The Constitution Does Not Bar Collectivism

...b) created a bank to be owned and operated by the State, its deposits to be guaranteed by the State...

...te) declared the purpose of the Stats was to engage in the business of manufacturing and marketing farm products, and created a Mill and Elevator Association vested with the power of eminent domain to acquire property for warehouses, flour mills and factories, and further empowered to buy, sell aad exchange food products and to apSeats exchanges, bureaus, markets and agencies either within the State or elsewhere...

...Several taxpayers sued to enjoin the enforcement of this legislation, contending that the use of public funds raised by taxes deprived them -of their property without due process of' lsw...

...tloa) is as cofprehensi ve as any...

...When the constituted authority of the Stats : - undertakes to exert the taxing power, and the question of the "validity of its action is brought before this court, every presumption in its favor ia indulged, and clear and demonstrated usurpation of power will authora^jhsdielal^ interfsrence with -—¦---1 - "In the present instance under the authority of the constitution and laws prevailing ia North Dakota the pepole, the legislature, and'the highest court of the state have declared the purpose for which these several acts were passed to be of a public "nature, and within the taxing authority of the state...

...The Constitution Does Not Bar Collectivism SUPREME COURT DECISION IN 1919 UPHELD POWER OF STATE TO OWN AND OPERATE INDUSTRIES—AS ACCEPTANCE OF SOCIALIST ECONOMICS SPREADS, THE COURT, FOLLOWINGELECTIONRETURNS, WILL REFLECT THi# SENTiment IN ITS DECISIONS By Louis Waldman V ''arise American phitos. .ajftjeri Mr...

...Dooley, once made the shrewd observation that the Supreme Court follows the election returns...

...g> declared the purpose of the State to provide homes for its residents, created a Home Building Association and authorized the jasuance of $2,000,000 in bonds for...

...And there seems to be room for a doubt that whatever concerns the general interest of learning, of agriculture, of manufacture and of commerce, are within the sphere of the national councils, as far as regards an application of money...

...Collectivism, like the non-Pan...

...issn League program eneetsd hat law in 1919, is not barred by a* Constitution...

...The questions involved were given elaborate consideration in that court, and it held, concerning what may in general terms be denominated the 'banking legislation,' that it' was justified for the purpose of providing banking facilities, and - to enable the state to carry oat the purposes of the other acts, of which the Mill and Elevator Association Act is the principal one...

...May government, under our Constitution, publicly own and operate these instrumentalities...

...Referring to these decisions of the court, a President of the American Bar Association said: "The general welfare clause, then, was given a meaning all...

...Frazier, ¦aisHini: the power of government to enter into business and publicly own and operate industries, is of such vital importance to our dis- ' cussion that we shall briefly summar :ze the facts...

...The Supreme Court has time and again upheld Congressional statutes enacted because their purposes were deemed by Congress as promoting the "general welfare...

...As to the Home Building Act, [ that was sustained because of the promotion of the general we!- ] fare in providing homes for the people, a large proportion of whom were tenants moving from place to place...

...It justified the Mill and Elevator Association Act by the peculiar situation in the state of North Dakota, and particularly by the great agricultural industry of the state...

...And Alexander Hamilton write in 1791: "The phrase ('general welfare' as used in the Federal Constitu-----,-¦ its own...

...It was believed and affirmed by the Supreme Court of North Dakota that the opportunity to secure and maintain homes would promote the • general welfare, and that the provisions of the statutes to enable this feature of the system to become effective would redound to the general benefit . . . "This is not a case of undertaking to aid private institutions by public taxation as was the fact in Citizens' Saving and Loan Association v. Topeka, 20 Wall...

...The ' Supreme Court has declared: "Thus has this court from the early days affirmed that the...

...that the state produced 125,000,000 bushels of wheat each year...

...Reasons for Opinion "We come now to examine the grounds upon which the supreme : court of North Dakota held this legislation not to amount to a taking of property without due process of law...

...Declares Professor "The judge's convictions and social preferences run in terms of the current ideologies of his master trends of the period "find their way into the Court's decisaid thst a period deserves whatever Supreme Court it gets—because it has created the judges in its own ideological image, A period in which capitalist enterprise is on the aggressive and the individualistic ideal sweeps everything before it is net likely awihssl ¦¦¦thing but an individualistic philosophy into its cotistitafjuwsl lew...

...It estimated . from facts of which it was authorised to take judicial notice, that 90 per cent of the' wealth* produced by the state was from agriculture, and stated that upon the prosperity and welfare of that industry other business and' pursuits carried on in the state were largely dependent...

...The principle that may be deduced from the ir risks, is this: if the prevailing sSH order is based on private owner...

...A state government may, therefere, enter into ordinary business —not necessarily the type heretofore denominated as being affected with a "public interest...

...It is therefore ef necessity left to the discretion of the National Legislature to pronounce upon the objects which tiiiaiira the general welfare aad for wieh, under that description, aa appropriation ef money is requisite aad proper...

...It answered the contention that the industries were private in their nature, by stating that all of them belonged to the state of North Dakota, and therefore the activities authorized by the legislation were to be distin-guished "from business of a private nature having private gain for its objective...

...The Supreme Court has held that it may...

...An Important Case In 1919, the Legislature of North Dakota enacted a series of statutes winch, among other things, (a) created art Industrial Commission, authorized to conduct and manage for the State all utilities, industries and enterprises owned, administered and operated by the State, and vested the commission with the right of eminent domain and the power to nx prices for afinajs and commodities which it bought and sold...

...c) authorized a bond issue of $2,000,000, the proceeds to coasti tut* the capital for the bank, and authorized the levying ef taxes for the payment of interest and for the redemption of one-nfth of the bonds annually...

...The case of Green vs...

...that could have been used, because it was not fit that the constrththmdaatBaarity ol the Union to appropriate its revenues should have been7 restricted within narrower limits than the 'general welfare* aad because this necessarily embraces a vast variety of particulars which are susceptible neither ef specification or . definition...

...In many instances states and municipalities have in late years seen fit to enter upon projects to promote the public welfare which in the past have been considered entirely within the domain of private enterprise...

...Court Approves | Mere, then, was a comprehensive system of public ownership of basic industries' in the State of North Dakota, to be financed from public funds raised through taxation...

...ship, the Supreme Court will an), tect the private owners iaJH traditional privileges of capitalist ownership and use of their ptttjB property...

...The manner in which the present system, of transporting and marketing this great crop prevents the realization of what are deemed just prices was elaborately stated...

...The court said: "The taxing power of the States is primarily vested in their legislatures, deriving their authority from the people When a state legislature acts within the scope of its authority it is responsible to the people, and their right to change the agents to whom they have entrusted the power is ordinarily deemed a sufficient check upon its abuse...

...power to promote the general welfare is inherent in government Touching the matters committed to it by the Constitution, the United States .possesses the power, as do the States in their sovereign capacity...

...But, if the cossssajfl| desires a social order based ea'dJH lectivism or public ownership, tat court will not interfere with JM right of the people to set up mm social order...

...665...

...dy authorized the issuance of 110,000,000 in bonds, the proceeds to be used to replace sums loaned by the bank on first mortgages, and the bonds to be backed by the credit of the State, which was authorised to levy taxes for the repayment of principal and interest on the bonds...

...With tins united action of people, legislature and court, we axe not at liberty to interfere unless it is clear beyond reasonable controversy that rights secured by the federal Constitution have been , violated...

...In doing so, it proceeds under its power to promote the general welfare of its people...

...Under the peculiar conditions existing in North Dakota which are emphasised in the opinion of its highest court, if the state sees fit to enter upon such enterprises as are here involved, with the sanction of the constitution, its legislature and its people, we are not prepared to say that it is within the authority of this court, in enforcing the observance of the Fourteenth Amendment, to set aside such action by judicial decision...

...A period like the arasiat bs which the individualistic ideal has been undermined by world-wide economic collapse is likely to fee increasingly tolerant of departures from an absolute conception of liberty or The essence of Socialism, as we Hsve seen, ia the public- or collective ownership and operation of the bask instrumentalities of production and distribution...

...The United States Supreme Court, by a unanimous decision, upheld the legislation as constitutional...

...It may levy taxes to establish and carry on -its business, and may exercise the right of eminent domain to acquire property for its business...

...It was affirmed that the annual loss from these sources including the loss of fertility to the soil and the failure to feed the by-products of grain to stock within the state) amounted to fifty-five millions of dollars to the wheat raisers of North Dakota...

...What the individual States and their subdivisions may do within their boundaries, the Federal government may do nationally...

...The bank was te transfer funds to other departments, industries or enterprises of the State and to make loans te political subdivisions of the State, to State or national banks, or to private citizens if the leans were uawssaq by first mortgages on lands within the State...

...f) authorized the issuance of $5,000,000 in bonds sorry on the business of the Elevator Association, principal and interest to be repaid through taxation...

...The same view is expressed somewhat less epigrammatkrally by Professor Max Lerner in bis article on The Supreme Court and American Capitalism...

...hot confined to the parT inelasttajf them, the couit'bsM that it could be used to Ansae* those snlbjeets .ef )sj||H which Congress in its wisdom es> termines are for the^wetfare si all of the people geSierally^MB Congress has so acted...