404 158 U. S. 564 (1895).

405 25 Stat. L. 501.

406 See 2 Willoughby on the Constitution, 855.

407 43d Cong., 1st Sess., Senate Rept. No. 478.

408 California v. Pacific Railroad Companies, 127 U. S. 1 (1887); U. S. v. Gettysburg Electric Co., 160 U. S. 668 (1896).

409 9 Wheat. 738 (1824).

410 9 Wheat. 785 (1824).

411 Farrar, The Post Road Power (Hearings before Committee on Interstate Commerce, United States Senate, 62d Congress, p. 1498 ff).

412 Monongahela Navigation Co. v. U. S., 148 U. S. 312 (1893).

413 Annals of 2d Congress, pp. 303–309.

414 See Prentice, Federal Power over Corporations and Carriers, p. 152.

415 Pensacola Telegraph Co. v. Western Union Telegraph Co., 96 U. S. 1 (1878). Congress may authorize the secretary of war to lease upon terms agreed upon any excess of water power which results from the conservation of the flow of a river, and the works which the government may construct. U. S. v. Chandler-Dunbar Water Power Co., 229 U. S. 53 (1913).

416 37 Stat. L. 560.

417 For an account of proposals in Congress to take this action, a history of its recommendation by successive postmasters general, and much valuable statistical information concerning the operation of the American privately owned, and the foreign publicly owned, telegraph and telephone systems, see “Government Ownership of Electrical Means of Communication,” 63d Congress, 2d Sess., Senate Doc. No. 399.

418 37 Stat. L. 240.

419 See Exclusion of Certain Publications from the Mails, p. 3 ff. (Hearing before the Committee on the Postoffice and Postroads, House of Representatives, 63d Cong., 3d Sess.).

420 Freund, Police Power, p. 509; 2 Willoughby on the Constitution, 841.

421 Schofield, Freedom of the Press in the United States, p. 90.

422 Pam, “Powers of Regulation Vested in Congress,” 24 Harvard Law Review, 77 (December, 1910).

423 As stated by Senator Newlands: “Congress can prohibit the use of the mails by any organization which it considers unlawful or injurious to the public welfare. It can, therefore, declare that any combination organized for the purpose of monopolizing the manufacture, production or sale of any article of commerce, or for the purpose of preventing competition is illegal, and can forbid and prohibit the use of the mails of the United States in aid of such business.” 33 Cong. Rec. (App.), p. 675. See also Remarks of Lanham, 33 Cong. Rec., p. 6324.

424 This was rejected by a House Committee on the ground that it was inadequate. See 56th Cong., 1st Sess., House Rept. No. 1501.

425 37 Stat. L. 560 (sec. 11). See also Mr. Adamson’s bill, H. R. 9576, 63d Cong., 2d Sess. (December 1, 1913).

426 Majority Report of the Committee Appointed to Investigate the Concentration of Control of Money and Credit (February 28, 1913), p. 162. A bill embodying these recommendations is given on p. 170. It denies the use of the mails to any stock exchange, “unless such exchange has been incorporated under the laws of the state or territory at which its business is conducted, or unless the charter and by-laws of such exchange or the law under which it is organized shall contain regulations and prohibitions satisfactory to the Postmaster General safeguarding the transactions of such exchange, the character of the securities dealt in thereon, the genuineness of the quotations thereof, and all other information concerning such transactions that is to be carried through the mails, and by telegraph and telephone beyond the limits of the state of the organization of such exchange against fraud and deceit in the following particulars”: These require publicity as to the assets and stock issues of a corporation before its securities may be listed; an annual report by the corporation whose securities are listed, to the secretary of the exchange and the postmaster general, giving a detailed statement of receipts, expenses, net earnings, salaries and commissions paid to officers or directors, etc.; prohibition of arbitrary action by a stock exchange in striking securities from its list, of artificial manipulation of securities, of hypothecation of securities purchased on a margin, of “short-selling,” etc. The bill also contains many requirements as to publicity. For a discussion of the economic features of the Pujo Committee’s proposals, see Regulation of the Stock Exchange, p. 585 ff. (Hearings before the Committee on Banking and Currency, United States Senate, 63d Cong., 2d Sess.).

427 Majority Report, p. 122.

428 See S. 5664, 63d Cong., 2d Sess. (May 26, 1914).

429 See Regulation of Cotton Exchanges, p. 310 ff. (Hearings before the Committee on Agriculture, House of Representatives (April, 1914)). See also 63d Cong., 2d Sess., House Rept. 765. It should be pointed out that the “trading in futures” that it was desired to prohibit was in the nature of gambling contracts and had come under the ban of local laws.

430 37 Stat. L. 553. A separate and concluding paragraph provides: “That all editorial or other reading matter published in any such newspaper, magazine or periodical, for the publication of which money or other valuable consideration is paid, accepted, or promised, shall be plainly marked ‘advertisement.’ Any editor or publisher printing editorial or other reading matter for which compensation is paid, accepted, or promised, without so marking the same, shall, upon conviction in any court having jurisdiction, be fined not less than fifty dollars ($50) nor more than five hundred dollars ($500).”

431 Report of the Commission on Second-Class Mail Matter, p. 143. In his message of February 22, 1912, transmitting this report to Congress, President Taft said: “The findings of the commission confirm the view that the cost of handling and transporting second-class mail matter is greatly in excess of the postage paid, and that an increase in the rate is not only justified by the facts, but is desirable.”

432 Postal Laws and Regulations of 1913, p. 223.

433 Lewis Publishing Co. v. Morgan, 229 U. S. 288 (1913).

434 Veazie v. Fenno, 8 Wall. 533 (1869). Italics mine.

435 In Edye v. Robertson, 112 U. S. 580 (1884) the Supreme Court said that the imposition “was upheld because a means properly adopted by Congress to protect the currency which it had created,” and the tax was not, therefore, subject to the ordinary rules.

436 McCray v. U. S., 197 U. S. 27 (1903).

437 Veazie v. Fenno, above. The distinction has sometimes been drawn between acknowledged powers and implied powers of Congress. For example, the power to tax and to regulate interstate commerce is granted in the Constitution, while that to exclude from the mails is implied from the postal clause. From this it is argued that Congress may be limited in its indirect control under an implied power when the same objection would not apply to the exercise of an acknowledged power. (See the brief of James M. Beck in the newspaper publicity case, printed in Cong. Rec., December 11, 1912.) But this distinction has never been sanctioned by the Supreme Court of the United States.

It is proper, however, in this connection to point out the extraordinary nature of the taxing power, which is, in Marshall’s phrase, the “power to destroy.”

438 The term is Mr. J. M. Beck’s. See his brief in Lewis Publishing Co. v. Morgan, supra, and his article, “Nullification by Indirection,” 23 Harvard Law Review, 441.

439 Champion v. Ames, 188 U. S. 321 (1902).

440 Hippolite Egg Co. v. U. S., 220 U. S. 45 (1911).

441 Hoke v. U. S., 227 U. S. 308 (1913).

442 U. S. ex rel. Atty. Gen. v. Delaware & H. Co., 213 U. S. 366 (1909).

443 Opinion of Prof. W. W. Willoughby, quoted by J. Y. Brinton, “The Constitutionality of a Federal Child Labor Law,” 62 University of Pennsylvania Law Review, 501. See 2 Willoughby on the Constitution, 738.

444 A further argument in behalf of this legislation is that it would harmonize conflicting state laws which unduly operate in favor of certain manufacturers in their use of interstate commerce.

445 Brief of Samuel Untermyer and Louis Marshall, Regulation of the Stock Exchange, p. 652 ff. This brief argues the matter at greater length than does the report of the Pujo Committee (p. 119 ff.), made the previous year and is in reply to the brief of counsel on behalf of the New York Stock Exchange (Regulation of the Stock Exchange, p. 570 ff.).

446 Chapters II and IV. See also Burton v. U. S., 202 U. S. 344 (1909), where there is a dictum that the statute designed to prevent the postoffice from being used in aid of fraud “has its sanction in the power of the United States, by legislation, to designate what may be carried in the mails, and what must be excluded therefrom; such designation and exclusion to be, however, consistent with the rights of the people as reserved by the Constitution.”

447 U. S. v. Musgrave, 160 Fed. Rep. 700 (1908).

448 Regulation of the Stock Exchange, p. 657. The proposal in the Pujo Bill to deny unincorporated stock exchanges the use of the telephone or telegraph for the transmission of their quotations, raises the question whether Congress may exercise such indirect control under the guise of regulating interstate commerce. This question is discussed in the briefs (Regulation of the Stock Exchange, p. 570 ff. and p. 660 ff.), and is outside the purview of the present essay. From the brief review which I have attempted of the interstate commerce cases, however, it does not appear that they lend any support to the proposition contended for by the Pujo Committee. Generally speaking, the same principles are applicable, in relation to the power over interstate commerce as in relation to that over the mails as furnishing a means by which indirect control may be exerted. But it is proper to point out two possible differences: (1) an exclusion from interstate commerce is prima facie a “regulation” within the meaning of the grant in the Constitution; an exclusion from the mails, on the contrary, is not made “to establish postoffices,” and it would seem, therefore, that the inhibition would have to be justified as “necessary and proper” to this end; (2) postal facilities are established and maintained by Congress for use, upon the same terms, by everyone standing in the same relation to the government, and it is therefore possible to argue that a denial of these facilities would be improper, when an equally arbitrary regulation of interstate commerce might not be. Neither of these differences, it may be added, is so clear as to be controlling; the first seems to me of probable importance, but the second, while it has been suggested, is of doubtful validity.

449 U. S. v. Musgrave, above.

450 The point here made, to repeat, is that if Congress can legislate on grounds of public policy, its regulations must be connected with the use of the mails. The proposed legislation does not seem to fulfill this condition, for much, if not the greater part of the matter transmitted, would be harmless. It should be added, however (although the policy of the legislation is not here considered), that, conceding the power of Congress to act for the accomplishment of purposes not connected with the proper use of the mails, there are not unimportant economic objections to the proposed law. (Regulation of the Stock Exchange, p. 527 ff. and p. 585 ff.) These objections, I think, would have to be examined by the courts if Congress should be allowed the power which I have attempted to show it does not possess.

451 207 U. S. 463 (1907).

452 Adair v. U. S., 208 U. S. 161 (1907); see also Keller v. U. S., 213 U. S. 138 (1908).

453 McCulloch v. Maryland, 4 Wheat 316 (1819).

454 Mugler v. Kansas, 123 U. S. 623 (1887).

455 Houston v. Moore, 5 Wheat. 1 (1820).

456 Fairbank v. U. S., 181 U. S. 283 (1901). In Union Bridge Co. v. U. S., 204 U. S. 364 (1907) this language was used: “If the means employed have no substantial relation to public objects which the government may legally accomplish, if they are arbitrary and unreasonable beyond the necessities of the case, the judiciary will disregard mere forms and interfere for the protection of rights injuriously affected by such illegal action. The authority of the courts to interfere in such cases is beyond all doubt.” See also Morgan v. Louisiana, 118 U. S. 455 (1886); Postal Tel. Co. v. Adams, 155 U. S. 688 (1895); Collins v. New Hampshire, 171 U. S. 30 (1898), and Henderson v. The Mayor of New York, 92 U. S. 259 (1876).

457 Hoover v. McChesney, 81 Fed. Rep. 472 (1897). “The right to mail matter was considered in Teal v. Felton [12 How. 284 (1851)], but was not established as a right peculiar to citizens.” Lien, Privileges and Immunities of Citizens of the United States, p. 41 (Columbia University Studies in History, Economics and Public Law, vol. liv, no. 1). But it would not seem that this case considered such a subject.

458 Heisler, Federal Incorporation, p. 86.

459 Woodrow Wilson, Congressional Government, p. 12.

460 History of Greece, vol. ii, p. 86.

461 But see Goodnow, Social Reform and the Constitution, p. 91 ff.