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A business is not affected with a public interest merely because it is large or because the public are warranted in having a feeling of concern in respect to its maintenance. Nor is the interest meant such as arises from the mere fact that the public derives benefit, accommodation, ease, or enjoyment from the existence or operation of the business; and while the word has not always been limited narrowly as strictly denoting “a right," that synonym more nearly than any other expressed the sense in which it is to be understood.
We cite these cases not only for the purpose of showing that Congress is without power to deal with the propositions outlined in this proposed bill, but also in answer to Mr. John L. Lewis when he asks this committee to treat the bituminous-coal industry as a public utility. In the Wolff Packing case above cited (262 U. S. 522) the court divided into three classes those businesses which may be said to be affected with a public interest or “impressed with a public use"
(1) Those carried on under authority of a public grant or privilege, like railroads and public utilities.
(2) Other occupations regarded as exceptional and recognized from earliest times as subject to regulation, like those of innkeepers, grist mills, and the like.
(3) Those which, though not public in their nature, may fairly be said to have reason to be such and which “have an occasion to hold such a peculiar relation to the public that the regulation is self-imposed upon them."
None of the above propositions apply to the coal business.
Mr. BELCHER. No. But the proponents of this bill argue that because a sovereign State may license or permit a foreign corporation to do business within such State, or because of the authority of a sovereign State to refuse a foreign corporation to do business within such State, which powers, as they indicate, have been upheld by the courts, Congress, having the sole and exclusive right to regulate and control interstate commerce, has the power to impose conditions under which coal is to be mined and sold in interstate commerce. The proponents go further than the cases hold as to the right of a State to fix the conditions under which a foreign corporation may do business within a State, yet such cases have no application here. The right of sovereign States to impose restrictions and conditions upon the right to engage in business in such States is materially limited and restricted, even as to their own citizens. In the case of Houvouras v. Huntington (110 S. E. 692 W. Va.)—and this is the only case, if the committee please, that I have cited of a State court; all the other cases, as you will notice, have been cases decided by the Supreme Court of the United States—in the case of Houvouras v. Huntington the court had before it an ordinance requiring restaurants to be licensed, and pointed out that such a law would be unconstitutional if it gave the arbitrary right to withhold a license. And it is needless to say that if this proposed legislation is effective for any purpose, the coal commission could have the right to refuse to grant a license. And if it had no right to refuse to grant a license, it could not restrict production, and therefore it would be futile. It would have no power. The court said in the case of Houvouras v. Huntington:
It would give the authorities the right to dispense or refuse licenses at their pleasure. Such was not contemplated by the statute and such is not its meaning. Such meaning would render the statute void. (19 R. C. L. 813;
Yick Wo. v Hopkins, 118 U. S. 356, 6 Sup. Ct. 1064, 30 L. Ed. 220; Hagerstown v. Baltimore & Ohio Railroad Co., 107 Md. 178, 68 Atl. 490, 126 Am. St. Rep. 382.)
The case of Yick Wo v. Hopkins is cited in that opinion, and that case, in my opinion, settles the proposition here that no tribunal acting under
the authority of Congress or by any other authority in the United States Government or by any State can empower any commission or any set of men to refuse to grant me a license where I can earn a livelihood by legitimate labor or by legitimate industry.
Senator GLENN. They do refuse all over the country, do they not, where there is a utility operating to permit another utility to enter?
Mr. BELCHER. Under your interstate-commerce clause, yes. I am talking about that. But I am meaning in the State.
Senator GLENN. They do in the States.
Senator COUZENS. Oh, well, that is impressed with the public interest.
Mr. BELCHER. That is the proposition.
Senator GLENN. Of course, if you assume and if we concede that there is no public interest in this matter
Mr. BELCHER. Suppose I went to operate a hotel in West Virginia. I go over there and buy a hotel. Do you say to me that the State of West Virginia could prevent my use of that?
Senator GLENN. I do not put hotels upon the same basis as a utility or the coal industry or the oil industry:
Mr. BELCHER. Say, for instance, I am a foreign corporation and I have got 5,000 acres of coal land in West Virginia. Some foreign corporation over in New York comes over, and there is no law under the Federal Government or the State government to prevent my selling that 5,000 acres of coal land to this foreign corporation or to anyone whomsoever I please or have the chance to sell to. Do you mean to say to me that that concern could not operate its property and is by State authority or Federal authority prevented from using its property! It would be a deprivation of property without due process of law.
Senator GLENN. I would say that if there is a public interest in this business they would have the same right to prevent the sale of that property to be used for coal purposes as they would have to prevent me if I had a farm and I wanted to sell it to a railroad for right-of-way purposes to prevent me from selling it for that purpose.
Mr. BELCHER. I think the distinction is this: That before the railroad can do anything it must first get its permit from Congress. But I do not have to do that in a sovereign State.
Senator GLENN. Well, that is the question to decide.
Mr. BELCHER. And we oftentimes have occasion to thank God for it.
In Yick Wo v. Hopkins (118 U. S. 356), the court held: The ordinances of the city of San Francisco give the board of supervisors authority, at their discretion, to refuse permission to carry on laundries, except where located in buildings of brick or stone. The appellants applied for and were refused permission, and thereafter they were convicted of a violation of the above ordinances and sentenced to imprisonment. Held, That the ordinances were unconstitutional and invalid; it being a breach of the fourteenth amendment to the Constitution to empower any man, or body of men, at his or their absolute and unrestrained discretion to give or withhold permission to carry on a lawful business in any place.
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Senator GLENN. Well, that would apply even to the Interstate Commerce Commission.
Mr. BELCHER. How is that?
Senator GLENN. That would apply even to the Interstate Commerce Commission; “in their unrestrained discretion.”
Mr. BELCHER. Why, certainly. I would say that the Interstate Commerce Commission would have no power to say to me, “ Belcher,
99 you can not ship your coal in interstate commerce. They can regulate the rate that I pay, but they can not regulate what I sell.
Senator GLENN. No; no body, no commission has authority to take an arbitrary stand without reason for it.
Mr. BELCHER. I say to you that it has no right to take an arbitrary stand and refuse to permit me to make an honest living in a legitimate business for any reason. There is the difference.
Senator COUZENS. You overlook the zoning ordinances in cities where they can restrict the use of property.
Mr. BELCHER. Yes; certainly; they can do that under the police power, but whenever they refuse to permit me to make an honest living in a legitimate business that is an invasion of my constitutional rights.
Senator COUZENS. You referred to the San Francisco case where the permission was refused. That commission could refuse a permit to run a laundry in a zone that was restricted for residential purposes.
Mr. BELCHER. Oh, yes; under the police power, I grant you that. But you can not arbitrarily do it.
In the course of that opinion the court further held—and I want to impress this upon the committee:
When we consider the nature and the theory of our institutions of government, the principles upon which they are supposed to rest, and review the history of their development, we are constrained to conclude that they do not mean to leave room for the play and action of purely personal and arbitrary power. Sovereignty itself is, of course, not subject to law, for it is the author and source of law; but in our system, while sovereign powers are delegated to the agencies of government, sovereignty itself remains with the people, by whom and for whom all government exists and acts. And the law is the definition and limitation of power.
The definition and limitation of power. [Continuing reading:]
It is, indeed, quite true that there must always be lodged somewhere, and in some person or body, the authority of final decision; and in many cases of mere administration the responsibility is purely political, no appeal lying except to the ultimate tribunal of the public judgment, exercised either in the pressure of opinion or by means of the suffrage. But the fundamental rights to life, liberty, and the pursuit of happiness, considered as individual possessions, are secured by those maxims of constitutional law which are the monuments showing the victorious progress of the race in securing to men the blessings of civilization under the reign of just and equal laws, so that, in the famous language of the Massachusetts bill of rights, the government of the commonwealth " may be a government of laws and not of men.” For the very idea that one man may be compelled to hold his life, or the means of living, or any material right essential to the enjoyment of life, at the mere will of another seems to be intolerable in any country where freedom prevails as being the essence of slavery itself.
And in that connection and in view of that case in the Supreme Court of the United States I want to say this: Suppose I am, as I am, operating a little mine in West Virginia producing a thousand tons of coal a day. Before I can continue in that business I must
get a license, which the coal commission can take or revoke at any time. My property is destroyed. And what do you do when you destroy my business, which is a property right? You destroy the taxing power of a sovereign State, because the property becomes worthless. How would anybody ever conceive that such power was delegated by a sovereign State to the Federal Government to deprive its citizens of the right to do a legitimate business as contradistinguished from an unlawful business?
As held in Luchner v. New York (198 U. S. 59), in which case there was under consideration an act passed by the New York Legislature limiting the time which employees in bakeries might work to a maximum of 60 hours a week and a maximum of 10 hours in one day, which act as the court held was an arbitrary interference with the freedom of contract guaranteed by the fourteenth amendment and could not be sustained. In response to the State's claim of police power, the court said (and New York is a sovereign State) :
But are we all, on that account, at the mercy of legislative majorities? A printer, a tinsmith, a locksmith, a carpenter, a cabinetmaker, a dry-goods clerk, a bank's, a lawyer's, or a physician's clerk, or a clerk in almost any kind of business, would all come under the power of the legislature on this assumption. No trade, no occupation, no mode of earning power, and the acts of the legislature in limiting the hours of labor in all employments would be valid, although such limitation might seriously cripple the ability of the laborer to support himself and his family.
Senator GLENN. Have acts been upheld. limiting the hours of labor!
Mr. BELCHER. When you tried to do it in the District of Columbia—and I want to read that case presently, the minimum-wage scale—this proposed bill attempts to fix wages
Senator GLENN. No; I am not talking about that. I am talking about limiting hours of labor in various States. They have those laws, have they not?
Mr. BELCHER. Under the police power I say you can do that in some instances. You did it in the Adamson law, but the Supreme Court held that you did it by virtue of your power to regulate railroads and the manner in which they could conduct business.
Senator GLENN. I am asking about in different States. Are there not a number of State statutes prohibiting labor in excess of a certain number of hours per week?
Mr. BELCHER. I do not know whether there are or not. If it limits the rate of contract I would say no State has a right to pass any law that would prevent me from entering into any contract for a legitimate purpose.
Senator GLENN. I think they have been sustained.
In language often approved the court has thus indicated the difference between a private and a quasipublic business:
It is said that this meaning is plainly to be inferred because of fundamental differences both in an economic way and before the law between trade and manufacture on the one hand and railroad transportation on the other. Among these differences are the public character of railroad business, and as a result the peculiar power of control and regulation possessed by the State over railroad companies. The trader or manufacturer, on the other hand, carries on an entirely private business and can sell to whom he pleases; he may charge different prices for the same article to different individuals; he may charge
as much as he can get for the article in which he deals, whether the price be reasonable or unreasonable; he may make such discrimination in his business as he chooses, and he may cease to do any business whenever his choice lies in that direction. (U. S. Freight Association, 166 U. S. 320.)
That is in further answer, Senator Sackett, to your question a
In further answer to the proponents' contention that a State has the right to exclude foreign corporations from doing business therein, we quote from Fidelity Deposit Co. v. Tefoya (270 U. S. 426):
But it has been held a great many times that the most absolute seeming rights are qualified, and in some circumstances become wrong. One of the most frequently recurring instances is when the so-called right is used as a part of a scheme to accomplish a forbidden result. Thus the right to exclude a foreign corporation can not be used to prevent its resorting to a Federal court, or to tax it upon property that by established principles the State has no power to tax.
The State of Ohio undertook to fix as a condition precedent to the right of a foreign corporation to do an intrastate business therein a privilege tax based upon the entire authorized capital stock of the corporation, which in the particular case was very much more than the stock actually issued. The corporation filed its bill to enjoin the collection of so much of the tax as was exorbitant, and the State defended on the ground that it had the right to name any condition it pleased upon a foreign corporation desiring to enter its borders. In sustaining the injunction, the court held that a privilege tax on a foreign corporation must bear some reasonable relation to the value of the privilege and that the act imposing the tax in question "violated the equal-protection clause of the fourteenth amendment." (Air-Way Co. v. Day, 266 U. S. 71.)
In Frost v. Railroad Commission (271 U. S. 583) it was held that a private carrier was unconstitutionally deprived of his property without due process of law by a requirement of the State that he become a public carrier in order to secure a permit to use the public highways for transportation purposes. The opinion elaborates the proposition that while the State may, in some instances, exclude a foreign corporation, still it can not exercise this power to accomplish an unconstitutional purpose, for “acts generally lawful may become unlawful when done to accomplish an unlawful end," quoting at length from Security Insurance Co. v. Prewitt (202 U. S. 246), and other cases, particularly Western Union Telegraph Co. v. Kansas (216 U. S. 1). Among other quotations was this from Justice Day's dissent in the Prewitt case:
Conceding the right of a State to exclude foreign corporations, we must not overlook the limits upon that right now equally well settled in the jurisprudence of this court, that the right to do business can not be made to depend upon the surrender of a right created and guaranteed by the Federal Constitution. If this were otherwise, the State would be permitted to destroy the right created and protected by the Federal Constitution under the guise of exercising a privilege belonging to the State.
While we concede the right of a State to exclude foreign corporations from doing business within its borders for reasons not destructive of Federal rights, we deny that the right can be made to depend upon the surrender of the protection of the Federal Constitution which secured to alien citizens the rights to resort to the courts of the United States.
In other words, it would also be the same to deny a person the right to the persuit of life, liberty, and happiness which he can only