“Explanation of ZIP Code Address Purpose”
(Version 910816Z; rev. 081991)
W. C. Updegrave
c/o 300 Adams Street, Esterly
zip code exempt (DMM 122.32)
It is this writer’s opinion, both as a result of study, e.g. of page 11 of the National Area ZIP Code Directory; of 26 USC 7621; of Section 4 of the Federal Register, Volume 51, Number 53, of Wednesday, March 19, 1986, Notices at pages 9571 through 9573; of Treasury Delegation Order (TDO) 150-01; of the opinion in United States v. LaSalle National Bank, 437 U.S. 298, 308, 98 S.Ct.2d 2357, 57 L.Ed.2d 221 (1978); of 12 USC 222; of 31 USC 103; and as a result of my actual experience, that a ZIP Code address is presumed to create a “Federal jurisdiction” or “market venue” or “revenue districts” that override State boundaries, taking one who uses such modes of address outside of a State venue and its constitutional protections and into an international, commercial venue involving admiralty concerns of the “United States”, which is a commercial corporation domiciled in Washington, D.C.
More specifically, looking at the map on page 11 of the National ZIP Code Directory, e.g. at a local post office, one will see that the first digit of a ZIP Code defines an area that includes more than one State. The first sentence of the explanatory paragraph begins: “A ZIP Code is a numerical code
that identifies areas within the United States and its territories for purposes of …” [cf. 26 CFR 1.1-1(c)]. Note the singular possessive pronoun “its”, not “their”, therefore carrying the implication that it relates to the “United States” as a corporation domiciled in the District of Columbia (in the singular sense), not in the sense of being the 50 States of the Union (in the plural sense). The map shows all the States of the Union, but it also shows D.C., Puerto Rico and the Virgin Islands, making the explanatory statement literally correct.
Properly construed, ZIP Codes can only be applicable in Federal territories and enclaves that may be located within the 50 States of the Union, and to the “United States” and District of Columbia and its territories — cf. Piqua Bank v. Knoup, 6 Ohio 342, 404 (1856) and U.S. v. Butler, 297 U.S. 1, 63 (1936) to the effect that “in every state there are two governments; the state and the United States.” Therefore, ZIP Code addresses are for the corporate “United States” and its agents, for example, a customs and duty collector at New York harbor, when they move out into the States of the Union to perform functions delegated to
the “United States” by the National/Federal Constitution, or the Pennsylvania Department of Transportation, Bureau of Motor Vehicles, or a U.S. Congressman.
But, by propaganda, misleading information and seditious syntax, government has gotten nearly everyone in the 50 States of the Union to use ZIP modes of address, and that creates a PRESUMPTION or a PREJUDICIAL ADMISSION that one is in such a Federal venue, or that one is such a government agent.
In general, it is well settled in law that Income Tax Statutes apply only to corporations and to their officers, agents, and employees acting in their official capacities, e.g. from Colonial Pipeline Co. v. Traigle, 421 U.S. 100, 44 L.Ed.2d 1, 95 S.Ct. 1538 (1975): “… However, all ‘income tax statutes’
apply only to state created creatures known as corporations no matter whether state, local, or federal.” Since corporations act only through their officers, employees, etc., the income tax statutes reach out to them when acting in their official capacities, but not as individuals. This is the real purpose for Identifying Numbers — cf. 26 CFR 301.6109-1(d) & (g) and 26 USC 6331(a) and 26 CFR 301.6331-1, Part 4.
Use of a ZIP Code address is tantamount to the admission of being a “citizen of the United States” who does not necessarily have the protections of the first eight Amendments to the Constitution (in the Bill of Rights) when proceeded against by Federal or State authority — Maxwell v. Dow, 176 U.S. 581, 20 S.Ct. 448 (1900), but, “All the provisions of the constitution look to an indestructible union of indestructible states”, Texas vs White, 7 Wall. 700; U.S. v. Cathcart, 25 F.Case No. 14,756; In re Charge to Grand Jury, 30 F. Case No. 18,273 (65 C.J. Section 2) — not known to be overturned.
Also available from the same author:
“Brief of Law for ZIP Code Implications,” by W. C. Updegrave, c/o 300 Adams Street Esterly, Reading, NON-DOMESTIC, Pennsylvania (11 pages plus “Appendix of Unused Data and Quotes”)
# # #
“My Continuing Objection to Mail Sent with a
National Area ZIP Code Mode of Address”
W. C. Updegrave
c/o 300 Adams Street, Esterly
zip code exempt (DMM 122.32)
- In spite of my repeated demands that you correct the way in which you send mail to me, you insist and persist, over my most strenuous objections and contrary to my repeated NOTICES to you, to continue to send my mail with a National Area ZIP Code, which is both unnecessary, even by the application of Domestic Mail statutes and regulations, and is, in fact, an unlawful and fraudulent attempt to define me into an alien and foreign venue and jurisdiction that are, as a matter of fact, contrary to the Federal and State Constitutions and the case law that has developed on this issue. Briefly put, on the basis of my studies, such an address can only properly apply to Federal enclaves within the States of the Union, and perhaps to 14th Amendment citizens of the United States. For this reason alone, you are either making a mistaken or a fraudulent presumption as to my status. How would you prefer to be classified: as one who made an error? or one who has committed acts of fraud? If it is
fraudulent, then you are also engaged in a conspiracy against me and mine. All such mail is reviewed without prejudice but not accepted.
- My use of the term “without prejudice, UCC 1-207” in connection with my signature on this document, or any prior document or instrument, indicates that I have exercised the remedy provided for me in the Uniform Commercial Code, Article I, Section 207, whereby I have reserved my natural and common law right not to be compelled to perform under any contract, commercial agreement, or bankruptcy that I did not enter knowingly, voluntarily and intentionally, and reserved all other Uniform Commercial Code and common law remedies. It also indicates that I do not intend to ratify any fraudulently induced contract by continued acceptance of the benefits thereof. Furthermore, it notifies all administrative agencies of government that I do not and will not accept the liability associated with the compelled benefit of any unrevealed contract, commercial agreement or bankruptcy.
- Briefly put, Domestic Mail Manual (DMM) Section 111.2 and the copyrighted (hence, “private” and not governmental at all) NATIONAL AREA ZIP CODE DIRECTORY, page 11, both identify the term “United States” by using the third person, singular, personal pronoun “its”, which relates only to the “United States” at the District of Columbia, its territories and ceded enclaves, its agents and its “citizens”. In this context, the term “citizen of United States” has a very restricted definition —
cf. 26 C.F.R. 1.1-1(c) and 301.6109(g); 42 U.S.C. 1981 & 1982; 26 U.S.C. 3121(e); 26 U.S.C. 7701(a)(9) & (10); etc. It is to be noted that in DMM 111.2, the term “United States” is used, but none of the fifty states as the States in the Union is mentioned; therefore, the maxim expressio unius est exclusio alterius (mention of one thing implies the exclusion of others) becomes applicable. The 1789 Federal/National Constitution always makes a distinction between the “States in the Union” and the “United States”, the former always being referenced in the plural, and the latter sometimes being so referenced. The “United States” has no venue or jurisdiction within unceded territories inside the “States in the Union” (e.g. see Pollard’s Lessee v. Hagan, 44 U.S. (3 How.) 212, 221, 223 (1845); New Orleans v. U.S., 35 U.S.
(10 Pet.) 662, 737 (1836); 4 U.S.C. 72; 48 U.S.C. Chapters 2 and 3, “The Alaska and Hawaii Omnibus Acts”; 18 U.S.C., Appendix, FRCrP Rules 1 and 54(c); etc.) except where a man or a corporation can be presumed to be a “citizen of the United States” (see 26 C.F.R. 1.1-1(a), (b) and (c)), or a “Federal citizen”, or a “National citizen” (see U.S. v. Lee, 455 U.S. 252, 102 S.Ct. 1051, 71 L.Ed.2d 127 (1982), stating that National (“United States”) citizenship mandates Social Security participation, but the issues of jurisdiction and venue were not raised in that case, and it was argued on narrow and inappropriate statutory grounds — cf. the dissent in Maine v. Thiboutot, 448 U.S. 1, 65 L.Ed.2d 555, 100 S.Ct. 2502 (1980), pages 30-31 especially).
“All legislation is prima facie territorial.”
[American Banana Co. v. United Fruit Co.]
[213 U.S. 347, 356-357 (1909)]
“Legislation is presumptively territorial and confined to limits over which the law-making power has jurisdiction.”
[New York Central R.R. Co. v. Chisholm]
[268 U.S. 29, 31-32 (1925)]
… [T]he “canon of construction which teaches that legislation of Congress, unless a contrary intent appears, is meant to apply only within the territorial jurisdiction of the United States ….”
[U.S. v. Spelar, 338 U.S. 217, 222]
[70 S.Ct. 10 (1949)]
- Without getting into the several definitions of the term “citizen”, which the courts generally construe to mean a mere civil status for one who is politically involved, McCafferty vs Guyer, 59 Pa. 109, 126-127 (Agnew dissent), etc., but sometimes the term is limited to a representative of a city in Parliament, or one who is involved in the conduct and policy making of a civil government, the following is certain authority on the subject for those who are in that category. Persons who are “citizens of the United States” do not necessarily have all the protections of the first eight amendments to the U.S. Constitution when proceeded against by federal and state authorities (e.g., see Maxwell v. Dow, 176 U.S. 581, 20 S.Ct. 448 (1900)). One of the elements that can lead to such presumptions, by inference, is the acceptance of mail with a ZIP code mode of address. In Hooven & Allison v. Evatt, 324 U.S. 652, 671-672 (1944), the U.S. supreme Court has ruled that there are three recognized meanings for the term “United States”, to wit:
The term “United States” may be used in any one of several senses. It may be merely the name of a sovereign occupying the position analogous to that of other sovereigns in the family of nations. It may designate the territory over which the sovereignty of the United States extends, or it may be the collective name of the states which are united by and under the Constitution.6
See Langdell, “The Status of our New Territories,” 12 Harvard Law Review 365, 371; see also Thayer, “Our New Possessions,” 12 Harvard Law Review 464; Thayer, “The Insular Tariff Cases in the Supreme Court,” 15 Harvard Law Review 164; Littlefield, “The Insular Cases,” 15 Harvard Law Review 169, 281.
- The map on page 11 of the ZIP CODE DIRECTORY indicates that ZIP code denominators combine more than one of the States of the Union, hence they define a special venue related to revenue districts established, for example, by 26 U.S.C. 7621(a) and (b), and those are the only legitimate purposes for such a mode of address. For instance, the ZIP codes that denominate certain areas in the States of New York and Pennsylvania all use a fivedigit ZIP code, the first numeral of which begins with a “1”, e.g. “19600”. On page 15, ibid., a list is given of state abbreviations with two capital letters, to be used in conjunction with ZIP codes.
- Contrary to popular belief, “citizenship of the United States” arises from the so-called 14th Amendment, and did not exist before that fraudulent enactment was foisted on the unsuspecting free men (see Utah v. Phillips, 540 P.2d 936 (1975); Dyett v. Turner, 439 P.2d 266, 272 (1968); Adamson v. California, 332 U.S. 46 et seq. (1947); Ex Parte Knowles, 5 Cal. 300 (1855); Van Valkenberg v. Brown, 43 Cal. 43, 47 (1872); U.S. v. Anthony, 24 Fed. Case No. 14,459 at 830 (1873); Cory et al. v. Carter, 48 Ind. 327, 349-350, 17 Am. Rep. 738 (1874); Sharon v. Hill, 26 Fed. Reporter 337 at 343-344; State v. Manuel, 20 N.C. 144, 152; Arver v. U.S., 245 U.S. 366, 388-89 (1917); Hague v. C.I.O., 307 U.S. 496, 509 (1938)). In fact, such statutory provisions as 42 U.S.C. 1981 and 1982, now codified in the same title of the U.S. Codes as the Social Security Act (so called), still clearly make a distinction between “citizen of the United States” and “white state citizen”. It is also clear from various other authorities that there is a distinction between state citizenship for whites and 14th Amendment citizenship of the United States, since even such a
distinction can be drawn from the language of the infamous 14th Amendment itself. In Cory v. Carter, supra, quoting and basing its analysis on the opinion in the Slaughter House Cases, 16 Wall. 36, the court, with respect to the First Section, said:
“… [I]t overturns the Dred Scott decision by making all persons born within the United States and subject to its jurisdiction citizens of the United States. That its main purpose was to establish the citizenship of the negro can admit of no doubt.” … It recognizes and establishes a “distinction between citizenship of the United States and citizenship of a State.”
However, with reference to the second clause, that same opinion continues:
This clause does not refer to citizens of the States. It embraces only citizens of the United States. It leaves out the words “citizen of the State,” which is so carefully used, and used in contradistinction to citizens of the United States, in the preceding sentence. It places the privileges and immunities of citizens of the United States under the protection of the Federal Constitution, and leaves the privileges and immunities of citizens of a State under
the protection of the State constitution. This is fully shown by the recent decision of the Supreme Court of the United States in the Slaughter-House Cases, 16 Wall. 36.
- There are lots of reasons to believe, e.g. by an examination of 42 U.S.C. 1982 (which distinguishes between “citizens of the United States” and “white state citizens”), that Taney’s dicta in the Dred Scott case was not really overturned by the 14th Amendment, and lots of authorities to show that it was never validly adopted or ratified and that, in fact, the 14th Amendment did not repeal any part of the original 1789 Constitution for the United States of America.
Therefore, please state concisely, with supporting points, rationale and authority: What are the underlying presumptions by which you send me mail using such a mode of address?
# # #
But, those three meanings are simply evidence of the word games that the courts, legislatures and bureaucrats have played with the minds and rights of the freemen in this country. See also the clear admission in Ex Parte Knowles, 5 Cal. 300 (1855).
U.S. Supreme Court
U.S. v. BUTLER, 297 U.S. 1 (1936)
297 U.S. 1
BUTLER et al.
Argued Dec. 9, 10, 1935.
Decided Jan. 6, 1936.
[297 U.S. 1, 13]Messrs. Homer S. Cummings, Atty. Gen., and Stanley F. Reed, Sol. Gen., of Washington, D.C., for the United States.
Messrs. George Wharton Pepper, of Philadelphia, Pa., and Edward R. Hale and Bennett Sanderson, both of Boston, Mass., for respondents.
[297 U.S. 1, 53]
Mr. Justice ROBERTS delivered the opinion of the Court.
In this case we must determine whether certain provisions of the Agricultural Adjustment Act, 1933,1 conflict with the Federal Constitution.
Title 1 of the statute is captioned ‘Agricultural Adjustment.’ Section 1 (7 U.S.C.A. 601) recites that an economic emergency has arisen, due to disparity between the prices of agricultural and other commodities, with consequent destruction of farmers’ purchasing power and breakdown in orderly exchange, which, in turn, have affected transactions in agricultural commodities with a national public interest and burdened and obstructed the normal currents of commerce, calling for the enactment of legislation. [297 U.S. 1, 54] Section 2 (7 U.S.C.A. 602) declares it to be the policy of Congress:
‘To establish and maintain such balance between the production and consumption of agricultural commodities, and such marketing conditions therefor, as will reestablish prices to farmers at a level that will give agricultural commodities2 a purchasing power with respect to articles that farmers buy, equivalent to the purchasing power of agricultural commodities in the base period.’
The base period, in the case of cotton, and all other commodities except tobacco, is designated as that between August, 1909, and July, 1914
The further policies announced are an approach to the desired equality by gradual correction of present inequalities ‘at as rapid a rate as is deemed feasible in view of the current consumptive demand in domestic and foreign markets,’ and the protection of consumers’ interest by readjusting farm production at such level as will not increase the percentage of the consumers’ retail expenditures for agricultural commodities or products derived therefrom, which is returned to the farmer, above the percentage returned to him in the base period.
Section 8 (48 Stat. 34) provides, amongst other things, that, ‘In order to effectuate the declared policy,’ the Secretary of Agriculture shall have power
‘(1) To provide for reduction in the acreage or reduction in the production for market, or both, of any basic agricultural commodity, through agreements with producers or by other voluntary methods, and to provide for rental or benefit payments in connection therewith or upon that part of the production of any basic agricultural commodity required for domestic consumption, in such amounts as the Secretary deems fair and reasonable, to [297 U.S. 1, 55] be paid out of any moneys available for such payments. …
‘(2) To enter into marketing agreements with processors, associations of producers, and others engaged in the handling, in the current of interstate or foreign commerce of any agricultural commodity or product thereof, after due notice and opportunity for hearing to interested parties. …
‘(3) To issue licenses permitting processors, associations of producers, and others to engage in the handling, in the current of interstate or foreign commerce, of any agricultural commodity or product thereof, or any competing commodity or product thereof.’
It will be observed that the Secretary is not required, but is permitted, if, in his uncontrolled judgment, the policy of the act will so be promoted, to make agreements with individual farmers for a reduction of acreage or production upon such terms as he may think fair and reasonable.
Section 9(a), 48 Stat. 35 enacts:
‘To obtain revenue for extraordinary expenses incurred by reason of the national economic emergency, there shall be levied processing taxes as hereinafter provided. When the Secretary of Agriculture determines that rental or benefit payments are to be made with respect to any basic agricultural commodity, he shall proclaim such determination, and a processing tax shall be in effect with respect to such commodity from the beginning of the marketing year therefor next following the date of such proclamation. The processing tax shall be levied, assessed, and collected upon the first domestic proc ssing of the commodity, whether of domestic production or imported, and shall be paid by the processor.’
The Secretary may from time to time, if he finds it necessary for the effectuation of the policy of the act, readjust the amount of the exaction to meet the require- [297 U.S. 1, 56] ments of subsection (b). The tax is to terminate at the end of any marketing year if the rental or benefit payments are discontinued by the Secretary with the expiration of that year.
Section 9(b), 7 U.S.C.A. 609(b), fixes the tax ‘at such rate as equals the difference between the current average farm price for the commodity and the fair exchange value,’ with power in the Secretary, after investigation, notice, and hearing, to readjust the tax so as to prevent the accumulation of surplus stocks and depression of farm prices.
Section 9(c), 7 U.S.C.A. 609(c), directs that the fair exchange value of a commodity shall be such a price as will give that commodity the same purchasing power with respect to articles farmers buy as it had during the base period, and that the fair exchange value and the current average farm price of a commodity shall be ascertained by the Secretary from available statistics in his department.
Section 12(a), 7 U.S.C.A. 612(a), appropriates $100,000,000 ‘to be available to the Secretary of Agriculture for administrative expenses under this title (chapter) and for rental and benefit payments;’ and Section 12(b), 7 U.S.C.A. 612(b), appropriates the proceeds derived from all taxes imposed under the act ‘to be available to the Secretary of Agriculture for expansion of markets and removal of surplus agricultural products. … Administrative expenses, rental and
benefit payments, and refunds on taxes.’
Section 15(d), 7 U.S.C.A. 615(d), permits the Secretary, upon certain conditions, to impose compensating taxes on commodities in competition with those subject to the processing tax.
By section 16 (see 7 U.S.C.A. 616) a floor tax is imposed upon the sale or other disposition of any article processed wholly or in chief value from any commodity with respect to which a processing tax is to be levied in amount equivalent to that of the processing tax which would be payable with respect to the commodity from which the article is processed if the processing had occurred on the date when the processing tax becomes effective. [297 U.S. 1, 57] On July 14, 1933, the Secretary of Agriculture, with the approval of the President, proclaimed that he had determined rental and benefit payments should be made with respect to cotton; that the marketing year for that commodity was to begin August 1, 1933; and calculated and fixed the rates of processing and floor taxes on cotton in accordance with the terms of the act.
The United States presented a claim to the respondents as receivers of the Hoosac Mills Corporation for processing and floor taxes on cotton levied under sections 9 and 16 of the act. The receivers recommended that the claim be disallowed. The District Court found the taxes valid and ordered them paid. 3 Upon appeal the Circuit Court of Appeals reversed the order. 4 The judgment under review was entered prior to the adoption of the amending act of August 24, 1935,5 and we are therefore concerned only with the original act.
First. At the outset the United States contends that the respondents have no standing to question the validity of the tax. The position is that the act is merely a revenue measure levying an excise upon the activity of processing cotton-a proper subject for the imposition of such a tax-the proceeds of which go into the federal Treasury and thus become available for appropriation for any purpose. It is said that what the respondents are endeavoring to do is to challenge the intended use of the money pursuant to Congressional appropriation when, by con ession, that money will have become the property of the government and the taxpayer will no longer have any interest in it. Massachusetts v. Mellon, 262 U.S. 447 , 43 S.Ct. 597, is claimed to foreclose litigation by the respondents or other taxpayers, as such, looking to restraint of the expenditure of government funds. That case might be an authority [297 U.S. 1, 58] in the petitioners’ favor if we were here concerned merely with a suit by a taxpayer to restrain the expenditure of the public moneys. It was there held that a taxpayer of the United States may not question expenditures from its treasury on the ground that the alleged unlawful diversion will deplete the public funds and thus increase the burden of future taxation. Obviously the asserted interest of a taxpayer in the federal government’s funds and the supposed increase of the future burden of taxation is minute and indeterminable. But here the respondents who are called upon to pay moneys as taxes, resist the exaction as a step in an unauthorized plan. This circumstance clearly distinguishes the case. The government in substance and effect asks us to separate the Agricultural Adjustment Act into two statutes, the one levying an excise on processors of certain commodities; the other appropriating the public moneys independently of the first. Passing the novel suggestion that two statutes enacted as parts of a single scheme should be tested as if they were distinct and unrelated, we think the legislation now before us is not susceptible of such separation and treatment.
The tax can only be sustained by ignoring the avowed purpose and operation of the act, and holding it a measure merely laying an excise upon processors to raise revenue for the support of government. Beyond cavil the sole object of the legislation is to restore the purchasing power of agricultural products to a parity with that prevailing in an earlier day; to take money from the processor and bestow it upon farmers6 who will reduce their acreage for [297 U.S. 1, 59] the accomplishment of the proposed end, and, meanwhile, to aid these farmers during the period required to bring the prices of their crops to the desired level.
The tax plays an indispensable part in the plan of regulation. As stated by the Agricultural Adjustment Administrator, it is ‘the heart of the law’; a means of ‘accomplishing one or both of two things intended to help farmers attain parity prices and purchasing power.’ 7 A tax automatically goes into effect for a commodity when the Secretary of Agriculture determines that rental or benefit payments are to be made for reduction of production of that commodity. The tax is to cease when rental or benefit payments cease. The rate is fixed with the purpose of bringing about crop reduction and price raising. It is to equal the difference between the ‘current average farm price’ and ‘fair exchange value.’ It may be altered to such amount as will prevent accumulation of surplus stocks. If the Secretary finds the policy of the act will not be promoted by the levy of the tax for a given commodity, he may exempt it. Section 11. The whole revenue from the levy is appropriated in aid of crop control; none of it is made available for general governmental use. The entire agricultural adjustment program embodied in title 1 of the act is to become inoperative when, in the judgment of the President, the national economic emergency ends; and as to any commodity he may terminate the provisions of the law, if he finds them no longer requisite to carrying out the declared policy with re pect to such commodity. Section 13, see 7 U.S.C.A. 613.
The statute not only avows an aim foreign to the procurement of revenue for the support of government, but by its operation shows the exaction laid upon processors to be the necessary means for the intended control of agricultural production. [297 U.S. 1, 60] In these aspects the tax, co-called, closely resembles that laid by the Act of August 3, 1882 (22 Stat. 314), entitled ‘An Act to Regulate Immigration,’ which came before this court in the Head Money Cases, 112 U.S. 580 , 5 S.Ct. 247. The statute directed that there should be levied, collected, and paid a duty of 50 cents for each alien passenger who should come by vessel from a foreign port to one in the United States. Payment was to be made to the collector of the port by the master, owner, consignee, or agent of the ship; the money was to be paid into the Treasury, was to be called the immigrant fund, and to be used by the Secretary of the Treasury to defray the expense of regulating immigration, for the care of immigrants, and relieving those in distress, and for the expenses of effectuating the act.
Various objections to the act were presented. In answering them the court said ( 112 U.S. 580 , page 595, 5 S.Ct. 247, 252):
‘But the true answer to all these objections is that the power exercised in this instance is not the taxing power. The burden imposed on the ship-owner by this statute is the mere incident of the regulation of commerce-of that branch of foreign commerce which is involved in immigration. …
‘It is true, not much is said about protecting the ship-owner. But he is the man who reaps the profit from the transaction. … The sum demanded of him is not, therefore, strictly speaking, a tax or duty within the meaning of the constitution. The money thus raised, though paid into the treasury, is appropriated in advance to the uses of the statute, and does not go to the general support of the government.’
While there the exaction was sustained as an appropriate element in a plan within the power of Congress ‘to regulate commerce with foreign nations,’ no question was made of the standing of the shipowner to raise the ques- [297 U.S. 1, 61] tion of the validity of the scheme, and consequently of the exaction which was an incident of it.
It is inaccurate and misleading to speak of the exaction from processors prescribed by the challenged act as a tax, or to say that as a tax it is subject to no infirmity. A tax, in the general understanding of the term, and as used in the Constitution, signifies an exaction for the support of the government. The word has never been thought to connote the expropriation of money from one group for the benefit of another. We may concede that the latter sort of imposition is constitutional when imposed to effectuate regulation of a matter in which both groups are interested and in respect of which there is a power of legislative regulation. But manifestly no justification for it can be found unless as an integral part of such regulation. The exaction cannot be wrested out of its setting, denominated an excise for raising revenue, and legalized by ignoring its purpose as a mere instrumentality for bringing about a desired end. To do this would be to shut our eyes to what all others than we can see and understand. Child Labor Tax Case, 259 U.S. 20, 37 , 42 S.Ct. 449, 21 A.L.R. 1432.
We conclude that the act is one regulating agricultural production; that the tax is a mere incident of such regulation; and that the respondents have standing to challenge the legality of the exaction.
It does not follow that, as the act is not an exertion of the taxing power and the exaction not a true tax, the statute is void or the exaction uncollectible. For, to paraphrase what was said in the Head Money Cases, supra, 112 U.S. 580 , page 596, 5 S.Ct. 247, 252, if this is an expedient regulation by Congress, f a subject within one of its granted powers, ‘and the end to be attained powers, within that power, the act is not void because, within a loose and more extended sense than was used in the constitution,’ the exaction is called a tax. [297 U.S. 1, 62] Second. The government asserts that even if the respondents may question the propriety of the appropriation embodied in the statute, their attack must fail because article 1, 8 of the Constitution, authorizes the contemplated expenditure of the funds raised by the tax. This contention presents the great and the controlling question in the case. 8 We approach its decision with a sense of our grave responsibility to render judgment in accordance with the principles established for the governance of all three branches of the government.
There should be no misunderstanding as to the function of this court in such a case. It is sometimes said that the court assumes a power to overrule or control the action of the people’s representatives. This is a misconception. The Constitution is the supreme law of the land ordained and established by the people. All legislation must conform to the principles it lays down. When an act of Congress is appropriately challenged in the courts as not conforming to the constitutional mandate, the judicial branch of the government has only one duty; to lay the article of the Constitution which is invoked beside the statute which is challenged and to decide whether the latter squares with the former. All the court does, or can do, is to announce its considered judgment upon the ques- [297 U.S. 1, 63] tion. The only power it has, if such it may be called, is the power of judgment. This court neither approves nor condemns any legislative policy. Its delicate and difficult office is to ascertain and declare whether the legislation is in accordance with, or in contravention of, the provisions of the Constitution; and, having done that, its duty ends. 9
The question is not what power the federal government ought to have, but what powers in fact have been given by the people. It hardly seems necessary to reiterate that ours is a dual form of government; that in every state there are two governments; the state and the United States. Each state has all governmental powers save such as the people, by their Constitution, have conferred upon the United States, denied to the states, or reserved to themselves. The federal union is a government of delegated powers. It has only such as are expressly conferred upon it and such as are reasonably to be implied from those granted. In this respect we differ radically from nations where all legislative power, without restriction or limitation, is vested in a parliament or other legislative body subject to no restrictions except the discretion of its members.
Article 1, 8, of the Constitution, vests sundry powers in the Congress. But two of its clauses have any bea ing upon the validity of the statute under review.
The third clause endows the Congress with power ‘to regulate Commerce … among the several States.’ Despite a reference in its first section to a burden upon, and an obstruction of the normal currents of, commerce, the act under review does not purport to regulate transactions in interstate or foreign10 commerce. Its stated pur- [297 U.S. 1, 64] pose is the control of agricultural production, a purely local activity, in an effort to raise the prices paid the farmer. Indeed, the government does not attempt to uphold the validity of the act on the basis of the commerce clause, which, for the purpose of the present case, may be put aside as irrelevant.
The clause thought to authorize the legislation, the first, confers upon the Congress power ‘to lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States. …’ It is not contended that this provision grants power to regulate agricultural production upon the theory that such legislation would promote the general welfare. The government concedes that the phrase ‘to provide for the general welfare’ qualifies the power ‘to lay and collect taxes.’ The view that the clause grants power to provide for the general welfare, independently of the taxing power, has never been authoritatively accepted. Mr. Justice Story points out that, if it were adopted, ‘it is obvious that under color of the generality of the words, to ‘provide for the common defence and general welfare’, the government of the United States is, in reality, a government of general and unlimited powers, notwithstanding
the subsequent enumeration of specific powers.’ 11 The true construction undoubtedly is that the only thing granted is the power to tax for the purpose of providing funds for payment of the nation’s debts and making provision for the general welfare.
Nevertheless, the government asserts that warrant is found in this clause for the adoption of the Agricultural Adjustment Act. The argument is that Congress may appropriate and authorize the spending of moneys for the ‘general welfare’; that the phrase should be liberally [297 U.S. 1, 65] construed to cover anything conducive to national welfare; that decision as to what will promote such welfare rests with Congress alone, and the courts may not review its determination; and, finally, that the appropriation under attack was in fact for the general welfare of the United States.
The Congress is expressly empowered to lay taxes to provide for the general welfare. Funds in the Treasury as a result of taxation may be expended only through appropriation. Article 1, 9, cl. 7. They can never accomplish the objects for which they were collected, unless the power to appropriate is as broad as the power to tax. The necessary implication from the terms of the grant is that the public funds may be appropriated ‘to provide for the general welfare of the United States.’ These words cannot be meaningless, else they would not have been used. The conclusion must be that they were intended to limit and define the granted power to raise and to expend money. How shall they be construed to effectuate the intent of the instrument?
Since the foundation of the nation, sharp differences of opinion have persisted as to the true interpretation of the phrase. Madison asserted it amounted to no more than a reference to the other powers enumerated in the subsequent clauses of the same section; that, as the United States is a government of limited and enumerated powers, the grant of power to tax and spend for the general national welfare must be confined to the enumerated legislative fields committed to the Congress. In this view the phrase is mere tautology, for taxation and appropriation are or may be necessary incidents of the exercise of any of the enumerated legislative powers. Hamilton, on the other hand, maintained 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 ap- [297 U.S. 1, 66] propriate, limited only by the requirement that it shall be exercised to provide for the general welfare of the United States. Each contention has had the support of those whose views are entitled to weight. This court has noticed the question, but has never found it necessary to decide which is the true construction. Mr. Justice Story, in his Commentaries, espouses the Hamiltonian position. 12 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 Mr. 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 section 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.
But the adoption of the broader construction leaves the power to spend subject to limitations.
As Story says: ‘The Constitution was, from its very origin, contemplated to be the frame of a national government, of special and enumerated powers, and not of general and unlimited powers.’ 13
Again he says: ‘A power to lay taxes for the common defence and general welfare of the United States is not in common sense a general power. It is limited to those objects. It cannot constitutionally transcend them.’ 14
That the qualifying phrase must be given effect all advocates of broad construction admit. Hamilton, in his [297 U.S. 1, 67] well known Report on Manufactures, states that the purpose must be ‘general, and not local.’ 15 Monroe, an advocate of Hamilton’s doctrine, wrote: ‘Have Congress a right to raise and appropriate the money to any and to every purpose according to their will and pleasure? They certainly have not.’ 16 Story says that if the tax be not proposed for the common defense or general welfare, but for other objects wholly extraneous, it would be wholly indefensible upon constitutional principles. 17 And he makes it clear that the powers of taxation and appropriation extend only to matters of national, as distinguished from local, welfare.
As elsewhere throughout the Constitution the section in question lays down principles which control the use of the power, and does not attempt meticulous or detailed directions. Every presumption is to be indulged in favor of faithful compliance by Congress with the mandates of the fundamental law. Courts are reluctant to adjudge any statute in contravention of them. But, under our frame of government, no other place is provided where the citizen may be heard to urge that the law fails to conform to the limits set upon the use of a granted power. When such a contention comes here we naturally require a showing that by no reasonable possibility can the challenged legislation fall within the wide range of discretion permitted to the Congress. How great is the extent of that range, when the subject is the promotion of the general welfare of the United States, we need hardly remark. But, despite the breadth of the legislative discretion, our duty to hear and to render judgment remains. If the statute plainly violates the stated principle of the Constitution we must so declare. [297 U.S. 1, 68] We are not now required to ascertain the scope of the phrase ‘general welfare of the United States’ or to determine whether an appropriation in aid of agriculture falls within it. Wholly apart from that question, another principle embedded in our Constitution prohibits the enforcement of the Agricultural adjustment Act. 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 plan. They are but means to an unconstitutional end.
From the accepted doctrine that the United States is a government of delegated powers, it follows that those not expressly granted, or reasonably to be implied from such as are conferred, are reserved to the states or to the people. To forestall any suggestion to the contrary, the Tenth Amendment was adopted. 18 The same proposition, otherwise stated, is that powers not granted are prohibited. None to regulate agricultural production is given, and therefore legislation by Congress for that purpose is forbidden.
It is an established principle that the attainment of a prohibited end may not be accomplished under the pretext of the exertion of powers which are granted.
‘Should congress, in the execution of its powers, adopt measures which are prohibited by the constitution; or should congress, under the pretext of executing its powers, pass laws for the accomplishment of objects not intrusted to the government; it would become the painful duty of this tribunal, should a case requiring such a de- [297 U.S. 1, 69] cision come before it, to say, that such an act was not the law of the land.’ McCulloch v. Maryland, 4 Wheat. 316,
‘Congress cannot, under the pretext of executing delegated power, pass laws for the accomplishment of objects not intrusted to the federal government. And we accept as established doctrine that any provision of an act of Congress ostensibly enacted under power granted by the Constitution, not naturally and reasonably adapted to the effective exercise of such power, but solely to the achievement of something plainly within power reserved to the states, is invalid and cannot be enforced.’ Linder v. United States, 268 U.S. 5, 17 , 45 S.Ct. 446, 449, 39 A.L.R. 229.
These principles are as applicable to the power to lay taxes as to any other federal power. Said the court, in McCulloch v. Maryland, supra, 4 Wheat. 316, 421: ‘Let the end be legitimate, let it be within the scope of the constitution, and all means which are appropriate, which are plainly adapted to that end, which are not prohibited, but consist with the letter and spirit of the constitution, are constitutional.’
The power of taxation, which is expressly granted, may, of course, be adopted as a means to carry into operation another power also expressly granted. But resort to the taxing power to effectuate an end which is not legitimate, not within the scope of the Constitution, is obviously inadmissible.
‘Congress is not empowered to tax for those purposes which are within the exclusive province of the states.’ Gibbons v. Ogden, 9 Wheat. 1, 199.
‘There are, indeed, certain virtual limitations, arising from the principles of the Constitution itself. It would undoubtedly be an abuse of the (taxing) power if so exercised as to impair the separate existence and independent self-government of the States, or if exercised for ends [297 U.S. 1, 70] inconsistent with the limited grants of power in the Constitution.’ Veazie Bank v. Fenno, 8 Wall. 533, 541.
In the Child Labor Tax Case, 259 U.S. 20 , 42 S.Ct. 449, 21 A.L.R. 1432, and in Hill v. Wallace, 259 U.S. 44 , 42 S.Ct. 453, this court had before it statutes which purported to be taxing measures. But their purpose was found to be to regulate the conduct of manufacturing and trading, not in interstate commerce, but in the states- matters not within any power conferred upon Congress by the Constitution- and the levy of the tax a means to force compliance. The court held this was not a constitutional use, but an unconstitutional abuse of the power to tax. In Linder v. United States, supra, we held that the power to tax could not justify the regulation of the practice of a profession, under the pretext of raising revenue. In United States v. Constantine, 296 U.S. 287 , 56 S.Ct. 223, we declared that Congress could not, in the guise of a tax, impose sanctions for violation of state law respecting the local sale of liquor. These decisions demonstrate that Congress
could not, under the pretext of raising revenue, lay a tax on processors who refuse to pay a certain price for cotton and exempt those who agree so to do, with the purpose of benefiting producers.
Third. If the taxing power may not be used as the instrument to enforce a regulation of matters of state concern with respect to which the Congress has no authority to interfere, may it, as in the present case, be employed to raise the money necessary to purchase a compliance which the Congress is powerless to command? The government asserts that whatever might be said against the validity of the plan, if compulsory, it is constitutionally sound because the end is accomplished by voluntary co- operation. There are two sufficient answers to the contention. The regulation is not in fact voluntary. The farmer, of course, may refuse to comply, but the price of such refusal is the loss of benefits. The amount offered is intended to be sufficient to exert pressure on him to [297 U.S. 1, 71] agree to the proposed regulation. 19 The power to confer or withhold unlimited benefits is the power to coerce or destroy. If the cotton grower elects not to accept the
benefits, he will receive less for his crops; those who receive payments will be able to undersell him. The result may well to financial ruin. The coercive purpose and intent of the statute is not obscured by the fact that it has not been perfectly successful. It is pointed out that, because there still remained a minority whom the rental and benefit payments were insufficient to induce to surrender their independence of action, the Congress has gone further, and, in the Bankhead Cotton Act, used the taxing power in a more directly minatory fashion to compel submission. This progression only serves more fully to expose the coercive purpose of the so-called tax imposed by the present act. It is clear that the Department of Agriculture has properly described the plan as one to keep a nonco-operating minority in line. This is coercion by economic pressure. The asserted power of choice is illusory.
In Frost & Frost Trucking Company v. R.R. Commission, 271 U.S. 583 , 46 S.Ct. 605, 47 A.L.R. 457, a state act was considered which provided for supervision and regulation of transportation for hire by automobile on the public highways. Certificates of convenience and necessity were to be obtained by persons desiring to use the highways for this purpose. The regulatory [297 U.S. 1, 72] commission required that a private contract carrier should secure such a certificate as a condition of its operation. The effect of the commission’s action was to transmute the private carrier into a public carrier. In other words, the privilege of using the highways as a private carrier for compensation was conditioned upon his dedicating his property to the quasi public use of public transportation. While holding that the private carrier was not obliged to submit himself to the condition, the commission denied him the privilege of using the highways if he did not do
so. The argument was, as here, that the carrier had a free choice. This court said, in holding the act as construed unconstitutional: ‘If so, constitutional guaranties, so carefully safeguarded against direct assault, are open to destruction by the indirect, but no less effective, process of requiring a surrender, which, though in form voluntary, in fact lacks none of the elements of compulsion. Having regard to form alone, the act here is an offer to the private carrier of a privilege, which the state may grant or deny, upon a condition which the carrier is free to accept or reject. In reality, the carrier is given no choice, except a choice between the rock and the whirlpool-an option to forego a privilege which may be vital to his livelihood or submit to a requirement which may constitute an intolerable burden.’ 271 U.S. 583 , page 593, 46 S.Ct. 605, 607, 47 A.L.R. 457.
But if the plan were one for purely voluntary co-operation it would stand no better so far as federal power is concerned. At best, it is a scheme for purchasing with federal funds submission to federal regulation of a subject reserved to the states.
It is said that Congress has the undoubted right to appropriate money to executive officers for expenditure under contracts between the government and individuals; that much of the total expenditures is so made. But appropriations and expenditures under contracts for proper [297 U.S. 1, 73] governmental purposes cannot justify contracts which are not within federal power. And contracts for the reduction of acreage and the control of production are outside the range of that power. An appropriation to be expended by the United States under contracts calling for violation of a state law clearly would offend the Constitution. Is a statute less objectionable which authorizes expenditure of federal moneys to induce action in a field in which the United States has no power to intermeddle? The Congress cannot invade state jurisdiction to compel individual action; no more can it purchase such action.
We are referred to numerous types of federal appropriation which have been made in the past, and it is asserted no question has been raised as to their validity. We need not stop to examine or consider them. As was said in Commonwealth of Massachusetts v. Mellon, supra ( 262 U.S. 447 , page 487, 43 S.Ct. 597, 601): ‘As an examination of the acts of Congress will disclose, a large number of statutes appropriating or involving the expenditure of moneys for nonfederal purposes have been enacted and carried into effect.’
As the opinion points out, such expenditures have not been challenged because no remedy was open for testing their constitutionality in the courts.
We are not here concerned with a conditional appropriation of money, nor with a provision that if certain conditions are not complied with the appropriation shall no longer be available. By the Agricultural Adjustment Act the amount of the tax is appropriated to be expended only in payment under contracts whereby the parties bind themselves to regulation by the federal government. There is an obvious difference between a statute stating the conditions upon which moneys shall be expended and one effective only upon assumption of a contractual obligation to submit to a regulation which otherwise could not be enforced. Many examples pointing the distinction might be cited. We are ref rred to appropriations in aid [297 U.S. 1, 74] of education, and it is said that no one has doubted the power of Congress to stipulate the sort of education for which money shall be expended. But an appropriation to an educational institution which by its terms is to become available only if the beneficiary enters into a contract to teach doctrines subversive of the Constitution is clearly bad. An affirmance of the authority of Congress so to condition the expenditure of an appropriation would tend to nullify all constitutional limitations upon legislative power.
But it is said that there is a wide difference in another respect, between compulsory regulation of the local affairs of a state’s citizens and the mere making of a contract relating to their conduct; that, if any state objects, it may declare the contract void and thus prevent those under the state’s jurisdiction from complying with its terms. The argument is plainly fallacious. The United States can make the contract only if the federal power to tax and to appropriate reaches the subject-matter of the contract. If this does reach the subject-matter, its exertion cannot be displaced by state action. To say otherwise is to deny the supremacy of the laws of the United States; to make them subordinate to those of a state. This would reverse the cardinal principle embodied in the Constitution and substitute one which declares that Congress may only effectively legislate as to matters within federal competence when the states do not dissent.
Congress has no power to enforce its commands on the farmer to the ends sought by the Agricultural Adjustment Act. It must follow that it may not indirectly accomplish those ends by taxing and spending to purchase compliance. The Constitution and the entire plan of our government negative any such use of the power to tax and to spend as the act undertakes to authorize. It does not help to declare that local conditions throughout the nation have created a situation of
national concern; for this [297 U.S. 1, 75] is but to say that whenever there is a widespread similarity of local conditions, Congress may ignore constitutional limitations upon its own powers and usurp those reserved to the states. If, in lieu of compulsory regulation of subjects within the states’ reserved jurisdiction, which is prohibited, the Congress could invoke the taxing and spending power as a means to accomplish the same end, clause 1 of section 8 of article 1 would become the instrument for total subversion of the governmental powers reserved to the individual states.
If the act before us is a proper exercise of the federal taxing power, evidently the regulation of all industry throughout the United States may be accomplished by similar exercises of the same power. It would be possible to exact money from one branch of an industry and pay it to another branch in every field of activity which lies within the province of the states. The mere threat of such a procedure might well induce the surrender of rights and the compliance with federal regulation as the price of continuance in business. A few instances will illustrate the thought.
Let us suppose Congress should determine that the farmer, the miner, or some other producer of raw materials is receiving too much for his products, with consequent depression of the processing industry and idleness of its employees. Though, by confession, there is no power vested in Congress to compel by statute a lowering of the prices of the raw material, the same result might be accomplished, if the questioned act be valid, by taxing the producer upon his output and
appropriating the proceeds to the processors, either with or without conditions imposed as the consideration for payment of the subsidy.
We have held in A. L. A. Schechter Poultry Corp. v. United States, 295 U.S. 495 , 55 S.Ct. 837, 97 A.L.R. 947, that Congress has no power to regulate wages and hours of labor in a local business. If the petitioner is right, this very end may be accomplished by [297 U.S. 1, 76] a propriating money to be paid to employers from the federal treasury under contracts whereby they agree to comply with certain standards fixed by federal law or by contract.
Should Congress ascertain that sugar refiners are not receiving a fair profit, and that this is detrimental to the entire industry, and in turn has its repercussions in trade and commerce generally, it might, in analogy to the present law, impose an excise of 2 cents a pound on every sale of the commodity and pass the funds collected to such refiners, and such only, as will agree to maintain a certain price.
Assume that too many shoes are being manufactured throughout the nation; that the market is saturated, the price depressed, the factories running half time, the employees suffering. Upon the principle of the statute in question, Congress might authorize the Secretary of Commerce to enter into contracts with shoe manufacturers providing that each shall reduce his output, and that the United States will pay him a fixed sum proportioned to such reduction, the money to make
the payments to be raised by a tax on all retail shoe dealers on their customers.
Suppose that there are too many garment workers in the large cities; that this results in dislocation of the economic balance. Upon the principle contended for, an excise might be laid on the manufacture of all garments manufactured and the proceeds paid to those manufacturers who agree to remove their plants to cities having not more than a hundred thousand population. Thus, through the asserted power of taxation, the federal government, against the will of individual
states, might completely redistribute the industrial population.
A possible result of sustaining the claimed federal power would be that every business group which thought itself underprivileged might demand that a tax be laid on its vendors or vendees, the proceeds to be appropriated to the redress of its deficiency of income. [297 U.S. 1, 77] These illustrations are given, not to suggest that any of the purposes mentioned are unworthy, but to demonstrate the scope of the principle for which the government contends; to test the principle by its applications; to point out that, by the exercise of the asserted power, Congress would, in effect, under the pretext of exercising the taxing power, in reality accomplish prohibited ends. It cannot be said that they envisage improbable legislation. The supposed cases are no more improbable than would the present act have been deemed a few years ago.
Until recently no suggestion of the existence of any such power in the federal government has been advanced. The expressions of the framers of the Constitution, the decisions of this court interpreting that instrument and the writings of great commentators will be searched in vain for any suggestion that there exists in the clause under discussion or elsewhere in the Constitution, the authority whereby every provision and every fair, implication from that instrument may be subverted, the independence of the individual states obliterated, and the United States converted into a central government exercising uncontrolled police power in every state of the Union, superseding all local control or regulation of the affairs or concerns of the states.
Hamilton himself, the leading advocate of broad interpretation of the power to tax and to appropriate for the general welfare, never suggested that any power granted by the Constitution could be used for the destruction of local self-government in the states. Story countenances no such doctrine. It seems never to have occurred to them, or to those who have agreed with them, that the general welfare of the United States ( which has aptly been termed ‘an indestructible Union, composed of indestructible States,’) might be served by obliterating the constituent members of the Union. But to this fatal conclu- [297 U.S. 1, 78] sion the doctrine contended for would inevitably lead. And its sole premise is that, though the makers of the Constitution, in erecting the ederal government, intended sedulously to limit and define its powers, so as to reserve to the states and the people sovereign power, to be wielded by the states and their citizens and not to be invaded by the United States, they nevertheless by a single clause gave power to the Congress to tear down the barriers, to invade the states’ jurisdiction, and to become a parliament of the whole people, subject to no restrictions save such as are self-imposed. The argument, when seen in its true character and in the light of its inevitable results, must be rejected.
Since, as we have pointed out, there was no power in the Congress to impose the contested exaction, it could not lawfully ratify or confirm what an executive officer had done in that regard. Consequently the Act of 1935, 30, adding section 21(b) to Act of May 12, 1933 (7 U.S.C.A. 623( b), does not affect the rights of the parties.
The judgment is affirmed.
Mr. Justice STONE (dissenting).
I think the judgment should be reversed.
The present stress of widely held and strongly expressed differences of opinion of the wisdom of the Agricultural Adjustment Act makes it important, in the interest of clear thinking and sound result, to emphasize at the outset certain propositions which should have controlling influence in determining the validity of the act. They are:
The power of courts to declare a statute unconstitutional is subject to two guiding principles of decision which ought never to be absent from judicial consciousness. One is that courts are concerned only with the power to enact statutes, not with their wisdom. The other is that while unconstitutional exercise of power [297 U.S. 1, 79] by the executive and legislative branches of the government is subject to judicial restraint, the only check upon our own exercise of power is our own sense of self-restraint. For the removal of unwise laws from the statute books appeal lies, not to the courts, but to the ballot and to the processes of democratic government.
The constitutional power of Congress to levy an excise tax upon the processing of agricultural products is not questioned. The present levy is held invalid, not for any want of power in Congress to lay such a tax to defray public expenditures, including those for the general welfare, but because the use to which its proceeds are put is disapproved.
As the present depressed state of agriculture is nation wide in its extent and effects, there is no basis for saying that the
expenditure of public money in aid of farmers is not within the specifically granted power of Congress to levy taxes to ‘provide for the … general welfare.’ The opinion of the Court does not declare otherwise.
No question of a variable tax fixed from time to time by fiat of the Secretary of Agriculture, or of unauthorized delegation of legislative power, is now presented. The schedule of rates imposed by the secretary in accordance with the original command of Congress has since been specifically adopted and confirmed by act of Congress, which has declared that it shall be the lawful tax. Act of August 24, 1935, 49 Stat. 750, 7 U. S.C.A. 602 et seq. That is the tax which the government now seeks to collect. Any defects there may have been in the manner of laying the tax by the secretary have now been removed by the exercise of the power of Congress to pass a curative statute validating an intended, though defective, tax. United States v. Heinszen & Co., 206 U.S. 370 , 27 S.Ct. 742, 11 Ann.Cas. 688; Graham & Foster v. Goodcell, 282 U.S. 409 , 51 S.Ct. 186; cf. Milliken v. United States, 283 U.S. 15 , 51 S.Ct. 324. The Agricultural Adjustment Act as thus amended de- [297 U.S. 1, 80] clares that none of its provisions shall fail because others are pronounced invalid.
It is with these preliminary and hardly controverted matters in mind that we should direct our attention to the pivot on which the decision of the Court is made to turn. It is that a levy unquestionably with n the taxing power of Congress may be treated as invalid because it is a step in a plan to regulate agricultural production and is thus a forbidden infringement of state power. The levy is not any the less an exercise of taxing power because it is intended to defray an expenditure for the general welfare rather than for some other support of government. Nor is the levy and collection of the tax pointed to as effecting the regulation. While all federal taxes inevitably have some influence on the internal economy of the states, it is not contended that the levy of a processing tax upon manufacturers using agricultural products as raw material has any perceptible regulatory effect upon either their production or manufacture. The tax is unlike the penalties which were held invalid in the Child Labor Tax Case, 259 U.S. 20 , 42 S.Ct. 449, 21 A.L.R. 1432, in Hill v. Wallace, 259 U.S. 44 , 42 S.Ct. 453, in Linder v. United States, 268 U.S. 5, 17 , 45 S.Ct. 446, 39 A.L.R. 229, and in United States v. Constantine, 296 U.S. 287 , 56 S.Ct. 223, because they were themselves the instruments of regulation by virtue of their coercive effect on matters left to the control of the states. Here regulation, if any there be, is accomplished not by the tax, but by the method by which its proceeds are expended, and would equally be accomplished by any like use of public funds, regardless of their source.
The method may be simply stated. Out of the available fund payments are made to such farmers as are willing to curtail their productive acreage, who in fact do so and who in advance have filed their written undertaking to do so with the Secretary of Agriculture. In saying that this method of spending public moneys is an invasion of the reserved powers of the states, the Court does not assert [297 U.S. 1, 81] that the expenditure of public funds to promote the general welfare is not a substantive power specifically delegated to the national government, as Hamilton and Story pronounced it to be. It does not deny that the expenditure of funds for the benefit of farmers and in aid of a program of curtailment of production of agricultural products, and thus of a supposedly better ordered national economy, is within the specifically granted power. But it is declared that state power is nevertheless infringed by the expenditure of the proceeds of the tax to
compensate farmers for the curtailment of their cotton acreage. Although the farmer is placed under no legal compulsion to reduce acreage, it is said that the mere offer of compensation for so doing is a species of economic coercion which operates with the same legal force and effect as though the curtailment were made mandatory by act of Congress. In any event it is insisted that even though not coercive the expenditure of public funds to induce the recipients to curtail production is itself an infringement of state power, since the federal government cannot invade the domain of the states by the ‘purchase’ of performance of acts which it has no power to compel.
Of the assertion that the payments to farmers are coercive, it is enough to say that no such contention is pressed by the taxpayer, and no such consequences were to be anticipated or appear to have resulted from the administration of the act. The suggestion of coercion finds no support in the record or in any data showing the actual operation of the act. Threat of loss, not hope of gain, is the essence of economic coercion. Members of a long-depressed industry have undoubtedly been tempted to curtail acreage by the hope of resulting better prices and by the proffered opportunity to obtain needed ready money. But there is nothing to indicate that those who accepted benefits were impelled by fear of lower prices if they did not accept, or that at any stage in the operation [297 U.S. 1, 82] of the plan a farmer could say whether, apart from the certainty of cash payments at specified times, the advantage would lie with curtailment of production plus c mpensation,
rather than with the same or increased acreage plus the expected rise in prices which actually occurred. Although the Agricultural Adjustment Act was put into operation in June, 1933, the official reports of the Department of Agriculture show that 6,343,000 acres of productive cotton land, 14 per cent. of the total, did not participate in the plan in 1934, and 2,790,000 acres, 6 per cent. of the total, did not participate in 1935. Of the total number of farms growing cotton, estimated at 1,500,000, 33 per cent. in 1934 and 13 per cent. in 1935 did not participate.
It is significant that in the congressional hearings on the bill that became the Bankhead Act, 48 Stat. 598, 7 U.S.C.A. 701 et seq., as amended by Act of June 20, 1934, 48 Stat. 1184, 7 U.S.C.A. 725, which imposes a tax of 50 per cent. on all cotton produced in excess of limits prescribed by the Secretary of Agriculture, there was abundant testimony that the restriction of cotton production attempted by the Agricultural Adjustment Act could not be secured without the coercive provisions of the Bankhead Act. See Hearing before Committee on Agriculture, U.S. Senate, on S. 1974, 73d Cong., 2d Sess.; Hearing before Committee on Agriculture, U.S. House of Representatives, on H.R. 8402, 73d Cong., 2d Sess. The Senate and House Committees so reported, Senate Report No. 283, 73d Cong., 2d Sess., p. 3; House Report No. 867, 73d Cong., 2d Sess., p. 3. The Report of the Department of Agriculture on the administration of the Agricultural Adjustment Act (February 15, 1934 to December 31, 1934), p. 50, points out that the Bankhead Act was passed in response to a strong sentiment in favor of mandatory production control ‘that would prevent non-cooperating farmers from increasing their own plantings in order to capitalize upon the price advances that had resulted from the reductions made by contract [297 U.S. 1,83] signers.’ 1 The presumption of constitutionality of a statute is not to be overturned by an assertion of its coercive effect which rests on nothing more substantial than groundless speculation.
It is upon the contention that state power is infringed by purchased regulation of agricultural production that chief reliance is placed. It is insisted that, while the Constitution gives to Congress, in specific and unambiguous terms, the power to tax and spend, the power is subject to limitations which do not find their origin in any express provision of the Constitution and to which other expressly delegated powers are not subject.
The Constitution requires that public funds shall be spent for a defined purpose, the promotion of the general welfare. Their expenditure usually involves payment on terms which will insure use by the selected recipients within the limits of the constitutional purpose. Expenditures would fail of their purpose and thus lose their constitutional sanction if the terms of payment were not such that by their influence on the action of the recipients the permitted end would be attained. The power of Congress to spend is inseparable from persuasion to action over which Congress has no legislative control. Congress may not command that the science of agriculture be taught in state universities. But if it would aid the teaching of that science by grants to state institutions, it is appropriate, if not necessary, that the grant be on the condition, incorporated in the Morrill Act, 12 Stat. 503, 7 U.S.C.A. 301 et seq., 26 Stat. 417, 7 U.S.C.A. 321 et seq., that it be used for the intended purpose. Similarly it would seem to be compliance with the Constitution, not violation of it, for the government to take and the university to give a contract that the grant would be so used. It makes no dif- [297 U.S. 1, 84] ference that there is a promise to do an act which the condition is calculated to induce. Co dition and promise are alike valid since both are in furtherance of the national purpose for which the money is appropriated.
These effects upon individual action, which are but incidents of the authorized expenditure of government money, are pronounced to be themselves a limitation upon the granted power, and so the time-honored principle of constitutional interpretation that the granted power includes all those which are incident to it is reversed. ‘Let the end be legitimate,’ said the great Chief Justice, ‘let it be within the scope of the constitution, and all means which are appropriate, which are plainly adapted to that end, which are not prohibited, but consist with the letter and spirit of the constitution, are constitutional.’ McCulloch v. Maryland, 4 Wheat. 316, 421. This cardinal guide to constitutional exposition must now be rephrased so far as the spending power of the federal government is concerned. Let the expenditure be to promote the general welfare, still if it is needful in order to insure its use for the intended purpose to influence any action which
Congress cannot command because within the sphere of state government, the expenditure is unconstitutional. And taxes otherwise lawfully levied are likewise unconstitutional if they are appropriated to the expenditure whose incident is condemned.
Congress through the Interstate Commerce Commission has set aside intrastate railroad rates. It has made and destroyed intrastate industries by raising or lowering tariffs. These results are said to be permissible because they are incidents of the commerce power and the power to levy duties on imports. See Minnesota Rate Case 1913, 230 U.S. 352 , 33 S.Ct. 729, 48 L.R.A. (N.S.) 1151, Ann.Cas. 1916A, 18; Houston, E . & W.T.R. Co. v. U.S. (Shreveport Rate Case), 234 U.S. 342 , 34 S.Ct. 833; Board of Trustees of University of Illinois v. United States, 289 U.S. 48 , 53 S.Ct. 509. The only conclusion to be drawn is that re- [297 U.S. 1, 85] sults become lawful when they are incidents of those powers but unlawful when incident to the similarly granted power to tax and spend.
Such a limitation is contradictory and destructive of the power to appropriate for the public welfare, and is incapable of practical application. The spending power of Congress is in addition to the legislative power and not subordinate to it. This independent grant of the power of the purse, and its very nature, involving in its exercise the duty to insure expenditure within the granted power, presuppose freedom of selection among divers ends and aims, and the capacity to impose such conditions as will render the choice effective. It is a contradiction in terms to say that there is power to spend for the national welfare, while rejecting any power to impose conditions reasonably adapted to the attainment of the end which alone would justify the expenditure.
The limitation now sanctioned must lead to absurd consequences. The government may give seeds to farmers, but may not condition the gift upon their being planted in places where they are most needed or even planted at all. The government may give money to the unemployed, but may not ask that those who get it shall give labor in return, or even use it to support their families. It may give money to sufferers from earthquake, fire, tornado, pestilence, or flood, but may not impose conditions, health precautions, designed to prevent the spread of disease, or induce the movement of population to safer or more sanitary areas. All that, because it is purchased regulation infringing state powers, must be left for the states, who are unable or unwilling to supply the necessary relief. The government may spend its money for vocational rehabilitation, 48 Stat. 389, but it may not, with the consent of all concerned, supervise the process which it undertakes to aid. It may spend its money for the suppression of the boll weevil, but may [297 U.S. 1, 86] not compensate the farmers for suspending the growth of otton in the infected areas. It may aid state reforestation and forest fire prevention agencies, 43 Stat. 653 (see 16 U.S.C.A. 471, 499 note, 505, 515, 564 et seq.), but may not be permitted to supervise their conduct. It may support rural schools, 39 Stat. 929 (20 U.S.C.A. 11 et seq.), 45 Stat. 1151 (20 U.S.C.A. 15a to 15c), 48 Stat. 792 (20 U.S.C.A. 15d to 15g), but may not condition its grant by the requirement that certain standards be maintained. It may appropriate moneys to be expended by the Reconstruction Finance Corporation ‘to aid in financing agriculture, commerce and industry,’ and to facilitate ‘the exportation of agricultural and other products.’ Do all its activities collapse because, in order to effect the permissible purpose in myriad ways the money is paid out upon terms and conditions which influence action of the recipients within the states, which Congress cannot command? The answer would seem plain. If the expenditure is for a national public purpose, that purpose will not be thwarted because payment is on condition which will advance that purpose. The action which Congress induces by payments of money to promote the general welfare, but
which it does not command or coerce, is but an incident to a specifically granted power, but a permissible means to a legitimate end. If appropriation in aid of a program of curtailment of agricultural production is constitutional, and it is not denied that it is, payment to farmers on condition that they reduce their crop acreage is constitutional. It is not any the less so because the farmer at his own option promises to fulfill the condition.
That the governmental power of the purse is a great one is not now for the first time announced. Every student of the history of government and economics is aware of its magnitude and of its existence in every civilized government. Both were well understood by the framers of the Constitution when they sanctioned the grant of the spending power to the federal government, and both were recognized by Hamilton and Story, whose views of the [297 U.S. 1, 87] spending power as standing on a parity with the other powers specifically granted, have hitherto been generally accepted.
The suggestion that it must now be curtailed by judicial fiat because it may be abused by unwise use hardly rises to the dignity of argument. So may judicial power be abused. ‘The power to tax is the power to destroy,’ but we do not, for that reason, doubt its existence, or hold that its efficacy is to be restricted by its incidental or collateral effects upon the states. See Veazie Bank v. Fenno, 8 Wall. 533; McCray v. United States, 195 U.S. 27 , 24 S.Ct. 769, 1 Ann.Cas. 561; compare Magnano Co. v. Hamilton, 292 U.S. 40 , 54 S.Ct. 599. The power to tax and spend is not without constitutional restraints. One restriction is that the purpose must be truly national. Another is that it may not be used to coerce action left to state control. Another is the conscience and patriotism of Congress and the Executive. ‘It must be remembered that legislatures are ultimate guardians of the liberties and welfare of the people in quite as great a degree as the courts.’ Justice Holmes, in Missouri, Kansas & Texas R. Co. v. May, 194 U.S. 267, 270 , 24 S. Ct. 638, 639.
A tortured construction of the Constitution is not to be justified by recourse to extreme examples of reckless congressional spending which might occur if courts could not prevent-expenditures which, even if they could be thought to effect any national purpose, would be possible only by action of a legislature lost to all sense of public responsibility. Such suppositions are addressed to the mind accustomed to believe that it is the business of courts to sit in judgment on the wisdom of legislative action. Courts are not the only agency of government that must be assumed to have capacity to govern. Congress and the courts both unhappily may falter or be mistaken in the performance of their constitutional duty But interpretation of our great charter of government which proceeds on any assumption that the responsibility for the preservation of our institutions is the exclusive [297 U.S. 1, 88] concern of any one of the three branches of government, or
that it alone can save them from destruction is far more likely, in the long run, ‘to obliterate the constituent members’ of ‘an indestructible union of indestructible states’ than the frank recognition that language, even of a constitution, may mean what it says: that the power to tax and spend includes the power to relieve a nationwide economic maladjustment by conditional gifts of money.
Mr. Justice BRANDEIS and Mr. Justice CARDOZO join in this opinion.
[ Footnote 1 ] May 12, 1933, c. 25, 48 Stat. 31 (see 7 U.S.C.A. 601 et seq.).
[ Footnote 2 ] Section 11 (48 Stat. 38) denominates wheat, cotton, field corn, hogs, rice, tobacco, and milk, and its products, ‘basic agricultural commodities,’ to which the act is to apply. Others have been added by later legislation.
[ Footnote 3 ] Franklin Process Co. v. Hoosac Mills Corp. (D.C.) 8 F.Supp. 552.
[ Footnote 4 ] Butler et al. v. United States (C.C.A.) 78 F.(2d) 1.
[ Footnote 5 ] Public No. 320, 74th Congress, 1st Sess. (7 U.S.C.A. 602 et seq.).
[ Footnote 6 ] U.S. Department of Agriculture, Achieving A Balanced Agriculture, p. 38: ‘Farmers should not forget that all the processing tax money ends up in their own pockets. Even in those cases where they pay part of the tax, they get it all back. Every dollar collected in processing taxes goes to the farmer in benefit payments.’
U.S. Dept. of Agriculture, The Processing Tax, p. 1: ‘Proceeds of processing taxes are passed to farmers as benefit payments.’
[ Footnote 7 ] U.S. Department of Agriculture, Agricultural Adjustment, p. 9.
[ Footnote 8 ] Other questions were presented and argued by counsel, but we do not consider or decide them. The respondents insist that the act in numerous respects delegates legislative power to the executive contrary to the principles announced in Panama Refining Company v. Ryan, 293 U.S. 388 , 55 S.Ct. 241, and A.L.A. Schechter Poultry Corp. v. United States, 295 U.S. 495 , 55 S.Ct. 837, 97 A.L.R. 947; that this unlawful delegation is not cured by the amending act of August 24, 1935 (7 U.S.C.A. 602 et seq.); that the exaction is in violation of the due process clause of the Fifth Amendment, since the legislation takes their property for a private use; that the floor tax is a direct tax and therefore void for lack of apportionment amongst the states, as required by article 1, 9; and that the processing tax is wanting in
uniformity and so violates article 1, 8, cl. 1, of the Constitution.
[ Footnote 9 ] Compare Adkins v. Children’s Hospital, 261 U.S. 525, 544 , 43 S.Ct. 394, 24 A.L.R. 1238; Commonwealth of Massachusetts v. Mellon, 262 U.S. 447, 488 , 43 S.Ct. 597.
[ Footnote 10 ] The enactment of protective tariff laws has its basis in the power to regulate foreign commerce. See Board of Trustees of University of Illinois v. United States, 289 U.S. 48, 58 , 53 S.Ct. 509.
[ Footnote 11 ] Story, Commentaries on the Constitution of the United States (5th Ed.) vol. I, 907.
[ Footnote 12 ] Loc. cit. chapter XIV, passim.
[ Footnote 13 ] Loc. cit. 909.
[ Footnote 14 ] Loc. cit. 922.
[ Footnote 15 ] Works, vol. III, p. 250.
[ Footnote 16 ] Richardson, Messages and Papers of the Presidents, vol. II, p. 167.
[ Footnote 17 ] Loc. cit. p. 673.
[ Footnote 18 ] The Tenth Amendment declares: ‘The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.’
[ Footnote 19 ] U.S. Dept. of Agriculture, Agricultural Adjustment, p. 9. ‘Experience of cooperative associations and other groups has shown that without such Government support, the efforts of the farmers to band together to control the amount of their product sent to market are nearly always brought to nothing. Almost always, under such circumstances, there has been a noncooperating minority, which, refusing to go along with the rest, has stayed on the outside and tried to benefit
from the sacrifices the majority has made. … It is to keep this noncooperating minority in line, or at least prevent it from doing harm to the majority, that the power of the Government has been marshaled behind the adjustment programs.’
[ Footnote 1 ] Whether coercion was the sole or the dominant purpose of the Bankhead Act, or whether the act was designed also for revenue or other legitimate ends, there is no occasion to consider now.
Optical character readers (OCRs) and barcodes sorters (BCSs) increase the speed, efficiency, and accuracy of processing your mail while keeping postal operating costs down. These computerized mail processing machines are located in post offices across the nation and are programmed to “read” and
sort up to 36,000 pieces of mail per hour. That’s 10 pieces every second. But if your mail isn’t technically compatible, you’ll miss the related benefits. So what type of mail is considered technically compatible? “Machinable” mail is the right size and shape to speed with ease through the equipment. “Readable” mail is quickly and accurately read, coded, and sorted by the equipment. Processing Equipment The OCR Each piece of mail passes by the computer’s scanner for a quick read of the delivery address. Then the OCR’s printer sprays on a delivery point barcode for that address. Next, the mailpiece zooms on to one of the OCR’s sorting channels reserved for the proper delivery area. From there, the barcoded mail is fed to BCSs for fast final separations — right down to the letter carriers who deliver it. The OCR is easily confused by sloppy handwriting, highly stylized characters, extraneous printing, and incorrectly placed address information. The Barcode Sorter As the barcode on your mailpiece shoots past the scanner, it is quickly read and sent to the appropriate channel for delivery.
Automation Requirements Size Make sure that your letter mail is the proper size. Mailpieces smaller than the dimensions below are not mailable. Letter mail larger than the dimensions is mailable but must bypass the OCR and be processed through slower and less efficient manual methods. Dimensions Minimum Maximum Height 3 1/2 6 1/8
Length 5 11 1/2 Thickness .007 1/4 * * Card stock thickness should not exceed .0095. Address Location The OCR looks for the address within a rectangular space on each mailpiece, called the OCR read area. All lines of the address should fall within the OCR read area for the best results. No portion of the return address should appear in the OCR read area.
BY ORDER OF THE SECRETARY OF THE TREASURY
TREASURY ORDER 150-01
DATE: September 28, 1995
SUNSET REVIEW: September 28, 2000
SUBJECT: Regional and District Offices of the Internal Revenue Service
Under the authority given to the President to establish and alter internal revenue districts by Section 7621 of the Internal Revenue Code of 1986, as amended, and vested in the Secretary of the Treasury by Executive Order 10289 (approved September 17, 1951, as amended) as made applicable to Section 7621 of the Internal Revenue
Code of 1986, as amended (as previously contained in the Internal Revenue Code of 1954) by Executive Order 10574 (approved November 5, 1954); under the authority vested in the Secretary of the Treasury by 31 U.S.C. §§321 (a), (b) and Reorganization Plan No. 1 of 1952 as made applicable to the Internal Revenue Code of 1986, as amended, by Section 7804(a) of such Code; and under the authority vested in the Secretary of the Treasury by Sections 7801(a) and 7803 of the Internal Revenue Code of 1986, as amended; the following internal revenue districts and regions are established or continued as described in this Order. When fully implemented, this Order establishes fewer internal revenue regions and districts than designated in previous Orders.
1. Regions . Four regions are established which shall be identified as Northeast Region, headquartered at New York, New York; Southeast Region, headquartered at Atlanta, Georgia; Midstates Region, headquartered at Dallas, Texas; and Western Region, headquartered at San Francisco, California. The head of each regional office shall bear the title “Regional Commissioners identified by the region name. The geographic areas and internal revenue districts within each region are shown in the Attachment to this Order.
2. Districts. Thirty-three districts are established. Each shall be known as an internal revenue district and shall be identified by the names listed in the Attachment. The head of each district office shall be titled ~Director” identified by the district name as specified in the Attachment. The geographic areas within each district are
shown in the Attachment.
3. U.S. Territories and Insular Possessions. The Commissioner of Internal Revenue shall, to the extent of authority vested in the Commissioner, provide for the administration of the United States internal revenue laws in the U.S. territories and insular possessions and other areas of the world.
4. Implementation. The district and regional organization described above shall be implemented on dates determined by the Commissioner of Internal Revenue. Until such dates, the existing offices are authorized to continue. Effective immediately, the Commissioner is authorized to effect such transfers of functions, personnel, positions, equipment and funds as may be necessary to implement the provisions of this Order.
5. Other Offices. This Order affects only the regional and district offices subject to this Order and does not affect service centers or other offices in existence within the Internal Revenue Service.
6. Effect On Prior Treasury Orders.
a. TO 150-01, “Designation of Internal Revenue Districts,” dated October 27, 1987, is superseded.
b. TO 150-03, “Designation of Internal Revenue Regions and Regional Service Centers,” dated January 24, 1986, is superseded.
Robert E. Rubin
Sec. 222. – Federal reserve districts; membership of national banks The continental United States, excluding Alaska, shall be divided into not less than eight nor more than twelve districts. Such districts may be readjusted and new districts may from time to time be created by the Board
of Governors of the Federal Reserve System, not to exceed twelve in all: Provided, That the districts shall be apportioned with due regard to the convenience and customary course of business and shall not necessarily be coterminous with any State or States. Such districts shall be known as Federal Reserve districts and may be designated by number. When the State of Alaska or Hawaii is hereafter admitted to the Union the Federal Reserve districts shall be readjusted by the Board of Governors of the Federal Reserve System in such manner as to include such State. Every national bank in any State shall, upon commencing business or within ninety days after admission into the Union of the State in which it is located, become a member bank of the Federal Reserve System by subscribing and paying for stock in the
Federal Reserve bank of its district in accordance with the provisions of this chapter and shall thereupon be an insured bank under the Federal Deposit Insurance Act (12 U.S.C. 1811 et seq.), and failure to do so shall subject such bank to the penalty provided by section 501a of this title