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Check Mike Check Sound Circulate Attendance. Time. Today’s Lecture: . Anti-Federalist and Laissez Faire Commerce Clause The Taney Commerce Clause The Laissez Faire Commerce Clause. Lecture Organization:. Class Announcements. Review. Brown v. Maryland.

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Check Mike

Check Sound

Circulate Attendance

Time


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Today’s Lecture:

  • Anti-Federalist and Laissez Faire Commerce Clause

  • The Taney Commerce Clause

  • The Laissez Faire Commerce Clause


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Lecture Organization:

  • Class Announcements

  • Review

  • Brown v. Maryland

  • Introduction to Roger Brooke Taney

  • Rise of the Dormant Commerce Power

  • Social Transformation

  • E.C. Knight

  • Hammer v. Daggenhart

Time


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Class Announcements

Next Quiz

-- Part II of the course is shorter than Part I

-- You will only have 1 quiz for Part II

-- It will be after Spring Break (Friday, March 21st)

Untested lectures

-- Three lectures from Part I remain untested. They will be tested in Part II

-- They are: lecture 8 (failed audio), lecture 10 (Marbury) and lecture 11 (the last one).

-- I’ll be accepting quiz questions from you on those at any time.


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Class Announcements

Exam

-- Sent to scantron place this week

-- I have to create the answer key


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Time

Class Announcements

Next Cases

  • -- Today:

    • New York v. Miln

    • E.C. Knight

    • Hammer v. Dagenhart

  • -- if we finish, head into the Taxing cases

    • McCray

    • Bailey

    • Butler

Questions?

  • Only 1 brief –

  • Only 1 brief accepted


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Review

“Commerce Clause”

-- There is an extremely important clause in the Constitution called a “commerce clause”


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Commerce Clause

Congress has the power to …

“Congress shall have the Power to regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes”

Congress has the power to …

“Congress shall have the Power to regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes”

Congress has the power to …

“Congress shall have the Power to regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes”

Congress has the power to …

“Congress shall have the Power to regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes”

Three basic ideas:

-- It must be “commerce”

-- It must be “interstate”

-- and THAT must be the objective?

Copyright, Sean Wilson. 2007


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Review

John Marshall’s Commerce Clause

Gibbons v. Ogden

  • -- Defined “commerce” as a broad activity.

  • -- He called it an “intercourse;” a better word is probably just “economy”

  • -- He conceded, however, that there was a sphere of economic activity that remained “local” and hence was not interstate commerce.


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Marshall ‘s Commerce Clause

If it remains completely local, it is not federal business

Wants to GOVERN this thing!

continuing its venture inside one state

State A

State B

crossing a border

An “intercourse”

(a broad concept)

“Uncle Sam”

No matter where it goes, it is federal business

Local Activity Cannot Be Touched --

Does not extend to activities completely internal or local (e.g., state inspection laws). State inspection laws, health laws, and laws for regulating the internal commerce of a State, and those which respect turnpike roads, ferries, &c. are not within the power granted to Congress.

“Interstate Commerce”

State C

State D

Copyright, Sean Wilson. 2007


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Review

John Marshall’s Commerce Clause

Regulation means “to govern”

  • -- the power to regulate does not mean just calling fouls between the trading participants, or setting uniform commercial trade rules

  • -- it means the power to govern the entire activity of the American economy

  • -- But what does he mean here?

    • banning goods?

    • breaking up monopolies?

    • ending slavery in commerce? Morality in business?


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Review

John Marshall’s Commerce Clause

“Exclusivity” Premise

  • -- Marshall also says that whatever sphere of authority the government has to govern the nation’s economy, it belongs ONLY to the feds.

  • -- Either/or logic, If/then logic

  • -- If we have this power, you cannot have it. The Constitution gives that to us.


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Commerce Clause

Congress has the power to …

“Congress shall have the Power to regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes”

Anything Economic

Exclusive

Govern

So long as it is not purely local within a state

Copyright, Sean Wilson. 2007


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Brown v. Maryland (1827)

Facts:

  • Maryland wanted to regulate people who sell products from other states or countries

  • Today, it would be like regulating the “Wallmart” as opposed to the local produce market

  • required each store to get a $50.00 licensing fee

  • Here is the statute

The statute --

all IMPORTERS of foreign articles or commodities, of dry goods, wares, or merchandise, by bale or package, or of wine, rum, brandy, whiskey and other distilled spirituous liquors, &c., and other persons SELLING the same by wholesale, bale or package, hogshead, barrel, or tierce, shall, before they are authorized to sell, take out a license … for which they shall pay fifty dollars

Question:

Is the statute constitutional?


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Time

Brown v. Maryland (1827)

The ruling

Original Package Rule

  • Not allowed if the product is in its original package.

  • idea: commerce that travels from one state to the next in an unopened package can only be regulated by the federal government, not the states


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Introduction to Roger Brooke Taney

Who is Roger Brooke Taney?

  • --Central Believer in “Jacksonian-Era America:”

    • pro-slavery

    • pro agrarian ideology (anti-banks, anti-Hamilton)

    • second-generation Jeffersonians

  • was Andrew Jackson’s Attorney General

  • was also the officer in the Jackson administration that executed the order to withdraw all of the federal funds from the Bank of the United States (explain)

Copyright, Sean Wilson. 2007


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Introduction to Roger Brooke Taney

Who is Roger Brooke Taney?

  • pro states rights

  • was also the author of Dred Scott (explain)

    • (views were consistent with his days of being Jackson’s attorney general)

  • Taney was the attorney who lost Brown v. Maryland

Copyright, Sean Wilson. 2007


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Time

Introduction to Roger Brooke Taney

Who is Roger Brooke Taney?

  • Taney’s appointment to the Supreme Court:

    • -- “Borked” in 1835 (Senate would not act on his appointment)

    • -- When John Marshall died, his appointment was successful

    • -- fierce debate in Congress that lasted 3 months.

Copyright, Sean Wilson. 2007


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Mayor of New York v. Miln

Facts:

  • Vessels coming to NY had to provide a list of passengers and post a 3-year bond against vagrancy and poverty.

  • A bond is called a “surety.” It is, in the common tongue, “bail.”

  • Post “bail” against your poverty (“poor law”)

  • New Yorkers are beginning to think that immigration is out of control – 60,500 yearly into the port (just wait until later in the century!)

  • The ship captains who bring them here charge fees – that is there business (think of it as a really long ferry ride)

Question:

What are the Facts of this case?


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Conceptualizing Miln

The posting of the bond is a regulation of his business. It makes his ferry riding less profitable. Imagine someone requiring an international taxi or airplane company to pay a bond for every passenger that is unemployed after transit.

Post Bond

People

From Europe (or wherever)

To New York

Copyright, Sean Wilson. 2007


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Mayor of New York v. Miln

Ruling:

“Police Power”

  • 1. This is intended as a “police power,” not a regulation of commerce

  • 2. So long as it does not conflict with a federal statute, it is ok

  • -- let’s look at the logic.

Question:

What does the rule of law say?

Answer:

Gibbons says this is interstate commerce

Question:

What does the Taney Court say?


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Mayor of New York v. Miln

Ruling:

“Police Power”

  • 1. This is intended as a “police power,” not a regulation of commerce

  • 2. So long as it does not conflict with a federal statute, it is ok

  • -- let’s look at the logic.

It’s a Police Power --

“The law is not a commercial regulation, in the sense contemplated in the constitution; but a police regulation. It is a part of the system of poor laws, and intended to prevent the introduction of foreign paupers


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Mayor of New York v. Miln

Ruling:

“Police Power”

  • 1. This is a “police power,” not a regulation of commerce

  • 2. So long as it does not conflict with a federal statute, it is ok

  • -- let’s look at the logic.

Inherent Power --

This power of determining how and when strangers are to be admitted, is inherent in all communities. Fathers of families, officers of colleges, and the authorities of walled cities, all have this power, as an incident of police


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Mayor of New York v. Miln

Ruling:

“Police Power”

  • 1. This is a “police power,” not a regulation of commerce

  • 2. So long as it does not conflict with a federal statute, it is ok

  • -- let’s look at the logic.

Inherent State Power --

In states, it is a high sovereign power. It belonged to the states, before the adoption of the federal constitution. It is nowhere relinquished; nor can it be, with safety. It is essential to the very existence of some, and to the prosperity and tranquility of all. That it was not intended to relinquish it, we infer: 1st. Because it was not prohibited to the states. 2d. Because it is not expressly granted to Congress


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Mayor of New York v. Miln

Ruling:

“Police Power”

The 1808 Clause --

The 1808 Clause declares, that 'the migration or importation of such persons as any of the states, now existing, shall think proper to admit, shall not be prohibited by congress prior to 1808.” What is the meaning of the words, “the states shall think proper to admit?” States can only think through their laws; legislation is the thought of states. The very phrase shows that the states reserved the power to admit or prohibit; and consequently, to regulate the admission. The power of congress is suspended until 1808; but the power of the states remains as before the constitution.

  • 1. This is a “police power,” not a regulation of commerce

  • 2. So long as it does not conflict with a federal statute, it is ok

  • -- let’s look at the logic.


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Conceptualizing Police Powers

Federal Government

States

Everything NOT given to Feds in the Constitution

Everything given by the Constitution

Including the natural right to police for health and safety

Question:

How can this be reconciled with the exclusivity premise?

Question:

How is this case factually different from Gibbons?

Answer:

No conflict with a federal statute

Time

Copyright, Sean Wilson. 2007


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The Rise of the Dormant Commerce Power

License Cases

  • -- a state passed a law that said, before you sell liquor, you need a license. (liquor license law)

  • -- Held: The states are allowed to do this.

  • -- Two reasons: (1) no federal law contradicts; (2) this is a purely local activity

  • -- Taney objects to the exclusivity premise.

Answer:

No. This is actually intended as a regulation of commerce. It’s just intrastate commerce

Question:

What does the rule of law say?

Question:

Is this a police power?

Answer:

It’s a local activity


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The Rise of the Dormant Commerce Power

License Cases

  • -- a state passed a law that said, before you sell liquor, you need a license. (liquor license law)

  • -- Held: The states are allowed to do this.

  • -- Two reasons: (1) no federal law contradicts; (2) this is a purely local activity

  • -- Taney objects to the exclusivity premise.

Exclusivity Premise Objected to --

“But with every respect for the opinion of my brethren with whom I do not agree, it appears to me to be very clear, that the mere grant of power to the general government cannot, upon any just principles of construction, be construed to be an absolute prohibition to the exercise of any power over the same subject by the States.”

-- Excerpt from Taney the License Cases


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The Rise of the Dormant Commerce Power

Cooley v. Board of Wardens

  • -- Thefacts: Ships had to use a local pilot when sailing into Philadelphia

The Pennsylvania Law --

A Pennsylvania law required that all ships entering or leaving the port of Philadelphia hire a local pilot. Ships that fail to do so would be subject to a fine, which would go to a fund for retire pilots and their dependents. This fund was administered by the Board of Wardens of the Port of Philadelphia. Cooley was a ship owner. He refused to hire a local pilot and he also refused to pay the fine.


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Conceptualizing Cooley

The paying of a local pilot increases the cost of the business. It makes ferrying less profitable.

Question:

How should the case come out?

Question:

Is this case different from Gibbons in any material way?

Question:

What does the rule of law say?

Question:

Is this interstate or intrastate commerce?

Question:

Is this a police power, or is it intended as an economic regulation

Pay for a local Pilot

Anything

From Anywhere

To Phili

Copyright, Sean Wilson. 2007


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The Rise of the Dormant Commerce Power

Cooley v. Board of Wardens

  • -- Theholding: The law is just fine, because:

    • -- Exclusivity only extends to those situations where uniformity is required.

    • -- Hence, if this is one of those regulations where uniformity is not required, we, the states, get to regulate commerce, too.

    • -- Marshall’s exclusivity premise is now dead

“Selective Exclusivity”


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The Rise of the Dormant Commerce Power

Cooley v. Board of Wardens

Selective Exclusivity --

Navigation was commerce; and, piloting was navigation. Therefore, the subject to be regulated was “commerce.” However, “some subjects demand a single uniform rule for the whole nation, while others, like pilotage, demand diverse local rules to cope with varying local conditions.” The power of Congress to be the exclusive say was therefore selective. For some things it would be the exclusive say, for others, it would not. Congress exercises exclusive power only over “subjects of this power [that] are in their nature national, or admit only of one uniform system or plan of regulation” [only where “one size fits all” – my words]

  • -- Theholding: The law is just fine, because:

    • -- Exclusivity only extends to those situations where uniformity is required.

    • -- Hence, if this is one of those regulations where uniformity is not required, we, the states, get to regulate commerce, too.

    • -- Marshall’s exclusivity premise is now dead

“Selective Exclusivity”


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The Rise of the Dormant Commerce Power

Cooley v. Board of Wardens

The Legal Point

  • -- There is now something called the “dormant commerce clause.”

  • -- States can regulate even the INTERSTATE economy in the absence of federal legislation

Question:

Do you think that is a correct interpretation of the constitution?


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The Rise of the Dormant Commerce Power

Cooley v. Board of Wardens

The Political Point

  • -- Would these cases have come out any differently if the Court was closer to the fire? (Keep track of this question)

Your final course paper

Question:

Why do you think I am showing you these cases? Of what relevance are these stupid cases to you?

Regime Politics!


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A Helpful Table Showing How to Synthesize Cases

Time

Copyright, Sean Wilson. 2007


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Social Transformation

Hamilton’s America Arrives

-- America will go through large scale social transformation in the post civil war years.

Hamilton’s America will come to pass; while Jefferson’s begins to die out

Banking

Becomes a common practice everywhere

Manufacturing

Becomes a common practice everywhere

Corporations

Becomes a common practice everywhere

Urbanization

The cities begin to swell

Industrialization

Takes off in the 1800s


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Social Transformation

No longer a regional issue

-- These things are no longer a sectional or regional issue (north and south adopt these economic institutions)

-- They are no longer new world versus old world (the new world is swallowing up the old world)

-- Northern and Southern elites begin making money the same way


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Copyright, Sean Wilson. 2007


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Social Transformation

Large Scale Production

  • -- From 1863-1899, index of manufacturing production rose by more than 700 percent

    • Andrew Carnegie

    • Innovations in Steel production (Bessemer technology)

Copyright, Sean Wilson. 2007


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Social Transformation

New Economic Goliaths

  • -- Mergers, Trusts, Monopolies, Oligopolies

  • -- New “economic Godzillas in an agrarian legal order”

Fundamentally-important point (explain)

Copyright, Sean Wilson. 2007


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Social Transformation

Population

-- doubled between 1870 and 1900

Copyright, Sean Wilson. 2007


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Social Transformation

Immigration

-- vast amounts from eastern and central Europe

Copyright, Sean Wilson. 2007


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Social Transformation

Labor Movement

  • -- Labor unions form

  • -- 8 hours a day, 48 hour work week

  • -- Terrible strikes in the late 1800s (Eugene debs)

    • violence, death

  • -- anti-strike laws (jail)

  • -- sit down strikes

  • -- people are demanding labor reform

Copyright, Sean Wilson. 2007


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Social Transformation

Capitalism gets sick?

  • -- New phenomenon: the roller coaster ride

  • -- Left unabated and unchecked, the new industrial capitalism seemed to have fits of boom and bust

  • -- sort of “bipolar” (highs too high, lows too low)

  • -- For example

    • -- depression in 1870s and 1890s

    • (1890’s would have been America’s “great depression” if it would not have been for the Great Depression.

    • Mention how overproduction sent prices down (and farmers just kept producing to the max)

Copyright, Sean Wilson. 2007


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Social Transformation

Should there be rules for capitalism?

-- Certain kinds of abuses would occur

-- worker injuries, child labor, unsafe products

-- the Upton Sinclair book

Famous book written by Upton Sinclair, called the “The Jungle,” which chronicled how the manufacturers of beef -- specifically, sausages -- had worked on conveyor belts, and rats would jump up on the conveyor belts and be chopped up and put into the sausages. The manufactures of the sausages didn’t care

Copyright, Sean Wilson. 2007


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Social Transformation

Transformation in the organization of political ideology

-- something fascinating results

-- how political ideology is organized, changes

Copyright, Sean Wilson. 2007


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Farmers

Steelworkers

Coal Miners

etc

Plantation Hegemony

The forces of capital

Labor

Copyright, Sean Wilson. 2007


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A new rationalization for the power center!

No more states rights!

Plantation Hegemony

Laissez Faire

Copyright, Sean Wilson. 2007


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Laissez Faire

Progressivism

Time

Copyright, Sean Wilson. 2007


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E.C. Knight

Facts:

  • -- Congress passed the Sherman Anti-Trust Act in 1890.

  • -- Concerned about large conglomerations and trusts

  • -- American Sugar Refining Company

    • purchased 4 sugar refineries in PA

    • controlled over 98 percent of the sugar-refining business in the United States.

    • E.C. Knight was one of the refineries

Outlawed --

It outlawed "every contract, combination...or conspiracy, in restraint of trade" or interstate commerce, and it declared every attempt to monopolize any part of trade or commerce to be illegal

Question:

What does the rule of law say about this? Can Congress do this?

Question:

What are the facts of this case?


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E.C. Knight

Ruling:

  • -- Sherman Anti-Trust Act is constitutional, but

  • -- Manufacturing is different from selling

“Dinner Logic”

Question:

What is the holding in the case?


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E.C. Knight

Basic Legal Rules:

  • -- Manufacturing is local

  • -- Can’t regulate commerce “indirectly”

  • (let’s conceptualize this)

Question:

What is the holding in the case?


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John Marshall

Time

1. purely local

2. if it NEVER leaves

Now we add something New:

1. purely local

2. BEFORE it leaves

State A

State B

Coal mining? Steel mills? All the big industrial factories?

“Abortion Logic”

“Dinner logic”

Regime politics and constitutionalism

Now Uncle Sam Can’t regulate it

Question:

What else can’t Congress do under this decision?

Question:

Why am I showing this to you? Of what relevance is this to our course?

Question:

What is the political significance of this decision?

State C

State D

Changes (narrrows) Marshall’s original idea

Copyright, Sean Wilson. 2007


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Hammer v. Dagenhart (1918)

Facts:

  • -- The Keating-Owen Child Labor Act prohibited the interstate shipment of goods produced by child labor.

  • -- couldn’t ship a product in interstate commerce if it employed children under the age of 14

  • -- or if it allowed children between the ages of 14 and 16 to work more than 8 hours a day or more than 6 days a week or at night

  • -- Reuben Dagenhart's father had sued to ALLOW his fourteen year old son to work in a textile mill in North Carolina

Huge Point!

Question:

What are the facts of this case?


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Hammer v. Dagenhart (1918)

Ruling:

  • -- Congress cannot ban child labor

  • -- Why?

Question:

What is the holding in the case?


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Hammer v. Dagenhart (1918)

Basic Legal Rules:

  • -- production is not commerce; it is “local”

Santa’s Elves Don’t Count --

“When offered for shipment, and before transportation begins, the labor of their production is over, and the mere fact that they were intended for interstate commerce transportation does not make their production subject to federal control.”


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Hammer v. Dagenhart (1918)

Basic Legal Rules:

  • -- production is not commerce; it is “local”

  • -- You can’t use the commerce power for general welfare purposes

    • This is “social-welfare legislation,” not the kind of thing you would find a commercial code

    • This is you making the world fair. Economic regulation is about supply and demand, trade agreements, etc. – not about utopian society

Motivation Premise


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Hammer v. Dagenhart (1918)

Basic Legal Rules:

  • -- “The power to regulate is not the power to govern”

    • (Marshall is turned on his head)

Not the Power to Destroy --

“The power to control commerce is not the power to destroy it”


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Factory

The Commerce Power

2

3

1

Formation of the Corporation

The labor or work performed inside

Putting it in shipment

Hammer & E.C. Knight

E.C. Knight

Hammer & E.C. Knight

“Social Welfare Motive”

Copyright, Sean Wilson. 2007


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Understanding the problem

State A

State B

Uncle same wants to get at this activity

State C

State D

Factory

commodity

Copyright, Sean Wilson. 2007


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Understanding the problem

State A

State B

Before production, it is not federal business

--E.C. Knight

State C

State D

Factory

Copyright, Sean Wilson. 2007


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Understanding the problem

State A

State B

After it comes out, it is not federal business if it NEVER leaves

State C

State D

Factory

(Gibbons)

Copyright, Sean Wilson. 2007


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Understanding the problem

State A

State B

1. it can still cross a border

2. yet not be “federal business”

3. if it is “social legislation”

State C

State D

Factory

Dagenhart

Copyright, Sean Wilson. 2007


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Understanding the problem

State A

State B

1. it can still cross a border

2. yet not be “federal business”

3. so long as there is no contradiction with state law

State C

State D

Factory

Dormant Commerce Clause (State’s Rights Era)

Copyright, Sean Wilson. 2007


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State A

State B

Regulation does not mean banning

State C

State D

Time

Copyright, Sean Wilson. 2007


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