In enacting the Packers and Stockyards Act of August 15, 1921, Congress did not move in obedience to powerful voting groups, as it did when it passed An Act for the Promotion of the Welfare and Hygiene of Maternity and Infancy, and for Other Purposes, and as it did in passing the bills on Child Labor.
It had no apparent reason for disregarding the Tenth Amendment and meddling in the duties of the States. There may have been complaints about the charges or services to the public of the stockyards at Chicago. If there had been dissatisfaction in that respect, the complaints should have been lodged with the commission of Illinois having authority. No default in the service of a corporation of a State could have given jurisdiction to Congress.
While the opinion has often been expressed by persons otherwise well educated that if a State will not perform its duty, then let the Nation do it, the Constitution is not changeable that way: an amendment is necessary to a change. The idea, however, is startlingly prevalent. Multitudes believe that the National Government should take over more often than it has done.
Whatever the urge, Congress stepped into Illinois and took the control of the stockyards at Chicago away from the State. The sanction in 1922 by the Supreme Court (258 U. S. 495) of the action of Congress made the law effective as to stockyards on railroads in other States, and managing bureaus moved in.
The action by Congress was under the Commerce Clause of the Constitution, which empowers it "to regulate commerce among the several States." This clause and the General Welfare Clause are the two stand-bys for Congress when it finds the Tenth Amendment in its way.
The Packers and Stockyards case was undoubtedly in the mind of Governor Franklin D. Roosevelt of New York when, in 1929, addressing a meeting of governors, he condemned unsparingly the "stretching" of the Commerce Clause by Congress to cover its intrusions into the States.
The stockyards at Chicago were being regulated by the State of Illinois. Livestock coming from other States was unloaded at the yards, fed and sheltered. Dealers in livestock had offices in or near the yards and made purchases there. Most of the animals received at the stockyards were taken by the large packing companies and manufactured into beef, pork, and other meats and foods. Those manufactured products were in part shipped out of Illinois to other States.
Someone in Congress or elsewhere conceived the idea that the transportation of freight was continuous, from the feeding lots where the livestock was fattened to the States in which the meats were consumed, and that therefore Illinois should have no control of such "interstate" commerce.
In the statement of facts preceding the opinion by Chief Justice Taft, it was said that "the act seeks to regulate the business of packers done in interstate commerce." But that could have been done without usurping the police power of the State of Illinois over a local industry. For the Sherman Anti-Trust Law had been enacted in 1891, thirty years before, to prevent or remove the conspiracies and combinations in restraint of trade and competition which were in this case charged against the packers. The Chief Justice said that the Packers and Stockyards Act "forbids unfair, discriminatory and deceptive practices in such commerce" precisely what the Sherman Law had long forbidden. Except that the Sherman Law was not an invasion of the State in disregard of the Tenth Amendment. The Packers and Stockyards Act was.
The Act made the Secretary of Agriculture a tribunal to hear complaints of unfair and monopolistic practices and to make desist orders. That was unnecessary, for courts of equity had been giving such remedies under the Sherman Law.
Indeed, as far back as 1905 a decree in a suit under the Sherman Law ordered (196 U.S. 875) the packers to desist from monopolistic practices in their trade in interstate commerce. And following the report of the Federal Trade Commission, and before the passage of the Packers and Stockyards Act, a bill was filed in a Federal Court of the District of Columbia to enjoin the Big Five packers from monopolistic practices in the purchase of livestock and the sale and distribution of meats. To a decree stopping the monopolistic practices complained of, the packers consented.
In 1912 these same packers had been indicted for monopolistic practices in violation of the Sherman Anti-Trust Law and upon trial were acquitted.
The Sherman Law also proved adequate to break up Standard Oil, Northern Securities, and many other powerful monopolies.
As has been shown, the courts had many times, under the Sherman Anti-Trust Law, made such combinations give up their controlling shares of stock and desist from the other practices complained of. There was no need for further legislation. The Interstate Commerce Commission had been, under the Commerce Clause, regulating transportation of commerce for more than a third of a century, and the Federal Trade Commission, under the Act of 1914, under the same clause, had for several years been making orders respecting fair practices in trade and commerce.
The decision in the Stockyards case was contrary to a long line of holdings by the Interstate Commerce Commission and the courts that interstate commerce begins upon the delivery of a shipment to a carrier consigned (addressed) to a point in another State, and that it ends upon delivery to the consignee. It was held, for illustration, in another case, that a shipment of property so delivered became taxable by the State where it was received. By many similar decisions the difference between interstate commerce and intrastate commerce had been clearly defined. By the definition so worked out the stockyards company in Chicago, chartered to provide for profit yardage, feed, and care for livestock, was no more engaged in interstate commerce subject to Congressional regulation than was a grocer in a nearby street receiving goods from another State. That the animals were later to go to other States in the form of foods did not make a through interstate shipment of the animals part of the way and the foods at another time the remainder of the distance.
The Supreme Court said that the Act treated all stockyards "as great national public utilities." But to call companies operating local yards for feeding and otherwise caring for livestock consigned to them and for facilitating local transactions between sellers and buyers, "great national public utilities," could not change the facts or confer jurisdiction on Congress to regulate their business to the ousting of the constitutional jurisdiction of the States.
However, the Supreme Court held (258 U. S. 495) otherwise, Justice McReynolds dissenting and Justice Day not sitting.
This decision is to be used later to support the extravagancies of the National Labor Relations Act as being, not what its title calls it, but a law regulating commerce among the States in accordance with the Commerce Clause of the Constitution!
Madison fondly believed that the States would rise unanimously against any aggression by the National Government upon their local authority (The Federalist, No. 46):
"But ambitious encroachments of the Federal Government on the authority of the State governments would not excite the opposition of a single State or of a few States only. They would be signals of general alarm. Every government would espouse the common cause. A correspondence would be opened. Plans of resistance would be concerted. One spirit would animate and conduct the whole."
Those revolutionary worthies could not conceive of the pusillanimity of a century and a half thereafter! The representatives of the people of the States in Government have originated most of the invasions of the States.
1. The Sherman Law was supplemented in 1914 by the Clayton Act. In the same year the Federal Trade Commission Law was enacted to prevent "unfair methods in competition in interstate commerce."
In suits under the Sherman Law combinations like Standard Oil and Northern Securities were broken apart. But each of the leading parties charges the other with failure during its time in office to enforce the anti-trust laws. Senator Borah said in a speech to his colleagues that each party is enthusiastic for regulation of too-big business only in campaign time. It is a question whether the magnitude of many industrial and commercial organizations may affect people toward a belief in Socialism or Communism.
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