United States v. Butler

No. 401

Argued December 9, 10, 1935

Decided January 6, 1936

297 U.S. 1

CERTIORARI TO THE CIRCUIT COURT OF APPEALS

FOR THE FIRST CIRCUIT

Syllabus



1. Processors of farm products have a standing to question the

constitutionality of the "processing and floor-stock taxes" sought to be

laid upon them by the Agricultural Adjustment Act of May 12, 1933, 48

Stat. 31.  Massachusetts v. Mellon, 262 U.S. 447, distinguished.  P.

57.



2. A tax, in the general understanding and in the strict constitutional

sense, is an exaction for the support of Government; the term does not

connote the expropriation of money from one group to be expended for

another, as a necessary means in a plan of regulation, such as the plan

for regulating agricultural production set up in the Agricultural

Adjustment Act.  P. 61.



3. In testing the validity of the "processing tax," it is impossible to

wrest it from its setting and treat it apart as a mere excise for

raising revenue.  P. 58.



4. From the conclusion that the exaction is not a true tax it does not

necessarily follow that the statute is void and the exaction

uncollectible if the regulation, of which the exaction is a part, is

within any of the powers granted to Congress.  P. 61.



5. The Constitution is the supreme law of the land, ordained and

established by the people, and all legislation must conform to the

principles it lays down.  P. 62.



6. It is a misconception to say that, in declaring an Act of Congress

unconstitutional, the Court assumes a power to overrule or control the

action of the people's representatives.  P. 62. [297 U.S. 2]



7. When an Act of Congress is appropriately challenged in a Court, it is

the duty of the court to compare it with the article of the Constitution

which is invoked and decide whether it conforms to that article.  P.

62.



8. All that the court does or can do in such cases is to announce its

considered judgment upon the question; it can neither approve nor

condemn any legislative policy; it can merely ascertain and declare

whether the legislation is in accordance with, or in contravention of,

the provisions of the Constitution.  P. 62.



9. The question in such cases is not what powers the Federal Government

ought to have, but what powers have, in fact, been given it by the

people.  P. 63.



10. Ours is a dual form of government; in every State there are two

Governments -- the State and the United States; each State has all

governmental powers save such as the people, by the Constitution, have

conferred upon the United States, denied to the States, or reserved to

themselves.  P. 63.



11. The Government of the United States is a Government of delegated

powers; it has only such powers as are expressly conferred upon it by

the Constitution and such as are reasonably to be implied from those

expressly granted.  P. 63.



12. The Agricultural Adjustment Act does not purport to regulate

transactions in interstate or foreign commerce, and the Government in

this case does not attempt to sustain it under the commerce clause of

the Constitution.  P. 63.



13. In Article I,  8, cl. 1 of the Constitution, which provides that

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, the phrase "to provide for the general

welfare" is not an independent provision empowering Congress generally

to provide for the general welfare, but is a qualification defining and

limiting the power "to lay and collect taxes," etc.  P. 64.



14. The power to appropriate money from the Treasury (Constitution, Art.

I,  9, cl. 7) is as broad as the power to tax, and the power to lay

taxes to provide for the general welfare of the United States implies

the power to appropriate public funds for that purpose.  P. 65.



15. The power to tax and spend is a separate and distinct power; its

exercise is not confined to the fields committed to Congress by the

other enumerated grants of power, but it is limited by the requirement

that it shall be exercised to provide for the general welfare of the

United States.  P. 65. [297 U.S. 3]



16. The Court is not required in this case to ascertain the scope of the

phrase "general welfare of the United States," or to determine whether

an appropriation in aid of agriculture falls within it.  P. 68.



17. The plan of the Agricultural Adjustment Act is to increase the

prices of certain farm products for the farmer by decreasing the

quantities produced; the decrease is to be attained by making payments

of money to farmers who, under agreements with the Secretary of

Agriculture, reduce their acreage and crops, and the money for this

purpose is exacted, as a tax, from those who first process the

commodities.



Held:



(1) The Act invades the reserved powers of the States.  P. 68.



(2) Regulation and control of agricultural production are beyond the

powers delegated to the Federal Government.  P. 68.



(3) The tax, the appropriation of the funds raised, and the direction

for their disbursement, are but parts of the plan -- the means to an

unconstitutional end.  P. 68.



(4) The power of taxation, which is expressly granted to Congress, may

be adopted as a means to carry into operation another power also

expressly granted, but not to effectuate an end which is not within the

scope of the Constitution.  P. 69.



(5) The regulation of the farmer's activities under the statute, though

in form subject to his own will, is, in fact, coercion through economic

pressure; his right of choice is illusory.  P. 70.



(6) Even if the farmer's consent were purely voluntary, the Act would

stand no better.  At best, it is a scheme for purchasing with federal

funds submission to federal regulation of a subject reserved to the

States.  P. 72.



(7) The right to appropriate and spend money under contracts or proper

governmental purposes cannot justify contracts that are not within

federal power.  P. 72.



(8) Congress cannot invade state jurisdiction by purchasing the action

of individuals any more than by compelling it.  P. 73.



(9) There is an obvious difference between a statute stating the

conditions upon which moneys shall be expended and one effective only

upon the assumption of a contractual obligation to submit to a

regulation which otherwise could not be enforced.  P. 73.



(10) Owing to the supremacy of the United States, if the contracts with

farmers contemplated by the Agricultural Adjustment Act were within the

federal power to make, the States could not declare them void or prevent

compliance with their terms.  P. 74.



(11) Existence of a situation of national concern resulting from similar

and widespread local conditions cannot enable Congress [297 U.S. 4] to

ignore the constitutional limitations upon its own powers and usurp

those reserved to the States.  P. 74.



(12) If the novel view of the General Welfare Clause now advanced in

support of the tax were accepted, that clause would not only enable

Congress to supplant the States in the regulation of agriculture and of

all other industries as well, but would furnish the means whereby all of

the other provisions of the Constitution, sedulously framed to define

and limit the power of the United States and preserve the powers of the

States, could be broken down, the independence of the individual States

obliterated, and the United States converted into a central government

exercising uncontrolled police power throughout the Union superseding

all local control over local concerns.  P. 75.



(13) Congress, being without power to impose the contested exaction,

could not lawfully ratify the acts of an executive officer in assessing

it.  P. 78.



78 F.2d 1 affirmed.



CERTIORARI, 296 U.S. 561, to review a decree which reversed an order of

the District Court (Franklin Process Co. v. Hoosac Mills Corp., 8

F.Supp. 552), directing the receivers of Hoosac Mills, a cotton milling

corporation, to pay claims of the United States for processing and floor

taxes on cotton, levied under  9 and 16 of the Agricultural Adjustment

Act of May 12, 1933.  The opinion of this Court begins on p. 53,

post; the dissenting opinion on p. 78. [297 U.S. 53] ROBERTS, J.,

lead opinion



MR. JUSTICE ROBERTS delivered the opinion of the Court.



In this case, we must determine whether certain provisions of the

Agricultural Adjustment Act, 1933,{1} conflict with the Federal

Constitution.



Title I of the statute is captioned "Agricultural Adjustment."  Section

1 recites that an economic emergency has arisen, due to disparity

between the prices of agricultural and other commodities, with

consequent destruction of farmers' purchasing power and breakdown in

orderly exchange, which, in turn, have affected transactions in

agricultural commodities with a national public interest and burdened

and obstructed the normal currents of commerce, calling for the

enactment of legislation. [297 U.S. 54]



Section 2 declares it to be the policy of Congress:



To establish and maintain such balance between the production and

consumption of agricultural commodities, and such marketing conditions

therefor, as will reestablish prices to farmers at a level that will

give agricultural commodities{2} a purchasing power with respect to

articles that farmers buy equivalent to the purchasing power of

agricultural commodities in the base period.



The base period, in the case of cotton and all other commodities except

tobacco, is designated as that between August, 1909, and July, 1914.



The further policies announced are an approach to the desired equality

by gradual correction of present inequalities "at as rapid a rate as is

deemed feasible in view of the current consumptive demand in domestic

and foreign markets," and the protection of consumers' interest by

readjusting farm production at such level as will not increase the

percentage of the consumers' retail expenditures for agricultural

commodities or products derived therefrom, which is returned to the

farmer, above the percentage returned to him in the base period.



Section 8 provides, amongst other things, that, "In order to effectuate

the declared policy," the Secretary of Agriculture shall have power



(1) To provide for reduction in the acreage or reduction in the

production for market, or both, of any basic agricultural commodity,

through agreements with producers or by other voluntary methods, and to

provide for rental or benefit payments in connection therewith or upon

that part of the production of any basic agricultural commodity required

for domestic consumption, in such amounts as the Secretary deems fair

and reasonable, to [297 U.S. 55] be paid out of any moneys available for

such payments. . . .



(2) To enter into marketing agreements with processors, associations of

producers, and others engaged in the handling, in the current of

interstate or foreign commerce of any agricultural commodity or product

thereof, after due notice and opportunity for hearing to interested

parties. . . .



(3) To issue licenses permitting processors, associations of producers,

and others to engage in the handling, in the current of interstate or

foreign commerce, of any agricultural commodity or product thereof, or

any competing commodity or product thereof.



It will be observed that the Secretary is not required, but is

permitted, if, in his uncontrolled judgment, the policy of the act will

so be promoted, to make agreements with individual farmers for a

reduction of acreage or production upon such terms as he may think fair

and reasonable.



Section 9(a) enacts:



To obtain revenue for extraordinary expenses incurred by reason of the

national economic emergency, there shall be levied processing taxes as

hereinafter provided.  When the Secretary of Agriculture determines that

rental on benefit payments are to be made with respect to any basic

agricultural commodity, he shall proclaim such determination, and a

processing tax shall be in effect with respect to such commodity from

the beginning of the marketing year therefor next following the date of

such proclamation.  The processing tax shall be levied, assessed, and

collected upon the first domestic processing of the commodity, whether

of domestic production or imported, and shall be paid by the processor.

. . .



The Secretary may from time to time, if he finds it necessary for the

effectuation of the policy of the act, readjust the amount of the

exaction to meet the requirements [297 U.S. 56] of subsection (b).  The

tax is to terminate at the end of any marketing year if the rental or

benefit payments are discontinued by the Secretary with the expiration

of that year.



Section 9(b) fixes the tax "at such rate as equals the difference

between the current average farm price for the commodity and the fair

exchange value," with power in the Secretary, after investigation,

notice, and hearing, to readjust the tax so as to prevent the

accumulation of surplus stocks and depression of farm prices.



Section 9(c) directs that the fair exchange value of a commodity shall

be such a price as will give that commodity the same purchasing power

with respect to articles farmers buy as it had during the base period

and that the fair exchange value and the current average farm price of a

commodity shall be ascertained by the Secretary from available

statistics in his department.



Section 12(a) appropriates $100,000,000 "to be available to the

Secretary of Agriculture for administrative expenses under this title

and for rental and benefit payments . . .", and  12(b) appropriates the

proceeds derived from all taxes imposed under the act to be available to

the Secretary of Agriculture for expansion of markets and removal of

surplus agricultural products. . . administrative expenses, rental and

benefit payments, and refunds on taxes.



Section 15(d) permits the Secretary, upon certain conditions, to impose

compensating taxes on commodities in competition with those subject to

the processing tax.



By  16, a floor tax is imposed upon the sale or other disposition of any

article processed wholly or in chief value from any commodity with

respect to which a processing tax is to be levied in amount equivalent

to that of the processing tax which would be payable with respect to the

commodity from which the article is processed if the processing had

occurred on the date when the processing tax becomes effective. [297

U.S. 57]



On July 14, 1933, the Secretary of Agriculture, with the approval of the

President, proclaimed that he had determined rental and benefit payments

should be made with respect to cotton; that the marketing year for that

commodity was to begin August 1, 1933, and calculated and fixed the

rates of processing and floor taxes on cotton in accordance with the

terms of the act.



The United States presented a claim to the respondents as receivers of

the Hoosac Mills Corporation for processing and floor taxes on cotton

levied under  9 and 16 of the act.  The receivers recommended that the

claim be disallowed.  The District Court found the taxes valid, and

ordered them paid.{3}  Upon appeal, the Circuit Court of Appeals

reversed the order.{4}  The judgment under review was entered prior

to the adoption of the amending act of August 24, 1935,{5} and we are

therefore concerned only with the original act.



First.  At the outset, the United States contends that the respondents

have no standing to question the validity of the tax.  The position is

that the act is merely a revenue measure levying an excise upon the

activity of processing cotton -- a proper subject for the imposition of

such a tax -- the proceeds of which go into the federal treasury, and

thus become available for appropriation for any purpose.  It is said

that what the respondents are endeavoring to do is to challenge the

intended use of the money pursuant to Congressional appropriation when,

by confession, that money will have become the property of the

Government and the taxpayer will no longer have any interest in it. 

Massachusetts v. Mellon, 262 U.S. 447, is claimed to foreclose

litigation by the respondents or other taxpayers, as such, looking to

restraint of the expenditure of government funds.  That case might be an

authority [297 U.S. 58] in the petitioners' favor if we were here

concerned merely with a suit by a taxpayer to restrain the expenditure

of the public moneys.  It was there held that a taxpayer of the United

States may not question expenditures from its treasury on the ground

that the alleged unlawful diversion will deplete the public funds, and

thus increase the burden of future taxation.  Obviously the asserted

interest of a taxpayer in the federal government's funds and the

supposed increase of the future burden of taxation is minute and

indeterminable.  But here, the respondents, who are called upon to pay

moneys as taxes, resist the exaction as a step in an unauthorized plan. 

This circumstance clearly distinguishes the case.  The Government, in

substance and effect, asks us to separate the Agricultural Adjustment

Act into two statutes, the one levying an excise on processors of

certain commodities, the other appropriating the public moneys

independently of the first.  Passing the novel suggestion that two

statutes enacted as parts of a single scheme should be tested as if they

were distinct and unrelated, we think the legislation now before us is

not susceptible of such separation and treatment.



The tax can only be sustained by ignoring the avowed purpose and

operation of the act and holding it a measure merely laying an excise

upon processors to raise revenue for the support of government.  Beyond

cavil, the sole object of the legislation is to restore the purchasing

power of agricultural products to a parity with that prevailing in an

earlier day; to take money from the processor and bestow it upon

farmers{6} who will reduce their acreage for [297 U.S. 59] the

accomplishment of the proposed end, and, meanwhile to aid these farmers

during the period required to bring the prices of their crops to the

desired level.



The tax plays an indispensable part in the plan of regulation.  As

stated by the Agricultural Adjustment Administrator, it is " the heart

of the law "; a means of " accomplishing one or both of two things

intended to help farmers attain parity prices and purchasing

power."{7}  A tax automatically goes into effect for a commodity when

the Secretary of Agriculture determines that rental or benefit payments

are to be made for reduction of production of that commodity.  The tax

is to cease when rental or benefit payments cease.  The rate is fixed

with the purpose of bringing about crop reduction and price-raising.  It

is to equal the difference between the " current average farm price "

and " fair exchange value."  It may be altered to such amount as will

prevent accumulation of surplus stocks.  If the Secretary finds the

policy of the act will not be promoted by the levy of the tax for a

given commodity, he may exempt it.  ( 11.)  The whole revenue from the

levy is appropriated in aid of crop control; none of it is made

available for general governmental use.  The entire agricultural

adjustment program embodied in Title I of the act is to become

inoperative when, in the judgment of the President, the national

economic emergency ends, and as to any commodity, he may terminate the

provisions of the law if he finds them no longer requisite to carrying

out the declared policy with respect to such commodity.  ( 13.)



The statute not only avows an aim foreign to the procurement of revenue

for the support of government, but, by its operation, shows the exaction

laid upon processors to be the necessary means for the intended control

of agricultural production. [297 U.S. 60]



In these aspects the tax, so-called, closely resembles that laid by the

Act of August 3, 1882, entitled "An Act to Regulate Immigration," which

came before this court in the Head Money Cases, 112 U.S. 580.  The

statute directed that there should be levied, collected and paid a duty

of fifty cents for each alien passenger who should come by vessel from a

foreign port to one in the United States.  Payment was to be made to the

collector of the port by the master, owner, consignee or agent of the

ship; the money was to be paid into the Treasury, was to be called the

immigrant fund, and to be used by the Secretary of the Treasury to

defray the expense of regulating immigration, for the care of immigrants

and relieving those in distress, and for the expenses of effectuating

the act.



Various objections to the act were presented.  In answering them the

court said (p. 595):



But the true answer to all these objections is that the power exercised

in this instance is not the taxing power.  The burden imposed on the

ship owner by this statute is the mere incident of the regulation of

commerce -- of that branch of foreign commerce which is involved in

immigration. . . .



It is true not much is said about protecting the ship owner.  But he is

the man who reaps the profit from the transaction, . . .  The sum

demanded of him is not, therefore, strictly speaking, a tax or duty

within the meaning of the Constitution.  The money thus raised, though

paid into the Treasury, is appropriated in advance to the uses of the

statute, and does not go to the general support of the government.



While there, the exaction was sustained as an appropriate element in a

plan within the power of Congress "to regulate commerce with foreign

nations," no question was made of the standing of the shipowner to raise

the question [297 U.S. 61] of the validity of the scheme, and

consequently of the exaction which was an incident of it.



It is inaccurate and misleading to speak of the exaction from processors

prescribed by the challenged act as a tax, or to say that as a tax it is

subject to no infirmity.  A tax, in the general understanding of the

term, and as used in the Constitution, signifies an exaction for the

support of the Government.  The word has never been thought to connote

the expropriation of money from one group for the benefit of another. 

We may concede that the latter sort of imposition is constitutional when

imposed to effectuate regulation of a matter in which both groups are

interested and in respect of which there is a power of legislative

regulation.  But manifestly no justification for it can be found unless

as an integral part of such regulation.  The exaction cannot be wrested

out of its setting, denominated an excise for raising revenue, and

legalized by ignoring its purpose as a mere instrumentality for bringing

about a desired end.  To do this would be to shut our eyes to what all

others than we can see and understand.  Child Labor Tax Case, 259

U.S. 20, 37.



We conclude that the act is one regulating agricultural production, that

the tax is a mere incident of such regulation, and that the respondents

have standing to challenge the legality of the exaction.



It does not follow that, as the act is not an exertion of the taxing

power and the exaction not a true tax, the statute is void or the

exaction uncollectible.  For, to paraphrase what was said in the Head

Money Cases (supra), p. 596, if this is an expedient regulation by

Congress, of a subject within one of its granted powers, and the end to

be attained is one falling within that power, the act is not void

because, within a loose and more extended sense than was used in the

Constitution, the exaction is called a tax. [297 U.S. 62]



Second. The Government asserts that, even if the respondents may

question the propriety of the appropriation embodied in the statute,

their attack must fail because Article I,  8 of the Constitution

authorizes the contemplated expenditure of the funds raised by the tax. 

This contention presents the great and the controlling question in the

case.{8}  We approach its decision with a sense of our grave

responsibility to render judgment in accordance with the principles

established for the governance of all three branches of the Government.



There should be no misunderstanding as to the function of this court in

such a case.  It is sometimes said that the court assumes a power to

overrule or control the action of the people's representatives.  This is

a misconception.  The Constitution is the supreme law of the land

ordained and established by the people.  All legislation must conform to

the principles it lays down.  When an act of Congress is appropriately

challenged in the courts as not conforming to the constitutional

mandate, the judicial branch of the Government has only one duty -- to

lay the article of the Constitution which is invoked beside the statute

which is challenged and to decide whether the latter squares with the

former.  All the court does, or can do, is to announce its considered

judgment upon the question.  [297 U.S. 63] The only power it has, if

such it may be called, is the power of judgment.  This court neither

approves nor condemns any legislative policy.  Its delicate and

difficult office is to ascertain and declare whether the legislation is

in accordance with, or in contravention of, the provisions of the

Constitution; and, having done that, its duty ends.{9}



The question is not what power the Federal Government ought to have, but

what powers, in fact, have been given by the people.  It hardly seems

necessary to reiterate that ours is a dual form of government; that in

every state there are two governments -- the state and the United

States.  Each State has all governmental powers save such as the people,

by their Constitution, have conferred upon the United States, denied to

the States, or reserved to themselves.  The federal union is a

government of delegated powers.  It has only such as are expressly

conferred upon it and such as are reasonably to be implied from those

granted.  In this respect, we differ radically from nations where all

legislative power, without restriction or limitation, is vested in a

parliament or other legislative body subject to no restrictions except

the discretion of its members.



Article I,  8, of the Constitution vests sundry powers in the Congress. 

But two of its clauses have any bearing upon the validity of the statute

under review.



The third clause endows the Congress with power "to regulate Commerce .

. . among the several States."  Despite a reference in its first section

to a burden upon, and an obstruction of the normal currents of commerce,

the act under review does not purport to regulate transactions in

interstate or foreign{10} commerce.  Its stated purpose [297 U.S. 64]

is the control of agricultural production, a purely local activity, in

an effort to raise the prices paid the farmer.  Indeed, the Government

does not attempt to uphold the validity of the act on the basis of the

commerce clause, which, for the purpose of the present case, may be put

aside as irrelevant.



The clause thought to authorize the legislation -- the first -- confers

upon the Congress 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. . . . It is not contended that this

provision grants power to regulate agricultural production upon the

theory that such legislation would promote the general welfare.  The

Government concedes that the phrase "to provide for the general welfare"

qualifies the power "to lay and collect taxes."  The view that the

clause grants power to provide for the general welfare, independently of

the taxing power, has never been authoritatively accepted.  Mr. Justice

Story points out that, if it were adopted, it is obvious that, under

color of the generality of the words, to "provide for the common defence

and general welfare," the government of the United States is, in

reality, a government of general and unlimited powers, notwithstanding

the subsequent enumeration of specific powers.{11} The true

construction undoubtedly is that the only thing granted is the power to

tax for the purpose of providing funds for payment of the nation's debts

and making provision for the general welfare.



Nevertheless the Government asserts that warrant is found in this clause

for the adoption of the Agricultural Adjustment Act.  The argument is

that Congress may appropriate and authorize the spending of moneys for

the "general welfare"; that the phrase should be liberally [297 U.S. 65]

construed to cover anything conducive to national welfare; that decision

as to what will promote such welfare rests with Congress alone, and the

courts may not review its determination, and finally that the

appropriation under attack was, in fact, for the general welfare of the

United States.



The Congress is expressly empowered to lay taxes to provide for the

general welfare.  Funds in the Treasury as a result of taxation may be

expended only through appropriation.  (Art. I,  9, cl. 7.)  They can

never accomplish the objects for which they were collected unless the

power to appropriate is as broad as the power to tax.  The necessary

implication from the terms of the grant is that the public funds may be

appropriated "to provide for the general welfare of the United States." 

These words cannot be meaningless, else they would not have been used. 

The conclusion must be that they were intended to limit and define the

granted power to raise and to expend money.  How shall they be construed

to effectuate the intent of the instrument?



Since the foundation of the Nation, sharp differences of opinion have

persisted as to the true interpretation of the phrase.  Madison asserted

it amounted to no more than a reference to the other powers enumerated

in the subsequent clauses of the same section; that, as the United

States is a government of limited and enumerated powers, the grant of

power to tax and spend for the general national welfare must be confined

to the enumerated legislative fields committed to the Congress.  In this

view, the phrase is mere tautology, for taxation and appropriation are,

or may be, necessary incidents of the exercise of any of the enumerated

legislative powers.  Hamilton, on the other hand, maintained the clause

confers a power separate and distinct from those later enumerated, is

not restricted in meaning by the grant of them, and Congress

consequently has a substantive power to tax and to appropriate, [297

U.S. 66] limited only by the requirement that it shall be exercised to

provide for the general welfare of the United States.  Each contention

has had the support of those whose views are entitled to weight.  This

court has noticed the question, but has never found it necessary to

decide which is the true construction.  Mr. Justice Story, in his

Commentaries, espouses the Hamiltonian position.{12}  We shall not

review the writings of public men and commentators or discuss the

legislative practice.  Study of all these leads us to conclude that the

reading advocated by Mr. Justice Story is the correct one.  While,

therefore, the power to tax is not unlimited, its confines are set in

the clause which confers it, and not in those of  8 which bestow and

define the legislative powers of the Congress.  It results that the

power of Congress to authorize expenditure of public moneys for public

purposes is not limited by the direct grants of legislative power found

in the Constitution.



But the adoption of the broader construction leaves the power to spend

subject to limitations.



As Story says:



The Constitution was, from its very origin, contemplated to be the frame

of a national government, of special and enumerated powers, and not of

general and unlimited powers.{13}



Again, he says:



A power to lay taxes for the common defence and general welfare of the

United States is not, in common sense, a general power.  It is limited

to those objects.  It cannot constitutionally transcend them.{14}



That the qualifying phrase must be given effect all advocates of broad

construction admit.  Hamilton, in his [297 U.S. 67] well known Report on

Manufactures, states that the purpose must be "general, and not

local."{15}  Monroe, an advocate of Hamilton's doctrine, wrote: Have

Congress a right to raise and appropriate the money to any and to every

purpose according to their will and pleasure?  They certainly have

not.{16} Story says that, if the tax be not proposed for the common

defence or general welfare, but for other objects wholly extraneous, it

would be wholly indefensible upon constitutional principles.{17}  And

he makes it clear that the powers of taxation and appropriation extend

only to matters of national, as distinguished from local, welfare.



As elsewhere throughout the Constitution, the section in question lays

down principles which control the use of the power, and does not attempt

meticulous or detailed directions.  Every presumption is to be indulged

in favor of faithful compliance by Congress with the mandates of the

fundamental law.  Courts are reluctant to adjudge any statute in

contravention of them.  But, under our frame of government, no other

place is provided where the citizen may be heard to urge that the law

fails to conform to the limits set upon the use of a granted power. 

When such a contention comes here, we naturally require a showing that

by no reasonable possibility can the challenged legislation fall within

the wide range of discretion permitted to the Congress.  How great is

the extent of that range when the subject is the promotion of the

general welfare of the United States we hardly need remark.  But,

despite the breadth of the legislative discretion, our duty to hear and

to render judgment remains.  If the statute plainly violates the stated

principle of the Constitution, we must so declare. [297 U.S. 68]



We are not now required to ascertain the scope of the phrase "general

welfare of the United States," or to determine whether an appropriation

in aid of agriculture falls within it.  Wholly apart from that question,

another principle embedded in our Constitution prohibits the enforcement

of the Agricultural Adjustment Act.  The act invades the reserved rights

of the states.  It is a statutory plan to regulate and control

agricultural production, a matter beyond the powers delegated to the

federal government.  The tax, the appropriation of the funds raised, and

the direction for their disbursement are but parts of the plan.  They

are but means to an unconstitutional end.



From the accepted doctrine that the United States is a government of

delegated powers, it follows that those not expressly granted, or

reasonably to be implied from such as are conferred, are reserved to the

states, or to the people.  To forestall any suggestion to the contrary,

the Tenth Amendment was adopted.{18}  The same proposition, otherwise

stated, is that powers not granted are prohibited.  None to regulate

agricultural production is given, and therefore legislation by Congress

for that purpose is forbidden.



It is an established principle that the attainment of a prohibited end

may not be accomplished under the pretext of the exertion of powers

which are granted.



Should Congress, in the execution of its powers, adopt measures which

are prohibited by the constitution, or should Congress, under the

pretext of executing its powers, pass laws for the accomplishment of

objects not intrusted to the government, it would become the painful

duty of this tribunal, should a case requiring such a decision [297 U.S.

69] come before it, to say that such an act was not the law of the land.

McCulloch v. Maryland, 4 Wheat. 316, 423.



Congress cannot, under the pretext of executing delegated power, pass

laws for the accomplishment of objects not entrusted to the Federal

Government.  And we accept as established doctrine that any provision of

an act of Congress ostensibly enacted under power granted by the

Constitution, not naturally and reasonably adapted to the effective

exercise of such power but solely to the achievement of something

plainly within power reserved to the States, is invalid and cannot be

enforced. Linder v. United States, 268 U.S. 5, 17.



These principles are as applicable to the power to lay taxes as to any

other federal power.  Said the court, in McCulloch v. Maryland, supra,

421:



Let the end be legitimate, let it be within the scope of the

constitution, and all means which are appropriate, which are plainly

adapted to that end, which are not prohibited, but consist with the

letter and spirit of the constitution, are constitutional.



The power of taxation, which is expressly granted, may, of course, be

adopted as a means to carry into operation another power also expressly

granted.  But resort to the taxing power to effectuate an end which is

not legitimate, not within the scope of the Constitution, is obviously

inadmissible.



"Congress is not empowered to tax for those purposes which are within

the exclusive province of the States."  Gibbons v. Ogden, 9 Wheat. 1,

199.



There are, indeed, certain virtual limitations, arising from the

principles of the Constitution itself.  It would undoubtedly be an abuse

of the [taxing] power if so exercised as to impair the separate

existence and independent self-government of the States or if exercised

for ends [297 U.S. 70] inconsistent with the limited grants of power in

the Constitution. Veazie Bank v. Fenno, 8 Wall. 533, 541.



In the Child Labor Tax Case, 259 U.S. 20, and in Hill v. Wallace,

259 U.S. 44, this court had before it statutes which purported to be

taxing measures.  But their purpose was found to be to regulate the

conduct of manufacturing and trading not in interstate commerce, but in

the states -- matters not within any power conferred upon Congress by

the Constitution -- and the levy of the tax a means to force compliance.

 The court held this was not a constitutional use, but an

unconstitutional abuse, of the power to tax.  In Linder v. United

States, supra, we held that the power to tax could not justify the

regulation of the practice of a profession, under the pretext of raising

revenue.  In United States v. Constantine, 296 U.S. 287, we declared

that Congress could not, in the guise of a tax, impose sanctions for

violation of state law respecting the local sale of liquor.  These

decisions demonstrate that Congress could not, under the pretext of

raising revenue, lay a tax on processors who refuse to pay a certain

price for cotton, and exempt those who agree so to do, with the purpose

of benefiting producers.



Third.  If the taxing power may not be used as the instrument to enforce

a regulation of matters of state concern with respect to which the

Congress has no authority to interfere, may it, as in the present case,

be employed to raise the money necessary to purchase a compliance which

the Congress is powerless to command?  The Government asserts that

whatever might be said against the validity of the plan if compulsory,

it is constitutionally sound because the end is accomplished by

voluntary cooperation.  There are two sufficient answers to the

contention.  The regulation is not, in fact, voluntary.  The farmer, of

course, may refuse to comply, but the price of such refusal is the loss

of benefits.  The amount offered is intended to be sufficient to exert

pressure on him to [297 U.S. 71] agree to the proposed

regulation.{19}  The power to confer or withhold unlimited benefits

is the power to coerce or destroy.  If the cotton grower elects not to

accept the benefits, he will receive less for his crops; those who

receive payments will be able to undersell him.  The result may well be

financial ruin.  The coercive purpose and intent of the statute is not

obscured by the fact that it has not been perfectly successful.  It is

pointed out that, because there still remained a minority whom the

rental and benefit payments were insufficient to induce to surrender

their independence of action, the Congress has gone further and, in the

Bankhead Cotton Act, used the taxing power in a more directly minatory

fashion to compel submission.  This progression only serves more fully

to expose the coercive purpose of the so-called tax imposed by the

present act.  It is clear that the Department of Agriculture has

properly described the plan as one to keep a noncooperating minority in

line.  This is coercion by economic pressure.  The asserted power of

choice is illusory.



In Frost Trucking Co. v. Railroad Comm'n, 271 U.S. 583, a state act was

considered which provided for supervision and regulation of

transportation for hire by automobile on the public highways. 

Certificates of convenience and necessity were to be obtained by persons

desiring to use the highways for this purpose.  The regulatory [297 U.S.

72] commission required that a private contract carrier should secure

such a certificate as a condition of its operation.  The effect of the

commission's action was to transmute the private carrier into a public

carrier.  In other words, the privilege of using the highways as a

private carrier for compensation was conditioned upon his dedicating his

property to the quasi-public use of public transportation.  While

holding that the private carrier was not obliged to submit himself to

the condition, the commission denied him the privilege of using the

highways if he did not do so.  The argument was, as here, that the

carrier had a free choice.  This court said, in holding the act as

construed unconstitutional:



If so, constitutional guaranties, so carefully safeguarded against

direct assault, are open to destruction by the indirect but no less

effective process of requiring a surrender which, though in form

voluntary, in fact lacks none of the elements of compulsion.  Having

regard to form alone, the act here is an offer to the private carrier of

a privilege, which the state may grant or deny, upon a condition, which

the carrier is free to accept or reject.  In reality, the carrier is

given no choice, except a choice between the rock and the whirlpool --

an option to forego a privilege which may be vital to his livelihood or

submit to a requirement which may constitute an intolerable burden. (P.

593.)



But if the plan were one for purely voluntary cooperation, it would

stand no better so far as federal power is concerned.  At best, it is a

scheme for purchasing with federal funds submission to federal

regulation of a subject reserved to the states.



It is said that Congress has the undoubted right to appropriate money to

executive officers for expenditure under contracts between the

government and individuals; that much of the total expenditures is so

made.  But appropriations and expenditures under contracts for proper

[297 U.S. 73] governmental purposes cannot justify contracts which are

not within federal power.  And contracts for the reduction of acreage

and the control of production are outside the range of that power.  An

appropriation to be expended by the United States under contracts

calling for violation of a state law clearly would offend the

Constitution.  Is a statute less objectionable which authorizes

expenditure of federal moneys to induce action in a field in which the

United States has no power to intermeddle?  The Congress cannot invade

state jurisdiction to compel individual action; no more can it purchase

such action.



We are referred to numerous types of federal appropriation which have

been made in the past, and it is asserted no question has been raised as

to their validity.  We need not stop to examine or consider them.  As

was said in Massachusetts v. Mellon, supra, (p. 487):



. . . as an examination of the acts of Congress will disclose, a large

number of statutes appropriating or involving the expenditure of moneys

for nonfederal purposes have been enacted and carried into effect.



As the opinion points out, such expenditures have not been challenged

because no remedy was open for testing their constitutionality in the

courts.



We are not here concerned with a conditional appropriation of money, nor

with a provision that, if certain conditions are not complied with, the

appropriation shall no longer be available.  By the Agricultural

Adjustment Act, the amount of the tax is appropriated to be expended

only in payment under contracts whereby the parties bind themselves to

regulation by the Federal Government.  There is an obvious difference

between a statute stating the conditions upon which moneys shall be

expended and one effective only upon assumption of a contractual

obligation to submit to a regulation which otherwise could not be

enforced.  Many examples pointing the distinction might be cited.  We

are referred to appropriations in aid [297 U.S. 74] of education, and it

is said that no one has doubted the power of Congress to stipulate the

sort of education for which money shall be expended.  But an

appropriation to an educational institution which, by its terms, is to

become available only if the beneficiary enters into a contract to teach

doctrines subversive of the Constitution is clearly bad.  An affirmance

of the authority of Congress so to condition the expenditure of an

appropriation would tend to nullify all constitutional limitations upon

legislative power.



But it is said that there is a wide difference in another respect

between compulsory regulation of the local affairs of a state's citizens

and the mere making of a contract relating to their conduct:  that, if

any state objects, it may declare the contract void, and thus prevent

those under the state's jurisdiction from complying with its terms.  The

argument is plainly fallacious.  The United States can make the contract

only if the federal power to tax and to appropriate reaches the subject

matter of the contract.  If this does reach the subject matter, its

exertion cannot be displaced by state action.  To say otherwise is to

deny the supremacy of the laws of the United States; to make them

subordinate to those of a State.  This would reverse the cardinal

principle embodied in the Constitution, and substitute one which

declares that Congress may only effectively legislate as to matters

within federal competence when the States do not dissent.



Congress has no power to enforce its commands on the farmer to the ends

sought by the Agricultural Adjustment Act.  It must follow that it may

not indirectly accomplish those ends by taxing and spending to purchase

compliance.  The Constitution and the entire plan of our government

negative any such use of the power to tax and to spend as the act

undertakes to authorize.  It does not help to declare that local

conditions throughout the nation have created a situation of national

concern, for this [297 U.S. 75] is but to say that, whenever there is a

widespread similarity of local conditions, Congress may ignore

constitutional limitations upon its own powers and usurp those reserved

to the states.  If, in lieu of compulsory regulation of subjects within

the states' reserved jurisdiction, which is prohibited, the Congress

could invoke the taxing and spending power as a means to accomplish the

same end, clause 1 of  8 of Article I would become the instrument for

total subversion of the governmental powers reserved to the individual

states.



If the act before us is a proper exercise of the federal taxing power,

evidently the regulation of all industry throughout the United States

may be accomplished by similar exercises of the same power.  It would be

possible to exact money from one branch of an industry and pay it to

another branch in every field of activity which lies within the province

of the states.  The mere threat of such a procedure might well induce

the surrender of rights and the compliance with federal regulation as

the price of continuance in business.  A few instances will illustrate

the thought.



Let us suppose Congress should determine that the farmer, the miner, or

some other producer of raw materials is receiving too much for his

products, with consequent depression of the processing industry and

idleness of its employes.  Though, by confession, there is no power

vested in Congress to compel by statute a lowering of the prices of the

raw material, the same result might be accomplished, if the questioned

act be valid, by taxing the producer upon his output and appropriating

the proceeds to the processors, either with or without conditions

imposed as the consideration for payment of the subsidy.



We have held in Schechter Poultry Corp. v. United States, 295 U.S.

495, that Congress has no power to regulate wages and hours of labor in

a local business.  If the petitioner is right, this very end may be

accomplished by [297 U.S. 76] appropriating money to be paid to

employers from the federal treasury under contracts whereby they agree

to comply with certain standards fixed by federal law or by contract.



Should Congress ascertain that sugar refiners are not receiving a fair

profit, and that this is detrimental to the entire industry, and in turn

has its repercussions in trade and commerce generally, it might, in

analogy to the present law, impose an excise of two cents a pound on

every sale of the commodity, and pass the funds collected to such

refiners, and such only, as will agree to maintain a certain price.



Assume that too many shoes are being manufactured throughout the nation;

that the market is saturated, the price depressed, the factories running

half-time, the employes suffering.  Upon the principle of the statute in

question, Congress might authorize the Secretary of Commerce to enter

into contracts with shoe manufacturers providing that each shall reduce

his output, and that the United States will pay him a fixed sum

proportioned to such reduction, the money to make the payments to be

raised by a tax on all retail shoe dealers or their customers.



Suppose that there are too many garment workers in the large cities;

that this results in dislocation of the economic balance.  Upon the

principle contended for, an excise might be laid on the manufacture of

all garments manufactured, and the proceeds paid to those manufacturers

who agree to remove their plants to cities having not more than a

hundred thousand population.  Thus, through the asserted power of

taxation, the federal government, against the will of individual states,

might completely redistribute the industrial population.



A possible result of sustaining the claimed federal power would be that

every business group which thought itself underprivileged might demand

that a tax be laid on its vendors or vendees, the proceeds to be

appropriated to the redress of its deficiency of income. [297 U.S. 77]



These illustrations are given not to suggest that any of the purposes

mentioned are unworthy, but to demonstrate the scope of the principle

for which the Government contends; to test the principle by its

applications; to point out that, by the exercise of the asserted power,

Congress would, in effect, under the pretext of exercising the taxing

power, in reality accomplish prohibited ends.  It cannot be said that

they envisage improbable legislation.  The supposed cases are no more

improbable than would the present act have been deemed a few years ago.



Until recently, no suggestion of the existence of any such power in the

Federal Government has been advanced.  The expressions of the framers of

the Constitution, the decisions of this court interpreting that

instrument, and the writings of great commentators will be searched in

vain for any suggestion that there exists in the clause under

discussion, or elsewhere in the Constitution, the authority whereby

every provision and every fair implication from that instrument may be

subverted, the independence of the individual states obliterated, and

the United States converted into a central government exercising

uncontrolled police power in every state of the Union, superseding all

local control or regulation of the affairs or concerns of the states.



Hamilton himself, the leading advocate of broad interpretation of the

power to tax and to appropriate for the general welfare, never suggested

that any power granted by the Constitution could be used for the

destruction of local self-government in the states.  Story countenances

no such doctrine.  It seems never to have occurred to them, or to those

who have agreed with them, that the general welfare of the United States

(which has aptly been termed " an indestructible Union, composed of

indestructible States") might be served by obliterating the constituent

members of the Union.  But to this fatal conclusion [297 U.S. 78] the

doctrine contended for would inevitably lead.  And its sole premise is

that, though the makers of the Constitution, in erecting the federal

government, intended sedulously to limit and define its powers so as to

reserve to the states and the people sovereign power, to be wielded by

the states and their citizens and not to be invaded by the United

States, they nevertheless, by a single clause, gave power to the

Congress to tear down the barriers, to invade the states' jurisdiction,

and to become a parliament of the whole people, subject to no

restrictions save such as are self-imposed.  The argument, when seen in

its true character and in the light of its inevitable results, must be

rejected.



Since, as we have pointed out, there was no power in the Congress to

impose the contested exaction, it could not lawfully ratify or confirm

what an executive officer had done in that regard.  Consequently the Act

of 1935 does not affect the rights of the parties.



The judgment is



Affirmed. STONE, J., dissenting



MR. JUSTICE STONE, dissenting.



I think the judgment should be reversed.



The present stress of widely held and strongly expressed differences of

opinion of the wisdom of the Agricultural Adjustment Act makes it

important, in the interest of clear thinking and sound result, to

emphasize at the outset certain propositions which should have

controlling influence in determining the validity of the Act.  They are:



1. The power of courts to declare a statute unconstitutional is subject

to two guiding principles of decision which ought never to be absent

from judicial consciousness.  One is that courts are concerned only with

the power to enact statutes, not with their wisdom.  The other is that,

while unconstitutional exercise of power [297 U.S. 79] by the executive

and legislative branches of the government is subject to judicial

restraint, the only check upon our own exercise of power is our own

sense of self-restraint.  For the removal of unwise laws from the

statute books appeal lies not to the courts, but to the ballot and to

the processes of democratic government.



2. The constitutional power of Congress to levy an excise tax upon the

processing of agricultural products is not questioned.  The present levy

is held invalid not for any want of power in Congress to lay such a tax

to defray public expenditures, including those for the general welfare,

but because the use to which its proceeds are put is disapproved.



3. As the present depressed state of agriculture is nationwide in its

extent and effects, there is no basis for saying that the expenditure of

public money in aid of farmers is not within the specifically granted

power of Congress to levy taxes to " provide for the . . . general

welfare."  The opinion of the Court does not declare otherwise.



4. No question of a variable tax fixed from time to time by fiat of the

Secretary of Agriculture, or of unauthorized delegation of legislative

power, is now presented.  The schedule of rates imposed by the Secretary

in accordance with the original command of Congress has since been

specifically adopted and confirmed by Act of Congress, which has

declared that it shall be the lawful tax.  Act of August 24, 1935, 49

Stat. 750.  That is the tax which the government now seeks to collect. 

Any defects there may have been in the manner of laying the tax by the

Secretary have now been removed by the exercise of the power of Congress

to pass a curative statute validating an intended, though defective,

tax.  United States v. Heinszen & Co., 206 U.S. 370; Graham & Foster v.

Goodcell, 282 U.S. 409; cf. Milliken v. United States, 283 U.S. 15.  The

Agricultural Adjustment Act, as thus amended, declares [297 U.S. 80]

that none of its provisions shall fail because others are pronounced

invalid.



It is with these preliminary and hardly controverted matters in mind

that we should direct our attention to the pivot on which the decision

of the Court is made to turn.  It is that a levy unquestionably within

the taxing power of Congress may be treated as invalid because it is a

step in a plan to regulate agricultural production, and is thus a

forbidden infringement of state power.  The levy is not any the less an

exercise of taxing power because it is intended to defray an expenditure

for the general welfare, rather than for some other support of

government.  Nor is the levy and collection of the tax pointed to as

effecting the regulation.  While all federal taxes inevitably have some

influence on the internal economy of the states, it is not contended

that the levy of a processing tax upon manufacturers using agricultural

products as raw material has any perceptible regulatory effect upon

either their production or manufacture.  The tax is unlike the penalties

which were held invalid in the Child Labor Tax Case, 259 U.S. 20, in

Hill v. Wallace, 259 U.S. 44, in Linder v. United States, 268 U.S. 5,

17, and in United States v. Constantine, 296 U.S. 287, because they were

themselves the instruments of regulation by virtue of their coercive

effect on matters left to the control of the states.  Here regulation,

if any there be, is accomplished not by the tax, but by the method by

which its proceeds are expended, and would equally be accomplished by

any like use of public funds, regardless of their source.



The method may be simply stated.  Out of the available fund payments are

made to such farmers as are willing to curtail their productive acreage,

who, in fact, do so, and who, in advance, have filed their written

undertaking to do so with the Secretary of Agriculture.  In saying that

this method of spending public moneys is an invasion of the reserved

powers of the states, the Court does not assert [297 U.S. 81] that the

expenditure of public funds to promote the general welfare is not a

substantive power specifically delegated to the national government, as

Hamilton and Story pronounced it to be.  It does not deny that the

expenditure of funds for the benefit of farmers and in aid of a program

of curtailment of production of agricultural products, and thus of a

supposedly better ordered national economy, is within the specifically

granted power.  But it is declared that state power is nevertheless

infringed by the expenditure of the proceeds of the tax to compensate

farmers for the curtailment of their cotton acreage.  Although the

farmer is placed under no legal compulsion to reduce acreage, it is said

that the mere offer of compensation for so doing is a species of

economic coercion which operates with the same legal force and effect as

though the curtailment were made mandatory by Act of Congress.  In any

event, it is insisted that, even though not coercive, the expenditure of

public funds to induce the recipients to curtail production is itself an

infringement of state power, since the federal government cannot invade

the domain of the states by the "purchase" of performance of acts which

it has no power to compel.



Of the assertion that the payments to farmers are coercive it is enough

to say that no such contention is pressed by the taxpayer, and no such

consequences were to be anticipated or appear to have resulted from the

administration of the Act.  The suggestion of coercion finds no support

in the record or in any data showing the actual operation of the Act. 

Threat of loss, not hope of gain, is the essence of economic coercion. 

Members of a long depressed industry have undoubtedly been tempted to

curtail acreage by the hope of resulting better prices and by the

proffered opportunity to obtain needed ready money.  But there is

nothing to indicate that those who accepted benefits were impelled by

fear of lower prices if they did not accept, or that, at any stage in

the operation [297 U.S. 82] of the plan a farmer could say whether,

apart from the certainty of cash payments at specified times, the

advantage would lie with curtailment of production plus compensation,

rather than with the same or increased acreage plus the expected rise in

prices which actually occurred.  Although the Agricultural Adjustment

Act was put into operation in June, 1933, the official reports of the

Department of Agriculture show that 6,343,000 acres of productive cotton

land, 14% of the total, did not participate in the plan in 1934, and

2,790,000 acres, 6% of the total, did not participate in 1935.  Of the

total number of farms growing cotton, estimated at 1,500,000, 33% in

1934 and 13% in 1935 did not participate.



It is significant that, in the congressional hearings on the bill that

became the Bankhead Act, 48 Stat. 598, as amended by Act of June 20,

1934, 48 Stat. 1184, which imposes a tax of 50% on all cotton produced

in excess of limits prescribed by the Secretary of Agriculture, there

was abundant testimony that the restriction of cotton production

attempted by the Agricultural Adjustment Act could not be secured

without the coercive provisions of the Bankhead Act.  See Hearing before

Committee on Agriculture, U.S. Senate, on S.1974, 73rd Cong., 2nd Sess.;

Hearing before Committee on Agriculture, U.S. House of Representatives,

on H.R. 8402, 73rd Cong., 2nd Sess.  The Senate and House Committees so

reported, Senate Report No. 283, 73rd Cong., 2nd Sess., p. 3; House

Report No. 867, 73rd Cong., 2nd Sess., p. 3.  The Report of the

Department of Agriculture on the administration of the Agricultural

Adjustment Act (February 15, 1934 to December 31, 1934), p. 50, points

out that the Bankhead Act was passed in response to a strong sentiment

in favor of mandatory production control that would prevent

noncooperating farmers from increasing their own plantings in order to

capitalize upon the price advances that had resulted from the reductions

made by contract [297 U.S. 83] signers.* The presumption of

constitutionality of a statute is not to be overturned by an assertion

of its coercive effect which rests on nothing more substantial than

groundless speculation.



It is upon the contention that state power is infringed by purchased

regulation of agricultural production that chief reliance is placed.  It

is insisted that, while the Constitution gives to Congress, in specific

and unambiguous terms, the power to tax and spend, the power is subject

to limitations which do not find their origin in any express provision

of the Constitution and to which other expressly delegated powers are

not subject.



The Constitution requires that public funds shall be spent for a defined

purpose, the promotion of the general welfare.  Their expenditure

usually involves payment on terms which will insure use by the selected

recipients within the limits of the constitutional purpose. 

Expenditures would fail of their purpose, and thus lose their

constitutional sanction, if the terms of payment were not such that, by

their influence on the action of the recipients, the permitted end would

be attained.  The power of Congress to spend is inseparable from

persuasion to action over which Congress has no legislative control. 

Congress may not command that the science of agriculture be taught in

state universities.  But if it would aid the teaching of that science by

grants to state institutions, it is appropriate, if not necessary, that

the grant be on the condition, incorporated in the Morrill Act, 12 Stat.

503, 26 Stat. 417, that it be used for the intended purpose.  Similarly,

it would seem to be compliance with the Constitution, not violation of

it, for the government to take and the university to give a contract

that the grant would be so used.  It makes no difference [297 U.S. 84]

that there is a promise to do an act which the condition is calculated

to induce.  Condition and promise are alike valid, since both are in

furtherance of the national purpose for which the money is appropriated.



These effects upon individual action, which are but incidents of the

authorized expenditure of government money, are pronounced to be

themselves a limitation upon the granted power, and so the time-honored

principle of constitutional interpretation that the granted power

includes all those which are incident to it is reversed.  "Let the end

be legitimate," said the great Chief Justice, let it be within the scope

of the Constitution, and all means which are appropriate, which are

plainly adapted to that end, which are not prohibited, but consist with

the letter and spirit of the Constitution, are constitutional.

McCulloch v. Maryland, 4 Wheat. 316, 421.  This cardinal guide to

constitutional exposition must now be rephrased so far as the spending

power of the federal government is concerned.  Let the expenditure be to

promote the general welfare, still, if it is needful in order to insure

its use for the intended purpose to influence any action which Congress

cannot command because within the sphere of state government, the

expenditure is unconstitutional.  And taxes otherwise lawfully levied

are likewise unconstitutional if they are appropriated to the

expenditure whose incident is condemned.



Congress, through the Interstate Commerce Commission, has set aside

intrastate railroad rates.  It has made and destroyed intrastate

industries by raising or lowering tariffs.  These results are said to be

permissible because they are incidents of the commerce power and the

power to levy duties on imports.  See Minnesota Rate Cases, 230 U.S.

352; Shreveport Case, 234 U.S. 342; Board of Trustees of the

University of Illinois v. United States, 289 U.S. 48.  The only

conclusion to be drawn is that results [297 U.S. 85] become lawful when

they are incidents of those powers, but unlawful when incident to the

similarly granted power to tax and spend.



Such a limitation is contradictory and destructive of the power to

appropriate for the public welfare, and is incapable of practical

application.  The spending power of Congress is in addition to the

legislative power, and not subordinate to it.  This independent grant of

the power of the purse, and its very nature, involving in its exercise

the duty to insure expenditure within the granted power, presuppose

freedom of selection among divers ends and aims, and the capacity to

impose such conditions as will render the choice effective.  It is a

contradiction in terms to say that there is power to spend for the

national welfare while rejecting any power to impose conditions

reasonably adapted to the attainment of the end which alone would

justify the expenditure.



The limitation now sanctioned must lead to absurd consequences.  The

government may give seeds to farmers, but may not condition the gift

upon their being planted in places where they are most needed, or even

planted at all.  The government may give money to the unemployed, but

may not ask that those who get it shall give labor in return, or even

use it to support their families.  It may give money to sufferers from

earthquake, fire, tornado, pestilence or flood, but may not impose

conditions -- health precautions designed to prevent the spread of

disease, or induce the movement of population to safer or more sanitary

areas.  All that, because it is purchased regulation infringing state

powers, must be left for the states, who are unable or unwilling to

supply the necessary relief.  The government may spend its money for

vocational rehabilitation, 48 Stat. 389, but it may not, with the

consent of all concerned, supervise the process which it undertakes to

aid.  It may spend its money for the suppression of the boll weevil, but

may [297 U.S. 86] not compensate the farmers for suspending the growth

of cotton in the infected areas.  It may aid state reforestation and

forest fire prevention agencies, 43 Stat. 653, but may not be permitted

to supervise their conduct.  It may support rural schools, 39 Stat. 929,

45 Stat. 1151, 48 Stat. 792, but may not condition its grant by the

requirement that certain standards be maintained.  It may appropriate

moneys to be expended by the Reconstruction Finance Corporation "to aid

in financing agriculture, commerce and industry," and to facilitate "the

exportation of agricultural and other products."  Do all its activities

collapse because, in order to effect the permissible purpose, in myriad

ways the money is paid out upon terms and conditions which influence

action of the recipients within the states, which Congress cannot

command?  The answer would seem plain.  If the expenditure is for a

national public purpose, that purpose will not be thwarted because

payment is on condition which will advance that purpose.  The action

which Congress induces by payments of money to promote the general

welfare, but which it does not command or coerce, is but an incident to

a specifically granted power, but a permissible means to a legitimate

end.  If appropriation in aid of a program of curtailment of

agricultural production is constitutional, and it is not denied that it

is, payment to farmers on condition that they reduce their crop acreage

is constitutional.  It is not any the less so because the farmer, at his

own option, promises to fulfill the condition.



That the governmental power of the purse is a great one is not now for

the first time announced.  Every student of the history of government

and economics is aware of its magnitude and of its existence in every

civilized government.  Both were well understood by the framers of the

Constitution when they sanctioned the grant of the spending power to the

federal government, and both were recognized by Hamilton and Story,

whose views of the [297 U.S. 87] spending power as standing on a parity

with the other powers specifically granted have hitherto been generally

accepted.



The suggestion that it must now be curtailed by judicial fiat because it

may be abused by unwise use hardly rises to the dignity of argument.  So

may judicial power be abused.  "The power to tax is the power to

destroy," but we do not, for that reason, doubt its existence, or hold

that its efficacy is to be restricted by its incidental or collateral

effects upon the states.  See Veazie Bank v. Fenno, 8 Wall. 533;

McCray v. United States, 195 U.S. 27; compare Magnano Co. v.

Hamilton, 292 U.S. 40.  The power to tax and spend is not without

constitutional restraints.  One restriction is that the purpose must be

truly national.  Another is that it may not be used to coerce action

left to state control.  Another is the conscience and patriotism of

Congress and the Executive. It must be remembered that legislators are

the ultimate guardians of the liberties and welfare of the people in

quite as great a degree as the courts. Justice Holmes, in Missouri,

Kansas & Texas Ry. Co. v. May, 194 U.S. 267, 270.



A tortured construction of the Constitution is not to be justified by

recourse to extreme examples of reckless congressional spending which

might occur if courts could not prevent -- expenditures which, even if

they could be thought to effect any national purpose, would be possible

only by action of a legislature lost to all sense of public

responsibility.  Such suppositions are addressed to the mind accustomed

to believe that it is the business of courts to sit in judgment on the

wisdom of legislative action.  Courts are not the only agency of

government that must be assumed to have capacity to govern.  Congress

and the courts both unhappily may falter or be mistaken in the

performance of their constitutional duty.  But interpretation of our

great charter of government which proceeds on any assumption that the

responsibility for the preservation of our institutions is the exclusive

[297 U.S. 88] concern of any one of the three branches of government, or

that it alone can save them from destruction is far more likely, in the

long run, "to obliterate the constituent members" of "an indestructible

union of indestructible states" than the frank recognition that

language, even of a constitution, may mean what it says:  that the power

to tax and spend includes the power to relieve a nationwide economic

maladjustment by conditional gifts of money.



MR. JUSTICE BRANDEIS and MR. JUSTICE CARDOZO join in this opinion.

Footnotes ROBERTS, J., lead opinion (Footnotes)



1. May 12, 1933, c. 25, 48 Stat. 31.



2. Section 11 denominates wheat, cotton, field corn, hogs, rice,

tobacco, and milk and its products, "basic agricultural commodities," to

which the act is to apply.  Others have been added by later legislation.



3. Franklin Process Co. v. Hoosac Mills Corp., 8 F.Supp. 552.



4. Butler v. United States, 78 F . (2d) 1.



5. 49 Stat. 750, c. 641.



6. U.S. Department of Agriculture, Achieving A Balanced Agriculture, p.

38: Farmers should not forget that all the processing tax money ends up

in their own pockets.  Even in those cases where they pay part of the

tax, they get it all back.  Every dollar collected in processing taxes

goes to the farmer in benefit payments.



U.S. Dept. of Agriculture, The Processing Tax, p. 1:  " Proceeds of

processing taxes are passed to farmers as benefit payments."



7. U.S. Department of Agriculture, Agricultural Adjustment, p. 9.



8. Other questions were presented and argued by counsel, but we do not

consider or decide them.  The respondents insist that the act in

numerous respects delegates legislative power to the executive contrary

to the principles announced in Panama Refining Co. v. Ryan, 293 U.S.

388, and Schechter Corp. v. United States, 295 U.S. 495; that this

unlawful delegation is not cured by the amending act of August 24, 1935;

that the exaction is in violation of the due process clause of the Fifth

Amendment, since the legislation takes their property for a private use;

that the floor tax is a direct tax, and therefore void for lack of

apportionment amongst the states, as required by Article I,  9, and that

the processing tax is wanting in uniformity, and so violates Article I, 

8, clause one, of the Constitution.



9. Compare Adkins v. Children's Hospital, 261 U.S. 525, 544;

Massachusetts v. Mellon, 262 U.S. 447, 488.



10. The enactment of protective tariff laws has its basis in the power

to regulate foreign commerce.  See Board of Trustees of the University

of Illinois v. United States, 289 U.S. 48, 58.



11. Story, Commentaries on the Constitution of the United States 5th

ed., Vol. I,  907.



12. Loc. cit. Chapter XIV, passim.



13. Loc. cit.,  909.



14. Loc. cit.,  922.



15. Works, Vol. III, p. 250.



16. Richardson, Messages and Papers of the Presidents, Vol. II, p. 167.



17. Loc. cit.,  p. 673.



18. The Tenth Amendment declares:



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.



19. U.S. Dept. of Agriculture, Agricultural Adjustment, p. 9.



Experience of cooperative associations and other groups has shown that,

without such Government support, the efforts of the farmers to band

together to control the amount of their product sent to market are

nearly always brought to nothing.  Almost always, under such

circumstances, there has been a noncooperating minority, which, refusing

to go along with the rest, has stayed on the outside and tried to

benefit from the sacrifices the majority has made. . . .  It is to keep

this noncooperating minority in line, or at least prevent it from doing

harm to the majority, that the power of the Government has been

marshaled behind the adjustment programs. STONE, J., dissenting

(Footnotes)



* Whether coercion was the sole or the dominant purpose of the Bankhead

Act, or whether the act was designed also for revenue or other

legitimate ends there is no occasion to consider now.

