1. Lecture 26 The Commerce Power
Part 3: Industrial Revolution Cases II

2. This lecture
We will cover the second half of the section on the Industrial Revolution Cases
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3. Regulating Commerce as a Federal Police Power
The general authority of a government to regulate for the health, safety, morals and general welfare of its citizens
This was held by states prior to the Constitution being adopted
States retain this power as well as long as it does not conflict with constitutional limits
It is not a specific delegated federal power- it has to find a specific grant of authority
Hoke v. United States (1913)
The Mann Act made it a federal crime to transport someone across state lines for prostitution, debauchery, or any other immoral purposes
Congress could not regulate prostitution per se, but it could under the commerce clause
Because it dealt with interstate travel

4. Champion v. Ames (1903) Champion v. Ames (1903) Background Question
Congress passes a law prohibiting importing, transporting lottery tickets across state lines or through the mail
Champion was arrested for arranging lottery tickets from Paraguay to be sent to Texas and then transported to California by Wells Fargo
He says the law is unconstitutional
Question
Did the transport of the tickets by an independent carrier constitute commerce, which Congress could then regulate?

5. Champion v. Ames- II Arguments For Champion (strike down the law)
The power over regulation of lotter tickets is a police power exclusively reserved to states
It violates the 10th Amendment
It is not the regulation of commerce, but of an alleged evil
It has no relationship to commerce, thus not necessary and proper for carrying out the power to regulate commerce among the states
For Ames (uphold the law)
Lottery tickets are articles of commerce- they are things people buy and sell
The real question is whether the articles have been subjects of purchase and sale
The power to prohibit is absolute and the Congress is the final judge of that exercise

6. Champion v. Ames- III Justice Harlan writes for a 5-4 Court
Notice his full name is John Marshall Harlan
Commerce is not defined by the Constitution- he notices this several times
He says the leading case is Gibbons v. Ogden
Lottery tickets are subjects of traffic and therefore the subjects of commerce
The commerce power "is plenary, is complete in itself, and is subject to no limitations except such as may be found in the Constitution.“
Congress only prohibited interstate transport, not intrastate
Congress is assisting the states in rooting out an alleged evil
This case stands for the proposition that Congress may use the commerce clause in the same way states use their police powers

7. Champion v. Ames- IV Chief Justice Fuller dissents
Joined by Brewer, Peckham and Shiras
The police power has always belonged to the states
This is a reserved power to them
Granting Congress the general police power would defeat the purposes of the 10th Amendment
Hopolite Egg Company v. United States (1911)
The Court upholds the Food and Drug Act as a valid exercise of the commerce power
After Hoke, they made other federal crimes for activities that cross state lines

8. Hammer v. Dagenhart (1918) Hammer v. Dagenhart (1918) Background
Child labor had become a big issue
Companies had no problem hiring young children, often for very dangerous jobs
Businesses gained from these practices and made a lot of money- particularly textiles
The Progressive Movement wished to stop these practices
After a lot of debate, Congress finally passed the Keating-Own Child Labor Act of 1916
It prohibited the shipment in interstate commerce that came from a factory when those producing the good were below the age of 14, had those between work more than eight hours a day
Textile companies led the fight against it

9. Hammer v. Dagenhart- II More background
The textile owners needed a plaintiff- the found one
Dagenhart’s children were employed at a cotton mill in North Carolina
North Carolina law allowed them to work up to 11 hours a day
With the new law, one child could not work at all and the other limited to eight hours
The Executive Committee worked with the Dagenharts and the company
They said they effected employees would be unable to continue to work
They file for a preliminary injunction to stop enforcement
They win at the district court level
Attorney General John W. Davis said states had not been doing enough on child labor

10. Hammer v. Dagenhart- III
Question:
Did this law violate the Commerce Clause and the Tenth Amendment?
There was also a question of Due Process as well (not decided)
So will the Court follow the approach in E.C. Knight or the Shreveport Doctrine?
Arguments
For Hammer (uphold the law)
This only applies to transporting the products out of state- not within states
Transportation of goods is clearly within the meaning of commerce
Unfair competition- this has to be done at a national level
States rights are irrelevant- this is a power under the commerce clause

11. Hammer v. Dagenhart- IV Arguments For Dagenhart (strike down the law)
The commerce clause was not a positive grant of power to the federal government
The purpose of the legislation was to prevent child labor
Not to regulate commerce
Congress is trying to regulate production of goods, not their transportation
This goes beyond the scope of the commerce clause
The consequences of child labor are local- so they can only be regulated by states
The right to exercise police power over intrastate matters is reserved to the states

12. Hammer v. Dagenhart- V Justice Day writes for a 5-4 Court
There is no power vested in Congress to require the states to exercise their police power so as to prevent possible unfair competition
The Commerce Clause does not give the Congress the power to equalize conditions
Congress has not tried to deny transportation to other areas like hours and women labor
The country is a nation made up of states- power not expressly delegated to the national government are reserved to them
This is purely an issue of state authority
It exceeds the commerce power
Exerts power over a purely local matter
The effect of this opinion, along with E.C. Knight was that Congress was not going to be able to regulate manufacturing or production of goods through the Commerce Clause

13. Hammer v. Dagenhart- VI Justice Holmes, dissenting
Joined by Brandeis, Clarke and McKenna)
Note the new justices on the Court since Champion
He takes the across state lines approach
This is not seeking to regulate anything within the state
The power to regulate commerce belongs to Congress, not states
Congress should choose public policy here even if it has an indirect effect on states
Congress should shape policy for the nation as a whole
“self-seeking state”

14. Next lecture We move into the New Deal cases
We will first do the cases going against FDR
Plus a discussion of the Court packing plan
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