and foreign exchange quotations to the consul general; national finances to the consul general, except the budget, which went to the commercial attache.

Such an attempted division of the field shows a commendable effort on the part of the officers concerned to get together and avoid as much duplicate work as possible, but it also shows clearly on its face that the division agreed upon is personal, not topical; it is neither logical nor consistent, though like any other scheme it may work reasonably well as long as the individuals concerned are willing and anxious to coöperate. A fundamental division of the field by the departments at home is needed unless the working arrangements in the field are to be left to personal forces or blind chance.

The theory that both the department of state and the department of commerce should be free at all times to call upon their men for all the information they may need brings out clearly the character of the conflict between the two services, each seeking to cover the whole field and to be complete within itself. Such scope and purposes are by their very nature competitive.

Some important business organizations concerned with our foreign trade have given some study to this situation and one, at least, has made a proposed solution. It is that a commission be appointed by the President for the purpose of administering our foreign service in the interest of the public, both departments being subordinate to its direction. There is some precedent for such a scheme in the British procedure, but the difficulties involved in relieving the heads of the departments from the active direction of their departments are such as to make the proposal of doubtful acceptability.

That there is need of unity of control when it comes to contact with foreign officials, as well as with our own nationals, has been stated from time to time by responsible officials in charge of our foreign affairs. Thus, Secretary Hughes in addressing recently the United States Chamber of Commerce well said: "The effective intertwining of political and economic problems imposes a heavier strain upon the machinery and requires suitable readjustment, but the exigency requiring a unified system

of contact with foreign powers remains exactly the same. In truth many of our economic problems have now the feature that governments, directly or indirectly, are themselves more largely involved in economic projects, and economic problems must of necessity to a larger extent than before be taken up with governments through diplomatic channels. Unity of control of contact with foreign governments is absolutely essential."

From the point of view of the public there should be only one foreign service. It should not be organized in separate departments at all but simply as the one service of the United States government. Business men should not be confused, as is true at present, with uncertainty as to which group of officers in a foreign. country looks after certain interests, or is the source of information of a certain kind. The officers themselves should not be subject to the strain of attempting to work a system on a coöperative basis which is fundamentally competitive; and especially should the public be freed from the necessity of paying for duplicate organizations in the foreign field.5

4 The Rogers Bill, of September 1, 1922, provides that all appointments shall be by commission to a class and not to any particular post, and that hereafter the diplomatic and consular services shall be known as the foreign service of the United States.

5 While theoretically possible, practically the question as to why there should not be one central department in which would be combined all our foreign activities and interests, is never discussed. The Brown committee on the reorganization of government departments is said to contemplate shifting, combining or eliminating a number of bureaus and divisions, within the various departments as now organized, but has never considered, apparently, setting up a separate foreign department, or grouping all foreign activities within one of the existing departments. Perhaps the basic reasons for a continuance along present lines arises from the fact that, functionally, these activities are so dissimilar in character that throwing them together into one department would not create any closer organic relationship, or any better control. Some of these foreign activities are purely commercial and promotional; some are fiscal; some political. They are so wide apart in their fundamental character as to make grouping into a single department of very doubtful value, to say nothing of the difficulty of overcoming long established organization lines and procedure.

CONSTITUTIONAL LAW IN 1921-1922

THE CONSTITUTIONAL DECISIONS OF THE SUPREME COURT OF THE

UNITED STATES IN THE OCTOBER TERM, 1921

EDWARD S. CORWIN

Princeton University

The central point of interest in the work of the court the past term is supplied by the large attention given to the question of the rights and duties of labor under the law. The problem is approached repeatedly, both from the side of the state's police power and that of national power, and in the field of statutory as well as that of constitutional construction. Important results were also reached in interpretation of the "commerce" clause, both in its aspect as a source of national power and in its aspectbecause of the doctrine of the exclusiveness of the power of Congressas a restriction on the states; but especially in the latter aspect. However, the most interesting single decision of the term for students of constitutional theory and of government was one dealing with the national power of taxation.

A. QUESTIONS OF NATIONAL POWER

I. NATIONAL TAXATION

1. The Child Labor Case

The case just referred to was that of Drexel Furniture Co. v. Bailey, in which a nearly unanimous court held void the special tax levied by the Act of February 24, 1919, on the incomes of concerns employing child labor, on the ground that it was not intended to raise revenue but to regulate the employment of children, a matter otherwise reserved to the states. The opinion of the new Chief Justice is so revelatory of his constitutional creed that it deserves special attention.

Summarizing the provisions of the measure under review, the Chief Justice makes out a very convincing case for its regulatory inten

1 Decided May 15.

tion, but his advantage is somewhat fortuitous, since a more drastic measure would have omitted most of the features he dwells upon, while in principle the act can by no means be considered as an extravagance even regarded as a purely revenue-raising measure. Concerns which

2 "It [the act]," he writes, "provides a heavy exaction for a departure from a detailed and specified course of conduct in business. That course of business is that employers shall employ in mines and quarries, children of an age greater than sixteen years; in mills and factories, children of an age greater than fourteen years; and shall prevent children of less than sixteen years in mills and factories from working more than eight hours a day or six days in the week. If an employer departs from this prescribed course of business, he is to pay to the government one tenth of his entire net income in the business for a full year. The amount is not to be proportioned in any degree to the extent or frequency of the departures, but is to be paid by the employer in full measure whether he employs five hundred children for a year, or employs only one for a day. Moreover, if he does not know the child is within the named age limit, he is not to pay; that is to say it is only where he knowingly departs from the prescribed course that payment is to be exacted. Scienters are associated with penalties not with taxes. The employer's factory is to be subject to inspection at any time not only by the taxing officers of the Treasury, the Department normally charged with the collection of taxes, but also by the Secretary of Labor and his subordinates, whose normal function is the advancement and protection of the welfare of the workers. In the light of these features of the act, a court must be blind not to see that the so-called tax is imposed to stop the employment of children within the age limits prescribed. Its prohibitory and regulatory effect and purpose are palpable. All others can see and understand this. How can we properly shut our minds to it?"

And again: "Taxes are occasionally imposed in the discretion of the legislature on proper subjects with the primary motive of obtaining revenue from them, and with the incidental motive of discouraging them by making their continuance onerous. They do not lose their character as taxes because of the incidental motive. But there comes a time in the extension of the penalizing features of the so-called tax when it loses its character as such and becomes a mere penalty, with the characteristics of regulation and punishment. Such is the case in the law before us. Although Congress does not invalidate the contract of employment, or expressly declare that the employment within the mentioned ages is illegal, it does exhibit its intent practically to achieve the latter result by adopting the criteria of wrongdoing, and imposing its principal consequence on those who transgress its standard."

His contention, however, that, "Grant the validity of this law, and all that Congress would need to do hereafter, in seeking to take over to its control any one of the great number of subjects of public interest, jurisdiction of which the states have never parted with, and which are reserved to them by the Tenth Amendment, would be to enact a detailed measure of complete regulation of the subject and enforce it by a so-called tax upon departures from it" cannot be conceded. See discussion of The Future Trading Act just below.

employ child labor occupy a degraded plane of competition and presumably enjoy special profits in consequence; why then, should not these profits be subject to special exactions by the taxing-power, whether national or local?

3

But what is far more important, the Chief Justice's evaluation of the purpose of the act does not touch the really serious difficulties in the way of holding it void merely because of that purpose. Precisely the same attack was made some years ago against the tax on yellow oleomargarine, and was characterized by the court, in the case of McCray v. United States, as amounting to "the contention that under our constitutional system, the abuse by one department of government of its lawful powers is to be corrected by the abuse of its powers by another department." "The decisions of this Court," the opinion continued, "from the beginning lend no support whatever to the assumption that the judiciary may restrain the exercise of lawful power on the assumption that a wrongful purpose or motive has caused the power to be exerted."

The Chief Justice would fain distinguish the McCray and similar cases from the one at bar, but is unable to do so convincingly, since he is unable to deny that the regulatory purpose of Congress was fully as palpable in those cases as in this. Indeed, as his own references show, the court took cognizance of the regulatory purpose of the tax on state bank issues which was involved in Veazie v. Fenno, but without suggesting that this at all affected the status of the measure as an excise. Nor should we overlook in this connection the most important chapter in the history of national taxation. Probably Congress has never enacted a customs revenue which did not contain whole schedules designed, not for raising revenue but for their regulatory effect; yet such duties have always been treated as "duties" in the sense of the Constitution, and as subject to the requirement that they be "uniform throughout the United States."5 Then finally, the decision directly collides with Chief Justice Marshall's dictum in McCulloch v. Mary

195 U. S. 27; and cases there cited.

48 Wall. 533. See, e.g. the court's remarks in Flint v. Stone Tracy Co., 220 U. S. 107.

"The absolute power to levy taxes," says Story, "includes the power in every form in which it may be used, and for every purpose to which the legislature may choose to apply it. This results from the very nature of such an unrestricted power. A fortiori it might be applied by Congress to purposes for which nations have been accustomed to apply it." The entire paragraph should be read. Commentaries, § 965. For the opposing view, which was first formulated by the "tariff for revenue" school, see Cooley's Principles of Constitutional Law (3rd ed.), p. 58.