly valid where the latter would be
+unconstitutional. Thus, the Supreme Court has upheld a tax by a state
+upon the real and personal property (as distinct from the franchises) of
+a railway company chartered by Congress for private gain, while
+conceding that the state could not tax the franchises, because to do so
+would be a direct obstruction to federal powers.[1]
+
+[Footnote 1: _Union Pacific Railroad Company vs. Peniston_, 18 Wall.,
+5.]
+
+It remains to notice briefly one or two Supreme Court decisions which
+are relied upon by the sponsors of the new tax law. Reference has
+already been made to the decision in the Spreckels case[1] which upheld
+the validity of the tax imposed by the War Revenue Act of 1898 upon the
+gross receipts of corporations engaged in the businesses of refining
+petroleum and refining sugar. The Court held the tax to be an excise tax
+"in respect of the carrying on or doing the business of refining sugar,"
+and such it obviously was. It was not a tax upon the privilege or
+franchise of doing business in a corporate capacity, like the tax now
+under debate. On the contrary, the act expressly applied to "every
+person, firm, corporation, or company carrying on or doing the business
+of refining sugar...." The case, therefore, has no bearing on the point
+we are discussing. Had the act applied only to corporations, a different
+question would have been involved.
+
+[Footnote 1: _Spreckels Sugar Refining Co. vs. McClain_. 192 U.S., 397.]
+
+The case of _Veazie Bank vs. Fenno_,[1] upholding the statute which
+taxed out of existence the circulation of the state banks, has
+frequently been cited as an authority sustaining the right of Congress
+to levy a tax upon a franchise or privilege granted by a state. It is
+true that in that case the eminent counsel for the bank (Messrs. Reverdy
+Johnson and Caleb Cushing) argued unsuccessfully "that the act imposing
+the tax impaired a franchise granted by the state, and that Congress had
+no power to pass any law which could do that;"[2] and that two justices
+dissented on that ground. The conclusive answer to this argument, was,
+however, that the power of the states to grant the particular right or
+privilege in question was subordinate to powers expressly conferred on
+Congress by the Constitution; that Congress was given power under the
+Constitution to provide a currency for the whole country, and the act in
+question was legislation appropriate to that end. The case does not
+hold that Congress has any general power to tax franchises or privileges
+granted by a state.
+
+[Footnote 1: 8 Wall., 533.]
+
+[Footnote 2: See 8 Wall., p. 535.]
+
+The scope of this chapter does not admit of further reference to the
+decisions. It is strongly urged, however, that none of them, rightly
+construed, will be found to sustain the right of the General Government
+to impose a tax upon the exercise of franchises granted by a state in
+the exercise of its independent sovereignty, and that such a decision
+would mark a new departure in our jurisprudence.
+
+In the debates in Congress over the bill many good lawyers appear to
+have assumed, somewhat too hastily, that the tax in question was an
+excise tax on business or occupation like that involved in the Spreckels
+case, and that the only constitutional question, therefore, was one of
+classification under the provision of the Constitution that excises
+shall be uniform throughout the United States. No less eminent a
+constitutional lawyer than Senator Bailey of Texas, in a colloquy with
+the junior Senator from New York, put the matter thus:[1]
+
+     Mr. Root: May I ask the Senator from Texas if I am right in
+     inferring from the statement which he has just made that he
+     does not seriously question the constitutional power of the
+     Congress to impose this tax on corporations?
+
+     Mr. Bailey: Mr. President, I answer the Senator frankly that I
+     do not.... I think the rule was and is that Congress can levy
+     any tax it pleases except an export tax. Of course a direct
+     tax must be apportioned and an indirect tax must be uniform.
+     But the uniformity rule simply requires that wherever the
+     subject of taxation is found, the tax shall operate equally
+     upon it.
+
+     I believe that Congress can tax all red-headed men engaged in
+     a given line of business if it pleases.... I have no doubt if
+     the tax fell upon every red-headed man in Massachusetts the
+     same as in Mississippi or Texas and all other states, the law
+     imposing such a tax would be perfectly valid.
+
+[Footnote 1: _Congressional Record_ for July 6, 1909, pp. 4251 to 4252.]
+
+The difficulty with this reasoning is that it overlooks the fact that
+the privilege of being red-headed is not a franchise granted by a
+sovereign state. From the viewpoint of constitutional law it may well be
+that Congress can tax a privilege conferred by the gods where it would
+be powerless to tax a franchise granted by the Legislature of New
+Jersey.
+
+
+
+
+XI
+
+THE CORPORATION TAX DECISION
+
+
+The immediate consequences of the decision of the United States Supreme
+Court[1] affirming the constitutionality of the federal corporation tax
+are so slight that its profound significance is likely to be overlooked.
+Until it was merged with the general income tax the exaction was not
+burdensome and proved easy of collection. The thing upon which it
+fell--the privilege of doing business in a corporate capacity--is an
+abstraction which makes little appeal to the sympathies or the moral
+sense. The public, more concerned with present conditions than with the
+passing of a theory, is indifferent.
+
+[Footnote 1: _Flint v. Stone Tracy Co._, 220 U.S., 107]
+
+Thus it has sometimes been with the turning points in the affairs of
+nations. They came quietly and without observation, and it remained for
+the historians to mark the actual parting of the ways.
+
+The Supreme Court holds, and in its opinion reiterates many times, that
+the tax is upon the _privilege of doing business in a corporate
+capacity_.
+
+Right here is the crux of the matter. Corporate capacity is not a right
+granted by the National Government. It is something which Congress can
+neither give nor take away. In the division of powers which marked the
+creation of our dual government the power to confer corporate capacity
+was reserved to the states. The decision, therefore, comes to this:
+Congress can by taxation burden the exercise of a privilege which only a
+state can grant. And the power to tax, it must be remembered, involves
+the power to destroy. This seems a long step from the theory of the men
+who founded the Republic.
+
+Nearly fifty years ago the Supreme Court stated the theory as follows:
+
+     The states are, and they must ever be, co-existent with the
+     National Government. Neither may destroy the other. Hence the
+     Federal Constitution must receive a practical construction.
+     Its limitations and its implied prohibitions must not be
+     extended so far as to destroy the necessary powers of the
+     States, or prevent their efficient exercise.[1]
+
+[Footnote 1: _Railroad Co. v. Peniston_, 18 Wall., 5.]
+
+The court buttresses its decision by the argument _ex necessitate_--that
+to hold otherwise would open the way for men to withdraw their business
+activities from the reach of federal taxation and thus cripple the
+National Government. The Court says:
+
+     The inquiry in this connection is: How far do the implied
+     limitations upon the taxing power of the United States over
+     objects which would otherwise be legitimate subjects of
+     federal taxation, withdraw them from the reach of the Federal
+     Government in raising revenue, because they are pursued under
+     franchises which are the creation of the states?... Let it be
+     supposed that a group of individuals, as partners, were
+     carrying on a business upon which Congress concluded to lay an
+     excise tax. If it be true that the forming of a state
+     corporation would defeat this purpose, by taking the necessary
+     steps required by the state law to create a corporation and
+     carrying on the business under rights granted by a state
+     statute, the federal tax would become invalid and that source
+     of national revenue be destroyed, except as to the business in
+     the hands of individuals or partnerships. It cannot be
+     supposed that it was intended that it should be within the
+     power of individuals acting under state authority thus to
+     impair and limit the exertion of authority which may be
+     essential to national existence.
+
+This argument will not bear scrutiny. It apparently loses sight of the
+vital distinction between a tax on the mere doing of business and a tax
+on the privilege of doing that business in a corporate capacity. These
+are two very different things. The right of Congress to tax the doing of
+business was not disputed. It had been expressly upheld in the
+well-known case of _Spreckels Sugar Refining Co. v. McClain_,[1] which
+involved a tax on the business of refining sugar, whether done by a
+corporation or by individuals. The tax under consideration, however,
+goes further and fastens upon something new--something which in the case
+of individuals or partnerships has no existence at all--which comes into
+being only by the exercise of the sovereign power of a state. The
+opponents of the tax, far from attempting to narrow the existing field
+of federal taxation, were in fact resisting an encroachment by Congress
+on an entirely new field, created by, and theretofore reserved
+exclusively to, the separate states. It was conceded that Congress could
+tax a business when done by individuals and could tax the same business
+when done by a corporation. The inquiry was: Does the act of a state in
+clothing the individuals with corporate capacity create a new subject
+matter for taxation by the General Government? That was the real
+question before the Court, and the decision answers it in the
+affirmative.
+
+[Footnote 1: 192 U.S., 397.]
+
+Other illustrations of the same apparent confusion of thought are to be
+found in the opinion. For example, it is said (citing various cases
+involving a tax on business where the party taxed was a corporation):
+
+     We think it is the result of the cases heretofore decided in
+     this Court, that such _business activities_, though exercised
+     because of state-created franchises, are not beyond the taxing
+     power of the United States.
+
+Here again the Court seems to lose sight of the distinction between a
+tax on "business activities" and a tax on the privilege of conducting
+such activities in a corporate capacity.
+
+It is futile, however, to quarrel with the logic of the opinion. The
+question is closed and the Court, by affirming the judgments appealed
+from, has committed itself to the theory that the Federal Government
+may, by taxation, burden the exercise of a privilege which only a state
+can confer. With the expediency of that theory as applied to present-day
+political conditions we are not now concerned. The object of this
+chapter is to point out that the decision marks a distinct departure
+from the earlier doctrine that the two sovereignties, federal and state,
+are upon an equality within their respective spheres.
+
+In view of the centralizing forces which are tending to transform these
+sovereign states into mere political subdivisions of a nation, the
+decision is of great significance. Moreover, in a very practical way it
+touches the right of each state under the compact evidenced by the
+Federal Constitution to manage its internal affairs free from compulsion
+or interference by the other states. To illustrate: In some parts of the
+country the anti-corporation feeling runs high. Many men if given their
+way would tax the larger corporations out of existence. Under this
+decision the way is open whenever a majority can be secured in Congress.
+An increase in the tax rate is all that would be necessary. Make the
+rate ten per cent. or twenty per cent. instead of one per cent. and the
+thing is accomplished.
+
+New York may deem it good policy to encourage the carrying on of
+industry in a corporate form. Texas may take a different view and
+conclude that the solution of the trust problem lies in suppressing
+certain classes of corporations altogether. Under this decision it lies
+within the power of Texas and her associates if sufficiently numerous to
+impose their view on New York and make it impossible for her domestic
+industries to be carried on profitably in a corporate form. And yet the
+possibility of impressing the will of one state or group of states upon
+another state with respect to her internal affairs is the very thing
+which the founders of the republic sought most carefully to avoid. Had
+it been understood in 1787 that the grant of taxing powers to the
+General Government involved such a curtailment of state independence,
+few states, in all probability, would have been ready to ratify the
+Constitution.
+
+
+
+
+XII
+
+THE FEDERAL GOVERNMENT AND THE TRUSTS
+
+
+The curbing of monopolies and combinations in restraint of trade was no
+part of the functions of the Federal Government as planned by the
+framers of the Constitution. To their minds such matters, under the dual
+system of government which they were establishing, belonged to the
+states. The Constitution was designed to limit the National Government
+to functions absolutely needed for the national welfare. All other
+powers were "reserved to the states respectively or to the people."
+
+As time went on, however, and industries expanded it was seen that the
+power of no single state was adequate to control concerns operating in
+many states at the same time. The need of action by the General
+Government became manifest. Power in Congress to legislate on the
+subject, albeit somewhat indirectly, was found in the Commerce Clause of
+the Constitution, and in the year 1890 the Sherman Anti-Trust Act was
+enacted.
+
+Few statutes have aroused more discussion or been the subject of more
+perplexity and misunderstanding. President Taft's remark, made after the
+decisions of the Supreme Court in the Standard Oil and Tobacco Trust
+cases,[1] that "the business community now knows or ought to know where
+it stands," was received with incredulity approaching derision. Yet from
+a lawyer's point of view (and it must be borne in mind that the
+President was a lawyer and is now Chief Justice of the Court) the
+statement cannot be controverted. The decisions in the Standard Oil and
+Tobacco cases did in fact dispel whatever uncertainty remained as to
+what the Sherman Act means.
+
+[Footnote 1: _Standard Oil Co. v. United States_, 221 U.S., 1.
+
+_United States v. American Tobacco Co._, id., 106.]
+
+The Sherman Act[1] declares unlawful every contract, combination, or
+conspiracy in restraint of interstate trade, and every attempt to
+monopolize interstate trade. The legal uncertainties that have arisen in
+its enforcement have not been with respect to the meaning of the terms
+"restraint of trade" and "monopoly," although the popular impression is
+to the contrary. In 1890, when the statute was passed, contracts in
+restraint of trade and monopolies were already unlawful at common law,
+and these terms, by a long series of decisions both here and in England,
+had been defined as definitely as the nature of the subject matter
+permitted. While incapable (like the term "fraud") of precise definition
+covering all forms which the ingenuity of man might devise, nevertheless
+their meaning and scope were well within the understanding of any man of
+reasonable intelligence. Whatever legal uncertainties have arisen have
+been chiefly owing to two questions: first, What is _interstate_ trade
+within the meaning of the act? and second, Did the act enlarge the
+common-law rule as to what restraints were unlawful?
+
+[Footnote 1: "An Act to protect trade and commerce against unlawful
+restraints and monopolies," approved July 2, 1890.]
+
+The act was nearly shipwrecked at the outset on the first of these
+questions. In the famous Knight case,[1] the first case under the
+Sherman Act to reach the Supreme Court, it was held that the
+transactions by which the American Sugar Refining Company obtained
+control of the Philadelphia refineries and secured a virtual monopoly
+could not be reached under the act because they bore no direct relation
+to interstate commerce. The effect of this decision naturally was to
+cast doubt upon the efficacy of the statute and encourage the trust
+builders. Perhaps the case was rightly decided in view of the peculiar
+form in which the issues were presented by the pleadings. In the light
+of later decisions, however, it is safe to assert that the Court would
+now find little difficulty in applying the remedies provided by the
+Sherman Act to a similar state of facts, properly presented. While no
+prudent lawyer would care to attempt a comprehensive definition of what
+constitutes interstate commerce, it may at least be said that the
+tendency of the courts has been and is toward a constant broadening of
+the term to meet the facts of present-day business.
+
+[Footnote 1: _United States v. E.C. Knight Company_, 156 U.S., 1.]
+
+The other question--Did the Sherman Act change the common-law rule as to
+what restraints and monopolies are forbidden?--has been even more
+troublesome. The lawyers in Congress who framed the law believed that it
+did not. This is the testimony of Senator Hoar in his Autobiography, and
+as he was a member of the Senate Judiciary Committee which reported the
+act in its present form, and claims to have drawn it himself, his
+testimony is entitled to belief. The Supreme Court, however, in this
+particular went further than was expected. In the Trans-Missouri
+Freight Association case,[1] which reached the Supreme Court two years
+after the Knight case, that tribunal decided by a five-to-four majority
+that the words "_every_ contract ... in restraint of trade" extended the
+operation of the law beyond the technical common-law meaning of the
+terms employed so as in fact to include all contracts in restraint of
+interstate trade without exception or limitation. This theory was
+strongly combated by the minority of the court, speaking through Justice
+(afterwards Chief Justice) White, and was denounced by many eminent
+lawyers, notably the late James C. Carter, then leader of the New York
+Bar, who predicted that sooner or later it must be abandoned as
+untenable. Their protests were well founded. The theory, carried to its
+logical conclusion, would have prohibited a great variety of
+transactions theretofore deemed reasonable and proper, and would have
+brought large business to a standstill. As a matter of fact, it was
+never carried to its logical conclusion, and six years later it was
+expressly repudiated by Justice Brewer; one of the five, in the course
+of his concurring opinion in the Northern Securities case.[2] Justice
+Brewer said that while he believed the Trans-Missouri case had been
+rightly decided he also believed that in some respects the reasons given
+for the judgment could not be sustained.
+
+     Instead of holding that the Anti-Trust Act included all
+     contracts, reasonable or unreasonable, in restraint of
+     interstate trade, the ruling should have been that the
+     contracts there presented were unreasonable restraints of
+     interstate trade, and as such within the scope of the Act....
+     Whenever a departure from common-law rules and definitions is
+     claimed, the purpose to make the departure should be clearly
+     shown. Such a purpose does not appear and such a departure was
+     not intended.
+
+[Footnote 1: _United States v. Trans-Missouri Association_, 166 U.S.,
+290.]
+
+[Footnote 2: _Northern Securities Company v. United States_, 193 U.S.,
+197.]
+
+Nevertheless, the troublesome question remained, to plague lawyers and
+the community generally, until it was finally put at rest and the
+statute once more planted on the firm ground of common-law rule and
+definition by the decisions in the Standard Oil and Tobacco cases.
+
+What, then, is this common-law rule which President Taft found so clear?
+No one has discussed it more lucidly than did the youthful Circuit Judge
+Taft himself in delivering the opinion of the Circuit Court of Appeals
+in the Addyston Pipe & Steel Co. case,[1] an opinion in which his two
+associates on the bench, the late Justices Harlan and Lurton, concurred.
+The rule may be briefly stated as follows:
+
+Every contract or combination whose primary purpose and effect is to fix
+prices, limit production, or otherwise restrain trade is unlawful,
+provided the restraint be direct, material, and substantial.
+
+Where, however, the restraint of trade is not direct, but merely
+ancillary or collateral to some lawful contract or transaction, it is
+not unlawful, provided it is _reasonable_, that is to say, not broader
+than is required for the protection of the party in whose favor the
+restraint is imposed.
+
+[Footnote 1: _United States v. Addyston Pipe & Steel Co._, 85 Fed. Rep.,
+271.]
+
+A familiar illustration is the sale of a business and its goodwill,
+accompanied by a covenant on the part of the vendor not to compete. Such
+a covenant is collateral to the sale, and if not broader than is
+reasonably required for the protection of the vendee it will be upheld,
+although a similar agreement, standing alone and not collateral to a
+sale or other lawful transaction, would be in direct restraint of trade
+and unlawful.
+
+So much for the alleged uncertainty of the law. Candid men must agree
+with President Taft that in the light of the Supreme Court decisions it
+is reasonably clear what the Sherman Law means. But the fact that "the
+business community now knows or ought to know where it stands" with
+respect to the law does not greatly help the business situation. The
+real difficulty lies, not in the uncertainty of the law, but in the fact
+that the law does not fit actual present-day conditions. This is partly
+because many of the trusts were organized with full knowledge that they
+involved a violation of law but in the belief that the law could not or
+would not be effectively enforced. The realization that this belief was
+mistaken has thrown a good many people into a state of very genuine
+bewilderment, but it is an uncertainty, not as to what is firm ground,
+but as to how to get out of a bog, once having gotten in. For the most
+part, however, the general feeling of insecurity is due not so much to
+having knowingly overstepped the law, as to a change in economic
+conditions. The spirit of the time is one of cooeperation and
+combination. It is manifested in the churches and colleges as well as in
+the marketplace. In the industrial arena, the tendency has been
+intensified by the invention of new machines and the resulting
+aggregations of fixed capital in forms designed for particular uses and
+incapable of diversion into other channels. Such rules of the common or
+customary law as were the outgrowth of an era of mobile capital and free
+competition no longer fit the conditions under which we are living.
+
+In a conflict between economic forces and legal enactment there can
+finally be but one outcome. The law must sooner or later adapt itself to
+life conditions. The real problem to-day is--how shall this adaptation
+be accomplished; how can statutes be framed which shall check abuses
+without falling under the wheels of social progress? Right here a swarm
+of half-informed theorizers are rushing in where trained economists fear
+to tread. It is difficult and dangerous ground, but there is at least
+one measure of legal reform--take away the right of one corporation to
+hold stock in another--which might be urged with confidence were it not
+for the existence of sundry oppressive and conflicting state laws.
+
+The abolition by law of the holding-company device is no new suggestion.
+It was strongly urged years ago by the late Edward B. Whitney. It was
+the keystone of the famous "Seven Sisters" statutes,[1] enacted with
+loud acclaim in New Jersey at the behest of Governor Woodrow Wilson (but
+subsequently repealed and thrown into the discard). Such a measure would
+be more effective and far-reaching than the public supposes. Nearly all
+the so-called trusts have been organized and are being held together in
+whole or in part, by the holding-company device. In many cases this has
+been done merely as an innocent measure of convenience. The device,
+however, is a perversion of the corporate machine to uses not
+contemplated by its inventors and fraught with danger. It is too
+powerful a weapon in the hands of those alive to its possibilities,
+enabling a small group of men with a relatively insignificant investment
+of capital to control a country-wide industry. Take the simplest
+possible illustration: The industry of manufacturing a particular
+commodity is carried on by a number of corporations scattered throughout
+the country with an aggregate capitalization of, say, $10,000,000. A, B,
+and C form a holding company to acquire a bare majority of the stock of
+each corporation, say $5,100,000 in the aggregate. They dispose of 49
+per cent. of the holding company's stock to the public, retaining a
+working majority. At one step they have secured absolute control of a
+$10,000,000 industry with an investment of little more than one-quarter
+of that amount, and by pursuing the same process further they can reduce
+the investment necessary for controlling the industry almost to the
+vanishing point.
+
+[Footnote 1: Laws of New Jersey of 1913, chaps. 13-19.]
+
+It is needless to enlarge on the possible abuses of the holding-company
+device. They are coming to light more and more. The remedy, however, is
+not so simple as it seems at first blush. A summary abolition of the
+holding-company device would result in great injury and hardship to
+industry. In the present condition of the corporation laws of certain of
+the states, the right of large corporations to operate through local
+subsidiary corporations is a practical necessity. Otherwise they would
+be subjected to well-nigh intolerable exactions and interference. It has
+been the policy in some states in dealing with foreign corporations to
+attempt to impose, under the guise of fees for the privilege of doing
+business in the state, a tax on all their property and business wherever
+situated. Some of the attempts have been nullified by the Supreme Court
+as violative of the prohibition of the Fourteenth Amendment against
+taking property without due process of law, but these decisions have
+not wholly remedied the evil or checked the ingenuity of state
+legislators. In some jurisdictions great corporations seem to be
+regarded as fair game for which there is no closed season.
+
+Right here the scheme of federal incorporation brought forward during
+President Taft's administration has many attractions to offer. It would
+do away with the principal excuse for the holding-company device, and
+pave the way for its abolition. It should satisfy the general public
+because it would clothe the Government with enormously increased powers
+of regulation and control; it should be attractive to the corporations
+because it would afford relief from many of the intolerable
+restrictions, not always fair or intelligent, imposed by state
+legislatures. Under present conditions the right of a corporation of one
+state to do business in another (other than business of an interstate
+character) rests merely upon comity and may be granted or refused upon
+such terms as interest or prejudice may dictate. The right of a federal
+corporation to do business in the several states, on the other hand,
+rests upon the powers conferred on Congress by the Constitution and is
+not subject to the whims of state lawmakers. Such a corporation is not
+"foreign" in the states into which its activity extends and state laws
+aimed at foreign corporations will not hit it. Moreover a corporation
+with a federal charter can always take its controversies into the
+federal courts (except when Congress expressly forbids)[1]--a right of
+extreme practical value where anti-corporation feeling or local
+prejudice is strong.
+
+[Footnote 1: The Act of Jan. 28, 1915, took away this right in the case
+of railroad companies incorporated under federal charter (38 Stat.
+804).]
+
+The scheme of federal incorporation presents some constitutional
+questions. As pointed out in a previous chapter, the Constitution
+nowhere expressly confers on Congress the right to grant corporate
+charters. Under Chief Justice Marshall's doctrine of "Implied Powers,"
+however, it has become well settled that Congress has implied power to
+charter a corporation whenever that is an appropriate means of
+exercising one of the powers expressly conferred, for example, the power
+to regulate interstate commerce. The most serious constitutional
+question appears to be whether Congress can authorize such a corporation
+to manufacture, the process of manufacturing not being an activity of an
+interstate character. In any event, the difficulty could be surmounted
+by a constitutional amendment. In these days of facile amendment such a
+thing seems quite within the range of possibility.
+
+The scheme of federal incorporation is by no means new. In the
+Convention of 1787 which framed the Constitution, Mr. Madison advocated
+giving Congress the power to grant charters of incorporation. The
+proposition, however, did not find favor, Mr. King suggesting that it
+might foster the creation of mercantile monopolies.[1]
+
+[Footnote 1: See Farrand, "Records of the Federal Convention," Vol. II,
+pp. 615-616, 620.]
+
+This objection would scarcely be urged to-day, when the country-wide
+operations of the so-called "trusts" have given them a national
+character and made their control by federal power a practical necessity.
+
+
+
+
+XIII
+
+WHAT OF THE FUTURE?
+
+
+In the preceding pages we have observed from various viewpoints the
+impressive phenomenon of federal encroachment upon state power. It must
+have become obvious to the most casual reader that the tide is running
+swiftly and has already carried far. Hamilton was mistaken when he
+predicted in the _Federalist_[1] that the National Government would
+never encroach upon the state authorities.
+
+[Footnote 1: _Federalist_, Numbers XVII, XXXI.]
+
+What then of the future? Is the Constitution hopelessly out of date? Are
+the states to be submerged and virtually obliterated in the drift toward
+centralization? No thoughtful patriot can view such a possibility
+without the gravest misgivings. The integrity of the states was a
+cardinal principle of our governmental scheme. Abandon that and we are
+adrift from the moorings which to the minds of statesmen of past
+generations constituted the safety of the republic.
+
+No mere appeal to precedents and governmental theory will check the
+current. The Americans are a practical people, moving forward with
+conscious power toward the attainment of their aims, along the lines
+which seem to them most direct. They are more interested in results than
+in methods or theories. Experience has demonstrated that federal control
+often spells uniformity and efficiency where state control had meant
+divisions and weakness. They favor federal control because it gets
+results.
+
+There is another aspect of the matter, however. The burden of federal
+bureaucracy is beginning to be felt by the average man. He is being
+regulated more and more, in his meats and drinks, his morals and the
+activities of his daily life, from Washington. If he will only stop and
+think he must realize that no one central authority can supervise the
+daily lives of a hundred million people, scattered over half a
+continent, without becoming top-heavy. He must realize, too, that, even
+if such a centralization of power and responsibility were humanly
+possible, our National Government is unsuited for the task. The
+electorate is too numerous and heterogeneous; its interests and needs
+are too diverse. Shall the conduct of citizens of Mississippi be
+prescribed by vote of congressmen from New York, or supervised at the
+expense of New York taxpayers? Will an educational system suitable for
+Massachusetts necessarily fit the young of Georgia? Such suggestions
+carry their own answer. In the very nature of things there is bound to
+be a reaction against centralization sooner or later. The real question
+is whether it will come in time to save the present constitutional
+scheme.
+
+The makers of the Constitution never intended that the people of one
+state should regulate, or pay for supervising, the conduct of citizens
+of another state. They made a division of governmental powers between
+nation and states along broad and obvious lines. To the Federal
+Government were entrusted matters of a strictly national
+character--foreign relations, interstate commerce, fiscal and monetary
+system, post office, patents and copyrights. Everything else was
+reserved, to the states or the people. Here was a scheme at once
+explicit and elastic. Explicit as to the nature of the functions to be
+performed by the National Government; elastic enough to permit the
+exercise of all other powers reasonably incidental to the powers
+expressly granted. The Constitution is not, and never was intended to
+be, a strait-jacket.
+
+Proofs abound of the adequacy of the constitutional scheme to deal with
+changing conditions. For example, when the Constitution was adopted,
+railroads, the most powerful economic force in our present civilization,
+were unknown. Nevertheless, the Constitution contains adequate provision
+for dealing with the railroads. They are instruments of interstate
+commerce and may be controlled by the Federal Government under the
+express grant of power to regulate such commerce. Similar considerations
+apply in the case of those nationwide industrial combinations popularly
+known as "trusts." Their activities are largely in the field of
+interstate commerce and are subject to control as such by the Federal
+Government. Theoretically, only such activities of the railroads and
+trusts as are of an interstate character fall within the federal
+jurisdiction. Everything else lies within the jurisdiction of the
+states. However, a practical people will not long permit matters which
+are essentially single and entire in their nature (for example, railroad
+classifications and rates) to be split up merely for purposes of legal
+jurisdiction and control. In such matters, therefore, some measure of
+federal encroachment is inevitable in order that industry and progress
+shall not be hampered. The encroachment, however, is more apparent than
+real. The industries are national in scope, and all the activities of
+each are more or less interwoven and interdependent. Hence state
+regulation of the intrastate activities may sometimes be overruled as an
+interference with federal regulation of the interstate commerce. There
+is nothing in this which involves any real violation of the
+Constitution. It is merely an application of Marshall's doctrine of
+implied powers.
+
+Social welfare legislation presents a very different problem. Some of
+the most dangerous assaults upon the Constitution to-day are being made
+in that field. The leaven of socialistic ideas is working.
+Representative government is becoming more paternalistic. Legislation
+dealing with conduct and social and economic conditions is being
+demanded by public sentiment in constantly increasing measure. Such
+legislation for the most part affects state police power and lies
+clearly outside the scope of the powers conferred by the Constitution on
+the National Government. Moreover, "the insulated chambers afforded by
+the several states" (to borrow a phrase of Justice Oliver Wendell
+Holmes) are ideal fields for social experiment. If an experiment
+succeed, other states will follow suit. If it prove disastrous, the
+damage is localized. The nation as a whole remains unharmed. The
+sponsors for such legislation, however, are seldom content to deal with
+the states. Reform was ever impatient. The state method seems too slow,
+and the difficulty of securing uniformity too formidable. Moreover, it
+often happens that some states are indifferent to the reform proposed or
+even actively hostile. Accordingly, recourse is had to Congress, and
+Congress looks for a way to meet the popular demand. There being no
+direct way, and public sentiment being insistent, Congressmen find
+themselves under the painful necessity of circumventing the Constitution
+they have sworn to uphold. The desired legislation is enacted under the
+guise of an act to regulate commerce or raise revenue, and the task of
+upholding the Constitution is passed to the Supreme Court.
+
+Such subterfuges, far from arousing public condemnation, are praised by
+the unthinking as far-sighted statesmanship. It is popular nowadays to
+apply the term "forward-looking" to people who would make the National
+Government an agency for social-welfare work, and to characterize as
+"lacking in vision" anyone who interposes a constitutional principle in
+the path of a social reform. Friends of progress sometimes forget that
+the real forward-looking man is he who can see the pitfall ahead as well
+as the rainbow; the man of true vision is one whose view of the stars is
+steadied by keeping his feet firmly on the ground.
+
+It cannot be reiterated too often that, under our political system,
+legislation in the nature of police regulation (except in so far as it
+affects commerce or foreign relations) is the province of the states,
+not of the National Government. This is not merely sound constitutional
+law; it is good sense as well. Regulations salutary for Scandinavian
+immigrants of the northwest may not fit the Creoles of Louisiana. In the
+long run the police power will be exercised most advantageously for all
+concerned by local authority.
+
+The present tendency toward centralization cannot go on indefinitely. A
+point must be reached sooner or later when an over-centralized
+government becomes intolerable and breaks down of its own weight. As an
+eminent authority has put it: "If we did not have states we should
+speedily have to create them."[1] The states thus created, however,
+would not be the same. They would be mere governmental subdivisions,
+without the independence, the historic background, the traditions, or
+the sentiment of the present states. These influences, hitherto so
+potent in our national life, would have been lost.
+
+[Footnote 1: Address of Supreme Court Justice Charles E. Hughes before
+New York State Bar Association, January 14, 1916.]
+
+In a memorable address delivered in the year 1906 before the
+Pennsylvania Society in New York, Elihu Root, then Secretary of State in
+President Roosevelt's Cabinet, discussed the encroachments of federal
+power and expressed the view that the only way in which the states could
+maintain their power and authority was by awakening to a realization of
+their own duties to the country at large. He said:
+
+     The Governmental control which they (the people) deem just and
+     necessary they will have. It may be that such control would
+     better be exercised in particular instances by the governments
+     of the states, but the people will have the control they need
+     either from the states or from the National Government; and if
+     the states fail to furnish it in due measure, sooner or later
+     constructions of the Constitution will be found to vest the
+     power where it will be exercised--in the National Government.
+     The true and only way to preserve state authority is to be
+     found in the awakened conscience of the states, their
+     broadened views and higher standard of responsibility to the
+     general public; in effective legislation by the states, in
+     conformity to the general moral sense of the country; and in
+     the vigorous exercise for the general public good of that
+     state authority which is to be preserved.
+
+Those words, spoken fifteen years ago, were prophetic. Moreover, they
+are as true to-day as when they were uttered.
+
+Will the people see these things in time? Americans with pride in their
+country's past and confidence in her future dare not say No. The
+awakening may be slow. Currents of popular will are not readily turned.
+It is hard to make the people think. But if leaders and teachers do
+their part American intelligence and prudence will assert themselves,
+and the slogan of an awakened public sentiment may yet be: "Back to the
+Constitution!"
+
+
+
+
+APPENDIX
+
+CONSTITUTION OF THE UNITED STATES OF AMERICA
+
+
+WE THE PEOPLE of the United States, in Order to form a more perfect
+Union, establish Justice, insure domestic Tranquility, provide for the
+common defence, promote the general Welfare, and secure the Blessings of
+Liberty to ourselves and our Posterity, do ordain and establish this
+CONSTITUTION for the United States of America.
+
+
+ARTICLE I.
+
+SECTION 1. All legislative Powers herein granted shall be vested in a
+Congress of the United States, which shall consist of a Senate and House
+of Representatives.
+
+SECTION 2. The House of Representatives shall be composed of Members
+chosen every second Year by the People of the several States, and the
+Electors in each State shall have the Qualifications requisite for
+Electors of the most numerous Branch of the State Legislature.
+
+No Person shall be a Representative who shall not have attained to the
+Age of twenty-five Years, and been seven Years a Citizen of the United
+States, and who shall not, when elected, be an Inhabitant of that State
+in which he shall be chosen.
+
+Representatives and direct Taxes shall be apportioned among the several
+States which may be included within this Union, according to their
+respective Numbers which shall be determined by adding to the whole
+Number of free Persons, including those bound to Service for a Term of
+Years, and excluding Indians not taxed, three-fifths of all other
+Persons. The actual Enumeration shall be made within three Years after
+the first Meeting of the Congress of the United States, and within every
+subsequent Term of ten Years, in such Manner as they shall by Law
+direct. The Number of Representatives shall not exceed one for every
+thirty Thousand, but each State shall have at Least one Representative;
+and until such enumeration shall be made, the State of New Hampshire
+shall be entitled to chuse three, Massachusetts eight, Rhode Island and
+Providence Plantations one, Connecticut five, New York six, New Jersey
+four, Pennsylvania eight, Delaware one, Maryland six, Virginia ten,
+North Carolina five, South Carolina five, and Georgia three.
+
+When vacancies happen in the Representation from any State, the
+Executive Authority thereof shall issue Writs of Election to fill such
+Vacancies.
+
+The House of Representatives shall chuse their Speaker and other
+Officers; and shall have the sole Power of Impeachment.
+
+SECTION 3. The Senate of the United States shall be composed of two
+Senators from each State, chosen by the Legislature thereof, for six
+Years; and each Senator shall have one Vote.
+
+Immediately after they shall be assembled in Consequence of the first
+Election, they shall be divided as equally as may be into three Classes.
+The Seats of the Senators of the first Class shall be vacated at the
+Expiration of the second Year, of the second Class at the Expiration of
+the fourth Year, and of the third Class at the Expiration of the sixth
+Year, so that one third may be chosen every second Year; and if
+Vacancies happen by Resignation, or otherwise, during the Recess of the
+Legislature of any State, the Executive thereof may make temporary
+Appointments until the next Meeting of the Legislature, which shall then
+fill such Vacancies.
+
+No Person shall be a Senator who shall not have attained to the Age of
+thirty Years, and been nine Years a Citizen of the United States, and
+who shall not, when elected, be an Inhabitant of that State for which he
+shall be chosen.
+
+The Vice President of the United States shall be President of the
+Senate, but shall have no Vote, unless they be equally divided.
+
+The Senate shall chuse their other Officers, and also a President pro
+tempore, in the Absence of the Vice President, or when he shall exercise
+the Office of President of the United States.
+
+The Senate shall have the sole Power to try all Impeachments. When
+sitting for that Purpose, they shall be on Oath or Affirmation. When the
+President of the United States is tried, the Chief Justice shall
+preside: And no Person shall be convicted without the Concurrence of two
+thirds of the Members present.
+
+Judgment in Cases of Impeachment shall not extend further than to
+removal from Office, and disqualification to hold and enjoy any Office
+of honor, Trust or Profit under the United States: but the Party
+convicted shall nevertheless be liable and subject to Indictment,
+Trial, Judgment and Punishment, according to Law.
+
+SECTION 4. The Times, Places and Manner of holding Elections for
+Senators and Representatives, shall be prescribed in each State by the
+Legislature thereof; but the Congress may at any time by Law make or
+alter such Regulations, except as to the Places of chusing Senators.
+
+The Congress shall assemble at least once in every Year, and such
+Meeting shall be on the first Monday in December, unless they shall by
+Law appoint a different Day.
+
+SECTION 5. Each House shall be the Judge of the Elections, Returns and
+Qualifications of its own Members, and a Majority of each shall
+constitute a Quorum to do Business; but a smaller Number may adjourn
+from day to day, and may be authorized to compel the Attendance of
+absent Members, in such Manner, and under such Penalties as each House
+may provide.
+
+Each House may determine the Rules of its Proceedings, punish its
+Members for disorderly Behavior, and, with the Concurrence of two
+thirds, expel a Member.
+
+Each House shall keep a Journal of its Proceedings, and from time to
+time publish the same, excepting such Parts as may in their Judgment
+require Secrecy; and the Yeas and Nays of the Members of either House on
+any question shall, at the Desire of one fifth of those Present, be
+entered on the Journal.
+
+Neither House, during the Session of Congress, shall, without the
+Consent of the other, adjourn for more than three days, nor to any other
+Place than that in which the two Houses shall be sitting.
+
+SECTION 6. The Senators and Representatives shall receive a
+Compensation for their Services, to be ascertained by Law, and paid out
+of the Treasury of the United States. They shall in all Cases, except
+Treason, Felony and Breach of the Peace, be privileged from Arrest
+during their Attendance at the Session of their respective Houses, and
+in going to and returning from the same; and for any Speech or Debate in
+either House, they shall not be questioned in any other Place.
+
+No Senator or Representative shall, during the Time for which he was
+elected, be appointed to any civil Office under the Authority of the
+United States, which shall have been created, or the Emoluments whereof
+shall have been encreased during such time; and no Person holding any
+Office under the United States, shall be a Member of either House during
+his Continuance in Office.
+
+SECTION 7. All Bills for raising Revenue shall originate in the House of
+Representatives; but the Senate may propose or concur with Amendments as
+on other Bills.
+
+Every Bill which shall have passed the House of Representatives and the
+Senate, shall, before it become a Law, be presented to the President of
+the United States; If he approve he shall sign it, but if not he shall
+return it, with his Objections to that House in which it shall have
+originated, who shall enter the Objections at large on their Journal,
+and proceed to reconsider it. If after such Reconsideration two thirds
+of that House shall agree to pass the Bill, it shall be sent, together
+with the Objections, to the other House, by which it shall likewise be
+reconsidered, and if approved by two thirds of that House, it shall
+become a Law. But in all such Cases the Votes of both Houses shall be
+determined by Yeas and Nays, and the Names of the Persons voting for
+and against the Bill shall be entered on the Journal of each House
+respectively. If any Bill shall not be returned by the President within
+ten Days (Sundays excepted) after it shall have been presented to him,
+the Same shall be a Law, in like Manner as if he had signed it, unless
+the Congress by their Adjournment prevent its Return, in which Case it
+shall not be a Law.
+
+Every Order, Resolution, or Vote to which the Concurrence of the Senate
+and House of Representatives may be necessary (except on a question of
+Adjournment) shall be presented to the President of the United States;
+and before the Same shall take Effect, shall be approved by him, or
+being disapproved by him, shall be repassed by two thirds of the Senate
+and House of Representatives, according to the Rules and Limitations
+prescribed in the Case of a Bill.
+
+SECTION 8. The Congress shall have Power To lay and collect Taxes,
+Duties, Imposts and Excises, to pay the Debts and provide for the common
+Defence and general Welfare of the United States; but all Duties,
+Imposts and Excises shall be uniform throughout the United States;
+
+To borrow Money on the credit of the United States;
+
+To regulate Commerce with foreign Nations, and among the several States,
+and with the Indian Tribes;
+
+To establish an uniform Rule of Naturalization, and uniform Laws on the
+subject of Bankruptcies throughout the United States;
+
+To coin Money, regulate the Value thereof, and of foreign Coin, and fix
+the Standard of Weights and Measures;
+
+To provide for the Punishment of counterfeiting the Securities and
+current Coin of the United States;
+
+To establish Post Offices and post Roads;
+
+To promote the Progress of Science and useful Arts, by securing for
+limited Times to Authors and Inventors the exclusive Right to their
+respective Writings and Discoveries;
+
+To constitute Tribunals inferior to the supreme Court;
+
+To define and punish Piracies and Felonies committed on the high Seas,
+and Offences against the Law of Nations;
+
+To declare War, grant Letters of Marque and Reprisal, and make Rules
+concerning Captures on Land and Water;
+
+To raise and support Armies, but no Appropriation of Money to that Use
+shall be for a longer Term than two Years;
+
+To provide and maintain a Navy;
+
+To make Rules for the Government and Regulation of the land and naval
+Forces;
+
+To provide for calling forth the Militia to execute the Laws of the
+Union, suppress Insurrections and repel Invasions;
+
+To provide for organizing, arming, and disciplining, the Militia, and
+for governing such Part of them as may be employed in the Service of the
+United States, reserving to the States respectively, the Appointment of
+the Officers, and the Authority of training the Militia according to the
+discipline prescribed by Congress;
+
+To exercise exclusive Legislation in all Cases whatsoever, over such
+District (not exceeding ten Miles square) as may, by Cession of
+particular States, and the Acceptance of Congress, become the Seat of
+the Government of the United States, and to exercise like Authority over
+all Places purchased by the Consent of the Legislature of the State in
+which the Same shall be, for the Erection of Forts, Magazines, Arsenals,
+dock-Yards, and other needful Buildings;--And
+
+To make all Laws which shall be necessary and proper for carrying into
+Execution the foregoing Powers, and all other Powers vested by this
+Constitution in the Government of the United States, or in any
+Department or Officer thereof.
+
+SECTION 9. The Migration or Importation of such Persons as any of the
+States now existing shall think proper to admit, shall not be prohibited
+by the Congress prior to the Year one thousand eight hundred and eight,
+but a Tax or duty may be imposed on such Importation, not exceeding ten
+dollars for each Person.
+
+The Privilege of the Writ of Habeas Corpus shall not be suspended,
+unless when in Cases of Rebellion or Invasion the public Safety may
+require it.
+
+No Bill of Attainder or ex post facto Law shall be passed.
+
+No Capitation, or other direct, tax shall be laid, unless in Proportion
+to the Census or Enumeration herein before directed to be taken.
+
+No Tax or Duty shall be laid on Articles exported from any State.
+
+No Preference shall be given by any Regulation of Commerce or Revenue to
+the Ports of one State over those of another: nor shall Vessels bound
+to, or from, one State, be obliged to enter, clear, or pay Duties in
+another.
+
+No Money shall be drawn from the Treasury, but in Consequence of
+Appropriations made by Law; and a regular Statement and Account of the
+Receipts and Expenditures of all public Money shall be published from
+time to time.
+
+No Title of Nobility shall be granted by the United States: And no
+Person holding any Office of Profit or Trust under them, shall, without
+the Consent of the Congress, accept of any present, Emolument, Office,
+or Title, of any kind whatever, from any King, Prince, or foreign State.
+
+SECTION 10. No State shall enter into any Treaty, Alliance, or
+Confederation; grant Letters of Marque and Reprisal; coin Money; emit
+Bills of Credit; make any Thing but gold and silver Coin a Tender in
+Payment of Debts; pass any Bill of Attainder, ex post facto Law, or Law
+impairing the Obligation of Contracts, or grant any Title of Nobility.
+
+No State shall, without the Consent of the Congress, lay any Imposts or
+Duties on Imports or Exports, except what may be absolutely necessary
+for executing its inspection Laws: and the net Produce of all Duties and
+Imposts, laid by any State on Imports or Exports, shall be for the Use
+of the Treasury of the United States; and all such Laws shall be subject
+to the Revision and Controul of the Congress.
+
+No State shall, without the Consent of Congress, lay any Duty of
+Tonnage, keep Troops, or Ships of War in time of Peace, enter into any
+Agreement or Compact with another State, or with a foreign Power, or
+engage in War, unless actually invaded, or in such imminent Danger as
+will not admit of delay.
+
+
+ARTICLE II.
+
+SECTION 1. The executive Power shall be vested in a President of the
+United States of America. He shall hold his Office during the Term of
+four Years, and, together with the Vice President, chosen for the same
+Term, be elected, as follows
+
+Each State shall appoint, in such Manner as the Legislature thereof may
+direct, a Number of Electors, equal to the whole Number of Senators and
+Representatives to which the State may be entitled in the Congress: but
+no Senator or Representative, or Person holding an Office of Trust or
+Profit under the United States, shall be appointed an Elector.
+
+The electors shall meet in their respective States, and vote by ballot
+for two Persons, of whom one at least shall not be an Inhabitant of the
+same State with themselves. And they shall make a List of all the
+Persons voted for, and of the Number of Votes for each; which List they
+shall sign and certify, and transmit sealed to the Seat of the
+Government of the United States, directed to the President of the
+Senate. The President of the Senate shall, in the Presence of the Senate
+and House of Representatives, open all the Certificates, and the Votes
+shall then be counted. The Person having the greatest Number of Votes
+shall be the President, if such Number be a Majority of the whole Number
+of Electors appointed; and if there be more than one who have such
+Majority, and have an equal Number of Votes, then the House of
+Representatives shall immediately chuse by Ballot one of them for
+President; and if no Person have a Majority, then from the five highest
+on the List the said House shall in like Manner chuse the President. But
+in chusing the President, the Votes shall be taken by States, the
+Representation from each State having one Vote; A quorum for this
+Purpose shall consist of a Member or Members from two thirds of the
+States, and a Majority of all the States shall be necessary to a Choice.
+In every Case, after the Choice of the President, the Person having the
+greatest Number of Votes of the Electors shall be the Vice President.
+But if there should remain two or more who have equal Votes, the Senate
+shall chuse from them by Ballot the Vice President.
+
+The Congress may determine the Time of chusing the Electors, and the Day
+on which they shall give their Votes; which Day shall be the same
+throughout the United States.
+
+No Person except a natural born Citizen, or a Citizen of the United
+States, at the time of the Adoption of this Constitution, shall be
+eligible to the Office of President; neither shall any Person be
+eligible to that Office who shall not have attained to the Age of thirty
+five Years, and been fourteen Years a Resident within the United States.
+
+In Case of the Removal of the President from Office, or of his Death,
+Resignation, or Inability to discharge the Powers and Duties of the said
+Office, the same shall devolve on the Vice President, and the Congress
+may by Law provide for the Case of Removal, Death, Resignation, or
+Inability, both of the President and Vice President, declaring what
+Officer shall then act as President, and such Officer shall act
+accordingly, until the Disability be removed, or a President shall be
+elected.
+
+The President shall, at stated Times, receive for his Services, a
+Compensation, which shall neither be encreased nor diminished during the
+Period for which he shall have been elected, and he shall not receive
+within that Period any other Emolument from the United States, or any of
+them.
+
+Before he enter on the Execution of his Office, he shall take the
+following Oath or Affirmation:--"I do solemnly swear (or affirm) that I
+will faithfully execute the Office of President of the United States,
+and will to the best of my Ability, preserve, protect and defend the
+Constitution of the United States."
+
+SECTION 2. The President shall be Commander in Chief of the Army and
+Navy of the United States, and of the Militia of the several States,
+when called into the actual Service of the United States; he may require
+the Opinion, in writing, of the principal Officer in each of the
+executive Departments, upon any Subject relating to the Duties of their
+respective Offices, and he shall have Power to grant Reprieves and
+Pardons for Offences against the United States, except in Cases of
+Impeachment.
+
+He shall have Power, by and with the Advice and Consent of the Senate,
+to make Treaties, provided two thirds of the Senators present concur;
+and he shall nominate, and by and with the Advice and Consent of the
+Senate, shall appoint Ambassadors, other public Ministers and Consuls,
+Judges of the supreme Court, and all other Officers of the United
+States, whose Appointments are not herein otherwise provided for, and
+which shall be established by Law: but the Congress may by Law vest the
+Appointment of such inferior Officers, as they think proper, in the
+President alone, in the Courts of Law, or in the Heads of Departments.
+
+The President shall have Power to fill up all Vacancies that may happen
+during the Recess of the Senate, by granting Commissions which shall
+expire at the End of their next Session.
+
+SECTION 3. He shall from time to time give to the Congress Information
+of the State of the Union, and recommend to their Consideration such
+Measures as he shall judge necessary and expedient; he may, on
+extraordinary Occasions, convene both Houses, or either of them, and in
+Case of Disagreement between them, with Respect to the Time of
+Adjournment, he may adjourn them to such Time as he shall think proper;
+he shall receive Ambassadors and other public Ministers; he shall take
+Care that the Laws be faithfully executed, and shall Commission all the
+Officers of the United States.
+
+SECTION 4. The President, Vice President and all civil Officers of the
+United States, shall be removed from Office on Impeachment for, and
+Conviction of, Treason, Bribery, or other high Crimes and Misdemeanors.
+
+
+ARTICLE III.
+
+SECTION 1. The judicial Power of the United States, shall be vested in
+one supreme Court, and in such inferior Courts as the Congress may from
+time to time ordain and establish. The Judges, both of the supreme and
+inferior Courts, shall hold their Offices during good Behaviour, and
+shall, at stated Times, receive for their Services, a Compensation,
+which shall not be diminished during their Continuance in Office.
+
+SECTION 2. The judicial Power shall extend to all Cases, in Law and
+Equity, arising under this Constitution, the Laws of the United States,
+and Treaties made, or which shall be made, under their Authority;--to
+all Cases affecting Ambassadors, other public Ministers and Consuls;--to
+all Cases of admiralty and maritime Jurisdiction;--to Controversies to
+which the United States shall be a Party;--to Controversies between two
+or more States;--between a State and Citizens of another
+State;--between Citizens of different States,--between Citizens of the
+same State claiming Lands under Grants of different States, and between
+a State, or the Citizens thereof, and foreign States, Citizens or
+Subjects.
+
+In all Cases affecting Ambassadors, other public Ministers and Consuls,
+and those in which a State shall be Party, the supreme Court shall have
+original Jurisdiction. In all the other Cases before mentioned, the
+supreme Court shall have appellate Jurisdiction, both as to Law and
+Fact, with such Exceptions, and under such Regulations as the Congress
+shall make.
+
+The Trial of all Crimes, except in Cases of Impeachment, shall be by
+Jury; and such Trial shall be held in the State where the said Crimes
+shall have been committed; but when not committed within any State, the
+Trial shall be at such Place or Places as the Congress may by Law have
+directed.
+
+SECTION 3. Treason against the United States, shall consist only in
+levying War against them, or in adhering to their Enemies, giving them
+Aid and Comfort. No Person shall be convicted of Treason unless on the
+Testimony of two Witnesses to the same overt Act, or on Confession in
+open Court.
+
+The Congress shall have Power to declare the Punishment of Treason, but
+no Attainder of Treason shall work Corruption of Blood, or Forfeiture
+except during the Life of the Person attainted.
+
+
+ARTICLE IV.
+
+SECTION 1. Full Faith and Credit shall be given in each State to the
+public Acts, Records, and judicial Proceedings of every other State.
+And the Congress may by general Laws prescribe the Manner in which such
+Acts, Records and Proceedings shall be proved, and the Effect thereof.
+
+SECTION 2. The Citizens of each State shall be entitled to all
+Privileges and Immunities of Citizens in the several States.
+
+A person charged in any State with Treason, Felony, or other Crime, who
+shall flee from Justice, and be found in another State, shall on Demand
+of the executive Authority of the State from which he fled, be delivered
+up, to be removed to the State having Jurisdiction of the Crime.
+
+No Person held to Service or Labour in one State, under the Laws
+thereof, escaping into another, shall, in Consequence of any Law or
+Regulation therein, be discharged from such Service or Labour, but shall
+be delivered up on Claim of the Party to whom such Service or Labour may
+be due.
+
+SECTION 3. New States may be admitted by the Congress into this Union;
+but no new State shall be formed or erected within the Jurisdiction of
+any other State; nor any State be formed by the Junction of two or more
+States, or Parts of States, without the Consent of the Legislatures of
+the States concerned as well as of the Congress.
+
+The Congress shall have Power to dispose of and make all needful Rules
+and Regulations respecting the Territory or other Property belonging to
+the United States; and nothing in this Constitution shall be so
+construed as to Prejudice any Claims of the United States, or of any
+particular State.
+
+SECTION 4. The United States shall guarantee to every State in this
+Union a Republican Form of Government, and shall protect each of them
+against Invasion; and on Application of the Legislature, or of the
+Executive (when the Legislature cannot be convened) against domestic
+Violence.
+
+
+ARTICLE V.
+
+The Congress, whenever two thirds of both Houses shall deem it
+necessary, shall propose Amendments to this Constitution, or, on the
+Application of the Legislatures of two thirds of the several States,
+shall call a Convention for proposing Amendments, which, in either Case,
+shall be valid to all Intents and Purposes, as Part of this
+Constitution, when ratified by the Legislatures of three fourths of the
+several States, or by Conventions in three fourths thereof, as the one
+or the other Mode of Ratification may be proposed by the Congress;
+Provided that no Amendment which may be made prior to the Year One
+thousand eight hundred and eight shall in any Manner affect the first
+and fourth Clauses in the Ninth Section of the first Article; and that
+no State, without its Consent, shall be deprived of its equal Suffrage
+in the Senate.
+
+
+ARTICLE VI.
+
+All Debts contracted and Engagements entered into, before the Adoption
+of this Constitution, shall be as valid against the United States under
+this Constitution, as under the Confederation.
+
+This Constitution, and the Laws of the United States which shall be made
+in Pursuance thereof; and all Treaties made, or which shall be made,
+under the Authority of the United States, shall be the supreme Law of
+the Land; and the Judges in every State shall be bound thereby, any
+Thing in the Constitution or Laws of any State to the Contrary
+notwithstanding.
+
+The Senators and Representatives before mentioned, and the Members of
+the several State Legislatures, and all executive and judicial Officers,
+both of the United States and of the several States, shall be bound by
+Oath or Affirmation, to support this Constitution; but no religious Test
+shall ever be required as a Qualification to any Office or public Trust
+under the United States.
+
+
+ARTICLE VII.
+
+The Ratification of the Conventions of nine States shall be sufficient
+for the Establishment of this Constitution between the States so
+ratifying the Same.
+
+Done in Convention by the Unanimous Consent of the States present the
+Seventeenth Day of September in the Year of our Lord one thousand seven
+hundred and Eighty seven, and of the Independence of the United States
+of America the Twelfth IN WITNESS whereof We have hereunto subscribed
+our Names.
+
+G'o: WASHINGTON----
+_Presidt. and deputy from Virginia_
+
+_New Hampshire_      { JOHN LANGDON
+                     { NICHOLAS GILMAN
+
+_Massachusetts_      { NATHANIEL GORHAM
+                     { RUFUS KING
+
+_Connecticut_        { WM. SAML. JOHNSON
+                     { ROGER SHERMAN
+
+_New York_             ALEXANDER HAMILTON
+
+                     { WIL: LIVINGSTON
+_New Jersey_         { DAVID BREARLEY
+                     { WM. PATERSON
+                     { JONA: DAYTON
+
+                     { B. FRANKLIN
+                     { THOMAS MIFFLIN
+                     { ROBT. MORRIS
+_Pennsylvania_       { GEO. CLYMER
+                     { THOS. FITZSIMONS
+                     { JARED INGERSOLL
+                     { JAMES WILSON
+                     { GOUV MORRIS
+
+                     { GEO: READ
+                     { GUNNING BEDFORD Jun
+_Delaware_           { JOHN DICKINSON
+                     { RICHARD BASSETT
+                     { JACO: BROOM
+
+                     { JAMES McHENRY
+_Maryland_           { DAN OF ST THOS JENIFER
+                     { DANL. CARROLL
+
+_Virginia_           { JOHN BLAIR--
+                     { JAMES MADISON JR.
+
+                     { WM. BLOUNT
+_North Carolina_     { RICHD. DOBBS SPAIGHT
+                     { HU WILLIAMSON
+
+                     { J. RUTLEDGE
+_South Carolina_     { CHARLES COTESWORTH PINCKNEY
+                     { CHARLES PINCKNEY
+                     { PIERCE BUTLER
+
+_Georgia_            { WILLIAM FEW
+                     { ABR. BALDWIN
+
+_Attest_ WILLIAM JACKSON _Secretary_
+
+
+
+
+AMENDMENTS
+
+
+[ARTICLE I.]
+
+Congress shall make no law respecting an establishment of religion, or
+prohibiting the free exercise thereof; or abridging the freedom of
+speech, or of the press; or the right of the people peaceably to
+assemble, and to petition the Government for a redress of grievances.
+
+
+[ARTICLE II.]
+
+A well regulated Militia, being necessary to the security of a free
+State, the right of the people to keep and bear Arms, shall not be
+infringed.
+
+
+[ARTICLE III.]
+
+No Soldier shall, in time of peace be quartered in any house, without
+the consent of the Owner, nor in time of war, but in a manner to be
+prescribed by law.
+
+
+[ARTICLE IV.]
+
+The right of the people to be secure in their persons, houses, papers,
+and effects, against unreasonable searches and seizures, shall not be
+violated, and no Warrants shall issue, but upon probable cause,
+supported by Oath or affirmation, and particularly describing the place
+to be searched, and the persons or things to be seized.
+
+
+[ARTICLE V.]
+
+No person shall be held to answer for a capital, or otherwise infamous
+crime, unless on a presentment or indictment of a Grand Jury, except in
+cases arising in the land or naval forces, or in the Militia, when in
+actual service in time of War or public danger; nor shall any person be
+subject for the same offence to be twice put in jeopardy of life or
+limb; nor shall be compelled in any Criminal Case to be a witness
+against himself, nor be deprived of life, liberty, or property, without
+due process of law; nor shall private property be taken for public use,
+without just compensation.
+
+
+[ARTICLE VI.]
+
+In all criminal prosecutions, the accused shall enjoy the right to a
+speedy and public trial, by an impartial jury of the State and district
+wherein the crime shall have been committed, which district shall have
+been previously ascertained by law, and to be informed of the nature and
+cause of the accusation; to be confronted with the witnesses against
+him; to have compulsory process for obtaining Witnesses in his favor,
+and to have the Assistance of Counsel for his defence.
+
+
+[ARTICLE VII.]
+
+In suits at common law, where the value in controversy shall exceed
+twenty dollars, the right of trial by jury shall be preserved, and no
+fact tried by a jury shall be otherwise re-examined in any Court of the
+United States, than according to the rules of the common law.
+
+
+[ARTICLE VIII.]
+
+Excessive bail shall not be required, nor excessive fines imposed, nor
+cruel and unusual punishments inflicted.
+
+
+[ARTICLE IX.]
+
+The enumeration in the Constitution, of certain rights, shall not be
+construed to deny or disparage others retained by the people.
+
+
+[ARTICLE X.]
+
+The powers not delegated to the United States by the Constitution, nor
+prohibited by it to the States, are reserved to the States respectively,
+or to the people.
+
+
+[ARTICLE XI.]
+
+The Judicial power of the United States shall not be construed to extend
+to any suit in law or equity, commenced or prosecuted against one of the
+United States by Citizens of another State, or by Citizens or Subjects
+of any Foreign State.
+
+
+[ARTICLE XII.]
+
+The Electors shall meet in their respective states, and vote by ballot
+for President and Vice-President, one of whom, at least, shall not be an
+inhabitant of the same state with themselves; they shall name in their
+ballots the person voted for as President, and in distinct ballots the
+person voted for as Vice-President, and they shall make distinct lists
+of all persons voted for as President, and of all persons voted for as
+Vice-President, and of the number of votes for each, which lists they
+shall sign and certify, and transmit sealed to the seat of the
+government of the United States, directed to the President of the
+Senate;--The President of the Senate shall, in the presence of the
+Senate and House of Representatives, open all the certificates and the
+votes shall then be counted;--The person having the greatest number of
+votes for President, shall be the President, if such number be a
+majority of the whole number of Electors appointed; and if no person
+have such majority, then from the persons having the highest numbers not
+exceeding three on the list of those voted for as President, the House
+of Representatives shall choose immediately, by ballot, the President.
+But in choosing the President, the votes shall be taken by states, the
+representation from each state having one vote; a quorum for this
+purpose shall consist of a member or members from two-thirds of the
+states, and a majority of all the states shall be necessary to a choice.
+And if the House of Representatives shall not choose a President
+whenever the right of choice shall devolve upon them, before the fourth
+day of March next following, then the Vice-President shall act as
+President, as in the case of the death or other constitutional
+disability of the President. The person having the greatest number of
+votes as Vice-President, shall be the Vice-President, if such number be
+a majority of the whole number of Electors appointed, and if no person
+have a majority, then from the two highest numbers on the list, the
+Senate shall choose the Vice-President; a quorum for the purpose shall
+consist of two-thirds of the whole number of Senators, and a majority of
+the whole number shall be necessary to a choice. But no person
+constitutionally ineligible to the office of President shall be eligible
+to that of Vice-President of the United States.
+
+
+[ARTICLE XIII.]
+
+SECTION 1. Neither slavery nor involuntary servitude, except as a
+punishment for crime whereof the party shall have been duly convicted,
+shall exist within the United States, or any place subject to their
+jurisdiction.
+
+SECTION 2. Congress shall have power to enforce this article by
+appropriate legislation.
+
+
+[ARTICLE XIV.]
+
+SECTION 1. All persons born or naturalized in the United States, and
+subject to the jurisdiction thereof, are citizens of the United States
+and of the State wherein they reside. No State shall make or enforce any
+law which shall abridge the privileges or immunities of citizens of the
+United States; nor shall any State deprive any person of life, liberty,
+or property, without due process of law; nor deny to any person within
+its jurisdiction the equal protection of the laws.
+
+SECTION 2. Representatives shall be apportioned among the several States
+according to their respective numbers, counting the whole number of
+persons in each State, excluding Indians not taxed. But when the right
+to vote at any election for the choice of electors for President and
+Vice-President of the United States, Representatives in Congress, the
+Executive and Judicial officers of a State, or the members of the
+Legislature thereof, is denied to any of the male inhabitants of such
+State, being twenty-one years of age, and citizens of the United States,
+or in any way abridged, except for participation in rebellion, or other
+crime, the basis of representation therein shall be reduced in the
+proportion which the number of such male citizens shall bear to the
+whole number of male citizens twenty-one years of age in such State.
+
+SECTION 3. No person shall be a Senator or Representative in Congress,
+or elector of President and Vice-President, or hold any office, civil or
+military, under the United States, or under any State, who, having
+previously taken an oath, as a member of Congress, or as an officer of
+the United States, or as a member of any State legislature, or as an
+executive or judicial officer of any State, to support the Constitution
+of the United States, shall have engaged in insurrection or rebellion
+against the same, or given aid or comfort to the enemies thereof. But
+Congress may by a vote of two-thirds of each House, remove such
+disability.
+
+SECTION 4. The validity of the public debt of the United States,
+authorized by law, including debts incurred for payment of pensions and
+bounties for services in suppressing insurrection or rebellion, shall
+not be questioned. But neither the United States nor any State shall
+assume or pay any debt or obligation incurred in aid of insurrection or
+rebellion against the United States, or any claim for the loss or
+emancipation of any slave; but all such debts, obligations and claims
+shall be held illegal and void.
+
+SECTION 5. The Congress shall have power to enforce, by appropriate
+legislation, the provisions of this article.
+
+
+[ARTICLE XV.]
+
+SECTION 1. The right of citizens of the United States to vote shall not
+be denied or abridged by the United States or by any State on account of
+race, color, or previous condition of servitude.
+
+SECTION 2. The Congress shall have power to enforce this article by
+appropriate legislation.
+
+
+[ARTICLE XVI.]
+
+The Congress shall have power to lay and collect taxes on incomes, from
+whatever source derived, without apportionment among the several States,
+and without regard to any census or enumeration.
+
+
+[ARTICLE XVII.]
+
+The Senate of the United States shall be composed of two Senators from
+each State, elected by the people thereof, for six years; and each
+Senator shall have one vote. The electors in each State shall have the
+qualifications requisite for electors of the most numerous branch of the
+state legislatures.
+
+When vacancies happen in the representation of any State in the Senate,
+the executive authority of such State shall issue writs of election to
+fill such vacancies: Provided, That the legislature of any State may
+empower the executive thereof to make temporary appointment until the
+people fill the vacancies by election as the legislature may direct.
+
+This amendment shall not be so construed as to affect the election or
+term of any Senator chosen before it becomes valid as part of the
+Constitution.
+
+
+[ARTICLE XVIII.]
+
+SECTION 1. After one year from the ratification of this article the
+manufacture, sale, or transportation of intoxicating liquors within, the
+importation thereof into, or the exportation thereof from the United
+States and all territory subject to the jurisdiction thereof for
+beverage purposes is hereby prohibited.
+
+SEC. 2. The Congress and the several States shall have concurrent power
+to enforce this article by appropriate legislation.
+
+SEC. 3. This article shall be inoperative unless it shall have been
+ratified as an amendment to the Constitution by the legislatures of the
+several States, as provided in the Constitution, within seven years from
+the date of the submission hereof to the States by the Congress.
+
+
+[ARTICLE XIX.]
+
+The right of citizens of the United States to vote shall not be denied
+or abridged by the United States or by any State on account of sex.
+
+Congress shall have power to enforce this article by appropriate
+legislation.
+
+
+
+
+
+End of Project Gutenberg's Our Changing Constitution, by Charles Pierson
+
+*** END OF THIS PROJECT GUTENBERG EBOOK OUR CHANGING CONSTITUTION ***
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