Charles W. Pierson

“ The makers of the Constitution represented the people of distinct and independent states, jealous of their rights and of each other but nevertheless impelled by experience of danger lately past and sense of other perils impending to substitute for their loose and ill-working confederation a more effective union. The most formidable obstacle, apart from mutual jealousies, was a fear of loss of liberties, state and individual, through encroachment of the central power. ”

“ An acute critic of our institutions has said that the Constitution "has changed in the spirit with which men regard it, and therefore in its own spirit." [1] Men realize that the words of the Constitution, like the words of Holy Writ, have not always meant the same thing to those who regulate their conduct by its precepts; that the system of government which those words embody has in reality changed, is changing to-day. ”

“ The preservation of the states, and the maintenance of their governments, are as much within the design and care of the Constitution as the preservation of the Union and the maintenance of the National Government. The Constitution, in all its provisions, looks to an indestructible Union composed of indestructible states. ”

“ Being a grant of powers to a government its language is general, and as changes come in social and political life it embraces in its grasp all new conditions which are within the scope of the powers in terms conferred. In other words, while the powers granted do not change, they apply from generation to generation to all things to which they are in their nature applicable. ”

“ The Supreme Court holds, and in its opinion reiterates many times, that the tax is upon the privilege of doing business in a corporate capacity.
Right here is the crux of the matter. Corporate capacity is not a right granted by the National Government. It is something which Congress can neither give nor take away. In the division of powers which marked the creation of our dual government the power to confer corporate capacity was reserved to the states. The decision, therefore, comes to this: Congress can by taxation burden the exercise of a privilege which only a state can grant. ”

“ None of these things, however, would seem to them to involve any essential change in the beliefs and purposes of men as they had known them. The Prohibition Amendment, on the contrary, would evidence to their minds the breaking down of a principle of government which they had deemed axiomatic, the abandonment of a purpose which they had supposed immutable. As students of the science of government they would realize that the most fundamental change which can overtake a free people is a change in their frame of mind, for to that everything else must sooner or later conform. ”

“ It would seem at first blush that the power in the Court to declare legislative acts unconstitutional affords a complete safeguard against congressional encroachment on the prerogatives of the states. Such is not the fact, however. The veto power of the Court by no means covers the entire field of legislative activity. In the Convention which framed the Constitution, attempts were made to give to the judiciary, in conjunction with the executive, complete power of revision over legislative acts, but all such propositions were voted down. ”

“ Gladstone called it "the most wonderful work ever struck off at a given time by the brain and purpose of man." The casual reader of the Constitution will be at a loss to account for such adulation. It will seem to him a businesslike document, outlining a scheme of government in terse and well-chosen phrases, but he is apt to look in vain for any earmarks of special inspiration. To understand the true greatness of the instrument something more is required than a mere reading of its provisions. ”

“ The desire for uniformity, standardization, efficiency, has outgrown the earlier fears of a centralization of power. Congress has found ways, under the constitutional grants of power to lay taxes and regulate interstate commerce, to legislate in furtherance of the popular demands. The Court is not strong enough (no governmental agency which could be devised would be strong enough) to hold back the flood or permanently thwart the popular will. In a government of the people everything has to yield sooner or later to the deliberate wish of the majority. ”

“ The makers of the Constitution took the utmost care to insure the independence of the Court. Its members hold office during good behavior, that is to say for life. They cannot be removed except by impeachment for misconduct. Only one attempt has ever been made to impeach a judge of the Supreme Court [1] and that attempt failed. Still further to insure their freedom from legislative control, the Constitution provides that the compensation of the judges shall not be diminished during their continuance in office. ”

“ It is familiar law, reiterated over and over again by the Supreme Court, that Congress cannot tax the means or instrumentalities employed by the states in exercising their powers and functions, any more than a state can tax the instrumentalities similarly employed by the General Government. ”

“ The powers of the legislature are defined and limited; and that those limits may not be mistaken or forgotten, the Constitution is written. To what purpose are powers limited, and to what purpose is that limitation committed to writing, if these limits may, at any time, be passed by those intended to be restrained?... The Constitution is either a superior paramount law, unchangeable by ordinary means, or it is on a level with ordinary legislative acts, and, like other acts, is alterable when the legislature shall please to alter it. ”

“ Witness the embarrassment toward Italy growing out of lack of federal jurisdiction in respect of the New Orleans riots, and the ever-present danger to our relations with Japan from acts of the sovereign State of California which the Federal Government is powerless to control. Among developments from within was the Civil War, with its triumph for the idea of national supremacy and an indissoluble union. Another, which has hardly received the attention it deserves, has been the influence of the large element of our population composed of immigrants since the Revolution and their descendants. ”

“ Obviously it is not a tax upon income as income. If it were, it would be obnoxious to the decision in the Pollock case as imposing a direct tax without apportionment among the states. The language of the act, as well as the declarations of its sponsors, clearly indicate that it is intended, not as a direct tax on property, but as an excise tax on privilege. The phraseology of the act itself is—"A special excise tax with respect to the carrying on or doing business by such corporation," etc. Undoubtedly Congress has power to impose an excise tax upon occupation or business. ”

“ The realization that this belief was mistaken has thrown a good many people into a state of very genuine bewilderment, but it is an uncertainty, not as to what is firm ground, but as to how to get out of a bog, once having gotten in. For the most part, however, the general feeling of insecurity is due not so much to having knowingly overstepped the law, as to a change in economic conditions. The spirit of the time is one of coöperation and combination. ”

“ V THE NINETEENTH AMENDMENT A prudent man touches the question of woman suffrage gingerly. Many fingers have been burnt in that fire and its embers are not yet dead. Some mention of the Nineteenth Amendment seems necessary, however, in any discussion of federal encroachment on state power, and it may be possible to approach the suffrage movement from the standpoint of constitutional law without getting upon controversial ground. ”

“ To determine the extent of the grants of power we must, therefore, place ourselves in the position of the men who framed and adopted the Constitution, and inquire what they must have understood to be the meaning and scope of those grants. ”

“ It is well that the personnel of the Court has been such as to command respect and deference, for in actual power the judiciary is by far the weakest of the three coördinate departments (legislative, executive, judicial) among which the functions of government were distributed by the Constitution. The power of the purse is vested in Congress: it alone can levy taxes and make appropriations. The Executive is Commander-in-Chief of the Army and Navy and wields the appointing power. The Supreme Court controls neither purse nor sword nor appointments to office. ”

“ The judiciary is without authority to avoid an act of Congress lawfully exerting the taxing power, even in a case where to the judicial mind it seems that Congress had, in putting such power in motion, abused its lawful authority by levying a tax which was unwise or oppressive, or the result of the enforcement of which might be to indirectly affect subjects not within the powers delegated to Congress, nor can the judiciary inquire into the motive or purpose of Congress in adopting a statute levying an excise tax within its constitutional power. ”

“ It is too powerful a weapon in the hands of those alive to its possibilities, enabling a small group of men with a relatively insignificant investment of capital to control a country-wide industry. Take the simplest possible illustration: The industry of manufacturing a particular commodity is carried on by a number of corporations scattered throughout the country with an aggregate capitalization of, say, $10,000,000. A, B, and C form a holding company to acquire a bare majority of the stock of each corporation, say $5,100,000 in the aggregate. ”

“ No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury, except in cases arising in the land or naval forces, or in the Militia, when in actual service in time of War or public danger; nor shall any person be subject for the same offence to be twice put in jeopardy of life or limb; nor shall be compelled in any Criminal Case to be a witness against himself, nor be deprived of life, liberty, or property, without due process of law; nor shall private property be taken for public use, without just compensation. ”

“ In the present condition of the corporation laws of certain of the states, the right of large corporations to operate through local subsidiary corporations is a practical necessity. Otherwise they would be subjected to well-nigh intolerable exactions and interference. It has been the policy in some states in dealing with foreign corporations to attempt to impose, under the guise of fees for the privilege of doing business in the state, a tax on all their property and business wherever situated. ”

“ The right of a federal corporation to do business in the several states, on the other hand, rests upon the powers conferred on Congress by the Constitution and is not subject to the whims of state lawmakers. ”

“ Unquestionably Congress may tax corporations organized under federal laws upon their franchises; any sovereignty may tax the creatures of its creation for the privilege of exercising their franchises; but how about corporations chartered by the states and doing purely an intrastate business? A state confers on John Doe and his associates the privilege or franchise of doing business in a corporate capacity. ”

“ The Judicial power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States by Citizens of another State, or by Citizens or Subjects of any Foreign State. ”

“ We shall have occasion to refer to this limitation more than once in later chapters.
An impression is abroad that the Supreme Court has plenary power to preserve the Constitution. Hence the tendency of groups to demand, and of legislators to enact, any kind of a law without regard to its constitutional aspect, leaving that to be taken care of by the Court.
Any such impression is erroneous and unfortunate. It puts upon the Court a burden beyond its real powers. It undermines the sense of responsibility which should exist among the elected representatives of the people. ”

“ Whether it is a doctrine suited to present-day conditions is a question outside the scope of this paper.
The fear of federal encroachment, so strong in the minds of the makers of our Constitution, has become little more than a tradition. To many it doubtless will seem that any rule of law which operates to prevent the nation, in the great exigency of war, from taxing a portion of the property of its citizens is pernicious and should be changed. ”

“ I believe that Congress can tax all red-headed men engaged in a given line of business if it pleases.... I have no doubt if the tax fell upon every red-headed man in Massachusetts the same as in Mississippi or Texas and all other states, the law imposing such a tax would be perfectly valid. ”

“ Right here a swarm of half-informed theorizers are rushing in where trained economists fear to tread. It is difficult and dangerous ground, but there is at least one measure of legal reform—take away the right of one corporation to hold stock in another—which might be urged with confidence were it not for the existence of sundry oppressive and conflicting state laws. ”

“ Let it be supposed that a group of individuals, as partners, were carrying on a business upon which Congress concluded to lay an excise tax. If it be true that the forming of a state corporation would defeat this purpose, by taking the necessary steps required by the state law to create a corporation and carrying on the business under rights granted by a state statute, the federal tax would become invalid and that source of national revenue be destroyed, except as to the business in the hands of individuals or partnerships. ”

“ The Court has taken the position that when power exists under the Constitution to legislate upon a given subject—say interstate commerce or taxation—it is not for the judiciary to seek to correct abuses by Congress of that power, or to question Congressional motives. ”

“ It was conceded that Congress could tax a business when done by individuals and could tax the same business when done by a corporation. The inquiry was: Does the act of a state in clothing the individuals with corporate capacity create a new subject matter for taxation by the General Government? That was the real question before the Court, and the decision answers it in the affirmative. ”

“ The tax under consideration, however, goes further and fastens upon something new—something which in the case of individuals or partnerships has no existence at all—which comes into being only by the exercise of the sovereign power of a state. The opponents of the tax, far from attempting to narrow the existing field of federal taxation, were in fact resisting an encroachment by Congress on an entirely new field, created by, and theretofore reserved exclusively to, the separate states. ”

“ In any discussion of the right of Congress to tax the agencies of or franchises granted by a state, the distinction must be borne in mind between a tax upon property acquired by means of the franchise from the state and a tax upon the exercise of the franchise itself. ”

“ Most of them had already granted woman suffrage or were ready to grant it. There was no overmastering need for coercing the states that were not yet ready. An impartial student of the period will be apt to conclude that the Nineteenth Amendment was the product of impatience rather than necessity.
Someone may ask, "What effect will the granting of votes to women have on the problem of preserving the constitutional equilibrium?" The ultimate power lies with the voters, and the women with votes now equal or outnumber the men. ”