491:
420:
of the United States. Each contention has had the support of those whose views are entitled to weight. This court had noticed the question, but has never found it necessary to decide which is the true construction. Justice Story, in his
Commentaries, espouses the Hamiltonian position. 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 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 Sec. 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.
644:"That portion of the Social Security legislation here under consideration, I think, exceeds the power granted to Congress. It unduly interferes with the orderly government of the state by her own people and otherwise offends the Federal Constitution.... is not a substantive general power to provide for the welfare of the United States, but is a limitation on the grant of power to raise money by taxes, duties, and imposts. If it were otherwise, all the rest of the Constitution, consisting of carefully enumerated and cautiously guarded grants of specific powers, would have been useless, if not delusive.... I can not find any authority in the Constitution for making the Federal Government the great
664:"...the statutory scheme is repugnant to the Tenth Amendment.... The Constitution grants to the United States no power to pay unemployed persons or to require the states to enact laws or to raise or disburse money for that purpose. The provisions in question, if not amounting to coercion in a legal sense, are manifestly designed and intended directly to affect state action in the respects specified. And, if valid as so employed, this 'tax and credit' device may be made effective to enable federal authorities to induce, if not indeed to compel, state enactments for any purpose within the realm of state power and generally to control state administration of state laws."
42:
968:
579:. In like manner every rebate from a tax when conditioned upon conduct is in some measure a temptation. But to hold that motive or temptation is equivalent to coercion is to plunge the law in endless difficulties.... Nothing in the case suggests the exertion of a power akin to undue influence... the location of the point at which pressure turns into compulsion, and ceases to be inducement, would be a question of degree.
624:
The essence of the dissenting opinions was that the Social
Security Act of 1935 went beyond the powers that were granted to the federal government in the Constitution. Imposing a tax that could be avoided only by contributing to a state unemployment compensation fund effectively coerced each state to
460:
established a tax on employers, but if a state established an approved unemployment compensation plan, the taxpayer could credit up to 90% of the federal tax paid to the state unemployment fund. In effect, the Act established a taxing structure, which was designed to induce states to adopt consistent
675:
was part of a set of decisions in which the
Supreme Court consistently upheld New Deal economic and regulatory legislation. The key role of the case was the expansion of Congressional authority to the regulation of state activity, which marked the end of Supreme Court attempts to limit Congressional
478:
The question is to be answered whether the expedient adopted has overlept the bounds of power. The assailants of the statute say that its dominant end and aim is to drive the state legislatures under the whip of economic pressure into the enactment of unemployment compensation laws at the bidding of
723:
When
Congress appropriates money to build a highway, it is entitled to insist that the highway be a safe one. But it is not entitled to insist as a condition of the use of highway funds that the State impose or change regulations in other areas of the State's social and economic life.... Indeed, if
549:
The fact developed quickly that the states were unable to give the requisite relief. The problem had become national in area and dimensions. There was need of help from the nation if the people were not to starve. It is too late today for the argument to be heard with tolerance that, in a crisis so
419:
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, limited only by the requirement that it shall be exercised to provide for the general welfare
394:
The Court held that the so-called tax was not a true tax because the payments to farmers were coupled with unlawful and oppressive coercive contracts, and the proceeds were earmarked for the benefit of farmers complying with the prescribed conditions. Making the payment of a government subsidy to a
740:
If the spending power is to be limited only by
Congress' notion of the general welfare, the reality, given the vast financial resources of the Federal Government, is that the Spending Clause gives "power to the Congress to tear down the barriers, to invade the states' jurisdiction, and to become a
595:
It is one thing to impose a tax dependent upon the conduct of the taxpayers, or of the state in which they live, where the conduct to be stimulated or discouraged is unrelated to the fiscal need subserved by the tax in its normal operation, or to any other end legitimately national.... It is quite
401:
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
690:
marked the beginning of the recognition that
Congress could use the Spending Clause, under the umbrella of general welfare, to regulate state laws by incentives and encouragement but not coercion. The federal government may induce the states, tempt them, or seduce them but not coerce them into
426:
The idea that
Congress has authority separate and distinct from powers granted by enumeration has been controversial. The fact that the Supreme Court struck down the Act despite an expansive interpretation of the Spending Clause reflects the turmoil in its thinking at the critical time.
390:
conflicted with the
Constitution. In the Act, a tax was imposed on processors of farm products, with proceeds to be paid to farmers who would reduce their area and crops. The intent of the Act was to increase the prices of certain farm products by decreasing the quantities produced.
368:
We are not free to speculate as to the motives which moved
Congress to impose it, or as to the extent to which it may operate to restrict the activities taxed. As it is not attended by an offensive regulation, and since it operates as a tax, it is within the national taxing
350:
From the beginning of our government, the courts have sustained taxes although imposed with the collateral intent of effecting ulterior ends which, considered apart, were beyond the constitutional power of the lawmakers to realize by legislation directly addressed to their
596:
another thing to say that a tax will be abated upon the doing of an act that will satisfy the fiscal need, the tax and the alternative being approximate equivalents. In such circumstances, if in no others, inducement or persuasion does not go beyond the bounds of power.
615:
Based on all the foregoing arguments, the final judgment was to affirm the lower court's decision upholding the constitutionality of the Act. The ruling upholding the Act was one of the two Social Security Cases that upheld elements of New Deal legislation in 1937.
530:
The arguments placed the actions of Congress within its constitutional power. The Court then established that the tax and the credit in combination were not weapons of coercion that would destroy or impair the autonomy of the states. The first step was
490:
339:
had held that a regulatory tax is valid even if the revenue purpose of the tax may be secondary. The Court had also held that a tax statute does not necessarily fail because it touches on activities that Congress might not otherwise regulate. In
449:
During the years 1929 to 1936, when the country was passing through a cyclical depression, the number of the unemployed mounted to unprecedented heights. Often the average was more than 10 million; at times a peak was attained of 16 million or
574:
The difficulty with the petitioner's contention is that it confuses motive with coercion. "Every tax is in some measure regulatory. To some extent it interposes an economic impediment to the activity taxed as compared with others not taxed."
412:
of the Constitution]]. The Court stated that the issue "presents the great and the controlling question in the case." After it compared opposing expansive and restrictive interpretations of the Spending Clause, the Court decided:
608:
The states are at liberty, upon obtaining the consent of Congress, to make agreements with one another.... We find no room for doubt that they may do the like with Congress if the essence of their statehood is maintained without
316:, the Court handed down decisions that affirmed both federal and state prerogative to legislate regarding social welfare. The decisions were the first wave of what has become known as the constitutional revolution of 1937.
564:
addressed the constitutional powers of Congress and established that Congress has a "separate and distinct" power to tax and spend that is "not limited by the direct grants of legislative power found in the Constitution."
293:
that was designed to induce states to adopt laws for funding and payment of unemployment compensation. The decision signaled the Court's acceptance of a broad interpretation of Congressional power to influence state laws.
361:
concluded that a tax does not cease to be valid merely because it regulates, discourages, or even definitely deters the activities taxed. In that case, the Court held regarding a tax on dealers in firearms:
702:
It is now common for Congress to tie grants-in-aid with requirements and restrictions upon the states, but the practice is still often controversial. In a modern case depending upon the jurisprudence of
741:
parliament of the whole people, subject to no restrictions save such as are self-imposed."... This, of course, as Butler held, was not the Framers' plan and it is not the meaning of the Spending Clause.
656:"The threat implicit in the present encroachment upon the administrative functions of the states is that greater encroachments, and encroachments upon other functions, will follow."
301:
and that it involved coercion of the states that called for a surrender by the states of powers essential to their quasi-sovereign existence, in contravention of the Constitution's
537:
To draw the line intelligently between duress and inducement there is need to remind ourselves of facts as to the problem of unemployment that are now matters of common knowledge.
1053:
550:
extreme, the use of the moneys of the nation to relieve the unemployed and their dependents is a use for any purpose narrower than the promotion of the general welfare.
713:
that Congress could influence states to raise the minimum drinking age to 21 by threatening to withhold funds for federal highways. In her dissenting opinion, Justice
520:
were collected in the hope or expectation that some other and collateral good would be furthered as an incident, that, without more, would not make the act invalid.
508:
The excise is not void as involving the coercion of the States in contravention of the Tenth Amendment or of restrictions implicit in our federal form of government.
983:
944:
889:
864:
841:
818:
784:
753:
131:
87:
472:
wrote for a sharply-divided Court, which was in the process of changing its character relative to affirmation of federal action for the general welfare:
972:
1078:
302:
17:
408:
Although it struck down the Act, the Court dealt positively with expenditure of funds to advance the general welfare as specified in Section 8 of
1058:
684:, had been the last case in which the Supreme Court struck down an Act of Congress as beyond the authority granted by the Spending Clause.
409:
395:
farmer conditional on the reduction of his planned crops went beyond the powers of the federal government. Specifically, the Court said:
1073:
1048:
297:
The primary challenges to the Act were based on the argument that it went beyond the powers granted to the federal government in the
724:
the rule were otherwise, the Congress could effectively regulate almost any area of a State's social, political, or economic life.
589:, was for the conduct to be both encouraged or induced accomplish a national end (general welfare) and related to the tax itself:
1063:
327:
By 1937, it had been well established that regulatory taxes controlling commercial economic actions were within the power of the
387:
313:
46:
1068:
779:
629:
1021:
994:
290:
119:
457:
468:
was whether the tax coerced the states and whether the tax was within the powers of Congress. Justice
322:
282:
495:
884:
382:
195:
1012:
913:
714:
179:
602:
Finally, Cardozo explicitly noted the liberty of the states to make agreements with Congress:
987:
948:
893:
868:
845:
822:
788:
135:
79:
1003:
498:"scored another great victory for the administration" in defense of the Social Security Act.
939:
709:
163:
8:
469:
286:
215:
171:
951:
871:
825:
759:
633:
336:
278:
848:
896:
632:, the conservative members of the Court who opposed the New Deal agenda of President
543:
After it reviewed the distressed condition of the nation's economy, the Court noted:
298:
191:
148:
The unemployment compensation sections of the Social Security Act are constitutional.
801:
568:
Directly addressing the contention that the tax is coercive, Justice Cardozo wrote:
514:
An important part of the rationale was the conclusion that even if the excise taxes
436:
323:
Use of federal government's spending power to regulate commercial economic activity
82:
203:
1030:
909:
183:
386:. The main issue presented in that case was whether certain provisions of the
1042:
328:
207:
691:
passing legislation considered desirable to meet national needs. Before
695:, Congress could regulate only commercial economic activity, but after
585:
An important issue in a tax not being coercive, which was satisfied in
127:
98:
651:
319:
There were three additional issues that set the stage in early 1937:
123:
69:
Harwell G. Davis, Individually and as Collector of Internal Revenue
967:
645:
648:
of public charity throughout the United States" (p. 603).
94:
41:
918:
The Oxford Companion to the Supreme Court of the United States
502:
This was the key holding regarding the excise tax of the Act:
357:
Further emphasizing the broad power of taxation, the Court in
676:
powers based on advancement of the general welfare. In fact,
699:, Congress could regulate the actions of state governments.
461:
laws for funding and payment of unemployment compensation.
116:
628:
The dissenters are sometimes known collectively as the
1054:
United States Supreme Court cases of the Hughes Court
754:
List of United States Supreme Court cases, volume 301
402:
plan. They are but means to an unconstitutional end.
375:
232:
Cardozo, joined by Hughes, Brandeis, Stone, Roberts
730:She later approved of and quoted from the text of
652:Justice Sutherland, joined by Justice Van Devanter
524:, 300 U.S. 506. This indeed is hardly questioned.
1040:
456:The unemployment compensation provisions of the
277:, 301 U.S. 548 (1937), was a case in which the
667:
556:Although it was not quoted specifically in
1079:Constitutional challenges to the New Deal
489:
380:The Supreme Court had recently decided
266:U.S. Constitution, Article I, Section 8
14:
1059:United States Tenth Amendment case law
1041:
619:
430:
639:
29:1937 United States Supreme Court case
908:
902:
435:The nation was in the midst of the
388:Agricultural Adjustment Act of 1933
65:Steward Machine Company, Petitioner
24:
815:Hampton & Co. v. United States
333:Hampton & Co. v. United States
248:Sutherland, joined by Van Devanter
47:Supreme Court of the United States
25:
1090:
1074:Unemployment in the United States
1049:United States Supreme Court cases
990:548 (1937) is available from:
960:
659:
376:Expansive view of general welfare
980:Steward Machine Company v. Davis
966:
780:Steward Machine Company v. Davis
274:Steward Machine Company v. Davis
40:
35:Steward Machine Company v. Davis
18:Steward Machine Company v. Davis
625:make law creating such a fund.
289:of 1935, which established the
1064:1937 in United States case law
932:
877:
854:
831:
808:
794:
772:
13:
1:
766:
308:
973:Steward Machine Co. v. Davis
7:
747:
494:Assistant Attorney General
485:
458:Social Security Act of 1935
443:decision, the Court noted:
314:In the first months of 1937
10:
1095:
1031:Oyez (oral argument audio)
861:Sonzinsky v. United States
577:Sonzinsky v. United States
522:Sonzinsky v. United States
359:Sonzinsky v. United States
914:"McReynolds, James Clark"
802:"Social Security History"
560:, the relevant aspect of
283:unemployment compensation
265:
260:
252:
244:
236:
228:
223:
157:
152:
147:
142:
111:
106:
74:
60:
53:
39:
34:
1069:Social Security lawsuits
668:Subsequent jurisprudence
496:Charles E. Wyzanski, Jr.
464:The main controversy in
344:, the Court had stated:
291:federal taxing structure
885:United States v. Butler
838:Magnano Co. v. Hamilton
680:, just the year before
479:the central government.
383:United States v. Butler
342:Magnano Co. v. Hamilton
499:
54:Argued April 8–9, 1937
493:
940:South Dakota v. Dole
710:South Dakota v. Dole
707:, the Court held in
56:Decided May 24, 1937
1022:Library of Congress
715:Sandra Day O'Connor
620:Dissenting opinions
470:Benjamin N. Cardozo
431:Economic conditions
287:Social Security Act
216:Benjamin N. Cardozo
180:James C. McReynolds
172:Willis Van Devanter
920:. Encyclopedia.com
760:Helvering v. Davis
640:Justice McReynolds
634:Franklin Roosevelt
500:
337:U.S. Supreme Court
285:provisions of the
279:U.S. Supreme Court
168:Associate Justices
93:57 S. Ct. 883; 81
971:Works related to
299:U.S. Constitution
270:
269:
192:George Sutherland
164:Charles E. Hughes
16:(Redirected from
1086:
1035:
1029:
1026:
1020:
1017:
1011:
1008:
1002:
999:
993:
970:
955:
936:
930:
929:
927:
925:
906:
900:
881:
875:
858:
852:
835:
829:
812:
806:
805:
798:
792:
776:
437:Great Depression
153:Court membership
44:
43:
32:
31:
21:
1094:
1093:
1089:
1088:
1087:
1085:
1084:
1083:
1039:
1038:
1033:
1027:
1024:
1018:
1015:
1009:
1006:
1000:
997:
991:
963:
958:
937:
933:
923:
921:
910:Hall, Kermit L.
907:
903:
882:
878:
859:
855:
836:
832:
813:
809:
800:
799:
795:
791:548 (1937).
777:
773:
769:
750:
670:
662:
654:
642:
622:
488:
433:
378:
351:accomplishment.
325:
311:
303:Tenth Amendment
206:
204:Harlan F. Stone
194:
182:
138:652 (1937).
102:
68:
66:
55:
49:
30:
23:
22:
15:
12:
11:
5:
1092:
1082:
1081:
1076:
1071:
1066:
1061:
1056:
1051:
1037:
1036:
976:
962:
961:External links
959:
957:
956:
931:
901:
876:
853:
830:
807:
793:
770:
768:
765:
764:
763:
756:
749:
746:
745:
744:
743:
742:
728:
727:
726:
725:
669:
666:
661:
660:Justice Butler
658:
653:
650:
641:
638:
621:
618:
613:
612:
611:
610:
600:
599:
598:
597:
583:
582:
581:
580:
554:
553:
552:
551:
541:
540:
539:
538:
528:
527:
526:
525:
512:
511:
510:
509:
487:
484:
483:
482:
481:
480:
454:
453:
452:
451:
432:
429:
424:
423:
422:
421:
406:
405:
404:
403:
377:
374:
373:
372:
371:
370:
355:
354:
353:
352:
324:
321:
310:
307:
268:
267:
263:
262:
258:
257:
254:
250:
249:
246:
242:
241:
238:
234:
233:
230:
226:
225:
221:
220:
219:
218:
184:Louis Brandeis
169:
166:
161:
155:
154:
150:
149:
145:
144:
140:
139:
113:
109:
108:
104:
103:
92:
76:
72:
71:
62:
61:Full case name
58:
57:
51:
50:
45:
37:
36:
28:
9:
6:
4:
3:
2:
1091:
1080:
1077:
1075:
1072:
1070:
1067:
1065:
1062:
1060:
1057:
1055:
1052:
1050:
1047:
1046:
1044:
1032:
1023:
1014:
1005:
996:
995:CourtListener
989:
985:
981:
977:
975:at Wikisource
974:
969:
965:
964:
953:
950:
946:
942:
941:
935:
919:
915:
911:
905:
898:
895:
891:
887:
886:
880:
873:
870:
866:
862:
857:
850:
847:
843:
839:
834:
827:
824:
820:
816:
811:
803:
797:
790:
786:
782:
781:
775:
771:
762:
761:
757:
755:
752:
751:
739:
738:
737:
736:
735:
733:
722:
721:
720:
719:
718:
716:
712:
711:
706:
700:
698:
694:
689:
685:
683:
679:
674:
665:
657:
649:
647:
637:
635:
631:
630:Four Horsemen
626:
617:
607:
606:
605:
604:
603:
594:
593:
592:
591:
590:
588:
578:
573:
572:
571:
570:
569:
566:
563:
559:
548:
547:
546:
545:
544:
536:
535:
534:
533:
532:
523:
519:
518:
517:
516:
515:
507:
506:
505:
504:
503:
497:
492:
477:
476:
475:
474:
473:
471:
467:
462:
459:
448:
447:
446:
445:
444:
442:
438:
428:
418:
417:
416:
415:
414:
411:
400:
399:
398:
397:
396:
392:
389:
385:
384:
367:
366:
365:
364:
363:
360:
349:
348:
347:
346:
345:
343:
338:
334:
330:
329:U.S. Congress
320:
317:
315:
306:
304:
300:
295:
292:
288:
284:
280:
276:
275:
264:
259:
255:
251:
247:
243:
239:
235:
231:
227:
224:Case opinions
222:
217:
213:
209:
205:
201:
197:
196:Pierce Butler
193:
189:
185:
181:
177:
173:
170:
167:
165:
162:
160:Chief Justice
159:
158:
156:
151:
146:
141:
137:
133:
129:
125:
121:
118:
114:
110:
105:
100:
96:
90:
89:
84:
81:
77:
73:
70:
63:
59:
52:
48:
38:
33:
27:
19:
979:
954: (1987).
938:
934:
922:. Retrieved
917:
904:
899: (1936).
883:
879:
874: (1937).
860:
856:
851: (1934).
837:
833:
828: (1928).
814:
810:
796:
778:
774:
758:
731:
729:
708:
704:
701:
696:
692:
687:
686:
681:
677:
672:
671:
663:
655:
643:
627:
623:
614:
601:
586:
584:
576:
567:
561:
557:
555:
542:
529:
521:
513:
501:
465:
463:
455:
440:
434:
425:
407:
393:
381:
379:
358:
356:
341:
332:
326:
318:
312:
296:
273:
272:
271:
261:Laws applied
211:
208:Owen Roberts
199:
187:
175:
107:Case history
86:
64:
26:
609:impairment.
281:upheld the
130:. granted,
97:1279; 1937
1043:Categories
767:References
309:Background
240:McReynolds
99:U.S. LEXIS
924:March 20,
439:. In its
410:Article I
75:Citations
978:Text of
912:(2005).
748:See also
717:stated:
486:Decision
229:Majority
124:5th Cir.
1004:Findlaw
705:Steward
697:Steward
693:Steward
688:Steward
682:Steward
673:Steward
646:almoner
587:Steward
558:Steward
466:Steward
441:Steward
253:Dissent
245:Dissent
237:Dissent
143:Holding
126:1937);
1034:
1028:
1025:
1019:
1016:
1013:Justia
1010:
1007:
1001:
998:
992:
943:,
888:,
863:,
840:,
817:,
783:,
732:Butler
678:Butler
562:Butler
369:power.
335:, the
256:Butler
214:
212:·
210:
202:
200:·
198:
190:
188:·
186:
178:
176:·
174:
95:L. Ed.
986:
947:
892:
867:
844:
821:
787:
450:more.
331:. In
134:
112:Prior
988:U.S.
949:U.S.
926:2012
894:U.S.
869:U.S.
846:U.S.
823:U.S.
789:U.S.
136:U.S.
128:cert
117:F.2d
101:1199
88:more
80:U.S.
78:301
984:301
952:203
945:483
890:297
872:506
865:300
842:292
826:394
819:276
785:301
132:300
120:207
115:89
83:548
1045::
982:,
916:.
849:40
734::
636:.
305:.
67:v.
928:.
897:1
804:.
122:(
91:)
85:(
20:)
Text is available under the Creative Commons Attribution-ShareAlike License. Additional terms may apply.