Download Supreme Court Decision on Agricultural Adjustment Act and Commerce Clause and more Slides Marketing in PDF only on Docsity!
1 of 1 DOCUMENT
WICKARD, SECRETARY OF AGRICULTURE, ET AL. v. FILBURN
No. 59
SUPREME COURT OF THE UNITED STATES
317 U.S. 111; 63 S. Ct. 82; 87 L. Ed. 122; 1942 U.S. LEXIS 1046
May 4, 1942, Argued November 9, 1942, Decided
SUBSEQUENT HISTORY: Reargued October 13, 1942.
PRIOR HISTORY: APPEAL FROM THE DISTRICT COURT OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF OHIO.
APPEAL from a decree of the District Court of three judges which permanently enjoined the Secretary of Agriculture and other appellants from enforcing certain penalties against the appellee, a farmer, under the Agricultural Adjustment Act.
DISPOSITION: 43 F.Supp. 1017, reversed.
CASE SUMMARY:
PROCEDURAL POSTURE: Appellants, agriculture secretary and other government officials, appealed from a decree of three judges of the United States District Court for the Southern District of Ohio, which permanently enjoined appellants from enforcing certain penalties against appellee farmer under the Agricultural Adjustment Act, 7 U.S.C.S. §§ 1281 and 1340.
OVERVIEW: Appellee farmer filed a complaint against appellants to enjoin enforcement against himself of the marketing penalty imposed by amendment to the Agricultural Adjustment Act of 1938 (Act), 7 U.S.C.S. §§ 1281 and 1340, and seeking a declaratory judgment the wheat marketing quota provisions of the Act applicable to him were unconstitutional. The district court held that the agriculture secretary's speech advocating quotas had invalidated the required referendum of farmers affected by the quota. The district court enjoined collecting a marketing penalty from appellee and from subjecting appellee's entire crop to a lien for the payment of the penalty and from collecting a penalty. The Court determined that the secretary's speech did not have the effect of invalidating a referendum. Appellee's complaint was found frivolous and injunction unwarranted. The Court also found that the Act amendment was not violative of U.S. Const. amend. V. Appellee was not denied due process by a penalty being imposed because government regulation was by an authorized act of Congress and was within its commerce powers. The judgment of the district court was reversed.
OUTCOME: The judgment of the lower court was reversed. The Court determined that the penalty was contingent upon an act that appellee committed not before but after the enactment of the statute, and had he chosen to act differently, no penalty would have been demanded.
CORE TERMS: wheat, marketing, quota, farm, crop, interstate commerce, farmer, consumption, commerce, acreage, bushel, referendum, marketed, planted, acre, commerce power, planting, indirect, allotment, grower, Agricultural Adjustment Act, intrastate, producer, power to regulate, retroactive, prescribed, interstate, harvested, regulated, consumed
LexisNexis(R) Headnotes
Constitutional Law > Congressional Duties & Powers > Commerce Clause > General Overview Governments > Agriculture & Food > General Overview [HN1] Within prescribed limits and by prescribed standards under the Agricultural Adjustment Act of 1938 (Act), the Secretary of Agriculture is directed to ascertain and proclaim each year a national acreage allotment for the next crop of wheat, which is then apportioned to the states and their counties, and is eventually broken up into allotments for individual farms. Loans and payments to wheat farmers are authorized in stated circumstances. 7 U.S.C.S. §§ 1335, 1302, 1303, and 1340(10).
Governments > Agriculture & Food > Product Promotion Governments > Legislation > Effect & Operation > Operability Governments > Legislation > Initiative & Referendum [HN2] The Agricultural Adjustment Act of 1938 provides that whenever it appears that the total supply of wheat as of the beginning of any marketing year, beginning July 1, will exceed a normal year's domestic consumption and export by more than 35 percent, the Secretary shall so proclaim not later than May 15 prior to the beginning of such marketing year; and that during the marketing year a compulsory national marketing quota shall be in effect with respect to the marketing of wheat. Between the issuance of the proclamation and June 10, the Secretary must, however, conduct a referendum of farmers who will be subject to the quota, to determine whether they favor or oppose it; and, if more than one-third of the farmers voting in the referendum do oppose, the Secretary must, prior to the effective date of the quota, by proclamation suspend its operation.
Governments > Agriculture & Food > Product Promotion Transportation Law > Interstate Commerce > Federal Powers [HN3] The Agricultural Adjustment Act of 1938 (Act), 7 U.S.C.S. §§ 1281 and 1340, includes a definition of "market" and its derivatives, so that as related to wheat, in addition to its conventional meaning, it also means to dispose of "by feeding to poultry or livestock which, or the products of which, are sold, bartered, or exchanged, or to be so disposed of." Hence, marketing quotas not only embrace all that may be sold without penalty but also what may be consumed on the premises.
Governments > Agriculture & Food > General Overview [HN4] Penalties do not depend upon whether any part of the wheat, either within or without the quota, is sold or intended to be sold. The sum of this is that the federal government fixes a quota including all that the farmer may harvest for sale or for his own farm needs, and declares that wheat produced on excess acreage may neither be disposed of nor used except upon payment of the penalty, or except it is stored as required by the Act or delivered to the Secretary of Agriculture.
Constitutional Law > Congressional Duties & Powers > General Overview Transportation Law > Interstate Commerce > Federal Powers Transportation Law > Interstate Commerce > State Powers [HN5] The commerce power is not confined in its exercise to the regulation of commerce among the states. It extends to those activities intrastate which so affect interstate commerce, or the exertion of the power of Congress over it, as to make regulation of them appropriate means to the attainment of a legitimate end, the effective execution of the granted power to regulate interstate commerce. The power of Congress over interstate commerce is plenary and complete in itself, may be exercised to its utmost extent, and acknowledges no limitations other than are prescribed in the Constitution. It follows that no form of state activity can constitutionally thwart the regulatory power granted by the
317 U.S. 111, *; 63 S. Ct. 82, **; 87 L. Ed. 122, ***; 1942 U.S. LEXIS 1046
"farmers should not be penalized because they have provided insurance against shortages of food," where the context shows that the penalties of which he spoke were more likely those in the form of ruinously low prices resulting from an excess supply rather than the penalties prescribed in the Act, and there is no evidence that any voter was in any way misled or that the speech influenced the outcome of the referendum.
[LEdHN2]*
COMMERCE, §
extent of Federal power -- regulation of production of wheat to be consumed by producer. --
Headnote:[2]
Federal regulation of the production of wheat not intended in any part for commerce but wholly for consumption on the farm is within the power conferred by the commerce clause, where the purpose of such regulation is to control the market price of wheat in interstate commerce.
[LEdHN3]*
COMMERCE, §
extent of Federal power -- criteria. --
Headnote:[3]
Questions of the power of Congress under the commerce clause are not to be decided by reference to any formula which would give controlling force to the facts that the regulation in question is of production or that it operates indirectly, and foreclose consideration of the actual effect of the activity in question upon interstate commerce.
[LEdHN4]*
COMMERCE, §
sphere of Federal regulation -- bearing of local character of activity. --
Headnote:[4]
That an activity is of a local character may help in a doubtful case to determine whether a congressional regulation of interstate commerce is intended to reach it, or in determining whether in the absence of congressional action it would be permissible for a state to exert its power on the subject matter even though in so doing it to some degree affected interstate commerce.
[LEdHN5]*
COMMERCE, §
extent of Federal power -- local activities. --
Headnote:[5]
An activity may, though local and not to be regarded as commerce, be reached by Congress if it exerts a substantial economic effect on interstate commerce; and this irrespective of whether such effect is "direct" or "indirect."
317 U.S. 111, *; 63 S. Ct. 82, **; 87 L. Ed. 122, ***LEdHN1; 1942 U.S. LEXIS 1046
[LEdHN6]*
COMMERCE, §
power of Congress to regulate as affected by smallness of volume. --
Headnote:[6]
That an individual's contribution to the demand for goods moving in interstate commerce may be trivial by itself is not enough to remove him from the scope of Federal regulation where his contribution taken together with that of many others similarly situated, is far from trivial.
[LEdHN7]*
COMMERCE, §
stimulation as included in power to regulate. --
Headnote:[7]
The stimulation of commerce is a use of the regulatory function quite as definitely as prohibitions or restrictions thereon.
[LEdHN8]*
COURTS, §
inquiry into wisdom or fairness of statute. --
Headnote:[8]
The courts have nothing to do with the wisdom, workability or fairness of a statutory plan of regulation.
[LEdHN9]*
CONSTITUTIONAL LAW, §
due process -- statute producing inequitable results. --
Headnote:[9]
An Act of Congress is not to be refused application by the courts as arbitrary and capricious and forbidden by the due process clause merely because it is deemed in a particular case to work an inequitable result.
[LEdHN10]*
CONSTITUTIONAL LAW, §
due process -- penalizing production of wheat to be consumed on the farm. --
Headnote:[10]
The Agricultural Adjustment Act of 1938 as amended (7 USC 1281 et seq.) in imposing a penalty on the production of wheat in excess of a farmer's quota does not work a deprivation of property without due process of law contrary to the
317 U.S. 111, *; 63 S. Ct. 82, **; 87 L. Ed. 122, ***LEdHN6; 1942 U.S. LEXIS 1046
satisfied by his purchases in the open market. P. 128.
- The amendatory Act of May 26, 1941, which increased the penalty upon "farm marketing excess" and included in that category wheat which previously had not been subject to penalty, held not invalid as retroactive legislation repugnant to the Fifth Amendment when applied to wheat planted and growing before it was enacted but harvested and threshed thereafter. P. 131.
COUNSEL: Solicitor General Fahy, with whom Assistant Attorney General Arnold and Messrs. Robert L. Stern, John S. L. Yost, W. Carroll Hunter, and Robert H. Shields were on the briefs, on the original argument and on the reargument (Mr. James C. Wilson was also on the brief on the original argument), for appellants.
Messrs. Webb R. Clark and Harry N. Routzohn, with whom Mr. Robert S. Nevin was on the briefs, for appellee.
Messrs. William Lemke, Louis M. Day, and T. A. Billingsly filed a brief, as amici curiae, in support of appellee.
JUDGES: Stone, Roberts, Black, Reed, Frankfurter, Douglas, Murphy, Byrnes, Jackson
OPINION BY: JACKSON
OPINION
[113] [83] [129] MR. JUSTICE JACKSON delivered the opinion of the Court.
The appellee filed his complaint against the Secretary of Agriculture of the United States, three members of the County Agricultural Conservation Committee for Montgomery County, Ohio, and a member of the State Agricultural Conservation Committee for Ohio. He sought to enjoin enforcement against himself of the marketing penalty imposed by the amendment of May 26, 1941, 1 to the Agricultural Adjustment Act of 1938, 2 upon that part of his 1941 wheat crop which was available for marketing in excess of the marketing quota established for his farm. He also sought a declaratory judgment that the wheat marketing quota provisions of the Act as amended and applicable to him were unconstitutional because not sustainable [114]* under the Commerce Clause or consistent with the Due Process Clause of the Fifth Amendment.
1 55 Stat. 203, 7 U. S. C. (Supp. No. I) § 1340.
2 52 Stat. 31, as amended, 7 U. S. C. § 1281 et seq.
The Secretary moved to dismiss the action against him for improper venue, but [84]** later waived his objection and filed an answer. The other appellants moved to dismiss on the ground that they had no power or authority to enforce the wheat marketing quota provisions of the Act, and after their motion was denied they answered, reserving exceptions to the ruling on their motion to dismiss. 3 The case was submitted for decision on the pleadings and upon a stipulation of facts.
3 Because of the conclusion reached as to the merits, we need not consider the question whether these appellants would be proper if our decision were otherwise.
The appellee for many years past has owned and operated a small farm in Montgomery County, Ohio, maintaining a
317 U.S. 111, *; 63 S. Ct. 82, **; 87 L. Ed. 122, ***; 1942 U.S. LEXIS 1046
herd of dairy cattle, selling milk, raising poultry, and selling poultry and eggs. It has been his practice to raise a small acreage of winter wheat, sown in the Fall and harvested in the following July; to sell a portion of the crop; to feed part to poultry and livestock on the farm, some of which is sold; to use some in making flour for home consumption; and to keep the rest for the following seeding. The intended disposition of the crop here involved has not been expressly stated.
In July of 1940, pursuant to the Agricultural Adjustment Act of 1938, as then amended, there were established for the appellee's 1941 crop a wheat acreage allotment of 11.1 acres and a normal yield of 20.1 bushels of wheat an acre. He was given notice of such allotment in July of 1940, before the Fall planting of his 1941 crop of wheat, and again in July of 1941, before it was harvested. He sowed, however, 23 acres, and harvested from his 11.9 acres of excess acreage 239 bushels, which under the terms of the Act as amended on May 26, 1941, constituted farm [115]* marketing excess, subject to a penalty of 49 cents a bushel, or $ 117.11 in all. The appellee has not paid the penalty and he has not postponed or avoided it by storing the excess under regulations of the Secretary of Agriculture, or by delivering it up to the Secretary. The Committee, therefore, refused him a marketing card, which was, under the terms of Regulations promulgated by the Secretary, necessary to protect a buyer from liability to the penalty and upon its protecting lien. 4
4 Wheat -- 507, §§ 728.240, 728.248, 6 Federal Register 2695, 2699-2701.
The general scheme of the Agricultural Adjustment Act of 1938 as related to wheat is to control the volume moving in interstate and foreign commerce in order to avoid surpluses and shortages and the consequent abnormally low or high wheat prices and obstructions to commerce. 5 [HN1] Within prescribed limits and by prescribed standards the Secretary of Agriculture is directed to ascertain and proclaim each year [130]* a national acreage allotment for the next crop of wheat, which is then apportioned to the states and their counties, and is eventually broken up into allotments for individual farms. 6 Loans and payments to wheat farmers are authorized in stated circumstances. 7
5 § 331, 7 U. S. C. § 1331.
6 § 335, 7 U. S. C. § 1335.
7 §§ 302 (b) (h), 303, 7 U. S. C. §§ 1302 (b) (h), 1303; § 10 of the amendment of May 26, 1941, 7 U. S. C. (Supp. I), § 1340 (10).
[HN2] The Act further provides that whenever it appears that the total supply of wheat as of the beginning of any marketing year, beginning July 1, will exceed a normal year's domestic consumption and export by more than 35 per cent, the Secretary shall so proclaim not later than May 15 prior to the beginning of such marketing year; and that during the marketing year a compulsory national marketing quota shall be in effect with respect to the marketing [116]* of wheat. 8 Between the issuance of the proclamation and June 10, the Secretary must, however, conduct a referendum of farmers who will be subject to the quota, to determine whether they favor or oppose it; and, if more than one-third of the farmers voting in the referendum do oppose, the Secretary must, prior to the effective date of the quota, by proclamation suspend its operation. 9
8 § 335 (a), 7 U. S. C. § 1335 (a).
9 § 336, 7 U. S. C. § 1336.
317 U.S. 111, *114; 63 S. Ct. 82, **84; 87 L. Ed. 122, ***129; 1942 U.S. LEXIS 1046
[**86] II
[LEdHR2]* [2]It is urged that under the Commerce Clause of the Constitution, Article I, § 8, clause 3, Congress does not possess the power it has in this instance sought to exercise. The question would merit little consideration since our decision in United States v. Darby , 312 U.S. 100, 12 sustaining the federal power to regulate production of goods for commerce, except for the fact that this Act extends federal regulation to production not intended in any part for commerce but wholly for consumption on the farm. [HN3] The Act includes a definition of "market" and its derivatives, so that as related to wheat, in addition to its conventional meaning, it also means to dispose of "by feeding (in any [119]* form) to poultry or livestock which, or the products of which, are sold, bartered, or exchanged, or to be so disposed of." 13 Hence, marketing quotas not only embrace all that may be sold without penalty but also what may be consumed on the premises. Wheat produced on excess acreage is designated as "available for marketing" as so defined, and the penalty is imposed thereon. 14 [HN4] Penalties do not depend upon whether any part of the wheat, either within or without the quota, is sold or intended to be sold. The sum of this is that the Federal Government fixes a quota including all that the farmer may harvest for sale or for his own farm needs, and declares that wheat produced on excess acreage may neither be disposed [132]* of nor used except upon payment of the penalty, or except it is stored as required by the Act or delivered to the Secretary of Agriculture.
12 See also, Gray v. Powell , 314 U.S. 402; United States v. Wrightwood Dairy Co ., 315 U.S. 110; Cloverleaf Co. v. Patterson , 315 U.S. 148; Kirschbaum Co. v. Walling , 316 U.S. 517; Overnight Transportation Co. v. Missel , 316 U.S. 572.
13 54 Stat. 727, 7 U. S. C. § 1301 (b) (6) (A), (B).
14 §§ 1, 2, of the amendment of May 26, 1941; Wheat -- 507, § 728.251, 6 Federal Register 2695, 2701.
Appellee says that this is a regulation of production and consumption of wheat. Such activities are, he urges, beyond the reach of Congressional power under the Commerce Clause, since they are local in character, and their effects upon interstate commerce are at most "indirect." In answer the Government argues that the statute regulates neither production nor consumption, but only marketing; and, in the alternative, that if the Act does go beyond the regulation of marketing it is sustainable as a "necessary and proper" 15 implementation of the power of Congress over interstate commerce.
15 Constitution, Article I, § 8, cl. 18.
[LEdHR3]* [3]The Government's concern lest the Act be held to be a regulation of production or consumption, rather than of marketing, is attributable to a few dicta and decisions of this Court which might be understood to lay it down that activities such as "production," "manufacturing," and [120]* "mining" are strictly "local" and, except in special circumstances which are not present here, cannot be regulated under the commerce power because their effects upon interstate commerce are, as matter of law, only "indirect." 16 Even today, when this power has been held to have great latitude, there is no decision of this Court that such activities may be regulated where no part of the [87]** product is intended for interstate commerce or intermingled with the subjects thereof. We believe that a review of the course of decision under the Commerce Clause will make plain, however, that questions of the power of Congress are not to be decided by reference to any formula which would give controlling force to nomenclature such as "production" and "indirect" and foreclose consideration of the actual effects of the activity in question upon interstate commerce.
317 U.S. 111, *118; 63 S. Ct. 82, **86; 87 L. Ed. 122, ***131; 1942 U.S. LEXIS 1046
16 After discussing and affirming the cases stating that such activities were "local," and could be regulated under the Commerce Clause only if by virtue of special circumstances their effects upon interstate commerce were "direct," the opinion of the Court in Carter v. Carter Coal Co ., 298 U.S. 238, 308, stated that: "The distinction between a direct and an indirect effect turns, not upon the magnitude of either the cause or the effect, but entirely upon the manner in which the effect has been brought about.... the matter of degree has no bearing upon the question here, since that question is not -- What is the extent of the local activity or condition, or the extent of the effect produced upon interstate commerce? but -- What is the relation between the activity or condition and the effect?" See also, cases cited infra , notes 17 and
At the beginning Chief Justice Marshall described the federal commerce power with a breadth never yet exceeded. Gibbons v. Ogden , 9 Wheat. 1, 194-195. He made emphatic the embracing and penetrating nature of this power by warning that effective restraints on its exercise must proceed from political rather than from judicial processes. Id. at
[121]* For nearly a century, however, decisions of this Court under the Commerce Clause dealt rarely with questions of what Congress might do in the exercise of its granted power under the Clause, and almost entirely with the permissibility of state activity which it was claimed discriminated against or burdened interstate commerce. During this period there was perhaps little occasion for the affirmative exercise of the commerce power, and the influence of the Clause on American life and law was a negative one, resulting almost wholly from its operation as a restraint upon the powers of the states. In discussion and decision the point of reference, instead of being what was "necessary and proper" to the [133]* exercise by Congress of its granted power, was often some concept of sovereignty thought to be implicit in the status of statehood. Certain activities such as "production," "manufacturing," and "mining" were occasionally said to be within the province of state governments and beyond the power of Congress under the Commerce Clause. 17
17 Veazie v. Moor , 14 How. 568, 573-574; Kidd v. Pearson , 128 U.S. 1, 20-22.
It was not until 1887, with the enactment of the Interstate Commerce Act, 18 that the interstate commerce power began to exert positive influence in American law and life. This first important federal resort to the commerce power was followed in 1890 by the Sherman Anti-Trust Act 19 and, thereafter, mainly after 1903, by many others. These statutes ushered in new phases of adjudication, which required the Court to approach the interpretation of the Commerce Clause in the light of an actual exercise by Congress of its power thereunder.
18 24 Stat. 379, 49 U. S. C. § 1, et seq.
19 26 Stat. 209, 15 U. S. C. § 1, et seq.
When it first dealt with this new legislation, the Court adhered to its earlier pronouncements, and allowed but [122]* little scope to the power of Congress. United States v. Knight Co ., 156 U.S. 1. 20 These earlier pronouncements also played an important part in several of the five cases in which this Court later held that Acts of Congress under the Commerce Clause were in excess of its power. 21
20 See also, Hopkins v. United States , 171 U.S. 578; Anderson v. United States , 171 U.S. 604.
21 Employers' Liability Cases , 207 U.S. 463; Hammer v. Dagenhart , 247 U.S. 251; Railroad Retirement Board v. Alton R. Co ., 295 U.S. 330; Schechter Corp. v. United States , 295 U.S. 495; Carter v. Carter Coal Co ., 298 U.S. 238; cf. United States v. Dewitt , 9 Wall. 41;
317 U.S. 111, *120; 63 S. Ct. 82, **87; 87 L. Ed. 122, ***LEdHR3; 1942 U.S. LEXIS 1046
regulatory power [135]* granted by the commerce clause to Congress. Hence the reach of that power extends to those intrastate activities which in a substantial way interfere with or obstruct the exercise of the granted power." United States v. Wrightwood Dairy Co ., 315 U.S. 110, 119.
[LEdHR4]* [4] [LEdHR5]* [5]Whether the subject of the regulation in question was "production," "consumption," or "marketing" is, therefore, not material for purposes of deciding the question of federal power before us. That an activity is of local character may help in a doubtful case to determine whether Congress intended to reach it. 26 The same consideration might help in determining whether in the absence of Congressional action it would be permissible for the state [125]* to exert its power on the subject matter, even though in so doing it to some degree affected interstate commerce. [HN6] But even if appellee's activity be local and though it may not be regarded as commerce, it may still, whatever its nature, be reached by Congress if it exerts a substantial economic effect on interstate commerce, and this irrespective of whether such effect is what might at some earlier time have been defined as "direct" or "indirect."
26 Cf. Federal Trade Commission v. Bunte Bros ., 312 U.S. 349.
The parties have stipulated a summary of the economics of the wheat industry. Commerce among the states in wheat is large and important. Although wheat is raised in every state but one, production in most states is not equal to consumption. Sixteen states on average have had a surplus of wheat above their own requirements for feed, seed, and food. Thirty-two states and the District of Columbia, where production has been below consumption, have looked to these surplus-producing states for their supply as well as for wheat for export and carry-over.
The wheat industry has been a problem industry for some years. Largely as a result of increased foreign production and import restrictions, annual exports of wheat and flour from the United States during the ten-year period ending in 1940 averaged less than 10 per cent of total production, while during the 1920's they averaged more than 25 per cent. The decline in the export trade has left a large surplus in production which, in connection with an abnormally large supply of wheat and other grains in recent years, caused congestion in a number of markets; tied up railroad cars; and caused elevators in some instances to turn away grains, and railroads to institute embargoes to prevent further congestion.
Many countries, both importing and exporting, have sought to modify the impact of the world market conditions on their own economy. Importing countries have taken measures to stimulate production and self-sufficiency. The four large exporting countries of Argentina, [126]* Australia, Canada, and the United States have all undertaken various programs for the relief of growers. Such measures have been designed, in part at least, to protect the domestic price received by producers. Such plans have generally evolved towards control by the central government. 27
27 It is interesting to note that all of these have federated systems of government, not of course without important differences. In all of them, wheat regulation is by the national government. In Argentina, wheat may be purchased only from the national Grain Board. A condition of sale to the Board, which buys at pegged prices, is the producer's agreement to become subject to restrictions on planting. See Nolan, Argentine Grain Price Guaranty, Foreign Agriculture (Office of Foreign Agricultural Relations, Department of Agriculture) May, 1942, pp. 185, 202. The Australian system of regulation includes the licensing of growers, who may not sow more than the amount licensed, and who may be compelled to cut part of their crops for hay if a heavy crop is in prospect. See Wright, Australian Wheat Stabilization, Foreign Agriculture (Office of Foreign Agricultural Relations, Department of Agriculture) September, 1942, pp. 329, 336. The Canadian Wheat Board has wide control over the marketing of wheat by the individual producer. 4 Geo. VI, c. 25, § 5. Canadian wheat has also been the subject of numerous Orders in Council. E. g., 6 Proclamations and Orders in Council (1942) 183, which gives the Wheat Board full control of sale, delivery, milling and disposition by any person or individual. See, also, Wheat Acreage Reduction Act, 1942, 6 Geo. VI, c. 10.
In the absence of regulation, the [136]* price of wheat in the United States would be much [90]** affected by
317 U.S. 111, *124; 63 S. Ct. 82, **89; 87 L. Ed. 122, ***134; 1942 U.S. LEXIS 1046
world conditions. During 1941, producers who cooperated with the Agricultural Adjustment program received an average price on the farm of about $ 1.16 a bushel, as compared with the world market price of 40 cents a bushel.
Differences in farming conditions, however, make these benefits mean different things to different wheat growers. There are several large areas of specialization in wheat, and the concentration on this crop reaches 27 per cent of the crop land, and the average harvest runs as high as [127]* 155 acres. Except for some use of wheat as stock feed and for seed, the practice is to sell the crop for cash. Wheat from such areas constitutes the bulk of the interstate commerce therein.
On the other hand, in some New England states less than one per cent of the crop land is devoted to wheat, and the average harvest is less than five acres per farm. In 1940 the average percentage of the total wheat production that was sold in each state, as measured by value, ranged from 29 per cent thereof in Wisconsin to 90 per cent in Washington. Except in regions of large-scale production, wheat is usually grown in rotation with other crops; for a nurse crop for grass seeding; and as a cover crop to prevent soil erosion and leaching. Some is sold, some kept for seed, and a percentage of the total production much larger than in areas of specialization is consumed on the farm and grown for such purpose. Such farmers, while growing some wheat, may even find the balance of their interest on the consumer's side.
The effect of consumption of home-grown wheat on interstate commerce is due to the fact that it constitutes the most variable factor in the disappearance of the wheat crop. Consumption on the farm where grown appears to vary in an amount greater than 20 per cent of average production. The total amount of wheat consumed as food varies but relatively little, and use as seed is relatively constant.
[LEdHR6]* [6] [HN7] The maintenance by government regulation of a price for wheat undoubtedly can be accomplished as effectively by sustaining or increasing the demand as by limiting the supply. The effect of the statute before us is to restrict the amount which may be produced for market and the extent as well to which one may forestall resort to the market by producing to meet his own needs. That appellee's own contribution to the demand for wheat may be trivial by itself is not enough to remove him from the [128]* scope of federal regulation where, as here, his contribution, taken together with that of many others similarly situated, is far from trivial. Labor Board v. Fainblatt , 306 U.S. 601, 606 et seq.; United States v. Darby, supra , at 123.
[LEdHR7]* [7]It is well established by decisions of this Court that [HN8] the power to regulate commerce includes the power to regulate the prices at which commodities in that commerce are dealt in and practices affecting such prices. 28 [137]* One of the primary purposes of the Act in question was to [91]** increase the market price of wheat, and to that end to limit the volume thereof that could affect the market. It can hardly be denied that a factor of such volume and variability as home-consumed wheat would have a substantial influence on price and market conditions. This may arise because being in marketable condition such wheat overhangs the market and, if induced by rising prices, tends to flow into the market and check price increases. But if we assume that it is never marketed, it supplies a need of the man who grew it which would otherwise be reflected by purchases in the open market. Home-grown wheat in this sense competes with wheat in commerce. The stimulation of commerce is a use of the regulatory function quite as definitely as prohibitions or restrictions thereon. This record leaves us in no doubt that Congress [129]* may properly have considered that wheat consumed on the farm where grown, if wholly outside the scheme of regulation, would have a substantial effect in defeating and obstructing its purpose to stimulate trade therein at increased prices.
28 Swift & Co. v. United States , 196 U.S. 375; Stafford v. Wallace , 258 U.S. 495; Chicago Board of Trade v. Olsen , 262 U.S. 1; Coronado Coal Co. v. United Mine Workers , 268 U.S. 295; United States v. Trenton Potteries Co ., 273 U.S. 392; Tagg Bros. & Moorhead v. United States , 280 U.S. 420; Standard Oil Co. of Indiana v. United States , 283 U.S. 163; Currin v. Wallace , 306 U.S. 1; Mulford v. Smith , 307 U.S. 38; United States v. Rock Royal Co-operative, supra; United States v. Socony-Vacuum Oil Co ., 310 U.S. 150; Sunshine Anthracite Coal Co. v. Adkins , 310 U.S. 381; United States v. Darby, supra; United States v. Wrightwood Dairy Co., supra; Federal Power Commission v. Pipeline Co ., 315 U.S. 575.
317 U.S. 111, *126; 63 S. Ct. 82, **90; 87 L. Ed. 122, ***136; 1942 U.S. LEXIS 1046
[***HR11]
The amendment of May 26, 1941 is said to be invalidly retroactive in two respects: first, in that it increased the penalty from 15 cents to 49 cents a bushel; secondly, in that, by the new definition of "farm marketing excess," it subjected to the penalty wheat which had theretofore been subject to no penalty at all, i. e., wheat not "marketed" as defined in the Act.
It is not to be denied that between seed time and harvest important changes were made in the Act which affected the desirability and advantage of planting the excess acreage. The law as it stood when the appellee planted his crop made the quota for his farm the normal or the actual production of the acreage allotment, whichever was greater, plus any carry-over wheat that he could have marketed without penalty in the preceding marketing year. 32 The Act also provided that the farmer who, while quotas were in effect, marketed wheat in excess of the quota for the farm on which it was produced should be subject to a penalty of 15 cents a bushel on the excess so marketed. 33 Marketing of wheat was defined as including disposition "by feeding (in any form) to poultry or livestock which, or the products of which, are sold, bartered, or exchanged,.. ." 34 The amendment [139]* of May 26, [132]* 1941, made before the appellee had harvested the growing crop, changed the quota and penalty provisions. The quota for each farm became the actual production of acreage planted to wheat, less the normal or the actual production, whichever was smaller, of any excess acreage. 35 Wheat in excess of this quota, known as the "farm-marketing excess" and declared by the amendment to be "regarded as available [93]** for marketing," was subjected to a penalty fixed at 50 per cent of the basic loan rate for cooperators, 36 or 49 cents, instead of the penalty of 15 cents which obtained at the time of planting. At the same time, there was authorized an increase in the amount of the loan which might be made to non-cooperators such as the appellee upon wheat which "would be subject to penalty if marketed" from about 34 cents per bushel to about 59 cents. 37 The entire crop was subjected by the amendment to a lien for the payment of the penalty.
32 § 335 (c) as amended July 26, 1939, 53 Stat. 1126, 7 U. S. C. § 1335 (c).
33 § 339, 7 U. S. C. § 1339.
34 § 301 (b) (6) (A), (B), as amended July 2, 1940, 54 Stat. 727, 7 U. S. C. § 1301 (b) (6) (A), (B).
35 By an amendment of December 26, 1941, 55 Stat. 872, effective as of May 26, 1941, it was provided that the farm marketing excess should not be larger than the amount by which the actual production exceeds the normal production of the farm wheat-acreage allotment, if the producer establishes such actual production to the satisfaction of the Secretary, provision being made for adjustment of the penalty in the event of a downward adjustment in the amount of the farm marketing excess.
36 §§ 1, 2, 3 of the amendment of May 26, 1941.
37 Section 302 (b) had provided for a loan to non-cooperators of 60% of the basic loan rate for cooperators, which in 1940 was 64cent. See United States Department of Agriculture Press Release, May 20, 1940. The same percentage was employed in § 10 (c) of the amendment of May 26, 1941, and the increase in the amount of the loan is the result of an increase in the basic loan rate effected by § 10 (a) of the amendment.
The penalty provided by the amendment can be postponed or avoided only by storing the farm marketing excess according to regulations promulgated by the Secretary or by delivering it to him without compensation; [133]* and the penalty is incurred and becomes due on threshing. 38 Thus the penalty was contingent upon an act which appellee committed not before but after the enactment of the statute, and had he chosen to cut his excess and cure it or feed it as hay, or to reap and feed it with the head and straw together, no penalty would have been demanded. Such manner of consumption is not uncommon. Only when he threshed and thereby made it a part of the bulk of wheat overhanging the market did he become subject to penalty. He has made no effort to show that the value of his excess wheat consumed without threshing was less than it would have been had it been threshed while subject to the statutory provisions in force
317 U.S. 111, *131; 63 S. Ct. 82, **92; 87 L. Ed. 122, ***LEdHR10; 1942 U.S. LEXIS 1046
at the time of planting. Concurrently with the increase in the amount of the penalty, Congress authorized a substantial increase in the amount of the loan which might be made to cooperators upon stored farm marketing excess wheat. That appellee is the worse off for the aggregate of this legislation does not appear; it only appears that, if he could get all that the Government gives and do nothing that the Government asks, he would be better off than this law allows. To deny him this is not to deny him due process of law. Cf. Mulford v. Smith , 307 U.S. 38.
38 Wheat -- 507, § 728.251 (b), 6 Federal Register 2695, 2701.
Reversed.
317 U.S. 111, *133; 63 S. Ct. 82, **93; 87 L. Ed. 122, ***139; 1942 U.S. LEXIS 1046
